Final answer:
Wal-Mart's significant contribution to U.S. productivity in the late 90s was due to its efficient operations and large-scale business model. While this led to productivity gains, it also created economic disparities and often negatively affected local economies and smaller businesses.
Step-by-step explanation:
Wal-Mart has had a significant impact on U.S. productivity, especially noticeable in the late 1990s. A common measure of productivity is the dollar value per hour a worker contributes to the employer's output, excluding sectors like government work and farming. During the second half of the 1990s, productivity growth began to rise, with an average change in output per hour worked reported by the Department of Labor.
Wal-Mart's business model, often referred to as Wal-Martization, involves paying low wages and offering few benefits, which has controversial effects on local economies and smaller businesses. By leveraging economies of scale, Wal-Mart can undersell and often displace locally owned businesses, affecting manufacturers, transportation workers, and local media in the process, while simultaneously dominating retail in many small towns.
Despite its impact on local economies, Wal-Mart's efficient operations and cost-saving strategies contributed to a large portion of overall productivity gains in the U.S. during that time. However, the wealth generated from increased productivity was not evenly distributed, often leading to greater economic disparity and leaving workers with stagnating incomes despite their higher output.