On Wal-Mart
Varous resources and articles on what's wrong with Wal-Mart and what they and we can do about it.
"Rats and roaches live by competition under the laws of supply and demand; it is the privilege of human beings to live under the laws of justice and mercy." - Wendell Berry
On this page
Get up to speed on the issue.
Wal-Mart teaches stores how to survive when they come to town
Time to Target Wal-Mart - a good overview of the problem of Wal-Mart
Wal-Mart's Spin Cycle - Business Ethics Professor, David Batstone
Frugality's folly - a faith perspective
Big Box Balderdash - Paul Krugman
My Mom hates you, Wal-Mart - Mikhail Onushko
Statistics
posters for community use
"Your quality of life is worth more than a cheap pair of underwear." - sprawl-busters.com
Wal-Mart Watch A web site that keeps us updated with Wal-Mart's troublesome issues and what can be / is being done about it.
Get up to speed quickly with this humorous animation from JibJab.
Watch the documentary trailer: WAL-MART, the high cost of the low price.
Wal-Mart Facts and Figures (2003)
World's largest retailer, 2003: Wal-Mart
United State's largest private employer, 2003: Wal-Mart
Wal-Mart's worldwide workforce: 1.3 million
Wal-Mart's most 2002 annual sales figures: $245 billion
Gross Domestic Product of Switzerland, 2002: 231 billion
Number of Wal-Mart stores worldwide: 4,300
Number of Wal-Mart stores opened on October 29, 2003: 39
Average hourly wage of Wal-Mart employee, 2001: $8.23
Average hourly wage of unionized supermarket workers: $10.35
Wal-Mart's price of Kellogg's Corn Flakes vs. competitors price: 56%
Here are some Wal-Mart statistics that you will not find in any economic study that is required prior to the introduction of a Wal-Mart into a community:
The estimated total amount of federal assistance for which Wal-Mart employees were eligible in 2004 was $2.5 billion.
[Harper's Index - Harper's Magazine, Vol. 310, No. 1858, 3/2005]
One 200-employee Wal-Mart store may cost federal taxpayers $420,750 per year.
This cost comes from the following, on average:
$36,000 a year for free and reduced lunches for just 50 qualifying Wal-Mart families.
$42,000 a year for low-income housing assistance.
$125,000 a year for federal tax credits and deductions for low-income families.
$100,000 a year for the additional expenses for programs for students.
$108,000 a year for the additional federal health care costs of moving into state children's health insurance programs (S-CHIP)
$9,750 a year for the additional costs for low income energy assistance.
From: THE HIDDEN PRICE WE ALL PAY FOR WAL-MART, A REPORT BY THE DEMOCRATIC STAFF OF THE COMMITTEE ON EDUCATION AND THE WORKFORCE, 2/16/04
Right Reality: Wal-Mart's Spin Cycle
by David Batstone, RightReality.com
Wal-Mart has come to terms with the fact that its public image is taking a nose dive. According to The New York Times, Wal-Mart hired a top-notch polling group to gauge the consumer impact of its reputation. The results reportedly show that anywhere from 2 percent to 8 percent of Wal-Mart shoppers have stopped visiting its retail stores due to "negative press they have heard."
Wal-Mart is trying hard to change that public sentiment, of course. The retailer harvested bushels of good will with its aid to victims of Katrina. While government agencies floundered, Wal-Mart effectively delivered emergency goods to those in most need. Late in 2005 Wal-Mart also announced a campaign that it trumpeted as the beginning of a new era for the company. Among the noteworthy initiatives: reducing greenhouse gases at its stores around the world by 20 percent in the next seven years; offering health-care coverage to all workers for around $25 a month; and calling on Congress to raise the nation's minimum wage above the current $5.15 per hour.
All good steps. Nonetheless, I can't help but feel cynical about Wal-Mart's efforts. The company seems more concerned about public relations than an actual reform of its business operations. Wal-Mart now has a rapid-response "war room" that handles criticism like a political operative. In actual fact, former advisers from the Reagan, Clinton, and Kerry electoral campaigns coordinate the image campaign. For that reason, it is hard to separate fact from spin at Wal-Mart.
To its credit, the company did host a public forum on its business practices last November. Advertised as "An In-Depth Look at Wal-Mart and Society," the retailer invited nine economists to assess its effects on the economy. Overall, the news was not good for the host. The majority of the economists put forward research demonstrating that Wal-Mart makes total payroll wages per person fall in towns where it does business and increases Medicaid costs significantly among its own workers.
On the other side of the ledger, Jerry Hausman, a professor at the Massachusetts Institute of Technology, showed that Wal-Mart's entry into a local market lowers food prices at all retailers about 25 percent, with the biggest benefits going to poor and minority households. "I'm actually quite disturbed at some of my liberal friends who want to keep Wal-Mart out," said Hausman.
No one disputes that Wal-Mart delivers lower prices, nor the fact that Wal-Mart employs 1.33 million working-class Americans. But what are the trade-offs for these benefits? Will Wal-Mart continue to squeeze its labor costs to sharpen its competitive edge?
A troubling answer to those questions came in a leaked memo sent in 2005 by a senior Wal-Mart executive to the company's board of directors. The memo may be the best indicator of Wal-Mart's intentions.
Susan Chambers, Wal-Mart's executive vice president for worker benefits, recommended in the memo that the company hire more part-time workers in order to keep down health-care costs and screen out unhealthy people from the Wal-Mart labor force. The Chambers memo acknowledged that 46 percent of Wal-Mart's employees already were uninsured or on Medicaid. Nonetheless, the primary purpose of the memo was to offer strategies for slicing benefits even further.
The Chambers memo also clearly expressed her anxiety about how Wal-Mart's battered reputation might suffer further if these actions were taken. Consumers and activists alike need to ensure that her concerns are justified. Even the strongest company brand is vulnerable to a soiled reputation.
*An original version of this column appears in the Jan/Feb edition of Sojourners magazine
From the Wal-Mart PR Stunts Department:
April 4, 2006
Wal-Mart to Offer Help Near Urban Stores
By MICHAEL BARBARO, New York Times
Wal-Mart Stores, whose voracious, all-in-one retailing model has crippled thousands of competitors over the last 40 years, is turning to an unusual business plan: helping its rivals.
The giant discount retailer, under assault as never before by critics, announced a wide-ranging effort today to support small business near its new urban stores, including the hardware stores, dress shops and bakeries with which it competes.
Under the program, Wal-Mart will offer those businesses financial grants, training on how to survive with Wal-Mart in town and even free advertising within a Wal-Mart store.
The program, part of a growing campaign by the company to burnish its image, is a measure of how worried Wal-Mart is about its future — particularly in urban markets where it has met stiff resistance to new stores.
Criticism of Wal-Mart's wages, health insurance and pricing strategy has grown louder this year, with the release of a feature-length film attacking the company and the passage of a law in Maryland forcing the retailer to increase spending on health care.
And there is growing evidence that the negative publicity is hurting the company. An internal Wal-Mart report, prepared in 2004, found that 2 percent to 8 percent of Wal-Mart consumers surveyed have ceased shopping at the chain because of "negative press they have heard."
And the company's chief executive, H. Lee Scott Jr., recently wrote on a confidential company Web site that criticism of the chain has slowed its expansion. Community opposition has foiled efforts to build stores in Chicago, Los Angeles and New York.
With that in mind, Wal-Mart executives created the Wal-Mart Jobs and Opportunity Zones, to be set up in 50 metropolitan areas where the chain wants to build stores. The first zone will be the West Side of Chicago, where Mr. Scott announced the program this morning.
In the zones, which Wal-Mart said are marked by high crime and unemployment, the company will identify local businesses to spotlight in newspaper advertisements and to feature on Wal-Mart's in-store radio network, which plays throughout the day.
The retailer will hold seminars that coach the businesses on how to compete with the giant discount stores — by, for example, intensifying customer service, for which Wal-Mart receives low marks. An annual report on trends in Wal-Mart's business will be distributed exclusively to those companies.
At the same time, Wal-Mart will invest $500,000 in local chambers of commerce, to be used for small business Web sites and business improvement seminars.
"We see we can be better for the communities than we have the in past if we are willing to stretch our resources," Mr. Scott said during a conference call with reporters this morning.
Critics contended that the proposed jobs and opportunity zones are an effort to divert attention from company's negative impact on local economies.
A study conducted by several economists, and presented at a conference held by Wal-Mart, found that after the company's arrival in a county, total earnings per worker, retail and nonretail, fell 2.5 percent to 4.8 percent. One reason is that Wal-Mart pressures its suppliers to cut their costs and that may lead to lower wages for the suppliers' workers.
A different study, conducted by a economic firm hired by Wal-Mart, found the retailer's pricing strategy has made the economy more productive, creating hundreds of thousands of new jobs and increasing net consumer purchasing power by $118 billion last year, or about $401 per American.
Chris Kofinis, a spokesman for Wake-Up Wal-Mart, a union-backed group prodding the company to improve wages and benefits, said the new program is "bitterly ironic" because it is "asking Wal-Mart to help solve the problems it created."
The program, he said, leaves major issues like Wal-Mart average wages, which amount to less than $20,000 a year, unaddressed. "What this is," he added, "is another P.R. stunt in a litany of P.R. stunts."
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Wal-Mart and frugality's folly
by C. Melissa Snarr
This article was distributed via SojoMail 11-09-2005 and may be found online at: http://www.sojo.net/index.cfm?action=news.display_article&mode=C&NewsID=5024
Frugality is not a spiritual discipline. Yet, Americans regularly follow weekend trips to places of worship with drives to giant discount stores. Jewish, Christian, and Muslim traditions unite in challenging those of us who would save a buck at the cost of another's well-being. Unfortunately, in our current culture, getting a "deal" has largely displaced righteous dealings as our first consideration in the marketplace.
Within the Christian tradition, the term frugal is wholly absent from the biblical text and is not among the fruits of the spirit in Galatians 5:22-23. Generosity is instead the prized theme in stories of faith. God enables human generosity by promising a care for believers and creation that allows us to put our store in heaven not in barns or walk-in closets here on earth. The images are numerous: banquet tables set for the homeless, fishes and loaves multiplied, water turned into wine, and manna falling from heaven. Throughout scripture, generosity is structured by obligations to the most vulnerable. Rulers, merchants, and nations are judged by how they treat the poor, widowed, and orphaned. Faithful generosity follows God's preference for those normally forgotten by society.
Admittedly, we saw a glimmer of generosity in Wal-Mart's speedy delivery of desperately needed supplies to hurricane victims last month. They were first on the scene to the poor, widowed, and orphaned among us. But to focus only on Wal-Mart's short-term charity misses major dimensions of the biblical concept of generosity. Modeled on the nature of God, the creating, sustaining, and redeeming character of biblical generosity is not about short-term charity but long-term justice for all God's children. The sustaining life of God is about creating structures and cultures of care, wholeness, and fairness that are enduring. Wal-Mart's charity should not divert public - particularly religious, attention - from the largest retailer's long-term discrimination, import exploitation, and overtime and union-busting scandals. In contrast, faithful generosity is not primarily about short-term gifts to the needy, but the long-term task of building right relationships, weaving righteousness into the fabric of our lives.
The biblical exhortation, "From everyone to whom much has been given, much will be required" (Luke 12:48), is about an understanding of stewardship that is always bound to fair use. Stewardship underscores our humble understanding of our temporary ownership of common goods and the obligations for equity and sustainability tied to that privilege. Unfortunately, Wal-Mart's current dominance of the market is draining rather than sustaining local communities. Every Wal-Mart store employing 200 or more people costs taxpayers more than $420,000 in government social services used by employees whose low wages and unaffordable health insurance mean they largely subsist among the ranks of the working poor, according to "Everday Low Wages: The Hidden Price We All Pay for Wal-Mart," a February 2004 report by the Democratic staff of the House Committee on Education and the Workforce. Wal-Mart's anti-union policies also prevent workers from organizing for wages and benefits to support their families.
In contrast, unionized workers in the retail food industry earn 30% more than their nonunion counterparts. Every time Wal-Mart increases its market share by 1% in the grocery business, cashier's wages in the local market drop an average of 5.5 cents per hour. And Wal-Mart's market share has grown by 20% in the last five years, according to United Food and Commercial Workers. Yet if Wal-Mart paid each employee $1 more an hour, it could maintain its current profitability level by increasing prices a mere half-penny a dollar. See also, "The Impact of Big Box Grocers on Southern California," a September 1999 report prepared by the Orange County Business Council of California.
Corporate giants regularly justify these practices by appealing to the needs of their hourly employees. They see themselves as serving those who live paycheck to paycheck and must be frugal. This is perhaps the most appealing and invidious part of Wal-Mart morality. In the process of "serving" its employees and consumers, Wal-Mart actually lowers the workplace quality of the retail sector and entraps communities in practices of inequity. When the standard bearer and largest retailer in the world refuses to pay wages that support families, undermines organizing for greater benefits, and imports well over half of its merchandise from countries with little or no labor regulation, they effectively place a lock on the door to class mobility for the entire discount retail sector.
Cheap products are not valued in and of themselves by religious traditions. As the Wal-Mart public relations machine continues to gain momentum, people of faith need to think more about our economic witness and demand that our discount giants do not discount human dignity in our name.
C. Melissa Snarr is an associate professor of ethics at Vanderbilt University in Nashville, Tennessee, where she teaches courses ranging from Early Christian Political Thought to Religion and War in an Age of Terror.
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Time to Target Wal-Mart
By Robert L. Borosage and Troy Peters, TomPaine.com
November 15, 2005
View this story online at: http://www.alternet.org/story/28263/
Wal-Mart must feel like a piñata these days -- everyone's lining up to take a shot at it. This week, 7,000 house parties are being held to screen Robert Greenwald's blockbuster documentary, "Wal-Mart: The High Cost of Low Price." The inspector general of the Labor Department censures its sweetheart deal that promised to give Wal-Mart notice before any future investigation of illegal child labor practices. Legislators from the L.A. City Council to the U.S. Senate are introducing legislation to curb the giant's public subsidies. Communities are rejecting Wal-Mart's demands for subsidies and zoning exemptions. Right-wing groups are furious Wal-Mart is taking the Christ out of the Christmas holidays. It's gotten so bad that Wal-Mart has created a war room staffed by veterans of political campaigns to wage the PR battle.
Why Wal-Mart? For one thing, it's hard to avoid. It is the world's largest private corporation, employing more than 1.6 million "associates" worldwide -- more people than Ford, GM, GE and IBM combined. The company serves 138 million customers per week worldwide and has outstripped any competitor. In 2004, it pocketed $10.3 billion in profits, on sales of $285 billion, more business than Target, Sears, Kmart, J.C. Penney, Safeway and Kroger combined. There are upward of 3,800 Wal-Mart stores in the United States today, in addition to nearly 1,600 locations in countries from Mexico to China. Wal-Mart alone is China's eighth-largest trading partner. It accounts for over 10 percent of our annual trade deficit with China, with over 70 percent of its products made in China.
If Wal-Mart's size is a problem, its policies are a threat. Wal-Mart is the model "low-road" corporation in the global economy. Its efficiency is celebrated; but its exploitation is caustic. The average pay of a Wal-Mart employee is $8.23 per hour, or an average yearly income of $14,000 -- not enough to lift a family out of poverty. Wal-Mart is infamous for requiring workers to work overtime off the books. It's been cited for locking workers in plants overnight. The company has been hauled into court for discriminating against female employees. And it is viciously, rabidly anti-union, crushing any attempt by its workers to organize to gain a fair share of the profits they help generate.
But Wal-Mart doesn't merely follow the low road; it drives its suppliers and its competitors into the same race. When Wal-Mart comes to town, it purposefully wipes out small mom-and-pop stores, leaving small towns looking like they were hit by a neutron bomb -- buildings intact, but people gone. Wal-Mart also undercuts big competitors that have unions and pay decent wages and benefits. They must slash wages, cut back on benefits or hang it up.
Given its size in the United States, Wal-Mart is a major force in driving wages down and forcing cutbacks in benefits. It is a central reason why we have an economy in which CEO salaries are up, stocks are up, but wages are down.
In China, Wal-Mart pushes its suppliers to lower their costs, generating sweatshops in which young workers -- primarily women -- are forced to work grotesque hours at subsistence wages. According to The Washington Post, Wal-Mart even pressures its suppliers to pay less than the Chinese minimum wage.
Wal-Mart also exploits taxpayers, for it is what Ronald Reagan would denounce as the leading corporate welfare queen. It's estimated that Wal-Mart's government subsidies total a whopping $2.7 billion, or $2,100 per employee. An internal memo to the board leaked recently reported that "our [health care] coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance." In fact, nearly one-half of the children of Wal-Mart employees are either on Medicaid or have no insurance at all.
While Wal-Mart is driving down wages and driving up public health care costs, its CEO and its owners are making out like bandits. The Walton family is the richest in the world. And they use their private wealth to foster their low-road policies. The Waltons donate millions to politics. Most goes to Republicans who defend their low-wage sweatshop practices, while 20 percent goes to buy a few business Democrats and divide the opposition. They are leading contributors to the voucher movement seeking to privatize education, and staunch advocates of the free trade policies that have stymied efforts to link trade access to the right to organize, environmental protection or even a crackdown on sweatshops.
Across America, people are starting to realize the stark reality: Wal-Mart's triumph is the defeat of middle-class America. If Wal-Mart sets the pace, Americans will pay the price, in declining wages, rising health care costs, longer hours, worse workplace conditions and rising personal taxes to offset soaring corporate subsidies.
America as we know it can't afford Wal-Mart. We can't sustain a $200 billion annual trade deficit with China, but Wal-Mart drives that deficit. We can't afford to subsidize the health care costs of the largest employers in the country -- even as declining wages starve our public coffers. We can't afford to allow sweatshop labor access to the largest distribution network, without accelerating a global race to the bottom.
In the Gilded Age of the 19th century, America faced a similar problem: corporate behemoths, private fortunes amassed from exploiting workers, unions banned, politicians bought. It took a progressive movement to put new rules around the marketplace -- to break up monopolies, create the 40-hour work week, institute the minimum wage, the right to organize, environmental protection, and workplace health and safety laws.
Now a new progressive movement is beginning to emerge. Once more, its agenda is to ban sweatshops, lift wages, empower workers and curb corporate power.
And surely Wal-Mart is and must be that movement's first target. The question isn't why Wal-Mart gets such bad press. The question is why Wal-Mart hasn't been confronted sooner.
Robert L. Borosage is co-director and Troy Peters is policy fellow at the Campaign For America's Future.
© 2005 Independent Media Institute. All rights reserved.
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December 12, 2005
Big Box Balderdash
By PAUL KRUGMAN
Op-Ed Columnist New York Times
I think I've just seen the worst economic argument of 2005. Given what the Bush administration tried to put over on us during its unsuccessful sales pitch for Social Security privatization, that's saying a lot.
The argument came in the course of the latest exchange between Wal-Mart and its critics. A union-supported group, Wake Up Wal-Mart, has released a TV ad accusing Wal-Mart of violating religious values, backed by a letter from religious leaders attacking the retail giant for paying low wages and offering poor benefits. The letter declares that "Jesus would not embrace Wal-Mart's values of greed and profits at any cost."
You may think that this particular campaign - which has, inevitably, been dubbed "Where would Jesus shop?" - is a bit over the top. But it's clear why those concerned about the state of American workers focus their criticism on Wal-Mart. The company isn't just America's largest private employer. It's also a symbol of the state of our economy, which delivers rising G.D.P. but stagnant or falling living standards for working Americans. For Wal-Mart is a huge and hugely profitable company that pays badly and offers minimal benefits.
Attacks on Wal-Mart have hurt its image, and perhaps even its business. The company has set up a campaign-style war room to devise responses. So how did Wal-Mart respond to this latest critique?
Wal-Mart can claim, with considerable justice, that its business practices make America as a whole richer. The fact is that Wal-Mart sells many products more cheaply than traditional stores, and that its low prices aren't solely or even mainly the result of the low wages it pays. Wal-Mart has been able to reduce prices largely because it has brought genuine technological and organizational innovation to the retail business.
It's harder for Wal-Mart to defend its pay and benefits policies. Still, the company could try to argue that despite its awesome size and market dominance it cannot defy the iron laws of supply and demand, which force it to pay low wages. (I disagree, but that's a subject for another column.)
But instead of resting its case on these honest or at least defensible answers to criticism, Wal-Mart has decided to insult our intelligence by claiming to be, of all things, an engine of job creation. Judging from its press release in response to the religious values campaign, the assertion that Wal-Mart "creates 100,000 jobs a year" is now the core of the company's public relations strategy.
It's true, of course, that the company is getting bigger every year. But adding 100,000 people to Wal-Mart's work force doesn't mean adding 100,000 jobs to the economy. On the contrary, there's every reason to believe that as Wal-Mart expands, it destroys at least as many jobs as it creates, and drives down workers' wages in the process.
Think about what happens when Wal-Mart opens a store in a previously untouched city or county. The new store takes sales away from stores that are already in the area; these stores lay off workers or even go out of business. Because Wal-Mart's big-box stores employ fewer workers per dollar of sales than the smaller stores they replace, overall retail employment surely goes down, not up, when Wal-Mart comes to town. And if the jobs lost come from employers who pay more generously than Wal-Mart does, overall wages will fall when Wal-Mart moves in.
This isn't just speculation on my part. A recent study by David Neumark of the University of California at Irvine and two associates at the Public Policy Institute of California, "The Effects of Wal-Mart on Local Labor Markets," uses sophisticated statistical analysis to estimate the effects on jobs and wages as Wal-Mart spread out from its original center in Arkansas.
The authors find that retail employment did, indeed, fall when Wal-Mart arrived in a new county. It's not clear in their data whether overall employment in a county rose or fell when a Wal-Mart store opened. But it's clear that average wages fell: "residents of local labor markets," the study reports, "earn less following the opening of Wal-Mart stores."
So Wal-Mart has chosen to defend itself with a really poor argument. If that's the best the company can come up with, it's going to keep losing the public relations war with its critics. Maybe it should consider an alternative strategy, such as paying higher wages.
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May 20, 2005
My Mom Hates You, Wal-Mart
Wal-Mart fired my mom because of her bad hip. At least, that’s what she believes. Originally hired for desk work, she was eventually asked to perform duties that involved walking the sales floor most of the day. Management did not appreciate her reluctance. Then, after several long weeks of recovery from hip-replacement surgery, she returned to the store only to be told that her position had evaporated.
So these days, my mom hates Wal-Mart. It wasn’t always this way. Years back, she fell in love with their prices, their smiling greeters, and their homey, family-friendly image. When she learned that a massive Wal-Mart was coming to town, she immediately rushed out to apply for a job; within a week of the store opening, the grandkids could already sing the company song.
Before long, however, her love affair showed signs of faltering. Brought up frugal, Mom watched with disgust as hundreds of mildly-damaged items were crushed to bits in the store’s industrial compactor. She bristled at the constant employee surveillance in the name of theft prevention. After several competent, agreeable co-workers were let go for insufficient smiling, even the daily team-building exercises that she initially enjoyed took on a threatening quality. She knew they were being strong-armed. She didn’t feel much like a valued associate, and certainly not part of any family.
Soon after her dismissal, I returned from a year living in the UK to find my hometown dramatically yet predictably gutted. My mom was left with one last bitter pill to swallow: although she had sworn off Wal-Mart, there was scarcely anywhere left for her to go. How many more ruined small businesses and barren Main Streets before the bloom comes off of Wal-Mart’s family-friendly rose? How much union busting and employee intimidation before repeating “Our People Make the Difference” is no longer enough? If the currently panicked pace of Wal-Mart’s corporate spin is any indication, we’re fast approaching that watershed.
The fact is, Wal-Mart has always had its opponents – activists who resent the ecological consequences of big-box retail, labor organizations critical of the company’s dubious manufacturing practices, and tight-knit (usually well-to-do) communities that fear for their small businesses. But these were never Wal-Mart’s people. My mom, on the other hand, definitely was, and she’s joined a growing constituency that has seen some very ugly guts through all of Wal-Mart’s folksy window dressing.
Mikhail Onushko
http://adbusters.org/the_magazine/59.php?id=122#
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