This was done for an informal disscussion in an online class, so it is not very, well, formal, but I still have cites and stuff. This was also in reaction to a discussion topic specifically about Wal-Mart: Wal-Mart a Good Thing or a Bad Thing. Most of the class thought Wal-Mart was a good thing because it is such a huge successful company, and they employee so many people.
W A L - M A R T
A * B A D * T H I N G
Sure, Wal-Mart has cheap prices and has a lot of employees, and makes a lot of money, but at what price?
Wal-Mart’s prices are typically the cheapest, this is because they have a list of about 1,000 items that that they will “Never Be Beat” on. This doesn’t matter in many small towns, because there is no competition left and Wal-Mart is actually free to set its own prices. In 2003, a federal judge ordered Wal-Mart to stop selling gas at a lost when they found that Wal-Mart had lost $300,000 on gas sales at 3 stores in an 8-month period. 1
In many rural markets, Wal-Mart’s buying power and pricing strategies have led to a lack of consumer choice.
There are bigger issues, though, such as Wal-Mart employees being one of the biggest recipients of “corporate welfare” in the world. Wal-Mart’s low pay and lack of sufficient benefits lead to hundreds of thousands of employees to rely on public assistance programs such as food stamps, Medicaid, and public housing assistance, to make ends meet. It cost American taxpayers at least $1.5 billion per year.
Wal-mart is the world’s largest and wealthiest corporation, but they allow their employees to live in poverty.
Because Wal-Mart is the world’s most powerful retailer, it can make demands of its 61,000 suppliers to reduce the cost of their products. This often results in good-paying American jobs being sent overseas to low-wage and low-regulation countries. Wal-Mart’s buying power also allows them to dictate everything from packaging to delivery systems.
Wal-Mart lures customers in with the focus of the inexpensive price, but people miss the true costs. An executive of Caroling Mills, a thread-maker, noted: “We want clean air, clear water, good living conditions, the best health care in the world – yet we aren’t willing to pay for anything manufacture under those restrictions.” 2
Wal-Mart abandoned its “Buy American” program and over one million jobs have been outsourced to China and more than 70% of the non-food goods Wal-Mart sells have components from China.
Each time Wal-Mart opens a store, it gets about 84% of its business from existing stores in the area. For every Wal-Mart that opens, 2 grocery stores close according to market analysts estimates. In Iowa, for example, where Wal-Mart has expanded and now has 60 stores, Wal-Mart’s growth led to the closings of the following: 555 grocery stores, 298 hardware stores, 293 building suppliers, 161 variety shops, 158 women’s stores, and 116 pharmacies, according to a University of Iowa study. 3
Wal-Mart has been accused for environmental fouls for years. They have paid hundreds of millions in fines. Wal-Mart repeatedly ignores environmental laws from the Clean Water Act to the Clean Air Act. 4 The company also harms the environment in a broader way. Its relentless expansion has had consequences including: loss of open space of rural landscapes; worsening traffic adding to air quality degradation; deterioration of historic commercial centers; loss of wildlife habitat; and hundreds of abandoned buildings and parking lots left behind as Wal-Mart closes stores to open super-centers.
Wal-Mart’s quest for lower prices has also forced their suppliers to have harmful business practices. For example, by demanding less expensive packaging, it directly or indirectly promotes irresponsible logging and clear-cutting. With Wal-Mart’s unprecedented market domination, it could set a new standard for responsible growth and sustainability. Instead it’s standard is profit at any cost. 1
Wal-Mart’s former number 2 executive, Vice Chairman Tom Coughlin, is accused of financial improprieties of up to $500,000. He claims he didn’t steal the money, but he used it to create a fund to finance anti-union activity. Since 1995, the U.S. government has more than 60 complaints against Wal-Mart for illegal anti-union conduct. Wal-Mart is fiercely anti-worker and has an anti-union group ready to dispatch at any sign of worker discontent. The only successful organizing effort in a U.S. Wal-Mart was in the butcher department of a store in Jacksonville, Texas. Within 2 weeks, Wal-Mart closed all the butcher departments. In Canada, workers formed a union in a store in Quebec, which Wal-Mart closed down citing “low profitability.” 1
Facts on women and Wal-Mart: Women make up 72% of the hourly workforce, yet only 33% of associate managers and 15% of senior store managers. On average, women earn from 5 to 15% less than men at Wal-Mart. Women workers at Wal-Mart remain stuck without promotion in the lowest paying jobs, making up 92% of the cashiers. 1
Wal-Mart frequently forces employees to continue working after they have clocked out. This has resulted in Wal-Mart paying $50 million to settle a lawsuit in Colorado involving 69,000 workers.
Wal-Mart has taken steps to “protect” its customers from a long list of products including Snoop Doggy Dogg CDs to the annual Sports Illustrated Swimsuit Issue. These bans are without a clear set of standards and has a serious impact on sales and distribution across America. Wal-Mart plays a pivotal role as the definer of what is culturally accepts, accounting for 30% of all sales of CDs, videos, and DVDs. It’s a huge bookseller and now has 15% of all single-copy magazine sales. In some rural communities, it is the only place to purchase these items. Wal-Mart bans any CD carrying a parental guidance sticker, as well as beeping any music that fails to meet the Wal-Mart definition of family values. Wal-Mart refused to carry Sheryl Crow’s self-titled album because it object to lyrics about violence with guns bought at Wal-Mart stores. 1 While some may not care, a lot of Americans do not want an executive to tell them what books, CDs and magazines they can buy.
Wal-Mart may seem like a bargain or a cheap place to shop; however, the price tag is huge in other ways.
1 Wal-Mart Watch, “Low Prices At What Cost? Annual Report 2005”
2Walt-Mart Watch quoting Fast Company, Issue 77, December 2003, http://www.fastcompany.com/magazine/77/walmart.html.
3 PBS, “Is Wal-Mart Good for America,” http://www.pbs.org/wgbh/pages/frontline/shows/walmart.
4 The Business Journal, “Wal-Mart Stores Inc. Settles Federal Air Pollution Suit,” 1/30/04; Chattanooga Times Free Press, “Wal-Mart Fined Over Violations,” 5/13/04.