Are Wal-Mart’s Low Prices Enough to Save Face?

It all starts with Wal-Mart’s slogan;  “Save money.  Live Better.” The phrase creates debate.  While Wal-Mart can save the consumer money and thus possibly allow for a better life, is the society or the world better off with Wal-Mart?

The “commercialized” view of Wal-mart is one that is positive; a store that provides a multiplicity of items at unbeatable prices.  But, the inner core of Wal-mart is one that is at times ugly and unknown by regular-everyday shoppers.

Company Profile

Wal-Mart was established by Sam M. Walton in 1945 and it has grown to become one of the most powerful corporations in the world.  In 2006, Market Watch stated that Wal-Mart operated 3,856 total stores in the U.S. and 2,285 stores world-wide, including 1.90 million total employees at the beginning of 2008.  As the stats show, Wal-Mart has continued to increase its profits, so it could grow globally.

“Wal-Mart has and should continue to gain share across today’s still challenging consumer spending environment,” Adrianne Shapira, an analyst said on Market Watch today.  “On-going expense pressures and tougher sales comparisons will likely translate to little near-term positive catalysts to drive shares higher.”

As of 2008, Wal-Mart’s net income was $11.28 billion.  Also on Thursday, June 4, Wal-Mart announced that it will open more than 22,000 jobs positions among its U.S. stores.

“This is not a time to slow down,” Wal-Mart’s current president and CEO, Mike Duke at the company’s Annual Shareholders’ Meeting on Friday, June 5.  “This is not a time to take comfort in our success. This is Wal-Mart’s time to look to the future and seize the opportunity to truly lead around the world.  We must broaden and accelerate what we’re already doing well. And where we can do better, we will innovate.”

Wal-Mart Stores Located in U.S. as of 2008, study by Wal-Mart Watch

Destruction of Small Business

In order for Wal-Mart to open so many stores all over the nation, the firm has to compete with neighborhood businesses.  The sad truth is that there really isn’t any competition for Wal-Mart.  It is a powerhouse that offers everything in one place.  It can contain a pharmacy, a bank, an arcade, fast food restaurant, and even a nail salon.  The fact that Wal-Mart is almost its own mall is very convenient for working parents who need to do their shopping quickly and efficiently.  In turn the small town businesses are forced to close because they lose most of their customers to the big bully in this case.

Wal-Mart can keep its prices low because of many manipulating factors, but a key reason is how it can negotiate with its suppliers.  Wal-Mart forces manufacturing companies to lower their retail prices, if they want their goods to be sold in the store.  This leaves the companies little choice, when Wal-Mart is the best and sometimes only option to sell their product to a regional community.

Therefore, Wal-Mart can arguably be called a monopoly, which causes a huge problem in our economy. Yes, Wal-Mart is a stable place to work for, since they seem to always be doing well, while other retail companies are plummeting, but Wal-Mart is not the answer.

Usually when there are monopolies the government steps in and creates regulations that make society more balanced and more consumer-friendly.  There needs to be more choices for low income to middle class shoppers to choose from.  It is remarkable how long it has taken to get some effective legislation out for the good of the public.

Exploitation of Workers

Wal-Mart’s front office exploits their workers in stores both in the U.S. and abroad.  The short segment below is part of a documentary by Robert Greenwald in 2005 called, “Wal-Mart: The High Cost of Low Prices.”  In the clip, it describes how workers in various foreign countries are being mistreated and underpaid for manufacturing goods for Wal-Mart.

A “full-time” employee at Wal-Mart has only 34 hours per week and earns an average wage of $10.86 per hour, which amounts to about $19,200.48 per year; this fact comes right from the 2008 Wal-Mart Employee Handbook courtesy of Wal-Mart Watch.  The U.S.  Federal Government defined the poverty level for a family of four in the contiguous states around $21,200 in 2008.  In further comparison, Wal-Mart’s top retail positions typically earn 26-37% less than the national average, according to Wal-Mart Watch.

This is a clip from “The High Cost of Low Prices” that shows the how Wal-Mart pressures its employees to controls wages and the way it cracks down on the idea of unionization in the U.S.  Also in the video, employees question whether the company gives out enough health benefits.

Wal-Mart is also known for manipulating the amount of hours a worker clocks a week.  Wal-Mart was forced by the U.S. Department of Labor to pay close to $34 million to some 87,000 employees who were not paid for working overtime in the U.S.   The problem came from “calculation errors and procedural errors” from Wal-Mart headquarters in 2004, reported the Washington Post on January 26, 2007.  There have been other cases filed by underpaid employees as well, according to Wal-Mart Watch.

So what benefit is Wal-Mart serving to their employees really?  The Ad below was made by Wake up Wal-Mart and its message suggests it’s time for a change.

“While many American companies use weak U.S. laws to stop workers from organizing, the retail giant stands out for the sheer magnitude and aggressiveness of its anti-union apparatus,” according to a report published by the Human Rights Watch “Discounting Rights,” on April 30, 2007.

President Obama and Vice President Joe Biden are currently looking into strengthen the American middle class and is trying to pass new legislature to help employers with the Employee Free Choice Act (EFCA).  This act could finally bring unions to the U.S. Wal-Mart stores after the fact that the company stores in China already attained this feat.  Unions would help give Wal-Mart employees a chance to negotiate better wages, benefits, and working conditions.

This short documentary was created by the group, “Wal-Mart Workers For Change” and it highlights real employees’ experiences with the company, while touching on the need for a union.

The Sunny Side of the Firm

Wal-Mart prides itself for supporting more than 100,000 charitable and community-based organizations, it proclaims it is a “store of the community.”

“At Wal-Mart, helping communities is what we do every day. And when a crisis strikes, that charge becomes an even greater priority,” the firm states on its website.

Wal-Mart shows a commitment to helping out during disasters as it has nine disaster distribution centers located throughout the country.  The company boasts that it made a $2.5 million donation toward relief efforts for Hurricanes Ike and Gustav in 2008.  Along with helping victims of Hurricane Katrina in 2005 by donating the largest amount of any corporation towards relief, $18 million.

Inside Information Not Publicized For a Reason

The truth about Wal-mart is one that is seldom shown in its uplifting commercials or on the shelves of its mega stores, that’s because it doesn’t exist in either of those places.  It occurs overseas, it lies at the small town’s market that went bankrupt, and it is on the faces of many of its employees when they are not treated with respect or wages suitable to “live better.”

You can sign the petition for the Employee Free Choice Act to be passed in Congress at its self-titled website.

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