Part I: The High Cost of Low Price
Uncle Bill Warner
recent film, "Wal-Mart--The High Cost of Low Price," shows
practices of the world's largest corporation, which are lowering
the standard of living in the U.S. worldwide. It covered the dark
side of the corporation pretty well.
come to symbolize in many people's minds what is wrong with the
way we do business in this country and the world. Low prices at
Wal-Mart are achieved not just by their "efficiency,"
but on the backs of their workers, their suppliers, and the taxpayers.
Wal-Mart says they put people first, but the film shows differently.
was caught using 120 "undocumented" laborers on a construction
site. Gotta keep those costs down! Their excuse was that these guys
were working for a subcontractor, but that does not absolve them
of their legal responsibility.
have shown that many Wal-Marts are keeping their prices low by charging
premiums for their health care plan that many of the their full-time
workers cannot afford, along with feeding and housing their families.
They are told that they should apply for food stamps, section 8
housing, Medicaid, and welfare, all coming out of your tax dollars.
The film categorizes Wal-Mart's main health plan as public assistance,
which costs the taxpayers over a billion dollars a year, and costs
workers their self-respect and dignity.
Some of the
people interviewed in the film said they were frequently forced
to put in overtime off the books. When it was time to go home, they
were expected to finish their continue their assigned task until
finished, even though the policy was no overtime. Employees were
afraid to complain for fear of losing their jobs. Another Wal-Mart
practice seen in the film is to increase pressure on employees (called"associates")
by systematic understaffing, even when there were large stacks of
job applications. There is always the threat that if you don't go
above and beyond, someone else will be hired to replace you.
been extremely active in shutting out unions. They even have a corporate
jet standing by at their headquarters in Arkansas, and at the first
sign of union organizing at a store, a specially trained team of
anti-union "troops" will be on site within hours, sometimes
even outnumbering the employees! "Troublemakers" get fired,
and a hard-sell is used on workers not to join up. When the workers
at one Wal-Mart meat section successfully unionized, Wal-Mart responded
by doing away with all of their jobs and switched to pre-packaged
meat. Interestingly enough, in Germany, Wal-Mart took over two chain
stores that were already unionized. Since German laws actually enforce
the rights of unions, the workers there have kept a decent health
plan and 6 weeks paid vacation a year.
I was teaching
economics at Porterville High at the time Wal-Mart announced they
were taking over the cotton field where the local store stands today.
I predicted that many of our small businesses and even the local
K-Mart would be forced out of business, and everyone laughed. However,
this scenario has been repeated thousands of times in the U.S. and
it didn't take a genius to see it coming. Wherever Wal-Mart goes,
small business' sales drop suddenly and dramatically, turning Main
Streets into ghost towns.
can't match Wal-Mart's prices. But that is not the whole story.
Wal-Mart typically demands and gets tax subsidies and other concessions
from the cities where they locate. If the city resists, they build
just outside the city limits, bringing all the negative impacts
with none of the tax benefits to the city. A recent trend is for
Wal-Marts to abandon their existing stores and relocate just outside
city limits. Many
towns find they could not even fund their fire or police departments
decently after Wal-Mart pulled that stunt.
More to come.
Visit us at