Progressive Writers Bloc

Wal-Mart, Part I: The High Cost of Low Price

By Uncle Bill Warner

A 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.

Wal-Mart has 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.

Recently Wal-Mart 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.

Investigations 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.

Wal-Mart has 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.

Small businesses 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.

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