Conclusion of the “Why Walmart is Bad for America” Series

This is part 6, and the conclusion, of the “Why Walmart is Bad for America” series.

During this series, we will examine a variety of issues related to Walmart and its business practices.  Yesterday, we covered Walmart’s impact on communities and contribution to the rise in poverty.  Today’s article is simple a recap of what has been covered over the past 5 days.

Part 1 - Walmart Believes Women Are Worth Less

In the first installment of this series, we covered “Dukes v. Wal-Mart Stores, Inc.,” the largest class action lawsuit in American history, as well as the lack of equal pay for equal work.  Women make up a rather significant portion of Walmart’s cashiers, but a rather small portion of Walmart store managers.

Part 2 - Walmart Believes “Made in America” is so 1985

In the second part of the series, we explored the change in focus from Sam Walton’s pledge to purchase American made goods to Walmart’s addiction to cheap Chinese imports.  Quality, American Jobs, and the economic stability are tossed aside in favor of profits.

Part 3 - Walmart’s Nazi T-Shirt

Part 3 of this series covered Walmart’s sale of a t-shirt which depicted the “Death’s Head” skull, a symbol of Hitler’s personal bodyguards and later the 3rd SS Division.  When the significance of the image was brought to Walmart’s attention in 2006, they pledged to stop sales of the shirt and remove it from stores.  The shirt was still being spotted in some Walmart stores early this year.

Part 4 - After School Special, Walmart’s Child Labor Violations

Walmart has been cited, and fined, many times for violating child labor laws.  Walmart’s own in-house audit exposed many violations of child labor law.

Part 5 - Walmart Hurts Communities, Contributes to Poverty

In the fifth installment of this series, the damage Walmart causes local economies was introduced, as well as its long term effects on the poverty levels within the communities Walmart stores are located.  A significant loss of American manufacturing jobs is also discussed.

In Summary

The issues which I have covered in this series are only a snapshot of the overall picture, and should not be taken as a complete list of questionable or illegal business practices by Walmart.  While other retailers may certainly practice unethical of illegal practices as well, Walmart is the largest retailer in the world, and has a net worth higher than that of most countries gross national product.

I hope that I have been able to show you how shopping at Walmart may save you some money at the cash register, but it will cost you far more in the future in taxes, property value, and economic turmoil.  I just don’t think Walmart’s low prices are worth the cost.

What do you think?

Walmart Hurts Communities, Contributes to Poverty

This is part 5 of the “Why Walmart is Bad for America” series.

During this series, we will examine a variety of issues related to Walmart and its business practices.  Yesterday, we covered Walmart’s child labor violations.  Today’s article focuses on Walmart’s impact on communities, and its contribution to the rise in poverty.

Walmart in, Money out

This has not been a good year for the American economy.  In fact, our economy is in the worst shape it has been in since the Great Depression, and there is no telling when things will “return to normal.”  There is little we can do but weather the storm, and look for cost savings in all aspects of our lives.  Almost sounds like I am endorsing Walmart there, doesn’t it?  Quite the contrary.  You see, Walmart’s low prices come at a very high cost to communities, one that you cannot afford to pay.  The state of our economy is not entirely Wall Street’s fault.

When Walmart enters a new community, building one or more of its over-sized retail stores, they plant the seed for long term economic erosion.  Over time, the presence of a Walmart store will force smaller “Mom & Pop” operations to reduce their workforce and eventually go out of business altogether.  The people who worked for these smaller companies will be left with two choices.  Seek employment in a different field, or work for Walmart which most often pays a lower wage than smaller local businesses do.

While individual workers have the option of working or not working for Wal-Mart, a public welfare issue arises if the chain creates externalities that raise poverty levels in the community. In that case public tax dollars are spent on welfare programs and a disutility is created for those who are concerned about poor people living in their community. The Wal-Mart phenomenon is such that the chain seeks to minimize its workers’ pay, while the rents captured by the Walton heirs place them amongthe ten wealthiest Americans.

- “Wal-Mart and County-Wide Poverty” by Stephan J. Goetz and Hema Swaminathan of the Department of Agricultural Economics and Rural Sociology at Pennsylvania State University

A side effect of Walmart’s murder of local business ownership, is the loss of the revenue which normally stayed within the community.  Small businesses owners often do business with other companies within their community.  They usually live in the community they do business in, and spend their money there as well.  By removing local businesses, Walmart diverts the cash infusion those businesses provided their community to its own.  What Walmart provides in savings to their customers just doesn’t cover the loss of jobs, lower wages, and lost community cash flow which existed prior to their arrival.

Now add to this, the loss of manufacturing jobs in the United States due to Walmart’s addiction to cheap Chinese imports.  Communities which rely, or relied, on the manufacture of goods to sustain their economy are severely effected by Walmart’s refusal to buy American.

The growing U.S. trade deficit with China has displaced huge numbers of jobs in the United States and been a prime contributor to the crisis in manufacturing employment over the past five years. Wal-Mart alone is responsible for the loss of nearly 200,000 U.S. jobs due to its own growing trade deficits with China. The current unbalanced U.S.-China trade relationship is bad for both countries, and Wal-Mart has played a major role in creating that imbalance.

- “The Wal-Mart effect” by Robert E. Scott, The Economic Policy Institute - June 26, 2007

It is truly unfortunate that a single company can have such a negative effect on the American economy.  I can only hope that as time moves on, the American People become more aware of the dangers of putting such reliance on imported goods from communist countries.  If our economy is thrive and remain viable, we will need to salvage American manufacturing.  If this means adding higher tariffs on imports, so be it.  Let the foreign companies who wish to destroy and replace American manufacturing take a few lumps for once.

Maybe then Walmart will again look to American manufacturers for their goods.  Maybe then Americans will have more money to spend on them.  What do you think?

After School Special, Walmart’s Child Labor Violations

This is part 4 of the “Why Walmart is Bad for America” series.

During this series, we will examine a variety of issues related to Walmart and its business practices.  Yesterday, we covered Walmart’s sale of Nazi clothing, and their reluctance to remove it from their shelves.  Today’s article focuses on Walmart’s child labor violations.

As we move into the “official holiday shopping season” this Friday, retailers around the nation will be trying their best to keep enough employees in their stores to handle the holiday crowds.  The seasonal employee is one of the retail industry’s greatest assets during the holidays, many of which are high school students working nights and weekends.  They often work part-time, earn minimum wage, and usually do not qualify for the expensive benefit packages full time employees are guaranteed.  Retailers are able to temporarily increase their workforce without great expense, and the seasonal employees make a bit of extra spending cash for the holidays.

One issue with the arrangement, however, is that many of the part-time students are also underage and can only work so many hours in a day, and usually cannot work before a certain time in the morning, or after a certain time at night due to state and federal child labor laws.  While many retailers will comply with such laws, some do not:

An internal audit now under court seal warned top executives at Wal-Mart Stores three years ago that employee records at 128 stores pointed to extensive violations of child-labor laws and state regulations requiring time for breaks and meals.

The audit of one week’s time-clock records for roughly 25,000 employees found 1,371 instances in which minors apparently worked too late at night, worked during school hours or worked too many hours in a day. It also found 60,767 apparent instances of workers not taking breaks, and 15,705 apparent instances of employees working through meal times.

If the same rate of violations were found throughout the Wal-Mart system, that would translate into tens of thousands of child-labor violations each week at Wal-Mart’s 3,500 stores and more than one million violations of company and state regulations on meals and breaks.

- In-House Audit Says Wal-Mart Violated Labor Laws, by Steven Greenhouse, NY Times - 1/13/2004

Child labor laws are in place to protect children from being overworked, which can effect their development, health, and ability to learn.  By allowing (or forcing) children to work restricted hours of the day is not only illegal, it is irresponsible.  While parents who allow their children to work later than the law allows are irresponsible as well, the employer is bound by law to prevent it from happening.

Walmart’s Nazi T-Shirt

This is part 3 of the “Why Walmart is Bad for America” series.

During this series, we will examine a variety of issues related to Walmart and its business practices.  Yesterday, we covered Walmart’s addiction to cheap Chinese goods.  Today’s article focuses on Walmart’s sale of Nazi t-shirts.

Walmart and Nazi imagery

In 2005, Walmart funded advertising using an image of Nazis burning books to make a point against government interfering with where they put their stores.

Wal-Mart Stores Inc., the world’s largest retailer, helped fund a full-page advertisement showing Nazis burning books that was placed in an Arizona newspaper by a group fighting proposed restrictions on supercenters

- By Lauren Coleman-Lochner - Bloomberg, May 13, 2005

It wasn’t too long after this, that Walmart began selling t-shirts with a skull and crossbones design used by the 3rd SS Division Totenkopf (Death’s Head).  The 3rd SS Division was initially comprised mostly of concentration camp guards.

Use of the “totenkopf” symbol as military insignia began with the cavalry of the Prussian army under Frederick the Great, and was later adopted by Adolf Hitler’s bodyguards.  Eventually, use of the symbol expanded throughout the SS.

Use of this symbol is outlawed in Germany due to its designation as a Nazi military insignia.  It may also be illegal in Austria, Hungary, Poland, Czech Republic, France, Brazil, Russia and other countries, depending on context.

While Walmart purchasers most likely did not recognize the significance of the symbol when ordering the t-shirts for sale in Walmart stores, the designers of the shirt surely did.  There is no mistaking the symbol for anything but what it is.

Pledge to remove shirts broken

Customers, civil rights groups, and members of Congress contacted Walmart requesting the shirts be removed from their stores.  On November 13, 2006, Walmart announced they would stop selling the controversial t-shirt and remove it from their stores.

Did this happen?

Not quite, no.  The shirt remained available for sale in Walmart stores at least as late as January of this year, as reported by The Consumerist.  The shirts that were removed from some stores were not destroyed either.  They began popping up in outlet stores such as Bealls Outlets.

Outrage, Frustration, Disgust

While I can certainly understand the difficulty in preventing ALL controversial logos, insignia, and icons from making it to mainstream store shelves, I am disgusted at the length of time it took for these shirts to disappear from stores once Walmart was notified.  There is absolutely no excuse for such a slow and irresponsible reaction.  Hell, those shirts could still be in a Walmart somewhere.

I wonder what else might be lurking on the shelves of America’s largest retailer.  Are there other articles of clothing with other nazi images on them floating about?  And if so, how long would it take for Walmart to pull those?  One thing is for sure…  I will not be the one to find them.  This story is just one of the many reasons I will not be shopping at Walmart this holiday season.  What are your thoughts on the subject?

The nazi t-shirt story originally broke a blog by Rick Rottman entitled “Bent Corner.”

Walmart Believes “Made in America” is so 1985

This is part 2 of the “Why Walmart is Bad for America” series.

During this series, we will examine a variety of issues related to Walmart and its business practices.  Yesterday, we discussed Walmart’s treatment of women in the workplace.  Today’s article focuses on the lack of American made products in Walmart stores.

Made in America is so 1985

Sam Walton, the founder of Walmart, wrote a letter to 3,000 American manufacturers and wholesalers announcing that Walmart was to purchase more American goods.

“We cannot continue to be a solvent nation as long as we pursue this current accelerating direction. Our company is firmly committed to the philosophy by buying everything possible from suppliers who manufacture their products in the United States.”

- Sam Walton, Founder of Walmart, February 1985

Wouldn’t that be nice?  The truth of that matter is that most of the products sold in Walmart stores are made predominantly in China, not the United States.  70-80% of Walmarts products are manufactured by companies in China, many of which have substandard working conditions.  In fact, CNN recently reported on Walmart’s use of sweat shops to manufacture Christmas ornaments for the upcoming holiday season:

China isn’t the only place Walmart purchases its goods from, however.  Business Week reported in October that Walmart was purchasing school uniforms from sweat shops in Bangladesh under the Faded Glory brand name.  Workers were forced to work 19 hours per day, and were forced to stand for hours at a time if they arrived to work late.

Out of work?  Thank Walmart

When Walmart imports products manufactured outside of the United States, they do more than support communist economies and sweat shop manufacturers, they eliminate American jobs in large numbers.  With more an more products coming in from China, less and less Americans are manufacturing them.  With less Americans employed, more and more people look to Walmart for low prices out of necessity.

It is becoming nearly impossible to find many products manufactured domestically these days, and I worry what will happen to the American economy in the future if this trend continues unchecked.  How many more American jobs will be eliminated in favor of importing foreign goods by Walmart?  There is an interesting writeup about this topic over at Walmart Watch.

We’ve been lead astray

In addition to the concerns of American Jobs, there is also the concern of product quality and safety.  Toys with lead parts or paint and toothpaste with industrial chemical ingredients coming in from China in the past, do you really feel confident in Chinese made products?  Goods manufactured in China have not been held to the same safety inspections as American made goods, so there is no telling when the next tainted product will pop up.

Walmart is not concerned about product safety or American jobs.  Walmart is concerned about underselling their competition, market share, and profitability.  Does that sound like the sort of company you feel safe doing business with?

Walmart Believes Women Are Worth Less

This is part 1 of the “Why Walmart is Bad for America” series.

During this series, we will examine a variety of issues related to Walmart and its business practices.  Today’s article focuses on Walmart’s discrimination against women.

Rolling Back Rights For Women

Title 7 of the Civil Rights Act of 1964 outlawed discrimination against employees on the basis of race, color, religion, sex or national origin, but that has not prevented Walmart from offering women lower wages and less opportunities for advancement as the men the company employees.

In 2003, Dr. Richard Drogin, professor emeritus at California State University-Hayward, conducted a study on wages for female employees at Wal-Mart and found that:

• female hourly workers earn up to 37 cents less per hour than their male counterparts;

• female full-time employees working at least 45 weeks earn on average nearly $5,000 less than male employees in yearly salary;

• women make up 72 percent of Wal-Mart’s total workforce, but only 33 percent of its managers;

• and women make up 92 percent of Wal-Mart’s cashiers, but only 14 percent of Wal-Mart store managers.

- Walmart Watch, Discrimination Against Women

My wife is a hard working woman.  She works harder than most men I know, including myself.  I think she might be a little crazy for working as hard as she does, but that’s part of who she is.  Her mother is the same way.  Should they be offered lower wages for working harder than most of the men they work with?  Of course not!  Walmart disagrees, however.

Why is it that Walmart pays its female employees less than its male employees?  Why are males offered more opportunities for advancement within the company than women?  The only reason I can come up with, is that Walmart believes women are worth less.  I have worked retail in the past, both as an employee and as a manager.  There isn’t a single job in retail which can be done any better by one gender or the other.  Stocking shelves, managing employees, assisting customers, even loss prevention can be handled just as well by women as by men.

Put up your Dukes v. Wal-Mart Stores, Inc.

In 2000, a 54 year old woman named Betty Dukes filed a discrimination claim against her employer… Walmart.  She claimed that Walmart refused to provide her with the training she needed to advance to a salaried position, regardless of excellent performance reviews over a six year period.

In 2001, the lawsuit was granted class action status by the US District Court in San Francisco, the plaintiffs seeking to represent all women who work or have previously worked for Walmart since December 26, 1998.  Class certification was granted in June of 2004 by Federal District Judge Martin Jenkins, though Walmart appealed the decision.  However, on February 6, 2008, the district court’s class certification was affirmed by the Ninth Circuit.

Dukes v. Wal-Mart Stores, Inc. is the largest civil rights class action suit in US history, with over 1.6 million women represented.

Low Prices From Low Wages

The low prices offered by Walmart are in part due to the lower wages paid by Walmart.  If Walmart were to join the rest of us here in reality and offer its female employees equal wages for equal work, what impact would that have on Walmart’s pricing?

Let’s take a trip down Hypothetical Lane, shall we?  Let’s imagine that all 1.6 million women represented in the class action lawsuit against Walmart only worked for the company for a total of 20 hours.  That would equate to a total of 32,000,000 hours worked (1.6 million x 20 hours each).  If these women made $0.37 less per hour as stated by Dr. Richard Drogin’s study, that would mean Walmart saved $11,840,000.00 in wages.

Think about that for a minute.  That’s almost 12 million dollars for only a single part time week for each of the women represented in the lawsuit.  A significant majority of those 1.6 million women worked for Walmart more than 20 hours total.  The actual figure of savings by Walmart for paying women unfair wages is much, much higher.

What are your thoughts about this?

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