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Why Wal-Mart Does Not Strengthen Our Economy
It's tax rebate time, and no one is hungrier for the tax rebate checks arriving in mailboxes today than Wal-Mart. The retailer is advertising tax-rebate sales and has offered to cash the checks for free -- all in hopes that consumers will spend their newfound money at Wal-Mart stores. But spending your tax rebate at Wal-Mart won't stimulate the economy -- and here's why:
- Despite bringing in over $378 billion last year, Wal-Mart repeatedly underpays its American workforce. More than 80 wage & hour lawsuits, including a recently certified class action lawsuit in California, are currently pending against the company. Plus, it faces more than 200 discrimination lawsuits for unfair promotion practices, pay discrepancies and other issues, including the nation's largest workplace gender discrimination lawsuit. By failing to fairly compensate its employees, Wal-Mart cheats states out of income tax revenues.
- Wal-Mart also pays poorly. While the company seeks to benefit from the government's rebate payout, Wal-Mart's low wages means store employees have little or no disposable income to spend to stimulate the economy. Think about what even a small raise for Wal-Mart's 1 million+ workers would mean nationally, or what it would mean to your city or town if everyone at your local Wal-Mart got a raise.
- Wal-Mart sources the vast majority of its products from countries overseas, meaning most of the cost of a given Wal-Mart product doesn't go into the U.S. economy. Rather than boosting the U.S. economy, Wal-Mart has played a major role in exporting U.S. manufacturing jobs to countries with low labor and environmental standards. Meanwhile, the company has embraced unions in its Chinese stores and has negotiated with them to raise Chinese salaries. Apparently, what is good enough for China is not good enough here at home.
- Wal-Mart underfunds its health care plan and cuts corners whenever possible, forcing many of its employees to postpone care, thus decreasing their productivity and increasing the eventual cost of their treatment. In desperation, many of them rely on state-sponsored care and drain yet more funds from American communities. That means when Wal-Mart employees end up in emergency rooms, it's U.S. taxpayers who end up footing the bill. If Wal-Mart were truly interested in stimulating the economy, it would begin to adequately fund its health care plan and take care of its own Associates.
- Wal-Mart routinely dodges state and local taxes, meaning money spent at a Wal-Mart store won't end up in your community. Wal-Mart actively works to challenge property tax assessments and creates complex real estate arrangements to obscure how much taxes the company owes. When Wal-Mart dodges its tax burden, it takes precious revenues away from cities and states to pay for roads, schools and other services. In turn, individual taxpayers are forced to pay more to make up the difference (which takes more money out of their pockets) or get by with less.
With its low price focus, Wal-Mart may appear to help the U.S. economy. But, the reality is that with its poor wages and benefits, massive China sourcing and tax avoidance, Wal-Mart makes its workers and the communities where it operates poorer.
As our nation's largest employer and most financially-successful company, Wal-Mart is a singular American institution. It occupies a unique position in our world by virtue of its size, reach and responsibility for the livelihoods of millions of workers and the needs of billions of consumers. And with such overwhelming influence comes certain moral responsibilities. It is the acceptance or rejection of those responsibilities that determines greatness.
For the time being, Wal-Mart has rejected those responsibilities and because of that choice, the money spent there does nothing of what it could to strengthen our economy. Higher salaries, quality affordable healthcare and paying what they owe like any good American, are just three things Wal-Mart can do tomorrow that will make them a company worthy of our money.
David Nassar is the Executive Director of Wal-Mart Watch, a joint project of The Center for Community & Corporate Ethics, a 501c3 organization devoted to studying the impact of large corporations on society, and its advocacy arm, Five Stones.
Copyright © 2008 HuffingtonPost.com, Inc.
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20 Comments so far
Show AllWhen I was growing up we could go to our corner grocery store, and with a note from my mother, charge the necessary items to get us through the week till my dad got paid. WalMart may be good for the American economy, but your neighborhood grocers were good for Americans. Maybe that's why they are gone.
Hoa binh
Unfortunately Wal-Mart has driven all of the competition out of some small towns and they are the only game in town. Higher fuel prices mean that the few people who have been driving to another town to shop will now be forced to shop at Wal-Mart.
The near future looks even bleaker, as this year's tight credit and inflation is driving many small retailers (who have thus far competed with Wal-Mart) to go out of business, resulting in more small towns where Wal-Mart is the only game in town.
If wal-Mart followed your suggestions their prices would have to rise. Then what would poorer Americans do? The people need cheap products because the cost of living is rising and wages are not keepin pace. Americans have seen their incomes buy less and less than before for over 10 years. this is not due to Wal-mart. People buying at Wal-mart and the very existance of wal-mart is a function of the declining standard of living. Why don't people boycott Wal-Mart? Because they need it. Are the workers bieng cheated? That is for the courts to decide. Are they underpaid? What is the minimum wage for then? Do they eliminate the competition? Yes, by employing cheap workers abroad. Is this against the law? If it is, take them to court. if it isn't, find another argument. We depend on China to lend us money and we also depend on them to provide us with cheap goods. Wal-Mart is not the reason for the decline of the US, it is a symptom of it.
Uhm, if i may interject here, I believe there is a growing sector of business that caters to those who choose NOT to shop at WalMart.
Costco comes to mind, but isn't a very good example. I don't shop there, but i've heard they compensate their employees well for labor monetarily. Not sure about benefits.
However, there are still other places to spend money, albeit they are a little more expensive. But that is the cots of the priviledge of NOT shopping at WalMart in my opinion.
I would be tempted to cash my bribery check at WalMart JUST to walk out the door immediately afterwards. Just to take money from them and put it BACK into my community through a credit union bank account.
Then again, i've even thought about sending the check back to the treasury with a note explaining that my civil liberties are worth more than a measly $600. They will have to do better than that.
It's funny the way things are working right now. 225 billion for Iraq, and $600 for you and I. Wouldn't it make more sense if it was 225 billion for Americans and a one-time $600 to each and every Iraqi person. But i guess that too would be a slap in their face too. I'm sure what was stolen is worth far more.
I don't shop at Walmart and I look for other ways to save money. They will never see another dollar of mine....
I like to look around since I don't find WM is the cheapest prices. Yes on some items but if you do most of your shopping there I bet your food etc bill will be about the same.
I can't wait till the price of gas gets so high even WM gets hit. It has hit Home Depot who renovations are down 20%. Do what our parents did , not replace the kitchen just put a new coat of paint on the doors and walls.
you can imagine 4 phonecalls to my bank...just to get the point across about the fact i dont want THE $300 or $600 bribe electronically deposited... hahaha... yeah i was the only one to call in about it so far. first option was "you could give it to me" (with a laugh), then they said i would have to close the account, among other limited options, etc.
i think it is in the water. hahahha
smilllllleeeeeeesssssss & kissssssssses wild ;)
But if we don't shop at Wal-Mart it will hurt the Chinese economy.
You see that news item about the Chinese steel we now import from them? Fifty schools SO FAR where those steel beams wwere used have to be either torn down or repaired at great cost. And those same type Chinese steel beams are being used for new highway bridges.
I knew it. It's termed "the squeeze" in China. They start off with high quality and then cut quality after awhile. "The Squeeze", squeezing pennies, __ or dollars.
Want to know what saps our economic strength? Read Military or Market-Driven Empire Building: 1950-2008.
If only Corporate America (allowed by our government) had put all of those companies and jobs into Mexico, rather than China, then we wouldn't have an immigration problem, nor would we be strengthening the economy of a dictatorship that persecutes Tibet, any religious group, as well as any freedom.
Many people work day and night at their small business, and Wal-Mart uses its huge power to put legitimate hard-working businesses out of business. But the small store / Wal Mart debate is more complex than that. I also see many small store owners who do not obtain lower priced goods, and who seem rather lazy and uncreative in what they do. In a rural area, I used to try to buy local and still do, but I don't buy local at the places where they charge higher prices, don't work hard, and don't use their brains and creativity to overcome obstacles.
How about pushing our elected leaders to negotiate fair trade agreements, where environmental, healthcare, and social concerns are internalized into their structures?
So there would be no profit motive for the Wal-Marts of the world to continue the race to the bottom.
WalMart wouldn't exist except that it gets a free pass on tax laws, labor laws and anti-trust laws. They got this special treatment by bribing you local legislature using the mechanism of "campaign contributions."
When WalMart becomes the only store in town they can charge you whatever they want and treat their employees like dirt. That's why you see small farm towns all over america boarded up within 20 miles of a WalMart. They would just run those stores at a loss for a year or two until the competition went out of business and then they jack the prices up.
If you want to be a slave just keep shopping at WalMart.
I'm a certified lefty, but I don't bash Walmart. They're thrifty operators to the core, for sure. But much of the cheapskateness IS passed through to customers, especially those willing to buy the grocery house brand, "Great Value", and the pharmacy house brand, "Equate". It's very easy to save $1000 - $2000 a year that way, and many people who need that savings actually get it on necessities.
As for all the China stuff, most of it is more in the "optional purchase" category and can be avoided.
I tend to agree with lizard above that Walmart's existence is a symptom of a living-standard decline in America, not the cause of it. Walmart is not going away. Every time they open a new store in a metro area, thousands, sometimes tens of thousands of people actually apply for the several hundred jobs offered. If other jobs were so available and so much better, this would not occur. It happens again and again.
Recently we had a local situation where a Walmart opened at edge of a metro and the small adjacent out-lying school district had a crisis of losing their non-certified staff of cooks, custodians and bus drivers to those bad jobs at Walmart. Turned out they were better jobs than offered even in the public sector school.
Item sold by Wal-Mart, which are imported from China?
A QUOTE: _____ "As for all the China stuff, most of it is more in the 'optional purchase' catagory and can be avoided" ____ By our own DANIEL DAVID.
Of all the really wrong things you have ever posted here at C/D Daniel David, that is perhaps the "wrongest". Over 78%% of the merchandise sold by Wal-Mart, not counting live plants, clothing, automotive tires, batteries, oil, paint, fish worms, foods, books, medicines and rifles an dammo is imported from China.
Almost everything, furniture, toys, appliances, lawn mowers, small tractors, garden tools, automotive parts, pots and pans, dishes, kitchen tools and machines including American brand name items, electronics, telephones, many canned food items, ALL sports gear, ALL fishing tackle and ALL camping gear, half the clothing clothing and ALL the shoes, etc, with VERY, very few exceptions.
So you absolutely do not know what you are talking about in that respect ~DANIEL DAVID~. It is almost impossible to find ANYTHING one needs, that is not made in China in Wal-Mart, Sears, Home Depot, Hallmark, Dollar stores, K-Mart Lowes, Checker auto, Target, Pep Boys, Auto Zone, etc.
And that is why Wal-Mart is not good for our economy and they certainly are NOT alone by any means. The stores where the Average middle class Americans shop are loaded to the rafters with imported goods, mostly Chinese.
Even some Japanese brand name items are now made in China. Our eight year old Sony radio is made in China. Our Chicago cutlery was made in China, Emerson, Hoover, Craftsman tools, Ace hardware tools, American brand name computers etc, are made in China. You don't know it unless you either check the bottom of the box or see it when you get home and open it.
Think about the oil used to make Walmart possible. The entire Walmart culture isn't sustainable. One day we will run out of oil, and floating cheaply made crap over from Asia will be become an impossibility.
Kem,
The reason I do not single out Walmart for bashing is just as you said. "Sears, Home Depot, Hallmark, Dollar stores, K-Mart Lowes, Checker auto, Target, Pep Boys, Auto Zone, etc." (your group) are all selling things made in China.
And I'd add that all the "mall" stores are selling clothing almost entirely made in dozens of low-wage countries.
My point, about shopping at Walmart, is that a person CAN choose to buy less optional things made abroad if one wants to. Walmart alone did not cause importation and I think that Walmart bashing is counter-productive for citizens.
Most American voters go there, after all, and we needn't
be driving them to Republican philosophy by our silliness with some kind of faux "righteousness" of being somehow too wise and too good to shop where they shop. Liberals actually have better things to be talking about----like wars, tax policy, deficits, health care, education, climate change, civil rights and the Supreme Court.
Walmart bashing by the left is like dwelling on Jeremiah Wright by the right. Off point.
Lizard, these "poorer Americans" you speak of existed long before Walmart did, and I'm sure they will survive long afterward if Walmart were to practice better social standards.
It wasn't a lack of bashing Wal-Mart Daniel. It was your comment that the Chinese merchandise "is optional" ___ LOL.
It is almost impossible to find anythng that is not made In China in Wal-mart. And indeed, they are not alone there. Perhaps you don't have a Wal or K-Mart store near you. Check it out if you do. It has been that way now for over seven years and became worse every year.
The world we live in is a result of "US" as a nation not caring enough to change what is wrong in the first place. There was a time when families would spend weekends at home with each other or go for a short trip out of town to keep the family close as a unit. Walmart and others have made sure that is no longer something kept sacred. I am a current worker at a Walmart and can tell you that family is NOT a priority to that company. Either is paying employees well compared to what the company profit is. In order to show profit Walmart has cut back on hours it gives a majority of its employees and puts a greater strain on those who are lucky enough to get 40 hours a week by combining jobs in its stores. It is not a bad place to work if you like the damned if you do damned if you don't mentality. I have seen things that baffle the mind go on in my store and it is a wonder how people don't lose what little sanity they have. After Mr. Walton died his greedy family finally got to get their grubby hands on the company he started. There are high powered ideas abound on how to cut costs and use loopholes to keep from paying taxes. How to guilt employees into staying late to get a job done but make them take extended lunches to keep them from reaping the benefits of the hard work they did.
Most stores are understaffed, the back rooms and trailers outside are packed to the hilt and sometimes there is no room to move. People are pulled from one department to another to help but then are "coached" as they call it because the work in their area was not completed. Don't get me wrong, I know there are other companies just as bad if not worse and in this time of economic crisis Walmart is one of the cheapest places to shop for almost everything a person needs. However I do believe that we as a people are at fault for almost everything this and other companies do. As a people is it not OUR responsibility to question how or why companies like Walmart get as powerful as they have? WE dropped the ball and now all we are doing is blaming someone else when it is our own fault. As long as we are pacified by low prices and new gadgets companies like Walmart will keep getting bigger until there IS nothing but Walmart. Our own government will not be able to quell this as most of them get fat campaign checks in return for looking the other way.
Until there are enough people who want to change the world we live in and finally stop all the nonsense in government and in private business's. Then we will always be at the sharp end of the stick for many years to come and family time will have to wait because there is a big sell on waffle makers this Sunday at my local Walmart. Walmart is just the result of what we forgot is important.