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.
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Why pick on Wal-Mart all the time? The underlying issue is the billions that US and European firms have been pumping into China for the last decade or so. Every penny pumped into China is money NOT invested at home.
Wouldn't walmart be the leading corporation pouring the billions into China? Well, freakin DUH!!!
David, I am trying to understand what prompted this blogg. It does not require any rocket scientist to understand that Wal Mart adds NO VALUE at all to the USA economy. Here is a brief summary of Wal Mart
Slave labor
Cheap shit from China
Run by blue suits without conscience
Peace to you today.
The example of employee exploitation established by Wal-Mart is now being adopted by other corporations as well. The folks working at our local "Whole Foods" store recently had their work hours reduced to prevent anyone from getting a full 8-hour shift or 40-hour week. This effectively eliminates full-time employees other than managers, and reduces or eliminates most of the benefits previously received by employees.
As Wal-Mart's tactics are adopted by more American businesses, the quality of life of all Americans (except the predatory corporate moguls) continues to spiral downward.
And Hillary Clinton sat on its board of directors for years...
Did you say something about Rev. Somebody? Did you know that the religious group Hillary belongs to is violently Anti-Union???
Now, let's put two and two together for the MSM. Hilllary belongs to a cult, she is anti-American worker, and she was paid by the enemy, which makes her a thief, a liar, and a hypocrite.
Sounds like someone needs to move back to Russia.
Always remember that our local politicians allowed Wal-Mart stores to enter the neighborhoods. The people in these neighborhoods didn't fight against it, maybe because they needed these poor paying jobs and low priced goods. Wal-Mart prices may be lower than some department store but the quality is bad, so I don't bother shopping there. I was in their plant section last week (to get fish emulsion plant food, which they didn't have anyway) and I was so disgusted at the poor condition of all their plants, I made a complaint and was told the manager would be getting new plants in soon. So Wal-Mart gets new plants but doesn't bother taking care of them, they just let them die; must be their motto - we will just buy more! Horrible way to run a business.
All retailer are after our money - that is nothing new if people bother to think about it. Don't go shopping unless absolutely necessary is my recommendation to people. Needless shopping is most likely the biggest culpret in the weak wallet syndrome.
While some argue that Wal Mart destroys small local and family owned businesses, to me just as bad is how they have destroyed and sent into bankruptcy all but a few regional discount variety stores. Here in the Northeast USA, they help to wipe out, especially in smaller towns, regional and often family owned discount chain stores including Ames, Bradlees, Caldor and Jamesway. In some cases they have taken over the former sites of those stores.
They have also badly hurt national chain K-Mart. They have also put pressure on and effectively shut down many local and regional food markets and supermarket chains, especially those with unions (recall the series of strikes of supermakets in Southern Calif. in part blamed on Wal Mart). Many towns have also embraced Wal Mart and other chain stores in a desprite bid for some property taxes to offset losses of manufacturing facilities and other local businesses.
I used to be a vendor for Ames stores back in 2000-2002...they filed bankruptcy and only paid my company a tenth of what they owed. That store chain, like all of the ones you mentioned (including K-Mart) are severely mismanaged and did not adapt over time. WalMart did not hurt those stores, they hurt themselves.
It's about time someone said that. Walmart being the great Satan is a normative, but really, really, it's time to recognize that other companies fell because of their own ineptitude. Period.
What if even half of all large public and private businesses/companies/corporations with large commuter workforces could find a way to shift the traditional 40-hr workweek to four 10-hour days vs. five 8-hour days? Same amount of work hours but less congestion on the roads, less gas consumed in a four-day work commute, and people would have an extra day to spend the money they didn't use to buy gas (hopefully to buy U.S. products or services...) Sick leave use would probably be lower - employees would have more to lose by taking a sick day they don't really need, and if they really are ailing have an extra day to rest and recuperate... morale would likely improve (in my workplace, for sure!) Perhaps tax credits of some sort as an incentive to the business community? Say, if a certain percentage of the workforce is in compliance within a certain amount of time (would three years be enough time to give businesses time to plan a way to really make it work, AND see quantifiable results?) I know it could not work for every business but it's worth debating.
Nice idea, but why stop there? The technology is there for massive amounts of telecommuting; with my iMac, which has a built in camera, you can teleconference from remote locations. I work from home when not travelling, and can't imagine doing the daily rush hour commute anymore. Maybe some jobs require a presence in an office, but the majority don't.
The kind of solution you proposed is what the author should have mentioned.
The company I work for recently lauched a home agent program, the pay scale is lower and if you switch to it you have to take a dollar an hour cut in pay. The wave of the future offshoring within the country by letting people work at home. Same work lower pay.
All I could think about when I was reading your post is that sounds dreamy.
I think the problem is is that a lot of companies extend the 40 hour week to 50 hours, but scheduling meetings at the end of the workday, trying to constantly increase worker productivity, and shift responsibilities from downsized workers to those left. So these organizations are already getting 10 hour days out of us-- every day of the work week.
We'll get to Wal Mart as soon as we are done with Rev. Wright. Gotta get those anti-Americans first, you know.
Indeed - never mind that Walmart is communist china's biggest trading partner and that Hu Jintao is #4 on the US state depts list of most brutal dictators according to Parade Magazines annual list
I don't disagree with the content of the article, but many Americans are so strapped that I'm afraid they won't have any choice. What is the alternative? To pay 20-30% more at Walgreen's, for exactly the same thing?
I'm not a Walmart apologist, the writer makes many good points, but they are not the only one who screws their employees. Can you compare what Walmart does with what Enron or Worldcom did?
To the author: let's have some solutions from you. If you don't have solutions, you are part of the problem.
What do you suggest increasingly poor Americans do?
Break the cycle thats what we need to do
Start demanding Walmart pay its fair share, communitiers need to stop being bullied by them for tax abatements.
Stop shopping there, yes it may be tough but it can be done. walmart does not ALWAYS have the lowest prices. There are alternatives that pay and treat their help better, Meijer and Costco come to mind. Some of their competition like Meijer and Kroger will match competitors ads as well.
Many like me are willing to pay a little more for quality non chinese made products as well - this is the single most effective thing to do for the US economy
Red, I remember in the mid sixties when Japanese products were just beginning to make inroads into our market place. Even as kids we would avoid buying anything made in Japan. This was pre-summer of love and the dawning awakening of our own feet of clay, but we were really believers in the quality of our own stuff--and it Was better! I even remember the phrase we used to describe anything sub-par--Oh, man, that's so Japan! So we all paid a bit more and were happy to do it!
Today i drive a Honda, because it's the best affordable car on the road. Japan kicked it up a notch and showed the world what it could do. Props to them. But when it comes to any other product and my choice is something from the PRC and supporting their dictatorship, or something from any other country, I'll pay a little more and not buy the Chinese goods. Walmart destroys businesses here at home, lowers wages, sends jobs overseas and supports regimes with the worst human rights records. I don't shop at Walmart--never have--never will.
Stay local is a solution. Focus on needs, not wants and Wal-Mart might be - and I have never shopped in one in my life - 90% want. In other words, pure consumer culture. Very little value in supporting them.
But if you were to focus your energy on locally grown organic food, you not only keep the money in your locality, but you clean the land, water and air, and are healthier.
If you can afford the cost differential of organic food that would be nice.
If you have local farmer markets near you. It may not be worth it to drive 60 miles roundtrip to buy local tomatoes.
Hillary used to sit on the Board of Wal-mart.
No matter the issue Obama supporters will try to find a way to attack Ms. Clinton.
Is it true, or not? I believe it is true. Her associations do matter, just ask the MSM!
I can only hope you are preaching to the choir here, David, but thanks for the reminders.
Excerpt from David's column:
"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."
Once again, this all comes back to a rule I call Universal Tax Rule #1: when rich individuals and big multinational corporations don't pay taxes or pay less than their fair share, SOMEONE ELSE MUST MAKE UP THE DIFFERENCE. Working class and poor Americans know all too well who that someone else usually is.
In general, I agree with your Universal Tax Rule. Where I disagree is that the "difference" is not being made up anymore, hence our crumbling infrastructure.
Hey, good thing Hillary Clinton was wise enough to make the right decision by never being closely associated with this company!!
Oh...wait...
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