President's Column - Wal-Mart Always a Bad Deal, Always!

Wal-Mart may be the world’s largest employers; certainly it’s the largest in the United States. Wal-Mart reports there are 1.8 million workers worldwide with 1.3 million in the United States at 6,500 stores in 15 countries. Its tentacles of influence are felt at every level of government in the U. S. and all of the 14 countries. Wal-Mart negotiates at all levels of government; contributes to all political parties and engages in public service campaigns to elicit support in obtaining zoning waivers and tax breaks for its operations.

Any discussion about Wal-Mart business practices and employment record engenders strong emotions and hard feelings. Any announcement of a new Wal-Mart or a Sam’s Club brings out the protesters. These protesters range from unions, small business owners and public-spirited citizens. Emotions are strong and heartfelt; the unions protesting the poor wages and lack of benefits; the small businesses owners fear they will be driven out of existence by the low prices; and the citizens because Wal-Mart and similar stores create urban sprawl and harm small towns. This has occurred everywhere Wal-Mart has opened a store. Local businesses that became suppliers of Wal-Mart have also not fared well either, many have gone bankrupt because of Wal-Mart’s increasing demand for lower and lower costs.

Wal-Mart is neither a good employer nor a good citizen. The poor wages with little or no benefits force the employees seek public assistance and this becomes a drain on the taxpayers of that city or state. During the new employee orientation they are given instructions on how to file for partial unemployment checks and other public assistance due to the lack of benefits or healthcare. In some states a large percentage of Wal-Mart employees are collecting partial unemployment and are on Public Assistance or medical assistance in the local hospitals. Wal-Mart’ website claims that the average salary for its employees is $10.15 and some limited benefits. But this is usually the aggregate salaries of all employees and then averaged out.

In virtually every town that Wal-Mart has established a store, Super Store or Sam’s Club small business are driven out by the competition and even those businesses who do get to sell to WAL MART suffered because of the hard nose buying techniques and the continuous driving down the price of product that will be paid. It amounts to price fixing and a Monopoly, business is conducted on Wal-Mart’s terms, simply take it or leave it. Barry C. Lynn wrote in a recent article in HARPERS that four of Wal-Mart’s top 10 suppliers have been forced into bankruptcy because of these practices.

So the saga of Wal-Mart has become a contrast of good and evil and poses the question, “Can we afford the downside of dealing with Wal-Mart?” The only good being the low prices that helps the low income customers, fight inflation, and have caused Wal-Mart to grow and provided over one million jobs. The bad being the low wages with lousy benefits, forcing out the mom and pop stores and destroying the downtown areas. Not to mention that this company and its policies have a negative impact on overseas suppliers, who are paying slave wages with poor working conditions, no benefits and the possible utilization of child labor.

Wal-Mart is rapidly becoming one of the most sued corporations. Recently, Wal-Mart was found guilty in the Pennsylvania courts for forcing employees to work through rest breaks and off the clock. This lawsuit will cost Wal-Mart $62 million in damages to 187,000 hourly current and former employees. Lead plaintiff Dolores Hummel, who worked at a Sam’s Club in Reading PA from 1992-2002 charged in her lawsuit that she had to work through her breaks and quitting time to meet work demands in the bakery. She said she worked eight to 12 hours of unpaid hours a month.

Wal-Mart is facing a slew of similar suites around the country. The company settled a Colorado case for $50 million and is appealing a $172 million award handed down last year by a California jury.

“One of Wal-Mart’s undisclosed secrets for its profitability is its creation and implementation of a system that encourages off-the- clock work for its hourly employees”, Hummel said in her suit which was filed in 2002.

So in my humble opinion, it is all works out as more bad than good. And the slogan should be “WAL-MAT Always a Bad Deal, Always.”