Walmart Business Practices Bad for America

[Guest ALWAYSRED]

Luke,

Walmart is not all bad. Look at all their doing to help rebuild our workforce.

 

http://walmartstores.com/CommunityGiving/9355.aspx?p=203

 

The Walmart Foundation has stepped up with an initiative aimed at providing job skill training to those hit hardest by the economic downturn. This year alone, we awarded more than $6.5 million in grants to programs designed to help train displaced workers and prepare them for the next chapter in their careers.

 

Our grants to the League for Innovation, the AARP Foundation and Experience Works underscore our commitment to helping people in our communities across the country by training approximately 2,250 women, mature workers and others.

 

Kathy Swartout, pictured to the right has been out of work for nine months. Without money for a new suit or gas to get her to interviews, finding a job seemed impossible. Kathy then learned about Experience Works’ JobReady program, sponsored in part by the Walmart Foundation. The program helped Kathy enroll in courses in Microsoft and business, polish up her resume and improve her interview skills. Armed with gift cards for gas and clothing for the job search, Kathy shared that "times have been difficult, but Walmart and Experienceworks have helped lighten the load."

 

See how our grants will help others who are out of work get the skills they need for jobs available today:

 

League for Innovation

Our $3.5 million grant to the League for Innovation will help the increasing numbers of unemployed Americans return to school. Dedicated to community colleges, the League will re-grant the funds to eight schools that have developed innovative plans to expand their existing programs to help people who have lost their jobs find new opportunities. These community colleges will serve as models for other institutions looking to grow their own programs.

 

AARP Foundation

We granted $1.5 million to the AARP Foundation to support its Women’s Scholarship Fund. This program helps women aged 40 and older acquire new job skills, training and education. Women in particular don’t always have the resources in the second half of life to get the education they need. As a result of our support, 450 women will earn scholarships of $500 - $5,000 to support their professional development. The majority of the scholarship recipients are women returning to the workforce after an extended absence, after holding jobs with limited pay and growth opportunities or after raising another family member’s child.

 

Experience Works

We awarded a $1.5 million grant to Experience Works, an organization that helps older people get the training they need to find jobs in their local communities. The grant will support a pilot program serving low-income workers over 50 who do not qualify for Senior Community Service Employment (SCSEP) or other government programs and lack resources to ready themselves for employment. Our grant will help Experience Works rapidly respond to the unmet needs of unemployed or underemployed older workers in crisis, helping preserve their dignity, prepare them to look for a job and give them hope for the future. By the end of 2009, Experience Works expects to equip up to 800 men and women with the skills they need to re-enter the workforce.

 

Since January 2009, the Walmart Foundation has awarded more than $16 million in grants for workforce development and job training programs.

[Guest Ron]

Read between the lines in this article. Walmart has chosen to purchase U.S. agriculture goods and Chinese manufactured goods.

 

Q: Why not get products made in the U.S. rather than in China?

 

A: For U.S. stores, that would be our preference. The majority of the food and consumable merchandise we sell in the U.S. is made here. Purchasing items made in the U.S. for our stores here or Canadian goods for our stores in Canada makes good business sense because it allows us to ensure greater customer relevance and reduce delivery times.

 

Q: The Obama administration has pushed China to revalue its currency. Do you have an opinion on whether this should be done?

 

A: No. We'll react to whatever currency relationships exist and try to do the best job we can.

 

Q: Walmart has a commitment to "everyday low prices." How do you get the lowest prices for Walmart customers around the world?

 

A: We believe in something called the productivity loop. It begins with operating for less. We want to use innovation to be the most productive retail store in the industry.

 

Q: How do you address concerns that Walmart's low prices could drive down product quality and wages for workers?

 

A: We operate in 15 countries around the world with more than 8,000 stores, and that allows us to leverage our scale and deliver value to our customers. And our goal in every market where we operate is not only to deliver products at a great value, but also to ensure all of the products we sell are made in an ethical and sustainable way.

 

In our "Standards for Suppliers," we outline our expectations ... that our suppliers must compensate all workers with wages, overtime premiums and benefits that meet or exceed local legal standards, local industry standards or collective agreements, whichever are higher.

 

Walmart was built on the idea that we could give our customers access to the items they need every day at the lowest prices by eliminating waste and managing our expenses better than the competition. So, it starts with expense management.

 

One funny example is when Mike Duke was promoted to Walmart's CEO, he and his wife moved his stuff out of the International CEO's office one weekend and not only did he take the office chair, the pens and the Post-it notes, but he even took those metal frames that hold the hanging files in the drawer. We watch pennies.

 

http://www.usatoday.com/money/companies/management/advice/2010-04-19-advice19_ST_N.htm

[Guest greezen]

I am willing to bet the actions of Walmart are going to force our government to repeal minimum wage to compete with the rest of the world.

 

Start learning how to grow your own food Chuck. It will save you money.

[Guest Laughing]

I disagree completely. The best way to break a company like Wal*mart down is to fight it and attack it little by little, and enjoy the small victories but keep fighting Wal*Mart propaganda of gluttony, and instant gratification. If people start associating Walmart as anti-America people will start to rise against them and shop somewhere else. Sam Walton would have fired the people running his company now.

 

"Sam Walton would have fired the people running his company now." You're damn right he would have - if there is anyone rapidly spinning in his grave, it's Sam.

 

Wal Mart has become a true American Corporate Giant in that the bottom line is more important than, literally, anything. Compensating workers fairly? Not a chance. Environmental concerns? Nah. Buying American? Surely you jest ...

[Guest Jimmy the Greek]

I personally find it almost impossible to find anything made in America at the wal mart store in Sterling VA.

IMO, they are the Goldman Sachs (NYSE:GS) of retailers: the bottom line trumps ethics and, well, everything else.

[Guest Ron]

Wal-Mart stated that its U.S. expansion will center less on its warehouse-sized Supercenters and more on far smaller urban stores, as well as condensed locations where consumers can pick up merchandise they order online. Look for the company to invade the social networks soon.

[Guest gonged]

America traded its dream to get a cheaper Tickle Me Elmo doll.

 

We allowed our government to help big and small businesses send everything America once made to China. Well, not just China, but any place Wal-mart could get junk made at pennies on the dollar. Thousands of small businesses went under over the years, and millions upon millions lost their jobs. Period.

[Guest JMM]

Wal-Mart stated that its U.S. expansion will center less on its warehouse-sized Supercenters and more on far smaller urban stores, as well as condensed locations where consumers can pick up merchandise they order online. Look for the company to invade the social networks soon.

 

I'll believe it when I see it - it sounds like corporate posturing (read: BS) to me.

[Guest I HATE WALMART]

A 138,000-square-foot China-Mart Supercenter is planned as the anchor of a 240,000-square-foot retail center on 51.5 acres a quarter-mile north of the intersection of State Routes 3 and 20 and the Fredericksburg and Spotsylvania National Military Park's Wilderness battlefield. Desecrate a historic site and replace it with cinder block junk.

[Guest Locust Grove]

The Wal-Mart store would attract commercial sprawl, turning a busy intersection into one with large traffic problems and thousands of additional vehicles.

 

The impact on the Wilderness's environment, rural character and infrastructure costs would be immense and regrettable. This vast development would be an intrusion against the footprint of a national heritage site, the Civil War's Wilderness Battlefield, wherein 29,000 soldiers were killed, wounded, captured, or missing in this battle of May 5 and 6, 1864. This site of hollowed ground helped form our nation.

 

The proposed store's location is unnecessary since there are already four Wal-Mart stores in the Fredericksburg/Culpeper area.

[Guest James Petras Ph.D.]

America traded its dream to get a cheaper Tickle Me Elmo doll.

 

We allowed our government to help big and small businesses send everything America once made to China. Well, not just China, but any place Wal-mart could get junk made at pennies on the dollar. Thousands of small businesses went under over the years, and millions upon millions lost their jobs. Period.

 

Given China’s continued growth, especially evident in the present, where it grew 9% in 2009 and 12% in 2010, while the US wallowed in and around zero growth, who has the most to lose if and when Washington decides to escalate into a trade war?

[Guest Spirit Fingers]

Let's fuse the Wal-Mart with the 99¢ Store and make some sort of discount Leviathan wherein I can purchase underwear sized irregular, a plastic water pistol, a window fan, and a DVD player for like $4.99

[Guest Billy]

What can people do when China Mart is now the only store in many small towns.

[Guest Ron]

This gets me sick to my stomach. How can Walmart take out life insurance policies on their own employees. How can their CEO sleep at night knowing he is profiting from the deaths of his workers while their families suffer. YUCK!!!!!!!!!!!!!!!!!

 

This is what happens when you move your business to a Communist country. You loose your business morals. And support Communism. Everything just becomes Pay Less and Make More.

 

http://news.tbo.com/news/metro/MGB5SEJVN3F.html

 

When Karen Armatrout died in 1997, her employer, Wal-Mart, collected thousands of dollars on a life insurance policy the retail giant had taken out without telling her, according to a lawsuit filed in U.S. District Court.

 

Armatrout was one of about 350,000 employees Wal-Mart secretly insured nationwide, said Texas attorney Michael D. Myers, who estimated the company collected on 75 to 100 policies involving Florida employees who died.

 

Myers is seeking to make the Armatrout lawsuit a class-action case on behalf of the estates of all the Florida employees who died while unwittingly insured by Wal-Mart.

 

"Creepy's a good word for it," Myers said. "If you ask the executives that decided to buy these policies and the insurance companies that sold them, they would say this was designed to create tax benefits for the company, which would use the benefits for benevolent purposes such as buying employee medical benefits.

 

"If you asked me, I would say they did it to make more money."

 

Wal-Mart spokesman John Simley said he could not comment because the company has not been served with the lawsuit.

 

The company settled two lawsuits with employees represented by Myers in Texas and Oklahoma, one for about $10 million and one for about $5 million. He said Karen Armatrout came to his attention when Wal-Mart mistakenly gave her husband's phone number to an Oklahoman who called the retailer inquiring about the settlement.

 

Myers said he also has filed a lawsuit against Wal-Mart in Louisiana.

[Guest KB]

Wal-Mart is forcing people to shop and work at its stores. Wal-Mart can afford to move into a new town, build a huge store, and lose money for 3 years until other shops in town go out of business. The people who shopped at those stores and worked at those stores must now shop and work at Wal-Mart. At this point Wal-Mart does not have to compete, and can raise its prices and lower its wages. You now have a group of people who are not being paid enough to shop anywhere besides Wal-Mart.

[Guest FoChick]

Buy American! Stop shopping at the Store who Took all our jobs to China. Start looking for American Made or sink deeper in crap.

[Guest American4Progress]

WAL-MART SPENDING MILLIONS TO BLOCK $7,000 FINE THAT COULD BRING NEW REGULATIONS: Hoping to avoid potential new regulations, Wal-Mart is spending "millions of dollars and thousands of man-hours" to combat a small, $7,000 fine from the Occupational Safety and Health Administration (OSHA) which was assessed after a Long Island employee was trampled to death by a crowd of shoppers. The company is arguing, according to the New York Times, "that the government is improperly trying to define 'crowd trampling' as an occupational hazard that retailers must take action to prevent." Despite that claim, Wal-Mart, "seeking to avoid criminal charges," has established new crowd-control policies nationwide. But the company is fighting hard to avoid the fine, which "has mystified and even angered some federal officials." "In contesting the penalty, Wal-Mart has filed 20 motions and responses totaling nearly 400 pages and has spent at least $2 million on legal fees, according to OSHA's calculations." A spokesman for the company said, "OSHA wants to hold Wal-Mart accountable for a standard that was neither proposed nor issued at the time of the incident. The citation has far-reaching implications for the retail industry that could subject retailers to unfairly harsh penalties and restrictions on future sales promotions." This is yet another step in Wal-Mart's on-going battle against workers' rights. The Wonk Room's Pat Garofalo notes, "I'd like to think that a regulation along the lines of 'don't let crowds run through your store and trample your employees to death' would be fairly uncontroversial." He concludes, "Safety regulations are put in place to, among many things, protect workers from the sort of corner-cutting that makes a company's bottom line look better. ... t'd be nice if every proposed regulation weren't treated as an assault on capitalism itself by the Big Business community."

[Guest wouldee5150]

IS Walmart patriotic? NO! They send US Dollars overseas to save you money? They took your jobs and livelihood away and gave it to CHINA!

[Guest True Cajun]

It is funny how my neighbors say they want a great little downtown with a nice ma and pop stores, but when you actually see their behavior, they shop at Walmart for the convenience and predictability and low price.

[Guest Douglas T.]

Walmart has raised the standard of living for millions of Americans. It is just upper middle class types that hate them. The poor and lower middle class love them.

[Guest agave_azulito]

I live in Mexico, and in my wallet I have a "Banco Walmart MasterCard" debit card (credit cards are also available). There are "branch banks" in most Walmart and Sam's Club stores (some stores have a branch of another Mexican bank in the store; these stores do not have a Banco Walmart branch).

 

In Mexico, in addition to Walmart and Sam's Club, Walmart owns other supermarket and restaurant chains, and often very good deals are offered only to Walmart Bank clients.

 

All cash registers in Walmart owned businesses have fairly complete banking services (balance info, deposits, and withdrawals). Banco Walmart does not yet have its own ATM machines and and a customer WEB site, but it's only a matter of time!

[Guest Fedup]

Damn right Agave. Wal-Mart executives have said little publicly about their financial services strategy in the U.S., but at the company's annual meeting last November, Eduardo Castro-Wright, the retailer's vice chairman and newly appointed head of global e-commerce, stated, "Our expectation is that [customers] will continue to drop the banks and buy [Wal-Mart's prepaid] cards."

 

http://moneycentral.msn.com/content/banking/betterbanking/p109171.asp

 

You can say I'm a dreamer, but I'm not the only one. Many banking experts predict that Wal-Mart will eventually break into the business -- despite determined opposition from the U.S. banking industry. (Relatives of Sam Walton, who founded Wal-Mart, control a regional bank called Arvest Bank. But in regulators' minds, and in practical reality, that's a far cry from publicly-traded Wal-Mart entering the banking business.)

 

Wal-Mart may have just taken a step toward that end by applying to create what's known as an "industrial loan corporation" in Utah. The ILC would handle Wal-Mart's credit card, debit card and electronic transactions, saving the processing fees the company now pays to a third party. ILCs typically can't offer checking accounts, but they can take deposits and make loans.

 

Wal-Mart's previous attempts to create a bank have been cut off at the pass, including once in 1999 when it tried to buy an Oklahoma bank and more recently in its attempts to buy a California industrial loan corporation.

 

 

"The banking community's opinion was that the world as we knew it would come to an end" if Wal-Mart were allowed to buy the savings bank, said banking analyst Bert Ely, who well remembers the 1999 tempest. "There was strong, strong, strong opposition."

[Guest greenzen]

They will kill America's financial industry.

[Guest Blue Byu]

United States economy has reached a point when the ongoing reduction in worker pay has damaged the consumers' overall buying power so badly that people can't buy anything but cheap China mart goods.

[Guest greenzen]

If Walmart would return to their Buy American campaign. This is the one company that has the power to bring manufacturing back to America.

 

http://www.huffingtonpost.com/henry-blodget/walmart-employs-1-of-amer_b_731962.html

 

Last week, the Census Bureau revealed that an astounding 44 million Americans live in poverty. This is the highest number ever and a jump of 4 million from the prior year.

 

Inequality in the country is getting ever more extreme: The richest 1% of the country owns a third of the country's assets and the poorer 50% owns less than 2.5%.

 

Well-paid manufacturing jobs are getting shipped overseas. Unemployment is 10%. Real wages are stagnant. Job security is a relic of the past. The "middle class" is disappearing. Americans who want to work are often forced to take poorly paid "McJobs" in the service industry that no one aspires to, that don't produce anything, and that won't lead anywhere.

 

Meanwhile, one of the world's largest corporations is still on a roll.

 

Walmart's global sales crossed $400 billion last year. Its profits exceeded $15 billion. Its market value -- $200 billion -- has weathered the Great Recession and market crash and remains near all-time highs.

 

Walmart employs an astounding 2.1 million people. In the United States alone, the company employs 1.4 million people. This is a staggering 1% of the U.S.'s 140 million working population.

 

Walmart, in other words, matters. Its payrolls, and its pay, move the needle.

 

And right now, many people argue, Walmart is very much part of the problem.

 

The average Walmart "associate," Wake Up Walmart reports, makes $11.75 an hour. That's $20,744 per year. Those wages are slightly below the national average for retail employees, which is $12.04 an hour. They also produce annual earnings that, in a one-earner household, are below the $22,000 poverty line.

 

On the other hand, these wages are far above minimum wage of $7.25 an hour. They also aren't that far below the national retail average (only 2.5% below). In a two-earner household, moreover, these wages would produce a household income of $40,000+, which, in some areas of the country, is comfortably middle-class. Walmart offers benefits to some of its employees, as well as store discounts and profit-sharing plans.

 

Most importantly, in an economy that is desperate to find some way to employ the ~25 million Americans who are either unemployed or under-employed, Walmart provides 1.4 million jobs.

 

But Walmart is constantly under attack for reaming its associates, for paying them too little, for putting higher-paid workers at other companies out of work, for making a major contribution to the national problems described above.

 

And with $15 billion of annual profits, Walmart could certainly afford to pay its employees more.

 

So should Walmart pay its employees more? Should Congress pass a law forcing Walmart to pay its employees more? If so, how much more? If Walmart did pay its employees more, what would happen? Would this begin to address some of the country's problems above?

 

The point of this essay is not to provide definitive answers to these questions. It is to put the questions up for debate.

 

Given the depressing wealth, employment, and income trends facing our country, questions like these are critical for our nation's future. So they are worth thinking through carefully.

 

Please weigh in below. But before you do, here are some more things to think about.

 

First, how much more could Walmart afford to pay its employees, given its current financials?

 

Here's one way of looking at it.

 

If Walmart took its entire $22 billion of annual pre-tax income and used all of it to give each one of its 2.1 million employees a raise, this would amount to about $10,000 a year apiece.

 

In other words, if Walmart decided to use 100% of its operating profit to pay all of its employees more, the average store associate's salary would go from $20,000 to $30,000. If Walmart paid bosses like CEO Mike Duke less (Duke made $6 million last year) that would create some more operating profit. So reducing inequality at the company would also certainly help.

 

A raise from $20,000 to $30,000 would be a nice bump, certainly. But it would not be earth-shattering. Walmart associate jobs still wouldn't be the $45,000+ a year unionized manufacturing jobs that the country has lost so many millions of in recent decades. The salary increase wouldn't radically change associates' lives, especially after taxes.

 

Now, Walmart is a private corporation, run for the benefit of not only employees but customers and owners, and Walmart's owners might justifiably squawk if the company suddenly decided to run at break-even (or were forced to). So Walmart might be able to channel, say, half of its pre-tax profit back into compensation, which would give the average associate a raise from $20,000 to $25,000. That's still better, but it's even less to write home about.

 

And then there would be other consequences.

 

For one thing, Walmart would almost certainly raise prices to offset some of the increased costs. This would make Walmart's products more expensive--not just for other Americans but for Walmart employees. So some of the increased wages would quickly be repatriated back to the mother-ship through increased prices.

 

Secondly, if Walmart's employment costs went up, Walmart would almost certainly find ways to make do with fewer employees. There are now apparently store check-out systems that are largely automated, for example, and if Walmart were to invest in some of these systems, it would radically reduce its need for cashiers. So the remaining Walmart employees might make a bit more money, but several hundred thousand of those 2.1 million employees would be on the unemployment line.

 

Thirdly, by making so much profit each year, Walmart currently pays a lot of taxes. Last year, for example, the company paid $7 billion of taxes -- a bill that reduced its income before taxes from $22 billion to $15 billion. If Walmart were to eliminate its $22 billion of income before taxes by giving every employee a raise, it would then pay no taxes. Which wouldn't help our national budget deficit.

 

Lastly, forcing Walmart to pay its employees more wouldn't address our long-term economic problems. It would lift some people out of poverty, certainly, and make others lives a bit more comfortable. But it would also increase costs for everyone else. More importantly, it wouldn't address our loss of manufacturing jobs, income and wealth inequality, or our horrific unemployment problem. In fact, it might make the latter worse.

 

So, should Walmart be forced to pay its employees more? Weigh in below. We'll send your comments down to Bentonville.