Walmart: What’s the true Cost of Convenience and Savings?
January 3, 2013 Leave a comment
Walmart. Everyone has heard of it but not everybody has been there. I’ve been there. I’ve been there a few times actually, but only once whilst being in the United States. (When I lived in China I went to Walmart quite a few times due to a lack of alternatives, unfortunately there very little about China that is not unethical. Trying to live ethically in China is like trying to start a vegetable garden on the moon; the place is an ethical vacuum). When you’re planning a trip across the US and you need cheap supplies like a pillows and eskis/coolers, then you would probably pop into the Walmart at some stage.
On my way out of LA I stopped in Walmart and bought up a few items. I got snacks and supplies including a massive bottle of Jack Daniels* that cost me less than a smaller bottle costs in Australia. Such savings should be a godsend but there are plenty of reasons to turn away from the chain of mega boxstores that help you “Save Money” so you can “Live More”.
For one thing, Walmart is one of the largest employers in the world and the largest private employer. Holding the number three spot behind the US and Chinese militaries might be an achievement to be proud of if you’re at the top of the corporate pile, but from the ranks of its 2.1 million employees there have been some very loud complaints. Many, unfortunately, bite their tongues instead of facing the sack.
On Thanksgiving in 2012, instead of taking America’s most celebrated non-denominational holiday off from work like they did in the past, Walmart workers were instead told they’d need to work the third Thursday in November. The idea was to start the pre-Christmas sales early, bringing the once legendary “Black Friday” forward a day. American consumers couldn’t have been happier, but Walmart employees were ropable. Many planned to walkout. Yet when push came to shove many bowed their heads and donned their blue vests. Walmart weren’t the only ones that did this. Target was another.
Some of the pro-business group cheered the positive impact on the bottom line and the ups for the American shoppers who drive their consumptive economy. Tragically, forcing its workers to work on Thanksgiving was only the latest stone of shame in the building of this empire of thrift and convenience.
If Walmart were a country it would be the 19th largest economy, nestled between the European nations of Belgium and Sweden. With such a good bottom line you might think that the Walmart Corp might have happy, well-paid employees. But in fact Walmart employees are paid 29 cents less than the national average of $12.04. Doesn’t sound like a lot, but when the average annual salary of a Walmart employee is less than $21,000 a year that extra $500 would make quite a difference. And it would be small change against the $19.2 million that CEO Mike Duke took home in 2010. Not to mention the $405 billion the company made in sales that year.
The CEO might be the rotten head of the fish now, but first we should look at the family behind the corporation, the Waltons. That’s right, Walmart started out as a family business in Bentonville, Arkansas. “Walton’s Five and Dime” opened in 1945 before becoming incorporated in 1969. From its humble beginnings, Walmart took on and defeated its competitors by slightly undercutting the competition’s prices. Fair enough for what was essentially a “Mom and Pop” store but when it sent broke many other mom and pop stores around the nation it became clear that this was not a company that cared about families. While it may be the largest employer in the world according to a study into the effects of Walmart on the labour market, for every two jobs the corporation creates more than 2.8 jobs are lost. Beyond that the six Waldon heirs have a net worth that equals the bottom 30 per cent of the USA.
So they are more convenient and they are cheap but they are costing the US tax payer $1.5 billion annually because its workers are so poorly paid. All those poor working woman with no chance of advancing or escaping the poverty cycle. Now, I am not being sexist or misogynistic; two thirds of Walmart employees are woman but they make up only 15 per cent of senior management.
Yes, I shopped there and I compromised my ethics but there is something consuming about a Walmart. It grabs you in its gravitational pull and pulls you inside. But the tragedy of America is that Walmart isn’t the only big bad face of America’s corporatocracy. Across the country, markets are drifting into the hands of the few with only a few names to choose from. Corporations are being consolidated, profits are being maximised, competition is being squeezed, strangled to death. It’s hardly an American phenomenon, just look at the Coles-Shell and Woolies-Caltex partnerships in Australia for more evidence of consolidation.
In the USA the local butcher or green grocer are a rare thing. Many cities have only supermarkets or box stores like Walmart, Costco, or the like. The wealthy and the well off might have the income and option to go elsewhere but the majority of Americans don’t have that income to seek the alternatives. Travelling on a budget means that I’m absolved myself this time of the ethical implications of giving Walmart my custom. Had they existed back home in Melbourne, I would have thought twice.
*According to the Shop Ethical! app, Jack Daniels has a good corporate record but looses points for using GM corn. It’s the highest rated bourbon/sour mash on the app.