To Walmart with Contempt

Submitted By: Mike Spindell, Guest Blogger

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The picture above really says it all. Walmart, our country’s largest retail operation is run by people who are so clueless that they’ve created a culture that doesn’t even understand the massive irony in running a Thanksgiving Food Pantry for its own employees.  The photo comes from a Walmart in Canton, Ohio. The concept of food collections for the poor at retail establishments is widespread in America, even as many Americans deny that anyone in this country goes hungry. The irony of this food drive though is that it is asking Walmart employees, who are already low paid, to donate food to fellow employees who are even worse off than they are. It is also ironic that the food drive is for Thanksgiving Dinner, since almost all Walmart Stores have been open all day for Thanksgiving for many years, so one wonders what type of Thanksgiving Dinner Walmart associates will have at all? What is new this year is that “Black Friday” for Walmart customers will begin at 6:00pm on Thanksgiving Day and run through the night.

The average Walmart Associate makes $8.81 per hour which translates into a yearly income of $15,576 if the Associate works a full time schedule.  Most Associates don’t work full time because working full time would entitle them to benefits that Walmart doesn’t want to pay. Interestingly, the current U.S. poverty level for a three person family in our country is $19,530. So we see that the rare Walmart full time employee, with two dependents, earns about $4,000 per year below the nation’s poverty level. Indeed, Walmart has made it a practice to inform its employees about benefits like Snap and Public Assistance. At the risk of being portrayed as a “bleeding heart” by some of our readers, let me state that I think this company is disgusting in its personnel policies and is an example of what is worst about our country. Let me explain further.Here is an insider’s view on the specific Walmart situation in Ohio, from an Ohio State Representative:

“A recent study concluded of all the companies in Ohio, Wal-Mart has the highest number of employees on public assistance. Of the 50,000 Wal-Mart employees and dependents, almost 13,000 are on food stamps, and 15,000 on Medicaid. What part of the American dream can the employees of this giant “welfare queen” expect? The Waltons, America’s wealthiest family, knows they are exploiting their workers, and all at the cost of American taxpayers. Wal-Mart wants its employees to take care of one another while everyone else foots the bill for health care, food and housing assistance.

Last year during the Thanksgiving season, Wal-Mart associates bravely spoke out and rallied on Black Friday to protest the company’s low wages and poor labor practices. And on cue, the retail giant’s management illegally harassed and even fired employees who participated in the protests. Thankfully, the National Labor Relations Boards found that Wal-Mart’s actions broke the law, but it is yet another example of the company’s ill treatment of their workers.”

From the Huffington Post article that supplied the picture and gave background to it.

“When their paychecks don’t cut it, many associates turn to public assistance to make up the difference. Walmart’s low wages and insufficient scheduling are behind the enormous costs to the taxpayer incurred by each store. One Walmart Supercenter costs taxpayers $900,000 in Medicaid, SNAP, housing assistance, and other forms of public assistance.”

This is in essence the dirty little secret of Walmart. This company, whose ownership has been among the largest funders of those who would gut all federal regulation, makes a good deal of money from government “entitlements.” One could almost say that they are the real “welfare cheats”. This doesn’t account for all of the local governments who give tax breaks to Walmart for the honor of having a store located in the community, or that fact that in many of these small communities Walmart “buys off” local officials. Stories detailing this have become so common that there is a website devoted to watching the government subsidies being given to Walmart:

“A secret behind Wal-Mart’s rapid expansion in the United States has been its extensive use of public money. This includes more than $1.2 billion in tax breaks, free land, infrastructure assistance, low-cost financing and outright grants from state and local governments around the country. In addition, taxpayers indirectly subsidize the company by paying the healthcare costs of Wal-Mart employees who don’t receive coverage on the job and instead turn to public programs such as Medicaid. This website brings together available information on both kinds of subsidies involved in Wal-Mart’s “double-dipping.” In the future we will add data on other ways Wal-Mart relies on taxpayers to finance its growth.”

This website is very helpful because it allows you to search its archives by putting in a location of your choice and supplying the information. At random I typed in Florida as the State and when given a menu of locales to choose from I chose Crescent City, a place I know nothing about. Here’s what I found:

“This distribution center project, announced in 2005, was approved by Putnam County over the objections of neighboring Volusia County, where there was concern over the traffic impact. In 2006 Wal-Mart warned a group of residents that their land would be seized through eminent domain if they did not sell to the company, which apologized after the story came out in the media. The state, through Enterprise Florida, has agreed to pay for infrastructure improvements in the area, including $2 million for upgrading roads and $675,000 for water and sewer plant upgrades. The project is also expected to be eligible for benefits under the enterprise zone and Qualified Target Industry programs, which could be worth thousands of dollars in tax credits for each worker hired.”

At the close of this guest blog I will supply links to much of the information I am synthesizing to write this piece. Everything that I am writing is backed up by copious evidence. I think that my contempt for this company is well-founded and well-grounded in facts. The case against Walmart is proven, but the problem of the Walmart syndrome is one that continues to plague this country. The object of any corporation should first be to make money. I believe that is a valid observation. Since I also believe that a mixed Capitalistic system can assure the most benefit, for the most people, I don’t object to people making money. However, where I draw the line is the difference between making money and using a corporation’s resource to exploit its own workers, as it continues to exploit the rest of us. This is the Walmart business model. From a management perspective I believe it is a horrible one, which may make money, but eventually damages not only the corporation itself, but the entire society in which it operates.

When Henry Ford began his company he purposely paid higher than the prevailing wage at the time. Ford explained that it was just good business since if his employees got higher pay they could afford to buy his cars, which they then did. We know that when working class and middle class people earn more, they spend more. Giving workers a good wage isn’t bad business, it is good business. Better paid workers are better workers and better workers make the company even higher profits. This isn’t rocket science after all. Even business-centric commentators believe this as was stated in this article from Fortune Magazine, which uses the ideas of conservative economists to make the case that Walmart can and should pay its workers more, without sacrificing either the bottom line or their stock prices.

There are a number of ways to answer the question of what Walmart should pay its employees. One possibility is this: The lowest wage that Walmart can get away with paying. That is probably the way many employers do it, but it’s far from the best economic answer. Better-paid employees are likely to work harder and stick around longer. If employees made more, they would have more to spend at Wal-Mart.

I’m sure most readers will remember the former electronics giant Circuit City, which is now defunct. In 2007 this company made a fatal decision that hastened its downfall. The decision was premised on the same lines as those who use the Walmart theory of employment, which is that employees are merely easily disposable cogs in the corporate wheel and should be treated as such:

In 2007, the starting wage [at Circuit City] for new employees was dropped from $8.75 an hour down to $7.40 an hour ($6.55 being the federal minimum wage at the time). In a press release on March 28, 2007, Circuit City announced that in a “wage management” decision in order to cut costs, it had laid off approximately 3,400 better-paid associates and would re-staff the positions at the lower market-based salaries. Laid-off associates were provided severance and offered a chance to be re-hired after ten weeks at prevailing wages. The Washington Post reported interviews with management concerning the firings.[24]The Post later reported in May 2007 that the layoffs, and consequent loss of experienced sales staff, appeared to be “backfiring” and resulting in slower sales”

Far too many insufferable young adults at the nation’s MBA factories have come away with degrees and with a feeling of superiority and contempt for the average worker. They see workers and treat workers as somehow a sub-human species to be used, abused and thrown out to the streets when they are no longer useful to the company. When I was a business major in Marketing and Management many years ago this was known as “Theory X”. Back in those early days of the 60’s “Theory X” was viewed as counterproductive and outdated. Somehow “Theory X” has reemerged to become the norm for worker treatment in America and perhaps our decline as an industrial nation has been spurred by it. I think when Ronald Reagan signaled corporations that it was okay for them to reopen their battle with Labor Unions via firing the striking air traffic controllers, “Theory X was resurrected.

Right now Walmart is suffering labor problems of its own as a Union is trying to organize its workers. The company has resisted any possibility of its workers organizing into a Union and has fought it in the courts and by firing and/or harassing those workers who are trying to organize.

“The wheels of the National Labor Relations Board grind slow and not especially fine, but they have ground to the point of authorizing complaints against Walmart for several alleged violations of workers’ rights, including threatening retaliation against workers for striking and actually carrying out such retaliation. According to the complaints, which will be brought before an administrative law judge if Walmart and the workers don’t reach a settlement:

  • During two national television news broadcasts and in statements to employees at Walmart stores in California and Texas, Walmart unlawfully threatened employees with reprisal if they engaged in strikes and protests on November 22, 2012.
  • Walmart stores in California, Colorado, Florida, Illinois, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, North Carolina, Ohio, Texas and Washington unlawfully threatened, disciplined, and/or terminated employees for having engaged in legally protected strikes and protests.
  • Walmart stores in California, Florida, Missouri and Texas unlawfully threatened, surveilled, disciplined, and/or terminated employees in anticipation of or in response to employees’ other protected concerted activities.”

The truth about Walmart is that they actually have a negative effect on our nation’s economy and the economy of other nations that they insinuate themselves into:

  • Walmart store openings destroy almost three local jobs for every two they create by reducing retail employment by an average of 2.7 percent in every county they enter.
  • Walmart cost America an estimated 196,000 jobs – mainly manufacturing jobs – between 2001 and 2006 as a result of the company’s imports from China.

As shown above Walmart jobs are jobs that ensure, rather than rescue workers from poverty and also:

  • “Walmart pays less than other retail firms. A 2005 study found that Walmart workers earn an estimated 12.4% less than retail workers as a whole and 14.5% less than workers in large retail in general. A 2007 study which compared Walmart to other general merchandising employers found a wage gap of 17.4%.
  • Last year, Walmart slashed already meager health benefits again, dropping health insurance for new hires working less than 30 hours a week and leaving more workers uninsured.”

As mentioned above Walmart puts a tremendous burden on the taxpayers in this country and in doing so harms the tax base in the localities where they set up shop.

  • “Taxpayers subsidize Walmart’s low wages and poor benefits. Just one Walmart store costs taxpayers an estimated $1 million in public assistance usage by employees, according to a new report from the Democratic staff of the U.S. House Committee on Education and the Workforce.
  • In many of the states across the country that release such information, Walmart is the employer with the largest number of employees and dependents using taxpayer-funded health insurance programs. A few examples:
  • In Arizona, according to data released by the state in 2005, the company had more 2,700 employees on the state-funded plan.
  • The company also topped the list in their home state of Arkansas, with nearly 4,000 employees forced onto the state’s plan according to data released by the state in 2005.
  • In Massachusetts, in 2009, taxpayers paid $8.8 million for Walmart associates to use publicly subsidized healthcare services.
  • Despite all the damage they have done to US workers and communities, a 2007 study found that, as of that date, Walmart had received more than $1.2 billion in tax breaks, free land, infrastructure assistance, low-cost financing and outright grants from state and local governments around the country. This number has surely increased as Walmart continues to receive additional subsidies.
  • Meanwhile, the Waltons use special tax loopholes to avoid paying billions in taxes. According to a recent Bloomberg story, the Waltons are America’s biggest users of a particular type of charitable trust that actually allows the donor to pass money on to heirs after an extended period of time, without having to pay much-debated estate and inheritance taxes. According to Treasury Department estimates reported in Bloomberg, closing the two types of loopholes the Waltons appear to use would raise more than $20 billion over the next decade.”

This Thanksgiving Season Walmart has been running a syrupy TV commercial that shows veterans returning home from our wars overseas. It guarantees that it will hire any veteran with an honorable discharge. To me this is yet another bitter irony that this company seems oblivious to. Walmart is “showing its support for our troops” how? By offering them some of the lowest paying jobs in America. This honors our troops in what to me is a rather backhanded way. Our veterans deserve to be well-treated after their service in these awful wars. Far too many of them can’t find work when they leave the service, but is working at Walmart honoring them, or is it offering them another low paying career, albeit without the danger?

When all of the truth began to come out about Walmart’s treatment of its workers I stopped shopping there. The truth is I can afford not to shop at Walmart, even though I’m on a fixed income that leaves me hanging onto the middle-class. There were times, when my family was young, that our income kept our heads barely above water. Therefore I can understand what it is like to clip coupons and go to multiple stores looking for sales. So I won’t say that anyone who shops at Walmart is bad because I’m not in a position to judge an individual family’s financial needs. I would ask people though, to raise their voices about the way that Walmart treats people. My request is that we find ways to oppose the “Walmartization” of our country, because if we don’t we will soon become one of those “third world” nation’s that we used to talk about disparagingly. My view in this is neither a liberal, nor conservative view. It is a question of fairness and it is an ethical question of how a capitalist enterprise should treat its workers. One can be a conservative, in the true meaning of the word and still decry such backward employment policies. From the perspective of those who don the mantle of fiscal conservatives alone, a fair analysis is that this company is costing us all billion$.

Submitted By: Mike Spindell, Guest Blogger

128 thoughts on “To Walmart with Contempt”

  1. “DavidM, I’m beginning to think folks here hate wealthy people. Could a Bolshevik Revolution be far away?”

    Hate has nothing to do with it. If you construct a system that keeps enough people cold and hungry you will surely generate social unrest.

    Since 1973 through 2007 the top 95% have had the largest gains in income by far – about twice as much as the median gain. Since the Great Recession of 2007-2008 the top earners have taken essentially all the gains from the economic recovery.

    Does anyone really believe this occurred by pain dumb luck or that the top earners really work that much harder than everyone else. Sure the top people work hard. But so does every one else.

    The fact is the rules of the system have changed and those changes tend to reward those at the top.

    And now we have the very rich trying to reduce the social safety net with the inevitable result that more people will be left cold, hungry, and some without shelter.

    Raises the question does the system select for smart of stupid leaders?

  2. Wealthy is not the same thing as greedy. It wasn’t wealthy people that sparked the French Revolution. It was greedy people. That greedy people sometimes end up wealthy is coincidence.

  3. “some organizations, particularly educational, plead to have the names of famous people on buildings because that helps w/ future fundraising.”

    I am originally from there. The Walton family OFFERED to build them, and the UofA took them up on it. Those buildings are enormous. Look them up on Google Earth.

  4. Help please, a comment was eaten. Thank you for your Thanksgiving spirit and help.

  5. OS. Some organizations, particularly educational, plead to have the names of famous people on buildings because that helps w/ future fundraising. But, feel free to hate the Waltons. Happy Thanksgiving to you and your family. I sincerely wish for it to be special day of food, family and friends.

  6. DavidM, I’m beginning to think folks here hate wealthy people. Could a Bolshevik Revolution be far away?

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