The Enemy Within
I usually don
usually don’t write about particular companies or send out articles on
particular entities. Well yes, I
send out all sort of things on Dubya, and some of the antics of Republicans in
general, but rarely do I pick on a particular company or corporation.
this one needs picking on, and I dug around to look for a lot of reasons to pick
on it.. It is a major cause of
unemployment, low wages, and tax burdens to communities and even states.
It is a major cause of our ever increasing debt to China and other
countries that sell us goods. And, such legislation as passed and is being passed in
congress like NAFTA and CAFTA - the deals that are supposed to help free trade
or bring better trade deals to the US - are actually costing us jobs, and
breaking our national treasury. And,
just recently, it has caused the loss of jobs of several hundred Union Employees
in just my area alone. A number of
grocery stores employing UFCW members have lost their jobs because these outlets
can no longer compete and most have closed their doors.
This is not only a local loss but it has an impact on the entire area and
even the state of Texas because now fewer
dollars are being circulated throughout the area and the loss of jobs means less
revenue to the state in lost taxes and spendable income.
and its ‘Everyday Low Prices’ don't come cheap.
fact, each Wal-Mart store employing maybe 200 or so workers costs taxpayers
approximately $420,750 annually in public social services used by Wal-Mart’s
workers whose low wages and unaffordable health insurance mean most of them are
among the working poor. That's the finding of Everyday
Low Wages: the Hidden Price We All Pay for Wal-Mart, a report by the
minority staff of the U.S. House of Representatives Education and the Workforce
Wal-Mart is #1 in Children of Employees on Publicly
Health Care Rolls March
17, 2005 report.
care and other public assistance for Wal-Mart employees costs
as much as $16 million annually
in MA, CT, GA, TN, WV, WI, WA show
states also footing
bill for Wal-Mart’s employees
giant, Wal-Mart, headquartered in
Bentonville, tops the list of companies in Arkansas with employees and their
children on the state Medicaid program for uninsured children and adults, the
Arkansas Democrat-Gazette reported. Arkansas
joins a growing list of states reporting Wal-Mart as the #1 or a top corporate
beneficiary of their public health programs.
the fact that Wal-Mart makes enormous corporate profits, the company is stingy
when it comes to its employees’ health care benefits,” said AFL-CIO
President John J. Sweeney. “When
its employees must join public health rolls instead of getting affordable health
care on the job, Wal-Mart is shifting the cost to taxpayers, cheating workers
and consumers alike. That’s simply wrong.”
the nation’s largest retailer does offer health care coverage to its
employees, waiting periods, to receive such coverage are long. Part-time employees cannot get family coverage and the cost
is too high to afford. According to
a fall 2003 AFL-CIO study, the insurance premium for Wal-Mart family coverage
was as high as $250 per month, a prohibitive expense for many of the retail
giant’s low paid workers.
to the Arkansas Democrat-Gazette story, “Wal-Mart Stores Inc., with 3,971 of
its 45,106 employees on public assistance, topped the list.
By contrast, at Triad Hospitals Inc. the state’s seventh largest
employer only 3 of its
employees were on public-assistance rolls.
Tennessee, Washington, Massachusetts, Wisconsin, West Virginia and Connecticut
have also reported that Wal-Mart employees, and their children are a
disproportionately large share of their state healthcare costs.
26 states have introduced legislation to require the states to disclose which
employers are shifting health care costs to taxpayers.
Championed by members of the National Labor Caucus of State Legislators,
these laws are designed to help measure the costs to state health care programs
when large and profitable employers such as Wal-Mart skimp on coverage.
2002 Georgia state survey showed that 10,261 of the 166,000 children covered by
Peach Care for Kids (a Georgia state health program) had a parent working at
Wal-Mart. That’s 14 times the number for the next highest employer, Publix
Grocery Stores, with 734.
in 2004, a University of California at Berkeley Labor Center study found that in
California alone, the reliance of Wal-Mart workers on public assistance programs
cost the state’s taxpayers $86 million annually. Health-related expenses made
up $32 million of that number.
is hitting its employees with a one-two punch that keeps them in poverty,
substandard wages, and stingy benefits. And,
taxpayers are picking up the tab,” continued Sweeney.
“Wal-Mart’s employees and consumers deserve better.”
annual sales of more than $250 billion, Wal-Mart netted $9.1 billion in 2003
profits, more than twice the profits of its leading retail competitors combined,
according to the company's most recent annual reports. Wal-Mart CEO, H. Lee
Scott, received a double digit pay increase in 2003, his salary and bonus
payments jumping by 26 percent over the previous year. Including the value of
stock received, Scott's pay package soared to $12.44 million. But many of his
1.3 million Wal-Mart employees are paid so poorly they can't even afford health
than 70 percent of them women, are paid an average $9.64 an hour if
they are full-time employees, according to Business Week.
Yet full-time workers, who comprise less than two-thirds of Wal-Mart's
workforce, may be scheduled for as few as 34 hours weekly.
Even at $9.64 hourly, working 34 hours a week, a Wal-Mart employee earns
only $17,043 annually, well under the $18,850 federal poverty guideline for a
family of four.
percent of workers at large U.S. firms get health coverage on the job, fewer
than half of Wal-Mart workers do, an
October 2003 AFL-CIO report finds.
virulent anti-union policies prevent workers from winning family-supportive
wages and benefits. Unionized
workers in the retail food industry make more than 30 percent more in hourly
wages than their nonunion counterparts, according
to a 2002 report by the Institute for Women's Policy Research.
Yet when new employees start at Wal-Mart, they must first watch a video
warning them against joining a union, according to author Barbara Ehrenreich,
who chronicled her experience working at Wal-Mart in Nickel and Dimmed: On
(Not) Getting by in America.
keeping its workers in poverty, Wal-Mart also impoverishes entire communities
when many residents have less to spend on goods and services, they can't support
community merchants and everyone's income and spending eventually drops.
retailers and super centers such as Wal-Mart transform
family-supporting, middle-class retail jobs into lower-paying jobs that often
leave workers unable to pay bills.
In the top 100 cities where Wal-Mart's share of the grocery industry grew
more than 20 percent between 1998 and 2002, the number of cashier jobs fell as
much as 2.3 percent. And every time
Wal-Mart expanded its market share by 1 percent in the grocery business, retail
food cashiers' wages dropped an average 5.5 cents per hour, according to an
analysis by the United Food and Commercial
Workers. With big-box retailers
and super centers tending to convert communities' union-scale retail jobs to
fewer, lower-paying retail jobs, the difference in overall compensation,
including wages and benefits, is "as much as $8 an hour," according to an October 2003 report prepared for the
city of Los Angeles
union grocery workers' wages were slashed to match the wages of
Wal-Mart workers, their communities would lose between $1.6 billion and $3
every $1 wage cut, the local economy loses a total $2.08 as less
circulates through the local economy. If
Wal-Mart paid each
$1 an hour more, it could maintain its profitability level by
prices a mere half penny per dollar.
according to the UFCW, would mean a $2 pair
of socks would now cost $2.01 A
very paltry sum which would be an immense help to Wal-Mart’s workers.
Wal-Mart comes to town, consumers often pay more than they save. Not only does
Wal-Mart ask taxpayers to subsidize the building of its giant retail stores,
Wal-Mart pays its workers so little they regularly are forced to use emergency
rooms and public services at taxpayer expense.
First, the company usually asks for massive public tax subsidies and
exemptions to build one of its big-box stores. Over the past 20 years, taxpayers
contributed at least $1 billion in subsidies to Wal-Mart stores and distribution
centers, as well as to developers of shopping centers anchored by Wal-Mart
Stores, according to Good Jobs First, a nonprofit research
group. Next, Wal-Mart makes
taxpayers pick up the health care tab for its employees. While 66 percent of
workers at large U.S. firms get health coverage on the job, fewer than half of
Wal-Mart workers do. As a result,
Wal-Mart workers are forced to use emergency rooms and public services for their
health care needs.
2001 study commissioned by the city of Barnstable, Mass., found big-box
retailers such as Wal-Mart annually depleted the town’s revenues by $794 per
1,000 square feet due to higher road maintenance costs and greater demand for
public safety services. Elected
officials in Cathedral City, Calif., gave Wal-Mart $1.8 million in tax rebates
10 years ago. Last year, when the city finally began getting its full $800,000
in annual sales taxes from the two stores, Wal-Mart decided to close them in
2005 and build a new super center in nearby Palm Desert.
Cathedral City officials learned Wal-Mart was moving out after reading
about it in the newspaper at a time when the city already had a $3 million
the huge costs taxpayers bear when Wal-Mart moves into an area, communities have
begun standing up to the giant retailer. In Franklin, Wis., a
coalition of union, consumer and environmental activists in July 2004 won
passage of a ‘size ordinance’ covering retail stores that stopped
development of a proposed 184,000-square-foot Wal-Mart super center selling
groceries as well as other goods. In Los Angeles, activists won passage of
a city ordinance in August 2004 requiring retailers such as Wal-Mart
to pay for economic analyses showing whether proposed super centers would
eliminate community jobs, depress wages or harm neighborhood businesses.
are not good neighbors their low-wage jobs have no health care,” says
Cathedral City Mayor Pro Tem Greg Pettis. He
advises other local leaders letting Wal-Marts into their community is “the
biggest mistake” they can make with public money. Whenever a new Wal-Mart opens, small businesses—from dress
shops and pharmacies to hardware, auto supply and music stores—close their
doors and good jobs disappear. According to the city
of Los Angeles’ 2003 report on big-box retailers such as Wal-Mart, Big box
retailers and super centers often can result in the reduction of consumer choice
due to their tendency to cannibalize competing retail businesses.
Wal-Mart kills family retail businesses and pushes out jobs that pay well, it
also forces suppliers to relocate their plants overseas to meet its low-price
demands. “Wal-Mart has the power
to squeeze profit-killing concessions from vendors,” wrote business reporter
Charles Fishman in the Dec.
2003 issue of Fast Company magazine: “To survive in the face of
its pricing demands, makers of everything from bras to bicycles to blue jeans
have had to lay off employees and close U.S. plants in favor of outsourcing
products from overseas.” “Suppliers
are just as much under the gun to deliver costs savings as are Wal-Mart's
non-union, part-time workers,” Jeffrey
Rubin, chief economist and chief strategist at CIBC World Markets, wrote March
8, 2004, in the Toronto newspaper, The Globe and Mail.
is the single
largest importer of foreign-produced goods in the United States, and
of its private-label clothing is manufactured in at least 48 countries around
the world and almost none in the United States.
the same time, Wal-Mart is the single largest importer of Chinese goods, buying
some $12 billion in merchandise in 2002, nearly 10 percent of all
Chinese goods sold in the United States. Through November 2004, the United
States was running a $147 billion trade deficit with China
foreign-made goods on such a massive scale, the company that trumpets its
All-American image is creating incentives for corporations to destroy good jobs
in the United States. Those
low-cost goods at Wal-Mart ultimately come at a high price: lost jobs, lower
wages and unsupportable U.S. trade deficits.
Lost Jobs Through Importing Foreign-Made Goods
a huge trade deficit undercuts
domestic manufacturing and destroys good U.S. jobs because the nation is
importing, on a large scale, products that had been produced domestically. The
company says its inventory of products made in China was expected to hit $18
billion last year, the second consecutive year the inventory grew by more than
20 percent. More than 70 per
cent of the products sold at Wal-Mart are made in China, according to the China
Business Weekly. More
than 80 percent of the 6,000 factories in Wal-Mart's worldwide database of
suppliers are in China. If Wal-Mart were a separate nation, it would rank as
China’s fifth-largest export market, ahead of Germany and Britain.
U.S. Jobs Shipped Overseas
1989 and 2003, the ever-increasing U.S. trade deficit with China has led to
about 1.5 million jobs that either moved overseas or never were created in this
country as production shifted to China, according to a report released Jan. 11,
2005, by the U.S.–China
Economic and Security Review Commission (USCC), a congressionally appointed
panel. The pace of job losses has picked up since China joined the World Trade
Organization in 2001, with about one-third of the total, or 500,000, occurring
in the past three years.
Lower Wages for U.S. Workers
supporting foreign-made goods on such a massive scale, the company that trumpets
its All-American image is creating incentives for corporations to destroy good
jobs in the United States. As the
world’s largest company with sales of $256 billion last year, Wal-Mart
exerts a strong downward pressure on wages, and not only for its own workers.
Its sheer size and buying power gives it the ability to influence wage
rates of its competitors and suppliers, including manufacturing and construction
pressures its suppliers through a policy that says the price Wal-Mart will pay
and will charge shoppers must drop each year for basic products that don't
change. To survive in the face of the retail giant’s pricing demands,
suppliers have had to lay off employees and close U.S. plants in favor of
outsourcing products from overseas.
purchasing such a large amount of goods produced in China, Wal-Mart indirectly
supports continued workers’ rights abuses by Chinese authorities.
A report in The
Washington Post shows how Wal-Mart pits suppliers against one another
and squeezes them for the lowest price. As a result, the report says factories
respond with longer hours or lower pay. And the workers have no options because
China forbids independent trade unions.
Wal-Mart sought to build a super center development the size of 17 football
fields on 60 acres in Inglewood, Calif., voters rejected the move in April 2004
in part because of the massive environmental and land-use exemptions Wal-Mart
demanded. Wal-Mart devastates community resources in other ways as well.
A delegation of activists from Inglewood went to Wal-Mart headquarters in
Bentonville, Ark., on April 5, and attempted to deliver a letter
to company CEO Lee Scott. The letter calls for a legally binding community
benefits agreement that will protect the rights of the Inglewood community and
guarantee living wage jobs, affordable family health care, fair pension
benefits, job training and advancement, freedom from retaliation and basic
rights on the job
“big-box” stores such as Wal-Mart often “destroy attempts to create
pedestrian-oriented communities and a sense of place and pride in low-income
neighborhoods by use of unattractive building architecture and site layouts
featuring huge expanses of black-top parking lots,” according to an October
2003 city of Los
Angeles report on super centers. Wal-Mart
super centers often drive
out neighborhood supermarkets and small businesses, creating urban blight
and driving down property values.
retailers such as Wal-Mart typically are at the edge of town, resulting in long
commutes to buy groceries, adding to increased traffic and air pollution, according
to the Sierra Club. When a
Wal-Mart closes, the vacant property drains value from surrounding commercial
and residential areas. According to the Feb. 20, 2002, The Dallas Morning
News, Wal-Mart has vacated stores in hundreds of communities as it builds
new super centers and Sam’s Club membership warehouse stores. Few non-retail
stores need the size of the space vacated by Wal-Mart, and real estate brokers
say Wal-Mart will not sell or lease empty stores to what it considers
competition. Controlling sprawl generated by Wal-Mart and other big-box
retailers may not only protect the environment but also create good jobs,
according to a recent Good
Jobs First study that looked at 155 metropolitan areas. The nonprofit group
found that, over a 10-year period, construction activity in cities with
managed-growth polices was worth $100,000 more per new resident than in those
that did not try to manage growth.
are, you know someone who works at Wal-Mart. Not only is Wal-Mart not a good
neighbor, its corporate practices are less than friendly. In fact, millions
of current and former Wal-Mart workers currently are seeking to win back their
rights in court. Current and former female Wal-Mart workers say the company
has discriminated against them in pay and promotion policies because of their
gender. In June, a U.S. District Court in San Francisco gave
class-action status to their lawsuit against Wal-Mart, making it the
largest class-action lawsuit in U.S. history representing 1.6 million women who
have worked at Wal-Mart since 1998. For
the same job classification, women earn from 5 percent to 15 percent less than
to a February 2003 report by Richard Drogin, professor emeritus of
Statistics at the University of California, Berkeley. In 2001, this equated to nearly 40 cents less per hour for
hourly workers or nearly $5,000 less annually for female managers, according to
Drogin. Wal-Mart balks at paying
even the poverty-level wages workers have earned:
As of December 2002, 31 lawsuits in 30 states had been filed against
Wal-Mart, claiming tens
of millions in back pay for hundreds of thousands of workers forced to work off
the clock or denied breaks. In
April 2004, the California Supreme Court declined to block class certification
in a lawsuit alleging Wal-Mart Stores Inc. required some 250,000 employees to
work off the clock. Workers say managers required employees to finish their work
before going home and that Wal-Mart understaffed stores in order to make
off-the-clock work mandatory for all practical purposes.
June 2003, a National Labor Relations Board administrative law judge found Wal-Mart violated federal labor laws in 2000 by
refusing to bargain over job changes it imposed on meat cutters in a
Jacksonville, Texas, store after they voted for a voice at work with the United
Food and Commercial Workers. After they sought to join a union, the skilled meat
cutters were suddenly demoted to “sales associates” and all Wal-Mart stores
eventually shifted to selling pre-cut meat.
Wal-Mart interferes with its workers' freedom to form unions in order to keep
wages and benefits down, it encourages other employers to follow suit. Such
efforts have real and significant consequences. According to a
report prepared for the city of Los Angeles, grocery chains cited “the
labor polices of nonunion superstore retailers” as a factor in their demanding
wage and benefit cuts from UFCW grocery workers who struck and were locked out
in 2003 . And according to a 2002
report by the Institute for Women’s Policy Research, unionized workers in
the retail food industry make more than 30 percent more in hourly wages than
their nonunion counterparts.
workers have been exploited at Wal-Mart. On Oct. 23, 2003, federal agents raided
61 Wal-Mart stores in 21 states and arrested 245 nightshift janitors who were
undocumented workers employed by cleaning contractors. In an Oct. 25, 2003, New
York Times story, one undocumented janitor said he had worked every night
except Christmas and New Year’s Eve for 16 months and made approximately $6.25
an hour with no benefits. Following the October raids, nine Mexican immigrants
who worked as janitors in New Jersey sued Wal-Mart alleging that it, as well as
the contractors, failed to pay overtime, withhold taxes and make required
workers’ compensation contributions. No federal charges were filed against
Wal-Mart, but the company agreed to pay $11 million to settle claims stemming
from the federal investigation.
early 2005, Wal-Mart launched a million-dollar advertising campaign in an
attempt to silence its critics. The company bought hundreds of television ads,
newspaper ads, and more to tell you what to think.
than fight back with more slick advertising and giant ad budgets, we think
there’s a better way to get the real facts out about Wal-Mart— a grassroots
way that depends on you for success. Invite your friends to view the facts about
Wal-Mart, and then see who accepted your invitations on an animated map that
tracks your fact sheet as it spreads across the country.
out the Wal-Mart Fact Checker!
PurpleOcean.org launched the Fact Checker in February of 2005 and it's
still going strong, with over 11,000 participants working to spread the word
are many interesting sites to visit to learn about Wal-Mart’s ongoing rip-off
of its workers, its customers, and its ‘Everyday Low Prices’
which costs the communities in which it operates more than the ‘low
prices’ are worth. Here are just a few, but if you get into one or two you
will be surprised to find thousands more linked from one site to another.
for this article was researched and compiled by Leo C. Helmer from United Food
and Commercial Workers Union, SEIU Purple Oceans Org., AFL/CIO sites, and
various news sources and stories.