Why Wal-Mart Sucks and is Bad for America

A look at all the sneaky/bad things Wal-Mart does. Well, not all, but some big ones.

They Don’t Give Healthcare Benefits to their Employees

But all the careful public relations work was demolished by the leak of an internal memo last week which acknowledged some shocking home truths about Wal-Mart – including the fact that 46 per cent of the children of company employees either had no health insurance or relied on emergency government programs nominally set up for the indigent and unemployed. The memo, written by Wal-Mart’s executive vice-president for benefits in conjunction with the management consultants McKinsey, also showed the true purpose of rearranging the company’s health plan was to cut costs further.
Sure enough, close examination of the health plan revealed that, while monthly insurance payments were being lowered in some cases, they came with a hefty deductible that many company employees were unlikely to be able to afford. The memo went so far as to suggest adding a physical element to sedentary jobs such as cashiering to deter unhealthy people from applying.
-”Wal-Mart: Is This the Worst Company in the World?” by Andrew Gumbel, November 2, 2005

The Low Prices Cost Americans their Jobs

Wal-Mart wields its power for just one purpose: to bring the lowest possible prices to its customers. At Wal-Mart, that goal is never reached. The retailer has a clear policy for suppliers: On basic products that don’t change, the price Wal-Mart will pay, and will charge shoppers, must drop year after year. But what almost no one outside the world of Wal-Mart and its 21,000 suppliers knows is the high cost of those low prices. Wal-Mart has the power to squeeze profit-killing concessions from vendors. 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.
Of course, U.S. companies have been moving jobs offshore for decades, long before Wal-Mart was a retailing power. But there is no question that the chain is helping accelerate the loss of American jobs to low-wage countries such as China. Wal-Mart, which in the late 1980s and early 1990s trumpeted its claim to “Buy American,” has doubled its imports from China in the past five years alone, buying some $12 billion in merchandise in 2002. That’s nearly 10% of all Chinese exports to the United States.
-”The Wal-Mart You Don’t Know” by Charles FishmanDecember 1, 2003

They Get Paid if One of Their Employees Dies (The Dead Peasant Policy)

Right now, your company could have a life insurance policy on you that you know nothing about. When you die — perhaps years after you leave your employer — the tax-free proceeds from this policy wouldnt go to your family. The money would go to the company.Whats more, the company might use this policy to pay for retirement benefits and other perks not for you or your fellow workers, but for your companys top executives.Sound outrageous? Such corporate-owned life insurance is also big business:
Companies pay a whopping $8 billion in premiums each year for such coverage, according to the American Council of Life Insurers, a trade group.
The policies make up more than 20% of the all the life insurance sold each year.
Companies expect to reap more than $9 billion in tax breaks from these policies over the next five years. The policies are treated as whole life policies. So, companies can borrow against the policies (though the IRS won’t let them write off the interest). And the death benefits are tax-free.Hundreds of companies — including Dow Chemical, Procter & Gamble, Wal-Mart, Walt Disney and Winn-Dixie — have purchased this insurance on more than 6 million rank-and-file workers.
These policies, nicknamed dead janitors or dead peasants insurance, soared in popularity after many states cleared the way for them in the 1980s. Congress recently tried to crack down on the practice, to the howls of the insurance industry — which earlier this year managed to derail reforms.
-By Liz Pulliam Weston – “Does Your Boss Want You Dead?”

They Ruin the Environment

The federal government charged Wal-Mart with violating the Clean Water Act in 17 locations across the country. Run-off from Wal-Mart construction sites polluted drinking water, streams and lakes. To settle the charges Wal-Mart agreed to pay a $1 million dollar fine. -EPA

They Attack Union Efforts

Human Rights Watch, an advocacy group based in New York, released a report yesterday detailing what it called excessively aggressive tactics by Wal-Mart Stores to stop union organization in its stores.
The report is the first comprehensive look at the retailer’s anti-union operations, the group said, though much information had previously been reported. Most of Wal-Mart’s actions were legal but heavy-handed, the report says, including a rapid-response team to prevent organization, a hotline for store managers and tips on staying “union free.” In addition, the report cites more than a dozen rulings against Wal-Mart by the National Labor Relations Board that found that Wal-Mart illegally confiscated union literature, prohibited discussions of unions and retaliated against union supporters.
-”Wal-Mart’s Union Stance Attacked” By Ylan Q. Mui and Amy JoyceWashington Post Staff Writers Tuesday, May 1, 2007

WAL-MART Drives Down Retail Wages $3 BILLION Every Year

“A recent study by researchers at UC Berkeley’s Labor Center has quantified what happened to retail wages when Wal-Mart set up shop, drawing on 15 years of data on actual store openings. The study found that Wal-Mart drives down wages in urban areas, with an annual loss of at least $3 billion dollars in earnings for retail workers.”
UPDATE: Since the completion of our film, the study has been finalized and published, and the published findings produced a different number for the annual loss in retail earnings than the preliminary figure we used in the film. The published study ultimately found that Wal-Mart actually reduced the take-home pay of retail workers by $4.7 BILLION dollars annually. Unfortunately for the retail workers this statistic concerns, Wal-Mart’s effect on retail wages turns out to be worse than we had anticipated.
Source: Arindrajit Dube, “Impact of Wal-Mart Growth on Earnings throughout the Retail Sector in Urban and Rural Counties” [PDF File], UC Berkeley Labor Center, November 2005.

Wal-Mart Costs Taxpayers Money

In 2004, a study released the UC Berkeley Labor Center found that “reliance by Wal-Mart workers on public assistance programs in California comes at a cost to taxpayers of an estimated $86 million annually; this is comprised of $32 million in health related expenses and $54 million in other assistance.”
Source: Ken Jacobs and Arindrajit Dube, “Hidden Costs of Wal-Mart Jobs” [PDF file], UC Berkeley Labor Center, August 2, 2004.
Wal-Mart dismisses the findings of the UC Berkeley study, “Hidden Costs of Wal-Mart Jobs,” as a “union hit piece.” However, text from Wal-Mart’s own internal memo substantially corroborates their findings. An excerpt from the memo states:
“We also have a significant number of Associates and their children who receive health insurance through public-assistance programs. Five percent of our Associates are on Medicaid compared to an average for national employers of 4 percent. Twenty-seven percent of Associates’ children are on such programs, compared to a national average of 22 percent (Exhibit 5). In total, 46 percent of Associates’ children are either on Medicaid or are uninsured.” Source: Wal-Mart Internal Memo [PDF File], via New York Times
The researchers from the UC Berkeley Labor Center recently re-visited the situation, using Wal-Mart’s own findings as a basis for their analysis. This is what they have found:
Applying Wal-Mart’s reported percentages of workers and children enrolled in Medicaid/SCHIP implies Wal-Mart workers and children cost $456 million to taxpayers nationally through their use of public health programs. This does not include the costs of adult dependents. (See Table 3) Adding in the cost of adult dependents, the number approaches the original estimate reported in the Labor Center report.
Also, the original report did not include costs to the public for Wal-Mart employees who are uninsured. Information from the Wal-Mart memo also points to the possibility of additional taxpayer costs incurred from uninsured employees, as analyzed by the Labor Center:
The memo further reports that 19% of Wal-Mart employees lack health insurance. The cost of uncompensated care for those workers adds an estimated $202 million in taxpayer costs nationally, and $10 million in California. These costs were not quantified in the original report (see Table 4).Source: The updated analysis, with additional references to primary source material, can be found on the UC Berkeley Labor Center website (see: “Internal Wal-Mart Memo Validates Findings of UC Berkeley Study,” November 2005)
In addition to these new findings, a paper presented at the recent Wal-Mart sponsored conference by Michael J. Hicks of the Air Force Institute of Technology and Marshall University, finds that “Wal-Mart does increase Medicaid expenditures by roughly $898 per worker, which is consistent with other studies of the Medicaid costs per low wage worker across the United States.”
Source: Michael Hicks, “Does Wal-Mart Cause an Increase in Anti-Poverty Program Expenditures?” [PDF File], via Business Week, October 26, 2005.

More sites to find out about WalMart’s war on humanity

http://wakeupwalmart.com/facts/

Documentary: WalMart- The High Cost for a Low Price

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