Ten Things Wal-Mart Doesn’t Want You To Know

BY JARED CRAM | MAY 9, 2005 AT 5:53 PM
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Living on a college campus brings with it two immutable truths: last call always comes about four hours too early and you never have enough money in your pocket. Given this second fact, I’m sure most of you have ventured into your local Wal-Mart at least once. (Sure, that same Wal-Mart is probably the fifteenth to open in your town and maybe even qualifies for its own zip code at this point.) But the next time you’re tempted by a color television selling for about ten bucks, consider the following ten facts that Wal-Mart doesn’t want you to know about the real costs behind its “everyday low prices.”
1. Wal-Mart regularly violates federal law and flouts international human rights standards.
The right of workers to organize labor unions is protected by the National Labor Relations Act and is also cited as a basic human right by the International Labor Organization. In 2002, 43 distinct charges were filed against Wal-Mart for violations of the National Labor Relations Act and since 1995, 60 complaints have been filed against Wal-Mart with the National Labor Relations Board. These complaints and charges range from illegal firings to threats and intimidations against workers who attempt to exercise their right to organize. In fact, Wal-Mart provided store managers with a “toolbox for remaining union-free” that includes lists of warning sings that employees may be organizing and a hotline number to summon a corporate anti-union SWAT team.
2. Wal-Mart regularly falls below industry standards for employee pay.
In 2001, the average pay of a Wal-Mart worker was $8.23 per hour, more than two dollars less per hour than the average supermarket employee wage of $10.35 per hour. Furthermore, Wal-Mart associates only average 32 hours a week, causing many employees to be classified as “part-time,” thus restricting their access to health care and other benefits exclusively earmarked for full-timers. In fact, Wal-Mart wages are so low that the average Wal-Mart worker’s annual salary in 2001 was almost $1,000 below the federal poverty line of $14,630 for a family of three.
3. Wal-Mart has made the glass ceiling wider and thicker than ever before.
In 2001, six female employees in California filed suit against Wal-Mart, triggering the largest class action lawsuit in American history involving more than one million current and former female employees. Women in the Wal-Mart “family” make up more than two-thirds of its hourly employees, but hold only one-third of managerial positions, according to a report in the Financial Times. The report also notes that only 15 percent of Wal-Mart store managers are women. Check out Selling Women Short: The Landmark Battle for Workers’ Rights at Wal-Mart to learn more.
4. Wal-Mart sometimes doesn’t even pay its low wages at all.
Poverty level wages are bad enough. But Wal-Mart apparently feels that not paying wages at all is even better for its bottom line. As of December 2002, 39 class action lawsuits in 30 states were filed against Wal-Mart claiming tens of millions of dollars in back pay owed to hundreds of thousands employees. These lawsuits included instances of Wal-Mart forcing employees to work through breaks, forcing employees to work off the clock, and even deleting hours from employees’ time sheets without their knowledge. According a former Wal-Mart manager in Alabama and Mississippi, Wal-Mart’s central office threatened to write up managers who didn’t reduce labor costs and this led to managers leaning on assistant managers to falsify time sheets and force employees to work without pay.
5. Wal-Mart routinely makes health care unavailable or unaffordable for its employees.
Wal-Mart’s company health insurance is too expensive or practically impossible to get for many of its employees. Just over 40 percent of Wal-Mart employees have insurance through the company plan, far fewer than the 66 percent that is typical of a firm the size of Wal-Mart. There are a few causes for this: classifying employees as “part-time,” increasing the waiting period for eligibility, and refusing to allow employees to extend coverage to spouses and children. The end result of this is that the public is forced to pick up the slack with our tax dollars. According to a study put out by the Institute for Labor and Employment at the University of California-Berkeley, Wal-Mart employees received $20.5 million in public health care assistance in California alone. And Wal-Mart is more than happy to keep this subsidy gravy train going. Knowing that its employees can’t afford the company health plan, or because they just refuse to make it available to employees, Wal-Mart encourages employees to apply for public assistance programs like Medicaid that are meant to be last resort safety net options, while Wal-Mart continues to bilk American taxpayers for millions in health care costs.
6. Wal-Mart regularly drains public coffers at all levels of government.
The government subsidization of health care for Wal-Mart employees is just the tip of the iceberg. Wal-Mart routinely uses taxpayer money to finance its never-ending corporate growth. A report commissioned by the House Committee on Education and Welfare estimates that a two hundred person Wal-Mart store costs federal taxpayers approximately $420,750 a year, or $2,103 per employee. These costs include:
-$36,000 a year for free and reduced cost school lunches,
-$42,000 for Section 8 housing assistance,
-$125,000 for low-income family tax credits and deductions,
-$100,000 for additional Title I expenses,
-$108,000 for state children’s health insurance expenses, and
-$9,750 for low income energy assistance
State and local governments also lose when Wal-Mart comes to town. A study commissioned by the Los Angeles City Council in 2003 found that Wal-Mart is a net loss for the communities it moves into. An influx of “big box retailers” such as Wal-Mart was estimated to cost an additional $9 million in state health care costs and a loss in pensions and retirement benefits so large that the increase in public assistance necessary to make up the shortfall could not even be covered by increased sales and property taxes.
7. Wal-Mart makes a habit of flouting immigration laws and regulations.
As Wal-Mart continues its race to the bottom in worker compensation, Wal-Mart routinely seeks out the most vulnerable and powerless workers in the American economy: undocumented immigrant workers. On October 23, 2003, federal agents raided 61 stores in 21 states leading to the arrest of 250 janitors who were undocumented workers. Similar raids in 1998 and 2001 led to the arrest of an additional 102 undocumented Wal-Mart employees. In addition, the 2003 raid led to a grand jury being convened to consider federal labor racketeering charges against Wal-Mart executives. These charges were bolstered by wiretapped conversations between Wal-Mart executives and labor contractors that proved Wal-Mart knew its employees were undocumented immigrants.
8. Wal-Mart has played a major role in the outsourcing of American jobs overseas.
Although Wal-Mart has always tried to pass itself off as a company deeply concerned with the well-being of everyday American workers, actions speak louder than words. No longer content to follow its old motto of “Buy American,” Wal-Mart now imports over 50 percent of its merchandise from overseas. In 2003 alone, Wal-Mart purchased one-eighth of all Chinese imports to the United States. And by insisting on the low prices that only sweatshop labor can provide, Wal-Mart has used its tremendous power in the marketplace to bully American firms into moving their production facilities overseas. And once overseas, these firms are required to keep prices low at all costs to please Wal-Mart; even if it requires forcing employees to work in sweatshop conditions for little pay producing products that the factories lose money on.
9. Wal-Mart has consistently discriminated against disabled workers.
Wal-Mart has also been an equal opportunity discriminator by choosing to ignore federal laws banning discrimination against the disabled. Wal-Mart has been the defendant in a number of suits alleging this kind of discrimination and in 2001 alone it was required to pay $6 million to settle 13 such lawsuits. These lawsuits were brought not by individuals, but by the federal government through the Equal Employment Opportunity Commission. These settlements also required that Wal-Mart change its hiring practices and provide more training for employees in anti-discrimination laws. Nonetheless, on January 20, 2004, Wal-Mart was again in court after refusing to hire a man in Kansas City because he required a wheelchair.
10. Wal-Mart routinely puts its employees at risk of serious injury or death.
Wal-Mart has also chosen to flout federal worker safety regulations on a regular basis. This is most apparent in its policy to “lock-in” employees overnight. Wal-Mart claims this is to prevent employee theft and unauthorized breaks. In order to enforce these rules, Wal-Mart threatens to fire any workers who use the fire exits and only provides a key to unlock the doors to a manager. On many occasions, workers have been locked in overnight without a manager, forcing employees to wait until morning to receive treatment for injuries such as broken bones and lacerations. And although it has yet to happen at Wal-Mart, American history teaches us what happens when employees are locked in with no way to get out. In 1911, 146 employees of the Triangle Shirtwaist Company, mostly young women, were burned alive behind doors locked by the owners. More recently, in 1991, 25 workers were killed when a fire broke out in a chicken processing plant in North Carolina where the employees were locked in. The reason for the locked doors? Management concerns of employee theft and unauthorized breaks.
In the end, it’s pretty obvious that Wal-Mart is one of the most irresponsible employers in America today. It is hard to narrow its corporate misdeeds to only ten points. This list doesn’t even include Wal-Mart’s penchant for censorship or its damaging environmental record. As the largest retailer in the United States, Wal-Mart is a giant whose dominance allows the company to set standards in the retail sector and instead of acting as a responsible corporate citizen, it has chosen to lead a race straight to the bottom for American workers. Carry this list with you next time your wallet looks a little empty and you’re deciding where to shop.
Learn More:
Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart, an indispensable report, published February 16, 2004 by the minority staff of the House Committee on Education and the Workforce. You can download it as a PDF here. Much of the information in this story can be found in this report.