The Bad News About Wal-mart

"Wal-mart is an amazing story. Sam Walton found that underpricing the other guy worked, but his stores fifty years ago were rag-tag affairs. He and his associates finally realized a need for sound organization. He used K-mart, Target, and others as examples, and then surpassed them. Wal-mart developed an immense computer system to track sales, inventory, product location, etc. It carries an immense variety of products, which can be resupplied quickly with its efficient distribution system. It has become the largest corporation in the world in terms of sales and employment.

But size is hardly the only reason for the characterization: "The US of Wal-Mart." Wal-mart is also a part of a new business paradigm that is a shift away from the one established by major corps after WWII. Then, vast numbers of workers, both blue- and white-collar, often as members of unions, joined the middle-class with good wages and benefits. By the time of Reagan, that era of good will was over, as amply demonstrated with the busting of the PATCO union. Wal-mart, which arose out of the poor, rural South, where unions have never been tolerated, has thrived in and even helps drive the new business environment.

Wal-mart has become so big and influential that its manner of conducting business cannot be ignored. It pays near poverty-level wages with few benefits. US taxpayers end up having to subsidize Wal-mart workers, from EITC, food stamps, emergency medical care, etc. Wal-mart forces the same conditions on suppliers often resulting in outsourcing and loss of jobs. It is a habitual violator of US labor laws ranging from anti-unionization, failure to pay for hours worked or overtime, and discrimination against women. Of course, all of these practices are vigorously denied. Wal-mart has had to back off of claims that it sells at the lowest prices and that it emphasizes American-made goods.

Communities pay a large price when Wal-mart moves in. Local businesses are often forced to close and infrastructure has to be significantly upgraded. But then the threat of Wal-mart moving on, leaving a damaged community behind, becomes very real. Much of the protests against Wal-mart are based on adverse community impacts. However, according to the author's data, very few are successful. Wal-mart contends it is a huge job creator for communities. See above for the type of jobs. Furthermore, the author's data shows that Wal-mart jobs created scarcely equal those that it eliminates.

The author acknowledges that the primary American identity is as a consumer. Shopping and finding the best deal is a national obsession. The conditions under which goods are made and sold and the impacts on workers are not part of the national consciousness. Wal-mart seems to weather such controversies as the Kathy Lee Gifford clothing line being produced in sweatshops with nary a hiccup.

There is no doubt that the American political and economic system has been undergoing huge changes in the last twenty-five years. Yes, Wal-mart is a huge player. But the entire right-wing mantra of free markets and anti-government politics is bigger than Wal-mart. The media, educational and religious institutions support and promote the new thinking. Gone are the views that corporations have societal obligations and that government exists to control excesses and provide a safety net. That is the space in which Wal-mart fits. Few observers, including the author, see any sort of reversal on the horizon. The corporate agenda, if unchecked, will lead far down a road where we really do not want to go."

---Reviewer: Jim "PoliticalMan" (Grayson, GA USA)

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