Saturday, July 27, 2013

WALMART*, America's Welfare Queen

 94541 600 Walmart class action suit cartoons
Now I know that Walmart's policies do not reflect the best way of doing business and the values that I think are important in America.

 "More and more Americans are asking about the price that we have to pay when Walmart comes into a community, treats workers poorly, violates immigration laws and squashes small businesses."
Anthony Weiner 
 "You know, without China there is no Walmart and without Walmart there is no middle class and lower class prosperity in the United States." 

Each week one third of the US population visits a Walmart store. With 3500 stores and 2500 related outlets in the US and elsewhere, it is the country's largest employer. World Wide Revenues in 2011 amounted to $405 billion (about 70% in US) and profits $15.7 billion.  The products it sells mostly come from China. The Economic Policy Institute estimates that between 2001 and 2006 this resulted in a trade deficit with China that eliminated 200,000 US jobs. 

With close to 2.2 million employees worldwide, Walmart has faced a torrent of lawsuits and issues with regards to its workforce. These issues involve low wages and inadequate health care, as well as issues involving the company's strong anti-union policies. Critics point to Walmart's high turnover rate as evidence of an unhappy workforce, although other factors are involved. Approximately half of its employees leave within the first year.

THE GERMAN DEBACLE (an example of what is wrong with Walmart):
The Walmart way of doing business was clearly a non fit in German and they eventually left the market Here are some excerpts from an article in the Huffington Post written by David Macaray that makes for interesting reading about why Walmart failed. 
  •  Germany was too "green" for a slash-and-burn outfit like Walmart, with its plastic bags and plastic junk 
  • Walmart couldn't hack the pro-labor union culture of Germany.
  • German consumers prefer small neighborhood stores rather than large and remotely placed impersonal chains.
  • Walmart requires its checkout people to flash smiles at customers after bagging their purchases. Plastic bags, plastic junk, plastic smiles. But because the German people don't usually smile at total strangers, the spectacle of Walmart employees grinning like jackasses not only didn't impress consumers, it unnerved them.  
  • Walmart employees are required to stand in formation and chant, "WALMART! WALMART! WALMART!" while performing synchronized group calisthenics.Unfortunately, this form of corporate boosterism didn't go over particularly well with the Germans; a group-think too reminiscent of the one that that occurred in Nuremberg several decades earlier
  • in other northern European countries where as high as half the shopping population either walk or take bicycles to shop in nearby small and medium sized specialty stores the NA style Walmart located in a remote location is a non fit. 

A Walmart store can only prosper in a country where minimum wages are below the poverty line and with labour policies that allow companies to deprive workers of social benefits and full time employment. It is active in China but it could not prosper in countries such as Australia and most of Europe where minimum wages for working adults are more than twice what Walmart offers, unions exist and labour legislation is in place.

Here are is a example of what Walmart has to offer America
  • The merchandise is manufactured abroad, mainly in China thereby eliminating mostly well paying middle class American manufacturing jobs.
  • They push suppliers to move offshore by demanding lower and lower prices. Most suppliers to stay in business have been forced to comply
  • A race to the bottom by competitors and suppliers in order to compete thus setting  a labour income pattern for America
  •  They lobby for policies that make it easier to move jobs overseas.While this money was paid to influence a range of legislation, from promoting corporate tax cuts to opposing a bill to guarantee paid sick time to working people, trade policy was among the issues Walmart lobbied on most aggressively. They actively promote Free Trade Agreements.
  • Walmart has set the template for today’s economy; one in which increased economic productivity is not shared with working people, and the vast inequality that this creates is seen as the nation's norm.
  •  Today the six members of the Walton family who inherited the Walmart fortune enjoy wealth equal to that of the least-wealthy 30 percent of Americans ( that's over a hundred million Americans). These billionaires are the ultimate beneficiaries of Walmart’s push to cut costs, condemning retail employees to work in poverty and American factory workers to unemployment. 
  •  Walmart wages are so low that most of its workers rely on food stamps and other government aid programs to fulfill their basic needs. It is estimated that the  government subsidy to employees amounts to about 2.7 billion dollars a year or on the average about 402 thousand dollars per outlet. This certainly certainly qualifies Walmart and its beneficiaries in the Walton family as one of the nation's leading Welfare Queens.
Do the Walton family need to be Welfare Queens to carry on? I don't think so.

Here is a headline they should think about."Costco Pays Well and Soars, While Walmart and Others Pay Peanuts and Sink"

While their second biggest competitor, Walmart, only saw a 1.2% rise in year on sales, Costco’s most recent quarterly earnings report showed an 8% rate of growth in year on sales, a 5% rise in same-store sales, and an almost $70 million rise in membership fees.

Wake up Walmart!! Its possible to change and offer your employees a better life and money to spend if you want to.