Criticism of Wal-Mart

Criticism of Wal-Mart

Wal-Mart has been subject to criticism by various groups and individuals. Labor unions, community groups, grassroots organizations, religious organizations, and environmental groups protest against Wal-Mart, the company's policies and business practices, and Wal-Mart customers.Kabel, Marcus. " [http://www.washingtonpost.com/wp-dyn/content/article/2006/07/18/AR2006071800981.html Wal-Mart, Critics Slam Each Other on Web] ." "Washington Post." July 18, 2006. Retrieved on July 31, 2006.] [Sellers, Jeff M. (April 22, 2005). " [http://www.christianitytoday.com/ct/2005/116/52.0.html Women Against Wal-Mart] ." "Christianity Today." Retrieved July 31, 2006.] [Sellers, Jeff M. (April 22, 2005). " [http://www.christianitytoday.com/ct/2005/005/17.40.html Deliver Us from Wal-Mart?] ." "Christianity Today.". Retrieved on July 31, 2006.] Other areas of criticism include the corporation's foreign product sourcing, treatment of product suppliers, environmental practices, the use of public subsidies, and the company's security policies.Norman, Al (2004). "The Case Against Wal-Mart". Raphel Marketing, p. 7. . Wal-Mart denies doing anything wrong and maintains that low prices are the result of efficiency. [Copeland, Larry. (March 13, 2006). " [http://www.usatoday.com/money/companies/2006-03-15-young-walmart-usat_x.htm Wal-Mart's hired advocate takes flak] ." "USA Today." Retrieved on July 31, 2006.] [Rodino Associates. (October 28, 2003). " [http://www.lacity.org/council/cd13/houscommecdev/cd13houscommecdev239629107_04262005.pdf Final Report on Research for Big Box Retail/Superstore Ordinance] ." "Los Angeles City Council." Retrieved on July 31, 2006.] [Smith, Hedrick. " [http://www.pbs.org/wgbh/pages/frontline/shows/walmart/secrets/shots.html Who Calls the Shots in the Global Economy?] " "PBS." Retrieved on July 31, 2006.]

In 2005, labor unions created new organizations and websites to influence public opinion against Wal-Mart, including Wake Up Wal-Mart (United Food and Commercial Workers) and Wal-Mart Watch (Service Employees International Union). By the end of 2005, Wal-Mart had launched Working Families for Wal-Mart to counter criticisms made by these groups. Additional efforts to counter criticism include launching a public relations campaign in 2005 through their public relations website, [" [http://www.walmartfacts.com/ walmartfacts.com (official public relations website)] ." "Wal-Mart." Retrieved on August 1, 2006.] which included several television commercials. The company retained the public relations firm Edelman to interact with the press and respond to negative or biased media reports,Barnaro, Michael. (November 1, 2005). " [http://www.nytimes.com/2005/11/01/business/01walmart.ready.html?ex=1288501200&en=ec9edfc5f2f9841f&ei=5088&partner=rssnyt&emc=rss A New Weapon for Wal-Mart: A War Room] ." "New York Times." Retrieved on August 1, 2006.] and has started interacting directly with s by sending them news, suggesting topics for postings, and sometimes inviting them to visit their corporate headquarters.Barbaro, Michael. (March 7, 2006). " [http://www.nytimes.com/2006/03/07/technology/07blog.html?ex=1299387600&en=ae7585374bf280b9&ei=5088 Wal-Mart Enlists Bloggers in P.R. Campaign] ." "New York Times." Retrieved on August 1, 2006.]

Economists suggest that Wal-Mart is a success because it sells products at low prices that people want to buy, satisfying customer's wants and needs. However, Wal-Mart critics argue at the same time Wal-Mart's lower prices draw customers away from other smaller businesses, hurting the community. [Boaz, David. (November 8, 1996). " [http://www.cato.org/dailys/11-08-96.html Chrysler, Microsoft, and Industrial Policy] ." "Cato Institute." Retrieved on August 17, 2006.] [Bandow, Doug. (March 26, 1997). " [http://www.cato.org/dailys/3-26-97.html Can 'Unbridled Capitalism' Be Tamed?] " "Cato Institute." Retrieved on August 17, 2006.]

Local communities

tore openings

When Wal-Mart plans new store locations, activists sometimes oppose the new store and attempt to block its construction. Opponents to the new Wal-Mart cite concerns such as traffic congestion, environment problems, public safety, absentee landlordism, bad public relations, low wages and benefits, and predatory pricing. [Washburn, Gary; Meyer, H. Gregory. (September 1, 2004). " [http://www.chicagotribune.com/news/local/chicago/chi-0409010188sep01,1,6194811.story Wal-Mart hasn't written off city] ." "Chicago Tribune." Retrieved on August 4, 2006.] [Baldacci,Leslie. (January 26, 2006). " [http://www.suntimes.com/output/news/cst-nws-walmart26.html Thousands apply for jobs at new Wal-Mart] ." "Chicago Sun-Times." Retrieved on August 4, 2006.] " [http://courts.state.ar.us/opinions/old/94-235A.html Wal-Mart Stores, Inc. vs. American Drugs, Inc.: Arkansas Supreme Court Decision] ". (Case No. 94-235). "Arkansas Supreme Court." January 9, 1995. Retrieved on August 4, 2006.] Staff Writer. (October 1, 2001). " [http://www.newrules.org/retail/news_archive.php?browseby=slug&slugid=82 Wal-Mart Settles Predatory Pricing Charge] ." "The Hometown Advantage." Retrieved on August 4, 2006.] Staff Writer. (February 1, 2003). " [http://www.newrules.org/retail/news_archive.php?browseby=slug&slugid=165 German High Court Convicts Wal-Mart of Predatory Pricing] ". "The Hometown Advantage." Retrieved on August 4, 2006.] Opposition sometimes includes protest marches by competitors, activists, labor unions, and religious groups. [Buckley, Frank; Jamie McShane, Parija Bhatnagar (April 7, 2004). " [http://money.cnn.com/2004/04/07/news/fortune500/walmart_inglewood/ No smiles for Wal-Mart in California] ". "CNN." Retrieved on August 4, 2006.] [Taylor, Peter Shawn. (February 20, 2006). " [http://www.canada.com/nationalpost/news/issuesideas/story.html?id=a7729f56-1f18-41c6-976b-84c3e57d325b Freedom to shop] ". "National Post." Retrieved on August 4, 2006.] [Wallworth, Adam. (June 3, 2005). " [http://nwanews.com/nwat/News/28792/ Protesters hit streets to march against Wal-Mart] ". "Northwest Arkansas Times." Retrieved on August 4, 2006.] In some instances, activists demonstrated opposition by causing property damage to store buildings or by creating bomb scares. [Rosencrans, Willy. (August 31, 2004). " [http://www.agrnews.org/issues/294/localnews.html Wal-Mart Supercenter rammed] ". "Asheville Global Report." Retrieved on August 4, 2006.] [Roselle, Jody; Kerrie Frisinger. (May 26, 2005). " [http://www.theithacajournal.com/apps/pbcs.dll/article?AID=/20050526/NEWS01/505260331&SearchID=73215432188590 Wal-Mart receives bomb scare] ". "The Ithaca Journal." Retrieved on August 4, 2006.] Some city councils have denied permits to developers if they plan to include a Wal-Mart in their project. Those who defend Wal-Mart cite consumer choice, the overall benefits to the economy, and object to bringing the issue into the political arena.Sobel, Russell S.; Andrea M. Dean. " [http://www.be.wvu.edu/divecon/econ/sobel/WalMart/Walmart.pdf Has Wal-Mart Buried Mom and Pop?: The Impact of Wal-Mart on Self Employment and Small Establishments in the United States] ." "West Virginia University." Retrieved on August 4, 2006.]

A Wal-Mart Superstore opened in 2004 in Mexico, 1.9 miles away from the historic Teotihuacán archaeological site and Pyramid of the Moon.McKinley, Jr., James C. (September 28, 2004). " [http://www.nytimes.com/2004/09/28/international/americas/28mexico.html?ex=1254110400&en=9f21ee7203878784&ei=5088&partner=rssnyt No, the Conquistadors Are Not Back. It's Just Wal-Mart] ". "New York Times." Retrieved on August 4, 2006.] Although Wal-Mart's proposal received protest and media attention, the location was supported by Mexico's National Anthropology Institute, the United Nations, and the Paris-based International Council on Monuments and Sites. [Staff Writer. (November 5, 2004). " [http://news.bbc.co.uk/2/hi/business/3986729.stm Shoppers rush to pyramid Wal-Mart] ". "BBC News." Retrieved on September 5, 2006] Local merchants, helped by environmental groups and anti-globalization groups opposed the construction, [Stevenson, Mark. (November 4, 2004). " [http://www.signonsandiego.com/news/mexico/20041104-1407-mexico-wal-mart-ruins.html Despite months of protests, Wal-Mart-owned store opens near Mexico's pyramids] ". "San Diego Union-Tribune." Retrieved on August 4, 2006.] and poet Homero Aridjis joined the protest characterizing the opening as "supremely symbolic" and "...like planting the staff of globalization in the heart of ancient Mexico." [Staff Writer. (November 8, 2004). " [http://www.democracynow.org/article.pl?sid=04/11/08/1513234 Mexicans Protest Wal-Mart Opening Near Ancient Pyramids] ". " [http://www.democracynow.org/ Democracy Now!] " Retrieved on August 4, 2006.]

Archaeologists oversaw construction and discovered a small clay and stone altar along with some other artifacts where the store's parking lot is now located.

In 1998, Wal-Mart proposed construction of a store off of Charlotte Pike near Nashville, Tennessee. The building site was home to both American Indian burial grounds and a Civil War battle site. Protests were mounted by American Indians and the Civil War interest groups, but the Wal-Mart was eventually constructed after moving graves and some modifications of the site so as not to interfere with the battlefield.(February 13 2007). " [http://www.anairtn.org/walmart/index.html Wal-Mart / Lowe's Shopping Center Destroys Native American Cemetery] ". "Alliance for Native American Indian Rights". Retrieved on September 30 2007.] Civil War relics were also discovered at the site. The project developers, JDN Realty of Atlanta, donated land to permit access to the Civil War historic site. [East, Jim. (May 7 2001. " [http://www.tennessean.com/local/archives/01/04/04762281.shtml Builder's transfer of land for park expected in fall] ". "The Tennesseean". Retrieved on September 30 2007.] The Indian burials were removed and re-buried.

Economic impact

Wal-Mart is one of the largest corporations in the world.Staff Writer. (April 16, 2007). " [http://money.cnn.com/magazines/fortune/fortune500/2007/full_list/index.html Fortune 500] ." "CNN/Fortune." Retrieved on July 15, 2007.] Critics worry about the presence of Wal-Mart in their local communities. Studies have found both positive and negative effects on local businesses, jobs and taxpayers.

Kenneth Stone, Professor of Economics at Iowa State University, in a paper published in "Farm Foundation" in 1997, found that some small towns can lose almost half of their retail trade within ten years of a Wal-Mart store opening.Stone, Kenneth E. (1997). " [http://www.econ.iastate.edu/faculty/stone/10yrstudy.pdf Impact of the Wal-Mart Phenomenon on Rural Communities] ". (published in "Proceedings: Increased Understanding of Public Problems and Policies - 1997". Chicago, Illinois: Farm Foundation). "Iowa State University." Retrieved on August 4, 2006.] However, he compared the changes to previous competitors small town shops have faced in the past—from the development of the railroads and the Sears Roebuck catalog to shopping malls. He concludes that shop owners who adapt to the ever changing retail market can thrive after Wal-Mart comes to their community.A subsequent study in collaboration with Mississippi State University indicated that there are "both positive and negative impacts on existing stores in the area where the new supercenter locates." [Stone, Kenneth E.; Georgeanne Artz, Albert Myles (2003). " [http://msucares.com/pubs/misc/m1283.pdf The Economic Impact of Wal-Mart Supercenters on Existing Businesses in Mississippi] ". "Mississippi State University." Retrieved on August 4, 2006.]

A June 2006 article published by the libertarian Ludwig von Mises Institute suggested that Wal-Mart has a positive impact on small business.Kirklin, Paul. (June 28, 2006). " [http://www.mises.org/story/2219/ The Ultimate pro-WalMart Article] ". "Ludwig von Mises Institute." Retrieved on August 17, 2006.] It argued that while Wal-Mart's low prices caused some existing businesses to close, the chain also created new opportunities for other small business, and so "the process of creative destruction unleashed by Wal-Mart has no statistically significant impact on the overall size of the small business sector in the United States."

A Loyola University Chicago study which suggested that impact a WalMart store has on a local business is correlated to its distance from that store. The leader of that study admits that this factor is stronger in smaller towns and doesn't apply to more urban areas saying "It'd be so tough to nail down what's up with Wal-Mart".cite news|url=http://www.washingtonpost.com/wp-dyn/content/article/2008/06/22/AR2008062201717.html|title=When Wal-Mart Moves In, Neighborhood Businesses Suffer. Right?|last= Mui|first=Ylan Q.|date=June 23, 2008|work=Washington Post]

For the concern of jobs, a study commissioned by Wal-Mart with consulting firm Global Insight, found that its stores' presence saves working families more than US$2,500 per year, while creating more than 210,000 jobs in the U.S. [Clark, Sarah. (November 4, 2005). " [http://www.walmartfacts.com/impact/nov2005_conference_press_release.pdf Wal-Mart Saves Working Families $2,329 Per Year; Has Net Positive Impact on Real Wages and Job Creation] ". "Wal-Mart." Retrieved on August 4, 2006.] [Business Planning Solutions Global Insight Advisory Services Division. (November 2, 2005). " [http://www.globalinsight.com/publicDownload/genericContent/11-03-05_walmart.pdf The Economic Impact of Wal-Mart] ." "Global Insight." Retrieved on August 17, 2006.] Alternately the Economic Policy Institute estimates that 196,000 jobs were lost between 2001-2006, [Clark, Robert E. (June 26 2007). " [http://www.epi.org/content.cfm/ib235 The Wal-Mart effectIts Chinese imports have displaced nearly 200,000 U.S. jobs] Retrieved on August 2, 2008] and 68% of jobs lost were manufacturing jobs.

Another study at the University of Missouri found that a new store increases net retail employment in the county by 100 jobs in the short term, half of which disappear over five years as other retail establishments close. [Basker, Emek. (2002). " [http://econwpa.wustl.edu/eps/lab/papers/0303/0303002.pdf Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion] ". "University of Missouri." Retrieved on August 4, 2006.]

Studies of Wal-Mart show consumers benefit from lower costs. A 2005 "Washington Post" story reported that "Wal-Mart's discounting on food alone boosts the welfare of American shoppers by at least $50 billion per year." [Mallaby, Sebastian. (November 28, 2005). " [http://www.washingtonpost.com/wp-dyn/content/article/2005/11/27/AR2005112700687.html Progressive Wal-Mart. Really] ". "Washington Post." Retrieved on August 4, 2006.] A study in 2005 at Massachusetts Institute of Technology measured the effect on consumer welfare and found that the poorest segment of the population benefits the most from the existence of discount retailers. [Hausman, Jerry; Ephraim Leibtag. (October 2005). " [http://econ-www.mit.edu/faculty/download_pdf.php?id=1243 Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart] ". "Massachusetts Institute of Technology/United States Department of Agriculture." Retrieved on August 4, 2006.] In 2004, two professors at Pennsylvania State University asserted that although rates of poverty actually decreased in U.S. counties with Wal-Mart stores, their data suggested that poverty increased after "correcting" the data with an undocumented mathematical formula.Goetz, Stephan J.; Hema Swaminathan. (October 18 2004). " [http://cecd.aers.psu.edu/pubs/PovertyResearchWM.pdf Wal-Mart and County-Wide Poverty] ". "Pennsylvania State University." Retrieved on August 4, 2006.] They hypothesized, to explain their results: This could be due to the displacement of workers from higher-paid jobs in the retailers customers no longer choose to patronize, Wal-Mart providing less local charity than the replaced businesses, or a shrinking pool of local leadership and reduced social capital due to a reduced number of local independent businesses.

Because Wal-Mart employs some part-time and relatively low paid workers, some of these workers may partially qualify for some state welfare programs. This has led critics to claim that Wal-Mart increases the burden on taxpayer-funded services. [Vedder, Richard, [http://booktv.org/program.aspx?ProgramId=7916&SectionName=&PlayMedia=No The Wal-Mart Revolution: How Big-Box Stores Benefit Consumers, Workers, and the Economy] ] " [http://www.aflcio.org/corporatewatch/walmart/upload/walmart_tax_memo.pdf The Wal-Mart Tax: A Review of Studies Examining Employers' Health Care Cost-Shifting] ." "AFL-CIO." March 31, 2005. Retrieved on September 29, 2007.] A 2002 survey by the state of Georgia's subsidized healthcare system, PeachCare, found that Wal-Mart was the largest private employer of the parents of children enrolled in its program, one quarter of the employees of Georgia Wal-Marts qualified to enroll their children in Medicaid. [Bailey, Lynn. (April-June 2004). " [http://www.findarticles.com/p/articles/mi_qa4103/is_200404/ai_n9384014 The Extra Costs Behind "Everyday Low Prices!] " "The South Carolina Nurse." Retrieved on August 4, 2006.] A 2004 study at the University of California, Berkeley charges that Wal-Mart's low wages and benefits are insufficient and, although decreasing the burden on the social safety net to some extent, California taxpayers still pay $86 million a year to Walmart employees. [Arindrajit, Dube; Ken Jacobs. (August 2, 2004). " [http://laborcenter.berkeley.edu/lowwage/walmart.pdf Hidden Cost of Wal-Mart Jobs] ". "University of California, Berkeley." Retrieved on August 4, 2006.] [Raine, George. (August 3, 2004). " [http://www.commondreams.org/headlines04/0803-05.htm Wal-Marts Cost State, Study Says] ". "San Francisco Chronicle." Retrieved on November 30, 2006.]

Allegations of predatory pricing and supplier issues

Wal-Mart has been accused of selling merchandise at such low costs that competitors have tried to sue them for predatory pricing (intentionally selling a product at low cost in order to drive competitors out of the market). In 1995, in the case of "Wal-Mart Stores, Inc. v. American Drugs, Inc.", American Drugs accused Wal-Mart of selling items at too low a cost for the purpose of injuring competitors and destroying competition. The Supreme Court of Arkansas ruled in favor of Wal-Mart saying that their pricing, including the use of loss leaders, was not predatory pricing. In 2000, the Wisconsin Department of Agriculture, Trade, and Consumer Protection accused Wal-Mart of selling butter, milk, laundry detergent, and other staple goods at low cost, with the intention of forcing competitors out of business and gaining a monopoly in local markets.Staff Writer. (October 1, 2001). " [http://www.newrules.org/retail/news_archive.php?browseby=slug&slugid=82 Wal-Mart Settles Predatory Pricing Charge] ." "The Hometown Advantage." Retrieved on August 4, 2006.] Crest Foods filed a similar lawsuit in Oklahoma, accusing Wal-Mart of predatory pricing on several of its products, in an effort to drive their own company-owned store in Edmond, Oklahoma out of business. [Staff Writer. (September 28, 2000). " [http://findarticles.com/p/articles/mi_qn4182/is_20000928/ai_n10138957 Crest Foods sues Wal-Mart claiming predatory pricing] ." "The Oklahoma City Journal Record." Retrieved on August 4, 2006.] Both cases were settled out of court with no fine and no admission of wrongdoing. In the Wisconsin case, Wal-Mart was so confident of its innocence they agreed that Wisconsin could double or triple fine them should Wal-Mart ever violate the predatory pricing law.

In 2003, Mexico's antitrust agency, the Federal Competition Commission, investigated Wal-Mart for "monopolistic practices" prompted by charges that the retailer pressured suppliers to sell goods below cost or at prices significantly less than those available to other stores. Mexican authorities found no wrong-doing on the part of Wal-Mart. [Staff Writer. (August 1, 2002). " [http://www.ilsr.org/newrules/retail/news_archive.php?browseby=slug&slugid=134 Mexico Investigates Wal-Mart for Antitrust Violations] ." "The Hometown Advantage." Retrieved on August 4, 2006.] However, in 2003, the German High Court ruled that Wal-Mart's low cost pricing strategy "undermined competition" and ordered Wal-Mart and two other supermarkets to raise their prices. Wal-Mart won appeal of the ruling, then the German Supreme Court overturned the appeal. Wal-Mart has since sold its stores in Germany.

Wal-Mart has been accused of using monopsony power to force its suppliers into self-defeating practices. For example, Barry C. Lynn, a senior fellow at the New America Foundation, argues that Wal-Mart's constant demand for lower prices caused Kraft Foods to "shut down thirty-nine plants, to let go [of] 13,500 workers, and to eliminate a quarter of its products." Kraft was unable to compete with other suppliers and claims the cost of production had gone up due to higher energy and raw material costs. Lynn argues that in a free market, Kraft could have passed those costs on to its distributors and ultimately consumers.Lynn, Barry C. (July 2006). " [http://www.harpers.org/BreakingTheChain.html Breaking the Chain: The antitrust case against Wal-Mart] ". "Harper's Magazine." Retrieved on September 5, 2006.] However, only in a non-free market could Kraft or any other company "pass those costs on" without losing business because in a free market, consumers are free to choose another, less expensive brand.

In some cases, predatory pricing or unfair competition laws can hurt consumers. For example, most Wal-Mart store pharmacies fill many generic prescriptions for $4 for a month's supply. However, in California and ten other states, complaints from other pharmacies has resulted in Wal-Mart being required to charge at least $9 for a month's supply of certain drugs. [(November 30, 2006). " [http://www.nytimes.com/2006/11/30/business/30pharmacy.html?_r=1&ref=health&oref=slogin Side Effects at the Pharmacy] ". "The New York Times".]

Employee and labor relations

With close to two million employees worldwide, Wal-Mart has faced a torrent of lawsuits and issues with regards to its workforce. These issues involve low wages, poor working conditions, inadequate health care, as well as issues involving the company's strong anti-union policies. Critics point to Wal-Mart's high turnover rate as evidence of an unhappy workforce, although other factors may be involved. Approximately 70% of its employees leave within the first year." [http://www.pbs.org/itvs/storewars/stores3.html Store Wars: When Wal-Mart Comes to Town] ." "PBS." Retrieved on February 24, 2007.]

On the other hand, positions at Wal-Mart are in great demand. When the Wal-Mart store in Evergreen Park (near Chicago, Il) opened, 25,000 people applied for the 325 positions. Previously, the Wal-Mart in Oakland, California received 11,000 applications when it opened. [ [http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/08/17/MNGDPE91AH1.DTL Want a Wal-Mart job? Join the crowd] San Francisco Chronicle, Wednesday, August 17, 2005] Wal-Mart's Chicago-area manager Chad Donath said “we got an amazing response” and “that incredible number of applications shows the community thinks Wal-Mart is a great place to work.” He noted that generally stores receive between 3,000 and 4,000 applications for about 300 to 450 positions. [ [http://www.chicagobusiness.com/cgi-bin/news.pl?id=19286&seenIt=1 Wal-Mart gets 25,000 applications for Evergreen Park store] ChicagoBusiness, Jan. 25, 2006]

Wages

The activist group "Los Angeles Alliance for a New Economy" said "in 2006 Wal-Mart reports that full time hourly associates received, on average, $10.11 an hour." They further calculated that working 34 hours per week an employee earns $17,874 per year and claimed that's about 20 percent less than the average retail worker. (The number of hours the "average retail worker" worked was not specified) The report from LAANE further opines that this pay is "over $10,000 less than what the average two-person family needs."" [http://www.communitybenefits.org/article.php?id=757] ] Wal-Mart managers are judged, in part, based on their ability to control payroll costs. Some say this puts extra pressure on higher-paid workers to be more productive.Tejada, Carlos; Gary McWilliams. (June 26, 2003). " [http://www.careerjournal.com/salaryhiring/hotissues/20030626-tejada.html Well-Paid Professionals Draw Unwelcome Attention] ". "The Wall Street Journal (Career Journal)." Retrieved on February 24, 2007.]

By contrast, Wal-Mart insists its wages are generally in line with the current local market in retail labor. [ [http://www.walmartfacts.com/articles/4382.aspx Wal-Mart Facts - Wal-Mart Increases Start Rates at 1,200 Facilities ] ] Although direct comparisons are complicated because Wal-Mart employs more part time workers and the company's more extensive training, supervision and automation provides opportunity to workers with little or no experience or skills and this may account for wage differences. Wal-Mart grants "full time" benefits to those working as little as 34 hours per week but does not limit workers to just 34 hours per week. The company does control labor costs by discouraging overtime.

Other critics have noted that in 2001, the average wage for a Wal-Mart Sales Clerk was $8.23 per hour, or $13,861 a year, while the federal poverty line for a family of three was $14,630.Bianco, Anthony; Zellner, Wendy. " [http://www.businessweek.com/magazine/content/03_40/b3852001_mz001.htm Is Wal-Mart Too Powerful?] " "Business Week." October 6, 2003. Retrieved on September 29, 2007.] The company has hired low-skilled workers since its inception. Wal-Mart founder Sam Walton once said, "I pay low wages. I can take advantage of that. We're going to be successful, but the basis is a very low-wage, low-benefit model of employment."" (November 16, 2004). [http://www.pbs.org/wgbh/pages/frontline/shows/walmart/secrets/inside.html Is Wal-Mart Good for America] ?" "PBS." Retrieved on February 24, 2007.]

In August 2006, Wal-mart announced that it would roll out an average pay increase of 6% for all new hires at 1,200 U.S. Wal-Mart and Sam's Club locations, but the same time would institute pay caps on veteran workers.Staff Writer. (August 7, 2006). " [http://www.usatoday.com/money/industries/retail/2006-08-07-walmart-pay_x.htm Wal-Mart increases starting pay, adds wage caps] ". "USA Today." Retrieved on March 2, 2007.] While they maintain that the measures are necessary to stay competitive, critics believe that the salary caps are primarily an effort to push higher-paid veteran workers out of the company.

New, full-time Wal-mart associates must work one full year before receiving their first raise (ranging from 40 to 60 cents).

Working conditions

Wal-Mart has also faced accusations involving poor working conditions of its employees. For example, a class action lawsuit in Missouri asserted approximately 160,000 to 200,000 people who were forced to work off-the-clock, were denied overtime pay, or were not allowed to take rest and lunch breaks.Staff Writer. " [http://www.usatoday.com/money/companies/management/2005-11-02-walmart-employees_x.htm Wal-Mart to face employee suit in Missouri] ." "USA Today." November 2, 2005. Retrieved on February 24, 2007.] In 2000, Wal-Mart paid $50 million to settle a class-action suit that asserted that 69,000 current and former Wal-Mart employees in Colorado had been forced to work off-the-clock. The company has also faced similar lawsuits in other states, including Pennsylvania,Staff Writer. " [http://www.cbsnews.com/stories/2006/10/13/business/main2088901.shtml Wal-Mart Hit With $78M Fine] ." "CBS News." October 13, 2006. Retrieved on February 24, 2007.] Oregon and Staff Writer. " [http://www.cbsnews.com/stories/2002/12/20/national/main533818.shtml Wal-Mart Loses Unpaid Overtime Case] ." "CBS News." December 20, 2002. Retrieved on February 24, 2007.] Minnesota. [cite web | url=http://www.nytimes.com/2008/07/02/business/02walmart.html | title="Wal-Mart Faces Fine in Minnesota Suit" | author=Greenhouse, Steven | publisher=NY Times | date=2008-07-01 | accessdate=2008-07-01] Class-action suits were also filed in 1995 on behalf of full-time Wal-Mart pharmacists whose base salaries and working hours were reduced as sales declined, resulting in the pharmacists being treated like hourly employees.Tosh, Mark. " [http://findarticles.com/p/articles/mi_m3374/is_13_21/ai_55693813 Pharmacists win wage battle with Wal-Mart—for now] ." "Drug Store News." August 30, 1999. Retrieved on February 24, 2007.]

On October 16, 2006, approximately 200 workers on the morning shift at a Wal-Mart Super Center in Hialeah Gardens, Florida walked out in protest against new store policies and rallied outside the store, shouting "We want justice" and criticizing the company's recent policies as "inhuman."Gogoi, Pallavi. " [http://www.msnbc.msn.com/id/15305178/ Wal-Mart Workers Walk Out] ." "MSNBC." October 18, 2006. Retrieved on February 24, 2007.] This marks the first time that Wal-Mart has faced a worker-led revolt of such scale, according to both employees and the company. Reasons for the revolt included cutting full-time hours, a new attendance policy, and pay caps that the company imposed in August 2006, compelling workers to be available to work any shift (day, swing or night), and that shifts that would be assigned by computers at corporate headquarters and not by local managers. Wal-Mart quickly held talks with the workers, addressing their concerns. Wal-Mart asserts that its policy permits associates to air grievances without fear of retaliation. [http://www.pbs.org/itvs/storewars/stores3.html Wal Mart's open door policy]

The report by Congressman Miller alleged that in ten percent of Wal-Mart's stores, nighttime employees were locked inside, holding them prisoner.Miller, George. " [http://www.wakeupwalmart.com/facts/miller-report.pdf Everyday Low Wages: The Hidden Price We All Pay For Wal-Mart] ." "United States House of Representatives." February 16, 2004. Retrieved on February 24, 2007.] There has been some concern that Wal-Mart's policy of locking their nighttime employees in the building has been implicated in a longer response time to dealing with various employee emergencies, or weather conditions such as hurricanes in Florida.Greenhouse, Steven. " [http://www.nytimes.com/2004/01/18/national/18WALM.html?ex=1389762000&en=659ee9a0025b35de&ei=5007&partner=USERLAND Workers Assail Night Lock-Ins by Wal-Mart] ." "New York Times." January 18, 2004. Retrieved on February 24, 2007.] Wal-Mart said this policy was to protect the workers, and the store's contents, in high-crime areas and acknowledges that some employees were inconvenienced in some instances for up to an hour as they had trouble locating a manager with the key. However, fire officials confirm that at no time were fire exits locked or employees blocked from escape. Wal-Mart has advised all stores to ensure the door keys are available on site at all times. The issue has become less of a problem with the increase in the number of twenty-four hour stores.

Child labor violations

In January 2004, the "New York Times" reported on an internal Wal-Mart audit conducted in July 2000, which examined one week's time-clock records for roughly 25,000 employees.Greenhouse, Steven. " [http://www.corpwatch.org/article.php?id=9649 In-House Audit Says Wal-Mart Violated Labor Laws] ." "New York Times." January 13, 2004. Retrieved on February 24, 2007.] According to the Times, the audit, "pointed to extensive violations of child-labor laws and state regulations requiring time for breaks and meals," including 1,371 instances of minors working too late, during school hours, or for too many hours in a day. There were 60,767 missed breaks and 15,705 lost meal times. Wal-Mart’s vice president for communications, Mona Williams, responded that company auditors had determined that the methodology used was flawed. "This audit is so flawed and invalid that we did not respond to it in any way internally."

Use of illegal workers

Wal-Mart has been accused of allowing illegal immigrants to work in their stores. In one case, federal investigators say Wal-Mart executives knew that contractors were using illegal immigrants as they had been helping the Federal government with an investigation for the previous three years.Nordlinger, Jay. " [http://www.nationalreview.com/nordlinger/nordlinger200404050842.asp The New Colossus] ." "National Review." April 5, 2004. Retrieved on February 24, 2007.] Some critics said that Wal-Mart directly hired illegal immigrants, while Wal-Mart claims they were employed by contractors who won bids to work for Wal-Mart." [http://users1.wsj.com/lmda/do/checkLogin?mg=evo-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB113115662479389147.html%3Fmod%3Dcrnews Papers Suggest Wal-Mart Knew of Illegal Workers] ." (subscription required) "Wall Street Journal." November 5, 2005. Retrieved on April 1, 2007.]

On October 23, 2003, federal agents raided 61 Wal-Mart stores in 21 U.S. states in a crackdown known as "Operation Rollback," resulting in the arrests of 250 nightshift janitors who were undocumented.Staff Writer. " [http://money.cnn.com/2003/10/23/news/companies/walmart_worker_arrests/ 250 arrested at Wal-Mart] ." "CNN." October 23, 2003. Retrieved on February 24, 2007.] Following the arrests, a grand jury convened to consider charging Wal-Mart executives with labor racketeering crimes for knowingly allowing illegal immigrants to work at their stores. The workers themselves were employed by agencies Wal-Mart contracted with for cleaning services. Wal-Mart blamed the contractors, but federal investigators point to wiretapped conversations showing that executives knew some workers didn't have the right papers. The October 2003 raid was not the first time Wal-Mart was found using unauthorized workers. Earlier raids in 1998 and 2001 resulted in the arrests of 100 workers without documentation located at Wal-Mart stores around the country.Green, Cynthia. " [http://www.workinglife.org/wiki/Federal+Grand+Jury+Investigating+Wal-Mart%27s+Use+of+Undocumented+Immigrants+%28Nov.+12%2C+2003%29 Federal Grand Jury Investigating Wal-Mart’s Use of Undocumented Immigrants] ." " [http://www.laborresearch.org/ The Labor Research Association] ." November 12, 2003. Retrieved on February 24, 2007.]

In November 2005, 125 alleged undocumented immigrants were arrested while working on construction of a new Wal-Mart distribution center in eastern Pennsylvania.Staff Writer. " [http://money.cnn.com/2005/11/18/news/fortune500/walmart_raid/ Police: Wal-Mart site raided] ." "CNN." November 18, 2005. Retrieved on February 24, 2007.] According to Wal-Mart, the workers were employees of Wal-Mart's construction subcontractor.

Health insurance

As of October 2005, Wal-Mart's health insurance covered 44% or approximately 572,000 of its 1.3 million U.S. workers.Bernstein, Aaron. " [http://www.businessweek.com/bwdaily/dnflash/oct2005/nf20051020_3732_db016.htm A Stepped-Up Assault on Wal-Mart] ." "Business Week." October 20, 2005. Retrieved on February 24, 2007.] In comparison, Wal-Mart rival Costco insures approximately 96% of its eligible workers, although Costco has been criticized by investors for its high labor costs.Abelson, Reed. " [http://www.nytimes.com/2004/11/01/business/01health.html?ex=1256965200&en=56cfba459f08ba22&ei=5088&partner=rssnyt States Are Battling Against Wal-Mart Over Health Care] ." "New York Times." November 1, 2004.] Wal-Mart spends an average of $3,500 per employee for health care, 27% less than the retail-industry average of $4,800. [Wysocki, Bernard, Jr.; Zimmerman, Ann. " [http://users2.wsj.com/lmda/do/checkLogin?mg=wsj-users2&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB106452494523207000.html%3Fmod%3Dhome_page_one_us Wal-Mart Cost-Cutting Finds Big Target in Health Benefits] ." "Wall Street Journal." September 30, 2003. Retrieved on February 23, 2007.] When asked why so many Wal-Mart workers choose to enroll in state health care plans instead of Wal-Mart's own plan, Wal-Mart CEO Lee Scott acknowledged that some states' benefits may be more generous than Wal-Mart's own plan: "In some of our states, the public program may actually be a better value - with relatively high income limits to qualify, and low premiums."Bucher, Susan. " [http://wakeupwalmart.com/news/20050419-td.html Wal-Mart: the $288 billion welfare queen] ." "Tallahassee Democrat." April 19, 2005. Retrieved on February 24, 2007.] Critics of Wal-Mart in "" argue that employees are paid so little they cannot afford health insurance.

According to a September 2002 survey by the state of Georgia, one in four children of Wal-Mart employees were enrolled in PeachCare for Kids, the state's health-insurance program for uninsured children, compared to the state's second-biggest employer, Publix, had one child in the program for every 22 employees.Leonard, Andrew. " [http://www.salon.com/tech/htww/2006/01/23/georgia/index.html How the World Works: Our right to know about Wal-Mart] ." "Salon.com." January 23, 2006. Retrieved on February 24, 2007.] A December 2004 nationwide survey commissioned by Wal-Mart showed that the use of public-assistance health-care programs by children of Wal-Mart workers was at a similar rate to other retailers' employees, and at rates similar to the U.S. population as a whole.Zellner, Wendy. " [http://www.businessweek.com/bwdaily/dnflash/feb2005/nf20050210_3996_db016.htm?campaign_id=nws_insdr_feb11&link_position=link5 Wal-Mart's Clean Bill of Health?] " "Business Week." February 10, 2005. Retrieved on February 24, 2007.]

On October 26, 2005, a Wal-Mart internal memo sent to the firm's Board of Directors advised trimming over $1 billion in health care expenses by 2011 through measures such as attracting a younger, implicitly healthier work force by offering education benefits.Staff Writer. " [http://money.cnn.com/2005/10/26/news/fortune500/walmart/ Wal-Mart memo: Unhealthy need not apply] ." "CNN." October 26, 2005. Retrieved on February 24, 2007.] The memo also suggested giving sedentary Wal-Mart staffers, such as cashiers, more physically demanding tasks, such as "cart-gathering," and eliminating full-time positions in favor of hiring part-time employees who would be ineligible for the more expensive health insurance and several policy proposals which may violate the Americans with Disabilities Act of 1990. The memo also accused Wal-Mart's lower paid employees of abusing emergency room visits, "possibly due to their prior experience with programs such as Medicaid," whereas such visits may actually be due to the reduced ability of uninsured or underinsured people to make timely appointments to see a regular physician. Critics point to this story as evidence that Wal-Mart purports to be generous with its employee benefits, while in reality the company is working to cut such benefits by reducing the number of full-time and long-term employees and discouraging supposedly unhealthy people from working at Wal-Mart.

On January 12, 2006, the Maryland legislature enacted a law requiring that all corporations with more than 10,000 employees in the state spend at least eight percent of their payroll on employee benefits, or pay into a state fund for the uninsured.Staff Writer. " [http://msnbc.msn.com/id/10827217/ Md. forces Wal-Mart to spend more on health] ." "MSNBC." January 13, 2006. Retrieved on February 24, 2007.] Wal-Mart, with about 17,000 employees in Maryland, was the only known company to not meet this requirement before the bill passed. On July 7, 2006, the Maryland law was overturned in federal court by U.S. District Judge Frederick Motz who held that a federal law, the Employee Retirement Income Security Act (ERISA), pre-empted the Maryland law. In his opinion, Motz said that the law would "hurt Wal-Mart by imposing the administrative burden of tracking benefits in Maryland differently than in other states."" [http://www.walmartfacts.com/articles/4360.aspx Downloadable Audio of Wal-Mart Statement on Maryland Health Plan Mandate] ." "Wal-Mart." July 21, 2006. Retrieved on February 24, 2007.]

On January 19, 2006, the, "Fair Share Health Care," legislation in Wisconsin was defeated. Wal-Mart spokesperson Nate Hurst stated, "that this bill failed even to make it out of committee in the Wisconsin Assembly is a big setback to the Washington, D.C. union leaders driving these state-by-state attacks against large employers. We're hopeful that more state legislators across America -- like those in Wisconsin -- will come to realize that these bills are harmful to working families. Not only will they do nothing to control the cost of health care or improve access to health coverage, they will cost jobs and hurt economic growth. The American people want their legislators to resist special interest pressure and instead work with colleagues and businesses of all sizes to solve the health care challenges facing America."Staff Writer. " [http://www.prnewswire.com/news/index_mail.shtml?ACCT=104&STORY=/www/story/01-19-2006/0004264098&EDATE= Wal-Mart Statement on Wisconsin 'Fair Share Health Care' Legislation] ." "Wal-Mart." January 19, 2006. Retrieved on February 24, 2007.]

On April 17, 2006, Wal-Mart announced it was making a health care plan available to part-time workers after 1 year of service, instead of the prior 2 year requirement.Freking, Kevin. " [http://abcnews.go.com/US/wireStory?id=1852359 Wal-Mart to Offer More Health Coverage] ." "ABC News." April 17, 2006. Retrieved on February 24, 2007.] One criticism of the new plan is that it provides benefit only after a $1,000 deductible is paid ($3,000 for a family). These deductibles may financially be out of reach for eligible part-time workers. Wal-Mart estimates this change can add 150,000 workers to health coverage plans, if all who are eligible take part. By January 2007, the number of workers enrolled in the company's health care plans increased by 8%, which Wal-Mart attributed to the introduction of less expensive insurance policies.Barbaro, Michael; Abelson, Reed. " [http://www.nytimes.com/2007/01/11/business/11care.html?ex=1326171600&en=67ffb4f520ee9917&ei=5088&partner=rssnyt&emc=rss Wal-Mart Says Health Plan Is Covering More Workers] ." "New York Times." January 11, 2007. Retrieved on February 24, 2007.] However, even with this increase, less than half of Wal-Mart's employees, or 47.4%, received health insurance through the company, with 10%, or 130,000, receiving no coverage at all.

In March 2008, Wal-Mart sued a former Wal-Mart employee to recover the money it spent for her health care. The employee, Deborah Shank, was brain-damaged in a car accident. Wal-Mart sued her after she received a settlement from the accident, citing that company policy forbids them from receiving coverage if they also win a settlement in a lawsuit. After a wave of bad publicity, Wal-Mart dropped its suit. [cite news
last = Andrews
first = Michelle
title = Wal-Mart Rethinks Its Move on Deborah Shank
publisher = U. S. News and World Report
date = 2008-04-0
url = http://www.usnews.com/blogs/on-health-and-money/2008/04/03/wal-mart-rethinks-its-move-on-deborah-shank.html
accessdate = 2008-04-03
]

New, full-time Wal-Mart associates must work at least six months before being eligible to purchase the company's primary health insurance.

Labor union opposition

Wal-Mart has been criticized for its policies against labor unions. Critics blame workers reluctance to join the labor union on Wal-Mart anti-union tactics such as managerial surveillance and pre-emptive closures of stores or departments who choose to unionize. [Dicker, John. " [http://www.thenation.com/docprem.mhtml?i=20020708&s=dicker Union Blues at Wal-Mart] ." "The Nation." June 20, 2002. Retrieved on July 26, 2006.] Wal-Mart states that it is not anti-union but, "pro-associate," arguing that its employees do not need to pay third parties to discuss problems with management as the company's open-door policy enables employees to lodge complaints and submit suggestions all the way up the corporate ladder." [http://walmartfacts.com/articles/2950.aspx Wal-Mart's Position on Unions (For U.S. Operations Only)] ." "Wal-Mart." October 31, 2006. Retrieved on March 2, 2007.] In 1970, company founder Sam Walton resisted a unionization push by the Retail Clerks International Union in two small Missouri towns by hiring a professional, John Tate, to educate workers on the negative aspects of unions.Olsson, Karen. " [http://www.motherjones.com/news/feature/2003/03/ma_276_01.html Up Against Wal-Mart] ." "Mother Jones." March/April, 2003. Retrieved on March 2, 2007.] On Tate's advice, he also took steps to show his workers on how the company had their best interests in mind, encouraging them to air concerns with managers and implementing a profit-sharing program. A few years later, Wal-Mart hired a consulting firm, Alpha Associates, to develop a union avoidance program.

In March 2005, Tom Coughlin was forced to resign from Wal-Mart's Board of Directors, facing charges of embezzlement.Barbaro, Michael. " [http://www.nytimes.com/2006/01/09/business/09walmart.html?ex=1223182800&en=f1281a0fa5ff2967&ei=5035&partner=MARKETWATCH Was Wal-Mart's Anti-Union Image Used as a Shield?] " "New York Times." January 9, 2006. Retrieved on March 2, 2007.] Coughlin claimed that the money was used for an anti-union project involving cash bribes paid to employees of the United Food and Commercial Workers Union in exchange for a list of names of Wal-Mart employees that had signed union cards. He also claimed that the money was unofficially paid to him, by Wal-Mart, as compensation for his anti-union efforts. In August, 2006, Coughlin pleaded guilty to stealing money, merchandise, and gift cards from Wal-Mart, but avoided prison time due to his poor health. He was sentenced to five years probation and required to pay a $50,000 fine and $411,000 in restitution to Wal-Mart and the Internal Revenue Service. U.S. Attorney Robert Balfe has stated that no evidence was found to back up Coughlin's initial claims, and Wal-Mart continues to deny the existence of the anti-union program, though Coughlin himself apparently restated those claims to reporters after his sentencing. [ [http://www.washingtonpost.com/wp-dyn/content/article/2006/08/11/AR2006081100547.html 'Former Wal-Mart Exec Sentenced for Theft'] ." "Washington Post." August 11, 2006. Retrieved on August 11, 2006]

In 2000, meat cutters in Jacksonville, Texas voted to unionize. Wal-Mart subsequently eliminated in-house meat-cutting jobs in favor of prepackaged meats on the claims that it cut costs and was a preventive measure to lawsuits.Lydersen, Kari. " [http://www.inthesetimes.com/issue/24/12/lydersen2412.html Wal-Martyrs] ." "In These Times." May 15, 2000. Retrieved on March 2, 2007.] Wal-Mart claimed that the nationwide closing of in-store meat packaging had been planned for many years and was not related to the unionization. In June 2003, a National Labor Relations Board judge ordered Wal-Mart to restore the meat department to its prior structure, complete with meat-cutting, and to recognize and bargain with the union over the effects of any change to case-ready meat sales.Greenhouse, Steven. " [http://select.nytimes.com/gst/abstract.html?res=F00F15F83A5C0C7A8DDDAF0894DB404482&n=Top%2fReference%2fTimes%20Topics%2fOrganizations%2fN%2fNational%20Labor%20Relations%20Board Judge Rules Against Wal-Mart On Refusal to Talk to Workers] ." "New York Times." June 19, 2003. Retrieved on March 2, 2007.]

Wal-Mart's anti-union policies also extend beyond the United States. The documentary "Wal-Mart: The High Cost of Low Price", shows one successful unionization of a Wal-Mart store in Jonquière, Quebec (Canada) in 2004, but Wal-Mart closed the store five months later because the store had become unprofitable due to the costs of union demands.Bianco, Anthony. " [http://www.businessweek.com/magazine/content/06_07/b3971115.htm No Union Please, We're Wal-Mart ] ." "Business Week." February 13, 2006. Retrieved on July 26, 2006.] [Staff Writer. " [http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=FT&Date=20060430&ID=5681603 Wal-Mart faces Canadian labour clash] ." "MSNBC." April 30, 2006. Retrieved on July 26, 2006.] In September 2005, the Québec Labor Board ruled that the closing of a Wal-Mart store amounted to a reprisal against unionized workers and has ordered additional hearings on possible compensation for the employees, though it offered no details.Austen, Ian. " [http://www.iht.com/articles/2005/09/20/business/walmart.php Quebec panel rejects Wal-Mart store closing] ." "International Herald Tribune." September 20, 2005. Retrieved on March 2, 2007.]

Wal-Mart has also had some run-ins with the German Ver.di labor union as well.Fairlamb, David with Laura Cohn " [http://www.businessweek.com/magazine/content/03_40/b3852011_mz001.htm A Bumpy Ride in Europe] ." "BusinessWeek." October 6, 2003. Retrieved on July 27, 2006.] These issues, combined with cultural differences and low performing stores, led Wal-Mart to pull out of the German market entirely in 2006.Norton, Kate. " [http://www.businessweek.com/globalbiz/content/jul2006/gb20060728_594752.htm?chan=top+news_top+news Wal-Mart's German Retreat] ." "Business Week." July 28, 2006. Retrieved on March 2, 2007.]

In August 2006, Wal-Mart announced that it would allow workers at all of its Chinese stores to become members of trade unions, and that the company would work with the state-sanctioned All-China Federation of Trade Unions (ACFTU) on representation for its 28,000 staff. [Cheng, Allen T.; Spears, Lee. " [http://www.washingtonpost.com/wp-dyn/content/article/2006/08/09/AR2006080901924.html Wal-Mart to Allow Unions in China] ." "Washington Post." August 10, 2006. Retrieved on March 2, 2007.] [" [http://www.sec.gov/Archives/edgar/data/104169/000010416905000019/wmt10q_q3fy2006.htm Wal-Mart SEC Form 10-Q] ." "United States Securities and Exchange Commission." October 31, 2005. Retrieved on July 31, 2006.]

Imports and globalization

As the a large customer to most of its vendors, Wal-Mart openly uses its bargaining power to bring lower prices to attract its customers. The company negotiates lower prices from vendors. For certain basic products, Wal-Mart "has a clear policy" that prices go down from year to year.Fishman, Charles. " [http://www.fastcompany.com/magazine/77/walmart.html The Wal-Mart You Don't Know] ." "Fast Company." December, 2003. Retrieved on August 29, 2006.] If a vendor does not keep prices competitive with other suppliers, they risk having their brand removed from Wal-Mart's shelves in favor of a lower-priced competitor." [http://www.pbs.org/wgbh/pages/frontline/shows/walmart/ Is Wal-Mart Good for America?] " "PBS." November 16, 2004. Retrieved on August 29, 2006.] Critics argue that this pressures vendors to shift manufacturing jobs to China and other third world nations, where the cost of labor is less expensive.

In the mid-1990s, Wal-Mart had a "Buy American" campaign. But by 2005, about 60% of Wal-Mart's merchandise was imported, compared to 6% in 1995. In 2004, Wal-Mart spent $18 billion on Chinese products alone, and if it were an individual economy, the company would rank as China's eighth largest trading partner, ahead of Russia, Australia, and Canada. [Jingjing, Jiang. " [http://www.chinadaily.com.cn/english/doc/2004-11/29/content_395728.htm Wal-Mart's China inventory to hit US$18b this year] ." "China Daily." November 29, 2004. Retrieved on August 29, 2006.] One group estimates that the growing US trade deficit with China, heavily influenced by Wal-Mart imports, is estimated to have moved over 1.5 million jobs that might otherwise be in America to China between 1989 and 2003. [Scott, Robert E. " [http://www.epinet.org/workingpapers/epi_wp270.pdf U.S.-China Trade, 1989-2003: Impact on jobs and industries, nationally and state-by-state] ." "Economic Policy Institute." January, 2005. Retrieved on August 29, 2006.] According to the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), "Wal-Mart is the single largest importer of foreign-produced goods in the United States", their biggest trading partner is China, and their trade with China alone constitutes approximately 10% of the total US trade deficit with China as of 2004. [Serna, Liberty; Moser, Paul. " [http://www.aflcio.org/corporatewatch/walmart/walmart_5.cfm Paying the Price at Wal-Mart: Wal-Mart's Imports Lead to U.S. Jobs Exports] ." "AFL-CIO." 2006. Retrieved on August 29, 2006.]

While the company certainly imports many products, it points out that it purchases goods from more than 68,000 US vendors, spending $137.5 billion in 2004, and supporting more than 3.5 million supplier jobs in the US. [Staff Writer. " [http://www.walmartfacts.com/wal-marts-impact-on-economy.aspx Walmart's Impact on the Economy] ." "Wal-Mart." 2006. Retrieved on August 29, 2006.]

Overseas labor concerns

Critics say Wal-Mart's doesn't supervise its foreign suppliers enough. Critics say its products have been made using sweatshops or prison labor. (Although American companies produce products in American prisons providing work for inmates.) For example, in 1995, Chinese dissident Harry Wu charged that Wal-Mart was contracting prison labor in Guangdong Province. However, Wal-Mart says they do not use prison labor.Palast, Gregory. " [http://www.guardian.co.uk/Columnists/Column/0,,288760,00.html Praise Uncle Sam and pass the 18p an hour] ." "The Guardian." June 20, 1999. Retrieved on August 29, 2006.] There have also been reports of teenagers in Bangladesh working in sweatshops 80 hours per week at $0.14 per hour, for a Wal-Mart supplier Beximco. In 1994, Guatemalan Wendy Diaz reported that she had been working for Wal-Mart at $0.30 per hour at age 13. The film "" shows images of factories that produce goods for Wal-Mart that appear in poor condition, and factory workers subject to abuse and conditions the documentary producers consider inhumane. The same film outlines the life a young girl leaving her dirt-poor village in China, lured by the promise of working in the Wal-Mart factory. []

According to Wal-Mart and many self-described advocates of free trade, comparisons of wage levels between vastly different countries is not a useful way to assess the fairness of a trade policy. The company also points out that wages paid to overseas workers are comparable to or exceed local prevailing wages. In that case, the company claims that the overseas manufacturing jobs it creates are often an improvement in the quality of life for its employees. They have also drawn attention to the fact that factory jobs with its suppliers are often safer and healthier than local alternatives, which may include prostitution, the drug trade or scavenging.

Wal-Mart currently uses monitoring which critics say is inadequate and "leaves outsiders unable to verify" conditions. Critics suggest an agency such as Social Accountability International or the Fair Labor Association, should do the monitoring, and since Wal-Mart will not release its audits or factory names, outside organizations are left to simply take Wal-Mart's word. [Bernstein, Aaron. " [http://www.businessweek.com/magazine/content/05_21/b3934103.htm A Major Swipe At Sweatshops] ." "Business Week." May 23, 2005. Retrieved on August 29, 2006.] In 2004, Wal-Mart began working with Business for Social Responsibility, a San Francisco-based nonprofit organization, to reach out to groups active in monitoring overseas plants. BSR President, Aron Cramer, said: "Wal-Mart is at an early stage and it's likely that they, like most companies that engage in these processes, will adapt their approach over time." [Berner, Robert. " [http://www.businessweek.com/bwdaily/dnflash/sep2005/nf20050922_6448_db016.htm Can Wal-Mart Wear a White Hat?] ." "Business Week." September 22, 2005. Retrieved on August 29, 2006.]

Product selection

Wal-Mart's product selection has been criticized by some groups in the past, primarily as viewed as a promotion of a particular ideology or as a responses to their original rural, religious target market. For example, in 2003, Wal-Mart removed certain men's magazines from their shelves, such as "Maxim", "FHM", and "Stuff," citing customer complaints regarding their racy content. [Staff Writer. " [http://money.cnn.com/2003/05/06/news/companies/walmart_mags/ Wal-Mart banishes bawdy mags ] ." "CNN." May 6, 2003. Retrieved on September 29, 2006.] Later that year, they decided to partly obscure the covers of "Redbook," "Cosmopolitan," and "Marie Claire" on store shelves due to "customer concerns", and refused to stock an issue of Sports Illustrated's swimsuit special because it took exception to one photograph. [Younge, Gary. " [http://www.guardian.co.uk/usa/story/0,12271,1020794,00.html When Wal-Mart comes to town] ." "The Guardian." August 18, 2003. Retrieved on September 29, 2006.]

Since 1991, Wal-Mart also has not carried music albums marked with the Recording Industry Association of America's (RIAA's) Parental Advisory Label (contradictory to the allowance of R-rated movies and video games rated Mature), although they carry edited versions of such albums, with obscenities removed or overdubbed with less offensive lyrics. [Schneid, Scott. " [http://www.familymediaguide.com/features/articles/Ratings_Soup__Music_II-195.html Ratings Soup – Music II] ." " [http://www.familymediaguide.com/ Family Media Guide] ." July 26, 2005. Retrieved on September 29, 2006.] In one example in 2005, Wal-Mart rejected the original cover of Willie Nelson's reggae album, "Countryman," which featured marijuana leaves, in an apparent pro-marijuana statement. To satisfy Wal-Mart, the record label, Lost Highway Records, issued the album with an alternate cover, without recalling the original cover. Wal-Mart has never carried Marilyn Manson albums, solely because of the controversy surrounding the group, but recently began selling Nine Inch Nails albums after rejecting them for years. [Hall, Sarah. " [http://www.eonline.com/News/Items/0,1,16920,00.html?tnews Wal-Mart Tweaks Willie's Reggae] ." "E!" July 12, 2005. Retrieved on September 29, 2006.] In fact, some albums that do not carry "Parental Advisory" stickers, but include profanities are not edited. Such albums include Pink Floyd's "Dark Side of the Moon" and Arctic Monkeys' "Whatever People Say I Am, That's What I'm Not". However, Wal-Mart's policy on carrying albums with the Parental Advisory Label seems to vary by country, as albums containing the label can be found in Canadian Wal-Mart stores, for example.

In 1999, Wal-Mart announced that it would not stock emergency contraception pills in its pharmacies, not citing any particular reasons except for a "business decision" that was made earlier.Staff Writer. " [http://www.cbsnews.com/stories/1999/05/14/health/main47233.shtml Wal-Mart: No Morning-After Pill] ." "CBS News." May 14, 1999. Retrieved on September 29, 2006.] The move was criticized by family planning advocates, citing that women in small towns where Wal-Mart pharmacies had little competition would have greater difficulties in obtaining the drug. The decision was challenged in 2006, as three Massachusetts women filed suit against the company after they were unable to purchase emergency contraception at their local Wal-Mart stores,Staff Writer. " [http://www.cbsnews.com/stories/2006/03/03/health/main1369355.shtml Wal-Mart To Stock Morning-After Pill: Giant Retailer Reverses Earlier Policy Following Mass. Lawsuit] ." "CBS News." March 3, 2006. Retrieved on 2007-11-23.] resulting in a ruling that required Wal-Mart to stock the drug in all of its pharmacies in Massachusetts. Expecting that other states would soon do the same, Wal-Mart reversed its policy and announced that they would begin to stock the drug nationwide, while at the same time maintaining its conscientious objection policy, allowing any Wal-Mart pharmacy employee who does not feel comfortable dispensing a prescription to refer customers to another pharmacy.

Wal-Mart has also been criticized for some of the products that it carries. For example, it was criticized for selling the notoriously anti-Semitic text "The Protocols of the Elders of Zion" on its website. It is widely believed in academic circles to be a forgery," [http://www.jewishvirtuallibrary.org/jsource/anti-semitism/hoax.html A Hoax of Hate] ." " [http://www.jewishvirtuallibrary.org/ Jewish Virtual Library] (Anti-Defamation League)." Retrieved on April 7, 2008.] but Wal-Mart's product description suggested the text might be genuine. Wal-Mart stopped selling the book in September 2004, but many other booksellers still sell it in the interests of freedom of speech.

In October 2004, Wal-Mart cancelled its order for "The Daily Show"'s "America (The Book)" after discovering a page that depicts each US Supreme Court judge nude. A week later, it returned copies of George Carlin's "When Will Jesus Bring the Pork Chops?," with a cover recreating The Last Supper with Jesus' seat empty and Carlin seated next to it. The company claimed that the copies were shipped to it by mistake and a Wal-mart spokeswoman said she "didn't believe this particular product would appeal" to its customer base. [Staff Writer. " [http://money.cnn.com/2004/10/28/news/newsmakers/walmart_carlin/ Carlin's no joke for Wal-Mart] ." "CNN." October 28, 2004. Retrieved on September 29, 2006.]

In January 2006, Wal-Mart was criticized for the recommendation system on its website which suggested that some African American-related DVDs, such as "Introducing Dorothy Dandridge" and documentaries on Martin Luther King, Jr. were similar to the "Planet of the Apes" television series DVD box set. It quickly corrected the page, saying that it was a software glitch, but ultimately blamed the matter on human error. [Mui, Ylan Q. " [http://www.washingtonpost.com/wp-dyn/content/article/2006/01/06/AR2006010601875.html Wal-Mart Blames Web Site Incident on Employee's Error] ." "Washington Post." January 7, 2006. Retrieved on September 29, 2006.]

Taxes

Until the mid-1990s, Wal-Mart took out corporate-owned life insurance policies on employees including "low-level," employees such as janitors, cashiers, cart pushers, and stockers. This type of insurance is usually purchased to cover a company against financial loss when a high-ranking employee dies, and is usually known as "Key Man Insurance". Critics derided them as buying "Dead Peasants Insurance" or "Janitor Insurance". Critics, as well as the US Internal Revenue Service, charge that the company was trying to profit from the deaths of its employees, and take advantage of the tax law which allowed it to deduct the premiums. The practice was stopped in the mid-1990s when the federal government closed the tax deduction and began to pursue Wal-Mart for back taxes. [Reynolds, Frank. " [http://fsnews.findlaw.com/articles/andrews/bf/dcl/20050908/20050908walmart.html Wal-Mart Gambled, Lost $1.3B on 'Dead Peasant' Policies, Insurers Say] ." "Andrews Publications." September 8, 2005. Retrieved on September 29, 2006.]

ee also

* Business ethics
* Wake Up Wal-Mart
* Wal-Mart Watch
* ""
* Walmarting
* "Why Wal-Mart Works; and Why That Drives Some People C-R-A-Z-Y"
* Whirl-Mart

References

External links

* [http://reclaimdemocracy.org/walmart/ Articles, Studies and Resources on Wal-Mart]
* [http://www.momsvswalmart.org Moms vs. Wal-Mart]
* [http://www.sprawl-busters.com/ Sprawl Busters]
* [http://www.cfc.gob.mx/ Federal Competition Commission]
* [http://www.newrules.org/retail/walmartstudies.html Wal-Mart and Big Box Retail Economic Impact Studies]
* [http://hrw.org/reports/2007/us0507/index.htm Discounting Rights: Wal-Mart's Violation of US Workers’ Right to Freedom of Association]
* [http://www.wal-town.com/ Wal-Town]

;News Articles
* " [http://www.pikenet.com/dispatch/dispatch06/dispatch0911.html Could the "Walmart Effect" impact Real Estate?] "
* " [http://www.nytimes.com/2005/07/17/business/yourmoney/17costco.html?ex=1279252800&en=8b31033c5b6a6d68&ei=5088&partner=rssnyt&emc=rss How Costco Became the Anti-Wal-Mart] "
* " [http://www.commondreams.org/views03/0827-06.htm In Wal-Mart's America] "
* " [http://www.aftenposten.no/english/business/article1341741.ece Norway dumps Wal-Mart stock] "
* " [http://www.mises.org/story/713 Stop the Attack on Wal-Mart] "
* " [http://www.dollarsandsense.org/archives/2006/0106cervantes.html The Costco Alternative] "
* " [http://www.fastcompany.com/magazine/77/walmart.html The Wal-Mart You Don't Know] "
* " [http://www.cbc.ca/story/world/national/2005/11/30/walmartbangladesh051130.html Wal-Mart to cut ties with Bangladesh factories using child labour] "
* " [http://www.dollarsandsense.org/archives/2006/0106miller.html What's Good for Wal-Mart...] "
* " [http://www.fastcompany.com/magazine/102/open_snapper.html The Man Who Said No to Wal-Mart] "
* " [http://www.foodproductiondaily.com/news/ng.asp?n=81417 Wal-Mart sustainability programme faces criticism] "


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