By Danielle Damper
In the early 1990’s Walmart grew from a regional chain to a national phenomenon. For years, it seemed like the spread of the retail giant was unstoppable, people hailing the “always low prices” and the ubiquitous smiley face logo. Now, Walmart is a multinational corporation, home to over four thousand stores in the U.S. alone, and is the number one company in sales worldwide. However, as the company has grown, it’s been increasingly under fire for a plethora of complaints about topics ranging from obesity, to forcing small businesses to close, to workers’ rights and their aggressively anti-union policies.
Last week, employees of Walmart stores in Southern California staged a one of a kind “sit down” protest, where workers sat in the store, immobile, to call attention to “illegal threats” made against union members. This protest, sponsored by OUR Walmart kicks off a series of protests, culminating in their nationwide Black Friday protest, where over 1,600 stores are expected to participate. This attention is finally hitting Walmart’s revenues. Sales have fallen over the past 6 quarters, and they’ve changed their business model to scale back on the gigantic “super-Walmart” chain stores in reaction to the shop local movement.
Now, more and more people are asking: do we really need Walmart?
In my opinion, the answer is no. While Walmart does some good in the aggregate, for the most part Walmart’s business practices often do more harm than good.
Walmart as the global industry model
Globally, Walmart’s relentless “race to the bottom” has led to unhealthy reliance on foreign goods, as Walmart is the largest importer of Chinese goods, importing at least 15 Billion dollars in goods a year. This contributes to our increasing trade deficit with China, and also harms American businesses, who cannot compete with the incredibly cheap labor overseas. Furthermore, this reliance on incredibly cheap foreign goods has deep moral concerns as well. The Guardian recently found that the shrimp being sold on Walmart’s shelves had in fact been the product of Thai slave labor, in which slaves were bought and sold, then literally chained to the ship, forced to collect shrimp from the nets. Although Walmart claimed no knowledge of the practices, what kind of message does it send that the world’s largest retailer values low prices so much that it inadvertently supports slavery? Furthermore, we must remember that Walmart has a far wider effect than its singular company. As the industry leader, it sets the bar for pricing, meaning that these practices will only become more and more prevalent in our society, as companies will be forced to compete with Walmart or close down globally.
This does not just effect Walmart at the global level, we also see many of the problems both nationally and locally.
Federal Assistance and the Walmart Welfare State
Nationally, Walmart’s low pay for workers leads to an unnecessary group of people on welfare, effectively making the American people pick up the slack on Walmart’s wages. As the nation’s largest private employer, Walmart associates make up a significant portion of the work force. But, Walmart employees often do not make enough to make basic ends meet as more than half of their hourly workers make less than 25,000 dollars a year. This then causes employees to apply for government assistance to supplement their income. It’s estimated that Walmart costs American Taxpayers 2.6 Billion dollars a year in government assistance. In fact, Walmart employees account for 18 percent of the recipients of the Federal Food assistance program, or SNAP. This is further complicated with the large percentage of Walmart workers (about 33 Percent) who work part time, and thus do not qualify for benefits, and thus have to find another means for health insurance. For years, Walmart had a policy of keeping workers part time to avoid paying benefits, and it is only recently that they have begun to change their attitudes in light of this criticism.
Although Walmart may be trying to rebrand itself, the image still remains of a corporation that cares far more about profit margins than its employees; it’s not surprising then, that Walmart has an incredibly low employee retention rate, over 70 percent of Walmart associates leave after their first year. The most commonly cited answer of their internal exit poll? “Lack of recognition and inadequate pay.”
Not exactly giving back to the community
Walmart is known for being detrimental to local businesses, who cannot keep up with the low costs of Walmart goods. This is especially problematic in a large state like California, where a high cost of living makes it even more difficult for stores to compete with lower Walmart prices. The cost of living in California also has harsher effects on chronically underpaid Walmart employees. The MIT living wage calculator calculates that the bare minimum yearly salary to live in California as a single adult is $23,295 dollars. This does not take into account expendable income and assumes rent in California is $918 dollars a month for a single person. If over half of Walmart employees make less than 25 thousand dollars a year, it would be incredibly difficult to live in California without living in poverty. For those who live in cities, it would be impossible, the salary to live in San Francisco is $26,692 dollars a year.
Furthermore, Walmart does not do much to improve the community or reduce unemployment, as they often claim. According to city planner Joseph Minicozzi, A Walmart returns less jobs per acre as a set of small businesses in the same space. Aside from just economic factors, Walmart has even been linked to more obese neighborhoods and higher crime rates.
Protest and the Power of Consumers
This southern California protest is the first of many Walmart protests in the weeks to come, and OUR Walmart remains positive that their struggles will come to light. However, as long as the corporation continues to make billions of dollars a year with their unfair practices, nothing will change.
We, as consumers need to make the point that we do not support their business model, and instead support local businesses and make a point to buy American products. Walmart’s profits have fallen in the last 6 quarters, partially because of the “Shop Local” movement. This shows the power of the consumer, and we need to exercise that power until Walmart takes notice.