Wal-Mart Stores, Inc.
This company has areas of concern around Worker Rights, Human Rights, Political Influence, Environmental Issues, and Business Ethics. KnowMore Users are urged to boycott this company.
Wal-Mart Stores, Inc.
702 S.W. Eighth Street Bentonville AZ USA
Wal-Mart Stores, Inc. operates retail stores in various formats around the world. It organizes its business into three segments: Wal-Mart Stores, SAM'S CLUB and International.
As of September, 2004, Wal-Mart's market capitalization is over $221 billion, based on trailing twelve month revenues of $274.13 billion. Over the same time period, Wal-Mart's gross profit was nearly $60 billion. According to Reuters, Wal-Mart employs more than 1.5 million people world-wide. None of those employees in the United States belong to a labor union, and only one store (in Quebec, Canada) is unionized. (See Wal-Mart and Unions for more information.)
Some Statistics about Wal-Mart
- Wal-Mart is the largest company in the world.
- Wal-Mart is the largest grocery chain in the United States, with estimates that by 2007 it will have nearly 40% of all grocery sales. (source)
- Wal-Mart is the largest toy store in the world. (source)
- Wal-Mart is the largest reatiler in the world. (source)
- Wal-Mart is #1 on the Fortune 500 list. (source)
- Wal-Mart employees earn, on average, 25% less than employees at competing grocery stores and discount stores. (source)
- Wal-Mart gives more money to Republican politicians in the United States than any other company. (source) (see Political Contributions for more info)
- Wal-Mart accounts for more than 10% of all Chinese exports to the United States. (source)
- In the second-half of the 1990s, 12% of the U.S. economy's productivity gains are attributable to Wal-Mart alone.
- In 2002, 7.5 cents of every dollar spent at United States stores (excluding auto stores) went to Wal-Mart. (source)
Wal-Mart's Business Model
Wal-Mart's stated aim is "to deliver the broadest selection of products at the lowest prices."
Wal-Mart's success is dependent on its supply chain management innovations over the past several decades. In the early 1980s, Wal-Mart was one of the first stores to start wide-spread use of barcodes to facilitate inventory tracking; today, Wal-Mart's focus on vendor-managed inventory helps it avoid maintaining large inventories of products, which helps keep costs down. As of 2004, Wal-Mart is aggressively piloting the use of Radio Frequency Identification (RFID) chips for purposes of more accurately tracking products as they arrive at distribution centers.
Wal-Mart's goal is to work closely with vendor suppliers to reduce the costs of products on the shelves; given Wal-Mart's size, they can purchase tremendous volumes of products from suppliers (which ensures the lowest possible price). In addition, they tightly manage the logistics of the order, delivery and stocking of products in their stores, which helps keep inventory costs to a minimum. Finally, Wal-Mart applies tremendous pressure to suppliers to constantly lower their prices each year on products that do not change. (source) Critics have cited this practice as continually forcing manufacturers towards cheaper, more questionable labor.
Wal-Mart also "works hard to keep its labor costs low", another factor in delivering low prices to shoppers. As noted above, Wal-Mart employees on average earn less than their counterparts. In addition, fewer than half of Wal-Mart's employees are enrolled in Wal-Mart's health plan, and all employees who wish to participate are required to pay $250 or more per month.
Consequently, Wal-Mart keeps its costs low by choosing not to subsidize its employees' health costs, a decision that keeps its own costs low but comes at a cost to taxpayers. (By one estimate, taxpayers in California subsidize Wal-Mart employees health costs by more than $20 million each year.)
Wal-Mart maintains a detailed website that provides an overview of how to be a supplier to Wal-Mart. Wal-Mart's aim of delivering the lowest possible prices to its customers is often achieved by exerting tremendous influence on its suppliers; as the world's largest company (not to mention the largest retailer in the world, the largest grocery store in the U.S., largest toy store in the U.S., etc.; see Statistics for more), it can often demand lower prices than other businesses are able to.
In a December, 2003 article in Fast Company, Wal-Mart's influence in purchasing was highlighted.
- The real story of Wal-Mart, the story that never gets told, is the story of the pressure the biggest retailer relentlessly applies to its suppliers in the name of bringing us "every day low prices." It's the story of what that pressure does to the companies Wal-Mart does business with, to U.S. manufacturing, and to the economy as a whole.
- By now, it is accepted wisdom that Wal-Mart makes the companies it does business with more efficient and focused, leaner and faster. Wal-Mart itself is known for continuous improvement in its ability to handle, move, and track merchandise. It expects the same of its suppliers. But the ability to operate at peak efficiency only gets you in the door at Wal-Mart. Then the real demands start. The public image Wal-Mart projects may be as cheery as its yellow smiley-face mascot, but there is nothing genial about the process by which Wal-Mart gets its suppliers to provide tires and contact lenses, guns and underarm deodorant at every day low prices. Wal-Mart is legendary for forcing its suppliers to redesign everything from their packaging to their computer systems. It is also legendary for quite straightforwardly telling them what it will pay for their goods. (source: "The Wal-Mart You Don't Know", by Charles Fishman, Fast Company. December 2003, p. 68.)
Criticisms of Wal-Mart's Vendor Relations
Wal-Mart's relentless push to lower prices can have another unintended (but predictable) consequence: manufacturing companies outsource more manufacturing jobs, and companies may cut corners to meet Wal-Mart's price cuts:
- For suppliers, working with Wal-Mart is a mixed bag. On the plus side, Wal-Mart will agree to large-scale, long-term contracts in return for lowered costs. That can motivate firms to seek ways to cut costs and improve their productivity.
- But there are minuses. Wal-Mart's relentless cost pressure can lead vendors to cut corners, Allen says. For instance, in an effort to pare labor costs, a maker might end up sourcing through countries that have low safety and environmental standards and poor labor conditions. (source: "Wal-Mart's Low-Price Obsession Puts Suppliers Through Wringer", by Marilyn Much, Investor's Business Daily. January 30, 2004.)
Wal-Mart exerts considerable influence in the status of employee relations in America (not just for Wal-Mart employees, but by nature of its size, all employees). Consider this statement from a recent article:
- The entity that increasingly sets the pattern for the wages and benefits of America's workers is Wal-Mart. ...
- With the U.S. economy increasingly dominated by service-sector jobs, the wages of those jobs will determine whether America can remain a middle-class nation. Paying its workers an estimated $10 an hour less than the supermarket chains do, dragging down retail wages here and production wages across the planet, Wal-Mart presents a massive threat both to the nation's middle class and to the development of a global middle class. (Wal-Mart Nation, by Harold Meyerson. The American Prospect, January 1, 2004.) [link])
As Wal-Mart continues to grow and continues to exert downward pressure on wages, labor experts predict that:
- Wal-Mart's ability to escape controversy and a possible consumer backlash depends on the balance it can strike between its two, distinctly different images: The first is of the big and friendly retailer, ally of the little-guy consumer. The other is of an unfeeling giant putting the squeeze on its little-guy employees. (Two Faces of Wal-Mart by Amy Tsao. Business Week, January 28, 2004.) [link])
Wal-Mart Discriminates against hiring those with criminal backgrounds
- LETTER TO THE EDITOR, HANNIBAL COURIER POST
- -copy- for riverpost and internet blogs
- Certain area businesses discriminate in employment hiring and opportunities. A Missouri based organization, CFTA, has been working in cooperation with the ACLU to help those being treated unfairly in the hiring or firing discrimination. Those who are affected by this discrimination come from primarily one group of society. Those who have violated the law in some way or fashion, whether it be a misdemeanor or felony.
- These companies will soon find themselves with severe fines and penalties and pending litigation by the ACLU and MO Dept of Labor and Mo. Commission on Human Rights.
- The list of companies in Hannibal included but are not limited to Swiss Colony, Manpower, Wal-Mart, Radio-Shack, Sprint, Watlow, McDonald's Corporation, General Mills, Buckhorn, USBank, TRUE Manufacturing (Bowling Green, St. Charles MO)…
- Unfortunately, some of these companies, to protect themselves will hire the person for a short period of time, then let them go, so they can report that they have not been discriminating...
While Wal-Mart highlights the value it brings to the consumer -- always low prices -- much has been documented about the treatment of their U.S. employees. WalMart workers earn much less than their unionized counterparts, are only allowed to work about 32 hours a week with no overtime, and often have difficulty receiving their benefits.
Working Conditions in the U.S.
While working conditions in the U.S. do not come anywhere near the difficult conditions some foreign workers must endure, American employees of Walmart still endure poorer working conditions than their counterparts at other retail boxstores and grocery stores.
Although they are the largest employer in the United States, WalMart wages for workers fall well below union wages and other retail workers. In addition, WalMart workers are less likely to receive health benefits, and a full time schedule for most associates is only 32 hours a week - with no overtime.
The hidden cost of working at WalMart is the dependence by many WalMart workers on public assistance - costing tax-payers millions of dollars every year.
From Wal-Mart’s Labor Record, a report by Representative George Miller, February 16, 2004:
- Wal-Mart is undercutting labor standards at home and abroad, while those federal officials charged with protecting labor standards have been largely indifferent. Public outcry against Wal-Mart’s labor practices has been answered by the company with a cosmetic response. Wal-Mart has attempted to offset its labor record with advertising campaigns utilizing employees (who are euphemistically called 'associates') to attest to Wal-Mart’s employment benefits and support of local communities. Nevertheless – whether the issue is basic organizing rights of workers, or wages, or health benefits, or working conditions, or trade policy – Wal-Mart has come to represent the lowest common denominator in the treatment of working people.
Also from the report:
- Wal-Mart’s rampant violations of workers’ rights figured prominently. In the last few years, well over 100 unfair labor practice charges have been lodged against Wal-Mart throughout the country, with 43 charges filed in 2002 alone. Since 1995, the U.S. government has been forced to issue at least 60 complaints against Wal-Mart at the National Labor Relations Board . Wal-Mart’s labor law violations range from illegally firing workers who attempt to organize a union to unlawful surveillance, threats, and intimidation of employees who dare to speak out.
Read the full Miller Report.
Working Conditions Abroad
Despite WalMart's push to customers in the early 90's to "Buy American" in 1999 they were the nation's largest importer. Foreign suppliers from around the world make products solely for Wal-Mart stores and several non-profit organizations have focused on monitoring the working conditions at the factories of the suppliers. Here are links to sites about labor standards.
Labor Organizing in the U.S.
Since 1998, The United Food & Commercial Workers International Union (UFCW) has campaigned to unionize all of Wal-Mart's domestic operations. Only a meat department in Jacksonville, Texas actually elected to unionized. Two weeks later, Wal-Mart announced plans to only use prepackaged meat. Butchers would be phased out across the country. (see "Trying to Overcome Embarrassment, Labor Opens a Drive to Organize Wal-Mart," New York Times, 11/8/02)
Wal-Mart's Reaction to Organizing
Wal-Mart has aggressively and successfully blocked any attempts to unionize its stores or distribution centers. When a unionization campaign is mounted for an area, Wal-Mart quickly deploys special "resource teams" to dissuade employees from unionizing. Moira Herbst from the Labor Research Association described Wal-Mart's typical reaction:
"Because Wal-Mart is notorious for its union-busting tactics, the union and the workers know that winning won't be easy. It is well documented that at the first sign of worker interest in a union, Wal-Mart brings in "response teams" from its corporate headquarters in Arkansas. They hold captive audience meetings and show anti-union videos, and punish union supporters by cutting their hours or simply firing them.
"Managers are handed manuals on how to keep the store union-free. The company offers managers financial compensation as incentives to lower overheads--the largest component of which is payroll. Managers pressure employees to complete assignments off the clock.
"Given the company's anti-union extremism, it is no wonder that none of Wal-Mart's stores or distribution centers are organized, except for one unit of 11 meat cutters in Jacksonville, Texas."
The United Food & Commercial Workers International Union (UFCW) maintains a national campaign to unionize Wal-Mart. In support of their case, UFCW offers facts & figures on wages, health care, workers' rights to unionize, women, safety, and fair working conditions. The UFCW has has hired disaffected managers as organizers and created a radio show to criticize Wal-Mart's working conditions.
In March of 2005, Ryszard Tomtas, a Polish immigrant who fled to the US after being involved in the Solidarity movement in Poland in the 1980's, was fired from his job at Wal-Mart. His employers told him he was fired for "horseplay" after 12 years of employment, but he believes he was fired because he signed a union card in December and planned to organize a union at his distribution center. After being fired, Mr. Tomtas went on an 8-day hunger strike in protest. Tomtas said if he had gone on a hunger strike in communist Poland 20 years ago, entire churches would have shown up to pray with him, and crowds would have gathered to support him. UFCW is working with Mr. Tomtas on filing charges against Wal-Mart.
State Organizing Campaigns
The UFCW also maintains a site that highlights unionizing campaigns in each state.
Here are some additional U.S. labor organizing links.
Labor Organizing Abroad
Discriminating Against Women
- Articles about Discrimination against Women
- Links to sites about Discrimination against Women
Wal-Mart is a defendant in a historic class action law suit alleging that the company discriminates against women in promotions, jobs assignments, training, and pay throughout the United States. The class action could potentially cover 1.6 million women and cost Wal-Mart billions of dollars, either as a court-enforced judgement or as part of an out-of-court settlement. Visit http://www.walmartfacts.com/keytopics/default.aspx#a868 to view Wal-Mart's statement on the issue.
On June 22 2004, U.S. District Court Judge Martin Jenkins certified the case as a class action, finding that six current and former Wal-Mart employees from California may represent all female employees of Wal-Mart who worked at its U.S. stores anytime since December 26, 1998. The case is known as Dukes v. Wal-Mart Stores, Inc. (N.D. Cal. No C-01-2252). Read the judge's decision on class certification
The driving force behind the suit has been the Impact Fund. If you are a woman who might have a claim, you can contact the Impact Fund by calling 1-877-WOMAN-WM (966-2696). Or, you can write to WOMAN-WM, P.O. Box 7158, Berkeley, CA 94707-0158. All communications are entirely confidential and protected by the attorney-client privilege. No fee will be charged for any legal advice or for joining the national class.
To see another story about the Impact Fund, click here
Other resources discussing Wal Mart's discrimination against women:
walmartversuswomen.com/ This website was started by Carolyn Sapp, the 1992 Miss America.
Wal-Mart says the majority of their hourly store associates in the United States work full-time. The average hourly wage for regular full-time Wal-Mart associates in the U.S. is $9.68 an hour.
Competing with WalMart
- "Outsmarting Wal-Mart", CNN.Com, 3/23/05
"Wal-Mart, the world’s largest company, has a history of building large stores in environmentally sensitive areas, has been cited by the EPA for Clean Air and Clean Water violations, and is, in its own words, responsible for nearly 250 million tons of greenhouse gases each year." - WalmartWatch 
Wal-Mart, through its Political Action Committee Wal-Mart Stores Inc. For Responsible Government, gives more money to U.S. political candidates than any other corporation. For a state-by-state breakdown, see Political Money Line. Some statistics from Wal-Mart's contributions:
- PAC Name: Wal-Mart Stores Inc. For Responsible Government
- 91% of Wal-Mart's candidate contributions are to incumbents
- 72% of Wal-Mart's candidate contributions are to Republicans
- Total donated to candidates in 2003: $1,528,500
- to Republicans: $1,212,000
- to Democrats: $316,500
- Total donated to PACs: $294,000
- Total donated to political parties: $128,000
- to pro-Republican organizations: $70,000
- to pro-Democrat organizations: $18,000
- All FEC filings by Wal-Mart Stores Inc. For Responsible Government
References and External Links
Wal-Mart corporate web sites
Further Information Sources
- Reclaim Democracy huge collection of articles, studies and websites on Wal-Mart. The articles largely are critical of Wal-Mart, but supporters also are represented. Much of the best reporting and studies from multiple perspectives is collected here.
- Against the Walhas a larger, but much less selective collection of articles on Wal-Mart.
Articles supporting or explaining Wal-Mart
- Wal-Mart and RFID: A Case Study Wal-Mart's future plans to further reduce costs
- Wal-Mart's China inventory to hit US$18b this year China Daily, November 29, 2004.
- "A distorted lens on Wal-Mart", Bruce Bartlett, Washington Times, November 22, 2004
- "Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion" (pdf), Emek Basker, Dept. of Economics, University of Missouri, 2002.
- Should We Admire Wal-Mart? Fortune Magazine, March 8, 2004
Articles critical of Wal-Mart
- Company for the People Seattle Weekly, December 15 - 21, 2004, Article which contrasts Wal-Mart with employee-friendly Costco.
- Costco's Dilemma: Is Treating Employees Well Unacceptable for a Public Corporation? Wall Street Journal, March 26, 2004 Costco's compensation for its employees with comparison to Wal-Mart
- How Costco Became the Anti-Wal-Mart, New York Times, July 17, 2005
- Reclaim Democracy, Internal Documents of Wal-Mart Including "A Manager's Toolbox to Remaining Union-Free", A standard manual for all Wal-Mart managers.
- UC Berkeley report on the community impact of Wal-Mart's lower wages(pdf)
- "Inside the Leviathan" by Simon Head for The New York Review of Books, December 16, 2004
- "The Wal-Mart You Don't Know", Fast Company, Issue 77, December 2003, Page 68 Wal-Mart's relentless pressure can crush the companies it does business with and force them to send jobs overseas.
- California Legislators Call for Oversight of Wal-Mart's Health Benefits (Study of Peachcare)
- "Wal-Mart: High Prices for American Workers" file, PDF February 16, 2004) from the Democratic Staff of the House Committee on Education and the Workforce.
- Up against the Wal-Mart, Business Week, March 13, 2000, Explains union's attempt to unionize Wal-Marts
- In Wal-Mart's America, Washington Post, August 27, 2003. Article argues that the decline of Union Industry jobs and the rise of Wal-Mart is destroying America's middle class.
- Everyday Low Wages: The Hidden Price We All Pay For Wal-Mart(pdf), A Report by the Democratic Staff of the Committee on Education and the Workforce U.S. House of Representatives Representative George Miller, Senior Democrat, February 16, 2004
- Wal-Marts Cost State, Study Says, San Francisco Chronicle, August 3, 2004
- Retaliating first, Wal-Mart in Canada, The Economist, Feb 24th 2005
- Sweet Victory: Maryland Stands Up To Wal-Mart, The Nation, Sunday, April 17, 2005. Maryland's House approved a bill that would require all businesses in the state with more than 10,000 employees to spend at least 8 percent of their payroll on health benefits for workers.
Sites critical of Wal-Mart
- Sprawl Busters, site Al Norman, an activist who helps local "site fights" against big box stores
- Index of numerous studies on Wal-Mart's economic and social impacts from The American Independent Business Alliance.
- Wake-Up Wal-Mart website by the United Food and Commercial Workers
- Wal-Mart Watchlabor union-funded website
- Wal-Mart Wiki Though not strictly critical, this wiki is definitely weighted against Wal-Mart in its current state.
- Wal-Mart Free NYC A group fighting to keep New York City Wal-Mart free.
- The New Rules Project(critiques big box development, not limited to Wal-Mart)
- Yahoo! - Wal-Mart Stores, Inc. Company Profile
- WMT: Profile for WAL-MART STORES - Yahoo! Finance
- 2004-04-09 10-K
- Wal-Mart political donations
- AlwaysLowPrices.net a blog run by Kevin Brancato
- Wal-Mart Space a blog run by Bobby Gerry which explores Wal-Mart's financial statements
Studies and Reports Regarding Wal-Mart
- Institute for Policy Studies, "Wal-Mart's Pay Gap" (2005)
- AFL-CIO, "The Wal-Mart Tax: A Review of Studies Examining Employers' Health Care Cost-Shifting" (2005)
- Emek Basker, U of Missouri, "Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion" (2004)
- Penn State, "Wal-Mart and County-Wide Poverty" (2004)
- Berkeley Labor Center, "The Hidden Cost of Wal-Mart Jobs" (2004)
- Good Jobs First, "Shopping For Subsidies" (2004)
- US House Rep. George Miller, "Everyday Low Wages" (2004)
- AFL-CIO, "Wal-Mart: An Example of Why Workers Remain Uninsured and Underinsured." (2003)
- Kenneth Stone, U of Iowa, "Impact of the Wal-Mart Phenomenon on Rural Communities" (1997)
- Store Wars is a PBS special taking a close look at one community's battle over Wal-Mart.
- Frontline: Is Wal-Mart Good for America? (PBS Frontline documentary on the impact of Wal-Mart in the U.S. and China)
- Wal-Mart: The High Cost of Low Price November 2005 documentary by Robert Greenwald, the creator of Outfoxed.
- The Age of Wal-Mart was a 2004 documentary produced by CNBC. Featuring interviews with both Wal-Mart top brass and critics, it won a Pulitzer Prize and a Peabody Award for television excellence.
- Outrageous Fortunes, BBC Three, aired on April 26, 2004, detailing the workings of Wal-Mart.
- Independent Americais a 2005 documentary on the larger issue of independent businesses fighting for survival against corpprate chains.
Brands & Subsidiaries
Wal-Mart Stores, Inc., Wal-Mart.com, Wal-Mart Foundation, Wal-Mart Public Relations, Sam's Club, Wal-Mart Realty, Picture Me, Wal-Mart Financial Services, Wal-Mart Credit Cards, Wal-mart Check Printing, EverStart, ASDA, ASDA Travel, ASDA Entertainment, Amigos Supermercados, Bompreço, WalMex