2005-08-12 / Columnists

The Progressive

By John Paul Culotta


Ten years ago I had my first encounter with the Wal-Mart Corporation. My family and I were on vacation in Myrtle Beach, South Carolina. My daughter became ill and the pediatrician wrote out a prescription and told us we could have it filled at the local Wal-Mart near his office. My wife and I were surprised that the pharmacy in the store accepted my union drug plan and we paid only our required co-pay for the medicine.

The well-stocked shelves and the everyday low prices also surprised us. All over the store were giant American flags and a great many products in the store had stickers that said Made in USA. Sam Walton, the founder of Wal-Mart, prided himself on stocking his stores with American made products. Frugal Louisa, the woman I promised to love, cherish, and must obey, was happy with the low prices. I was forced into filling my car’s trunk with Wal-Mart merchandise. Every question my wife and I asked was answered with courtesy. It may have been a southern trait but in our further visits to Wal-Mart in upstate New York or New Jersey we encountered similar helpful and courteous staff.

Our pleasant experiences with the giant retail corporation though are now bitter sweet. Media reports of the use of child labor, the unpaid overtime for employees that is mandatory, the locking in the stores of cleaning staff while the store is closed, the anti-union activity of the management, the starvation wages paid to staff and the inadequate health benefits offered staff have made us ponder as to what everyday low prices really mean. Society may not be served by low prices that come at the expense of a just social order. All units of society (government, business, labor unions, press, and religious organization) need to be concerned about the effects of their actions. Wal-Mart is a corporation that has international impact. Local communities in this country were generally excited when Wal-Mart announced their plans to locate there. The prospect of additional employment opportunities and the lure of low prices for the consumer often was enough for the corporation to get tax breaks from the local government. Often zoning regulations were changed to allow the building of the big box stores in areas that were rural or scenic in nature. Historians and preservationists note the corporation requested to build near historic Civil War battlefields in Virginia, causing some trepidation by many who seek to preserve our heritage. Many small towns became ghost towns after Wal-Mart came to the area. Businesses that used to thrive could not compete when Wal-Mart arrived. Unemployment sometimes rose in the location after other businesses closed. No Wal-Mart store is unionized. In Quebec, Canada the corporation closed a store when the staff voted for union representation.

Wal-Mart generates annual revenues that exceed $250 billion dollars. Despite this, the American taxpayer helps its bottom line. In recent years Wal-Mart’s merchandise is mostly foreign imports mainly from Communist China (it is rarely mentioned that China is still a communist nation since American capitalists now find it a desirable place). Over eighty percent of the merchandise is foreign made causing our massive balance of trade deficit. Sam Walton’ s philosophy to encourage American manufacturers is not part of the Wal-Mart corporate agenda. Many manufacturing industries are now defunct because of the increased importation of products. The shoe industry in upstate New York is just one example. Can our country survive without a manufacturing sector? It may but the dislocation of American workers is a price we all must pay through higher taxes because of unemployment insurance benefits and welfare benefits that must be paid. It also does not address the social impact that massive unemployment causes. Broken marriages, suicides, depression, lower living standards, and homelessness can be a result of the dislocation of the manufacturing sector

Last year, the minority staff of the U.S. House of Representatives’ Education and Workforce Committee found that each Wal-Mart store employing 200 people costs taxpayers well over $420,000 annually in public services. This was stated in the report Everyday Low Prices: The Hidden Price We All Pay for Wal-Mart. Most of the Wal-Mart employees are eligible for food stamps and child healthcare benefits because of the starvation wages paid by the retail giant. Fewer than half of the corporation’s employees are insured by the company’s health plan because of its cost and restrictions. Health insurance premium costs are passed on to other corporations when such a large company shirks its responsibilities to its workers. We all pay dearly for the everyday low prices of Wal-Mart.

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