The High Price of Wal-Mart

By David Sirota, Christy Harvey and Judd Legum, The Progress Report. Posted February 5, 2004.

Faced with mounting criticism over low pay, sex-discrimination, exploitation of undocumented immigrants, violation of child labor laws and hard-line anti-union tactics, Wal-Mart has tapped its $250 billion in annual revenues to shower conservatives in Washington with money. According to a study by the non-partisan Center for Responsive politics, Wal-Mart is now the second highest contributor to the 2004 elections, having already contributed more than $1 million to federal candidates. Last year, Wal-Mart didn't even rank in the top 100. But, notwithstanding their generosity to "pro-business" politicians, as Wal-Mart aggressively expands -- 220 new U.S. supercenters are slated to open this year alone -- it is sparking citizen revolts around the country.

Wal-Mart already accounts for 8 percent of total U.S. retail sales. Chief Executive Lee Scott, trying to placate those who are alarmed by Wal-Mart's astounding rate of expansion, said company did not have a "grand plan to own the world."

Wages for many Wal-Mart employees are so low that many are forced to rely on government assistance -- especially for health care. The Seattle Times reports that in Washington State, subsidized insurance for the working poor costs tax payers "several million dollars annually." Some state lawmakers have had enough. Legislation has been that would "force big business to help pay for the state's Basic Health Plan."

The legislation has been nicknamed the "Wal-Mart bill." And not without justification -- of those enrolled in the taxpayer-subsidized health plan who are employed, more work at Wal-Mart than anywhere else. The Seattle Post-Intelligencer reported that citizen interest in the bill "drew crowds of people to a hearing last week in Olympia." In Georgia, a new AFL-CIO study found 10,000 children of Wal-Mart employees were enrolled in Georgia's public health insurance program. As comparison, the next highest employer was Publix, with 734 children enrolled.

In California, concerned about the effect that superstores would have on the local economy, the environment and water supply, the Inglewood City Council passed an ordinance banning the construction stores with over 155,000 square feet of space that sell 20,000 food items. But Wal-Mart "has decided to leap-frog" the City Council, according to the Washington Times. Determined to build a huge store in the Inglewood community, Wal-Mart introduced a ballot measure that will be voted on on April 6. The initiative would "authorize the entire [Wal-Mart] project without any action from the city."

Wal-Mart has been attempting to win approval for store construction by circumventing public city council meetings and talking to city council members privately. This tactic has raised legal and ethical concerns. In San Marcos, CA there is a call for a grand jury investigation into whether "three council members illegally reached a consensus before a formal vote on plans to build a Wal-Mart in south San Marcos," according to the North County Times. The complaint alleges that, prior to the vote, the three council members met privately with Jack Orr -- who was both their "political consultant" and representing Wal-Mart. Orr did not meet with two other council members who voted against the store. Opposition to the store was so fervent that, even after the vote approving the store, San Marcos voters forced a city-wide referendum on the issue, scheduled for March 2.

Wal-Mart used strikingly similar tactics in an attempt to win approval for a store in Grand Island City, NE. The Grand Island Independent reports that "eight council members violated the public's trust by meeting with Wal-Mart officials in individual or group meetings -- out of the public's eye and away from city staff and the mayor." After the private meeting, the council "basically gave them what they wanted," breeding "suspicion about what happened behind those doors."

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