Time to Target Wal-Mart

By Robert L. Borosage and Troy Peters, TomPaine.com. Posted November 15, 2005.

Wal-Mart must feel like a piñata these days -- everyone's lining up to take a shot at it. This week, 7,000 house parties are being held to screen Robert Greenwald's blockbuster documentary, "Wal-Mart: The High Cost of Low Price." The inspector general of the Labor Department censures its sweetheart deal that promised to give Wal-Mart notice before any future investigation of illegal child labor practices. Legislators from the L.A. City Council to the U.S. Senate are introducing legislation to curb the giant's public subsidies. Communities are rejecting Wal-Mart's demands for subsidies and zoning exemptions. Right-wing groups are furious Wal-Mart is taking the Christ out of the Christmas holidays. It's gotten so bad that Wal-Mart has created a war room staffed by veterans of political campaigns to wage the PR battle.

Why Wal-Mart? For one thing, it's hard to avoid. It is the world's largest private corporation, employing more than 1.6 million "associates" worldwide -- more people than Ford, GM, GE and IBM combined. The company serves 138 million customers per week worldwide and has outstripped any competitor. In 2004, it pocketed $10.3 billion in profits, on sales of $285 billion, more business than Target, Sears, Kmart, J.C. Penney, Safeway and Kroger combined. There are upward of 3,800 Wal-Mart stores in the United States today, in addition to nearly 1,600 locations in countries from Mexico to China. Wal-Mart alone is China's eighth-largest trading partner. It accounts for over 10 percent of our annual trade deficit with China, with over 70 percent of its products made in China.

If Wal-Mart's size is a problem, its policies are a threat. Wal-Mart is the model "low-road" corporation in the global economy. Its efficiency is celebrated; but its exploitation is caustic. The average pay of a Wal-Mart employee is $8.23 per hour, or an average yearly income of $14,000 -- not enough to lift a family out of poverty. Wal-Mart is infamous for requiring workers to work overtime off the books. It's been cited for locking workers in plants overnight. The company has been hauled into court for discriminating against female employees. And it is viciously, rabidly anti-union, crushing any attempt by its workers to organize to gain a fair share of the profits they help generate.

But Wal-Mart doesn't merely follow the low road; it drives its suppliers and its competitors into the same race. When Wal-Mart comes to town, it purposefully wipes out small mom-and-pop stores, leaving small towns looking like they were hit by a neutron bomb -- buildings intact, but people gone. Wal-Mart also undercuts big competitors that have unions and pay decent wages and benefits. They must slash wages, cut back on benefits or hang it up.

Given its size in the United States, Wal-Mart is a major force in driving wages down and forcing cutbacks in benefits. It is a central reason why we have an economy in which CEO salaries are up, stocks are up, but wages are down.

Robert L. Borosage is co-director and Troy Peters is policy fellow at the Campaign For America's Future.