Wal-Mart's Attempt at Green-Washing Doesn't do Anything for its Workers
Wal-Mart, the world's largest corporation, has been grabbing headlines with environmentally friendly initiatives, like increasing the fuel efficiency of their fleet and pushing compact fluorescent light bulbs. But Wal-Mart continues to abuse and neglect our world's most important natural resource: people.
By virtue of its huge market size, Wal-Mart maintains control over supplier products, costs and behavior. The upside of "big" is that efforts the company makes to, say, decrease packaging of products by suppliers, can be deployed without significant resistance. Who's to say no? The downside of "big," of course, is that the company's depressed wages and benefits create a floor upon which the entire discount industry stands. Wal-Mart should use its economic power to pull its workers up instead of holding them down.
A 2005 UC Berkeley study revealed that Wal-Mart paid hourly workers an average wage of $9.68 per hour, with other retailers averaging $11.08. Wal-Mart offered its hourly workers benefits worth 73 percent of comparable companies. And cases and lawsuits alleging off-the-clock labor dwarf those of comparable companies. Annual reports for 2004-2005 reveal no instances at Target and CostCo. For Wal-Mart, reports list 44 cases in the previous 10 years.
A Woman's Place?
Wal-Mart also has a long way to go to create an environment that's friendly for women. The behemoth faces the largest class-action suit in history, exceeding 1.6 million workers. This contrasts sharply with the magnitude of gender discrimination reported for comparable discount retailers like Target and Costco. According to numbers compiled by the plaintiffs, female store managers earn an average of 86 percent the annual income of male counterparts. And while women comprised 79 percent of hourly paid department heads, a mere 15.5 percent are store managers.
Wal-Mart and Unions
Wal-Mart's notorious union bashing also sets the industry bar. The company's strategy includes personality tests that determine applicants' union sympathy, anti-union videos, and a 56-page managers' manual on how to remain union free. Any sign of union activity, and the company dispatches a strike force from Bentonville. The store eliminated all its meat-cutting departments after butchers in a Texas store voted to unionize. And the company shut down a store in Quebec that voted for a union.
Benefits Free Loaders
Of course, for Wal-Mart "associates," as Sam Walton proudly christened them, no one is "holding a gun to their head" to work there. But, is somewhere short of felony assault the place to set the bar for responsible conduct by the largest company in the history of the world? The company claims the U.S. government should step up to the plate and level the playing field with a universal health care system. Universal health care is long overdue, but let's not let Wal-Mart's PR machine hijack reality. It's their job to play on the field that exists and that field is desperately tilted, with mothers grabbing at the sidelines, children in tow. Wal-Mart has gained a reputation as a free loader, topping the list of employers that are major users of state-provided health insurance programs aimed at low-income families in 11 of 13 states that have reported. One in nine Wal-Mart family members is getting state-provided health care, according to WakeUp Wal-Mart.
Scott the CEO
Wal-Mart CEO Lee Scott, who once called Wal-Mart critics "nibbling guppies" should recognize his power to lead the world in a better direction. CEOs are national and international leaders, and they can have reputations as corporate citizens or as cheats. Think Southwest Airlines, Patagonia, Body Shop, OR Enron and WorldCom. Increasingly CEOs survive or falter based on their stock performance as well as their public record. And Scott, the CEO, has made strides on environmental sustainability. Now he should take the lead in taking care of employees; there's lots of room for improvement.
There's evidence that paying better wages might not hurt Wal-Mart's bottom line at all. The company's staff turnover rate approaches 50 percent, indicating that workers tend to head for the door as soon as a more lucrative job opportunity appears. This revolving door has costs that are absorbed into Wal-Mart's operating budget. According to a Forbes article by James O'Toole and Edward E. Lawler III, professors at the University of Southern California's Marshall School of Business, offering "low wages paradoxically generate a variety of negative employee behaviors that add to the overall cost of doing business." They document that lower paying companies have significantly higher turnover rates than those at well-paying companies. Costco Wholesale pays its workers $17 an hour on average and 85 percent of Costco employees receive health insurance, compared to wages nearing $10 an hour with less than half of the workers receiving health insurance at Sam's Club, Wal-Mart's wholesale club.
Wal-Mart's labor troubles extend far beyond our borders to China, where the majority of the company's products are manufactured. According to a terrific PBS Frontline documentary, the loss of well-paying jobs in the United States has a direct correlation to Wal-Mart's push to create an endless supply of cheap consumer goods. Wal-Mart's own figures show it imports more than $15 billion of Chinese goods every year. China's low wages and lax regulatory environment are the perfect levers for Wal-Mart's bullying practices. It's a reminder that "everyday low prices" come at a cost, and that cost is paid by Chinese workers, who toil long hours for paltry wages.
As consumers, we have the right to demand that the world's largest corporation set a fair standard for labor -- at home and abroad. With continued pressure and a major change of heart, Wal-Mart could turn its company into a model for how it works with folks. In the meantime, Wal-Mart should be held accountable for following existing laws.
The next time we step into a Wal-Mart, let's look beyond the price tags to the people behind.