For two years in a row, Fortune Magazine, in a survey of 10,000 business experts, has named Wal-Mart "America’s Most Admired Company." But if businesspeople love Wal-Mart, many working people loathe it: Wal-Mart now faces at least 30 class-action lawsuits from employees and ex-employees. Some experts say Wal-Mart is sued more often than any American entity except the U.S. government.
released in February by the U.S. House of Representatives’
Committee on Education and the Workforce, led by Rep. George
Miller, D-Calif., provides a scathing critique of the way the
company treats its workers. The report charges that Wal-Mart
systematically discriminates against women by denying them raises
and promotions. It also includes allegations that the company
refuses to pay workers for "off-the-clock" or overtime work, and
that it violates the Fair Labor Standards Act by reducing work
In 2001, according to the report, the average
Wal-Mart sales clerk made $8.23 an hour, or just $13,861 per year.
To qualify for the corporation’s health plan, which has a
relatively high deductible, full-time employees must have six
months on the job, and then pay a third of the cost. The
approximately 30 percent of Wal-Mart workers who work part time,
less than 34 hours per week, must wait longer. According to the
Miller report, Wal-Mart employees had to pay 42 percent of their
health care costs overall in 2001.
its employee — "associates," in the company lingo —
from organizing or joining unions. The corporation provides store
managers with a "toolbox for remaining union-free," which helps
them spot warning signs that employees are beginning to organize.
The toolbox includes a hotline to summon special Wal-Mart
anti-union SWAT teams.
wages and benefits impact more than just its employees. Everywhere
Supercenters are built, other grocers have suffered, losing
business, closing stores, or, at the very least, having to delay
their own expansions. Wal-Mart in effect forces other businesses to
cut their budgets and payrolls to compete with it.
company passes on some of its labor costs to taxpayers, critics
say: Many Wal-Mart employees have to rely on public assistance to
get by. A study by the San Diego Taxpayers Association predicted
that an influx of big-box stores would result in an annual decline
in wages and benefits between $105 million and $221 million in San
Diego, Calif., along with an increase of $9 million in public
Wal-Mart responds that its wages appear low
because most Supercenters have not been open long enough for
employees to gain seniority. Without unions, it insists, its
employees are better able to work toward promotions into managerial
jobs. Other companies might offer free or cheaper health insurance,
Wal-Mart spokesman Peter Kanelos says, but those plans often have
caps on how much they pay out. Wal-Mart’s health plans have
no caps, and cover major operations like transplants, Kanelos says.
The company paid $2 billion in health care costs worldwide last
In a study commissioned by Wal-Mart, the Los
Angeles County Economic Development Corporation predicted that
Supercenters would have a positive impact on the economy.
Customers, by saving money on groceries and other items at
Wal-Mart, would "redirect" $3.76 billion per year into other
spending in the seven counties in Southern California, thereby
creating 36,400 jobs, the study said. Even so, the study
acknowledged that the Supercenters would cause the loss of more
than 5,000 jobs in the higher-paying unionized chain stores.
Some experts point out that Wal-Mart’s effects on
workers and jobs are just one part of its impact on the greater
economy. The corporate giant is responsible for pushing U.S.
manufacturing jobs overseas and driving small businesses under, at
the same time that it sucks up subsidies from local governments
desperate for tax revenue, according to Stacy Mitchell, a senior
researcher with the Minneapolis-based Institute for Local
Self-Reliance (HCN, 12/1/03: Does Wal-Mart really need our tax
dollars?). Wal Mart "is leading the way in pioneering an economic
system in which everyone connected with it loses," she says.