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Corporations: Why Walmart is bad for America

Updated on February 14, 2013

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Interior of a Walmart store in Miami, Florida
Interior of a Walmart store in Miami, Florida | Source

Why Walmart is Bad

Everyone knows Walmart, since they are the world’s biggest retailer. The real question isn’t if you have heard of them or not, it is how much do you really know about them? Do you understand how they became the company that they are today? What about their business practices or how they compensate their employees? I think it is fair to say that the majority of consumers do not know much about the company, just how low their prices are on their favorite items.

We have all seen the negative effects that bad companies have had on our nation. The Enron scandal eliminated retirement pensions for thousands of employees; when the warning signs were recognized it was too late to save these accounts. What puzzles me is how we have a company that operates like they do and not too many people are concerned about how they conduct business, with only a few exceptions.

Obviously unions are one of their most vocal opponents because their employees are non-union. Labor rights groups have stood up against them as well because of how they are obtaining these cheap goods and if the workers in China (or wherever) are being treated fairly, and paid reasonably. Smaller local groups have also formed to fight new Walmart’s coming into their neighborhoods or when an existing store is proposed to become a Supercenter.

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Why Walmart is Bad for America

Economists have taken a look at what the ramifications are to a state with Walmart’s in it and the numbers might surprise you. Since the company doesn’t offer the best compensation structure for wages and benefits some of their employees are actually receiving government assistance for medical care and food. What troubles me with this is that they makes billions in profit every year, but can’t get their employees decent medical insurance and this is one of my primary beefs with them as a company.

A study by University of California Berkeley back in 2004 determined that my state, California, was paying 86 million dollars in health, food and housing assistance on Walmart employees. The study showed that the employees couldn’t get by with their wages and needed something from the state to help get by. As a taxpayer here in the state I am being expected by their rich executives to subsidize their employee’s compensation so the big shots back in Arkansas can get fatter bonuses, which doesn’t sit too well with me.

This report was based on approximately 44,000 employees spread out to 143 Walmart’s and Sam’s Club stores. Quick math shows that each facility costs the state just over $600,000 in subsidies to the store’s employees; no wonder our budget is such a mess these days.

Their own website lists, at the end of April 2012, that California now has 214 facilities and just over 72,000 employees. If the same average in 2004 still applies in 2012 the state of California is subsidizing over 128 million dollars to their employees every year. Seeing my state exploited for that much money, by one of our own American companies, makes me sick to my stomach.

Why is Walmart Bad

With the tremendous size they hold incredible power over their suppliers, and reports have been issued how they used this advantage to blackmail better deals for the company, to make more money for the company. I’m not bothered by a company negotiating a better deal for themselves; what upsets me is the way that they do their ‘negotiating’.

Walmart has also received negative press for paying women less than men for the same job, closing stores that vote to unionize, hiring illegal workers to clean stores and the latest problem of bribing Mexican officials to get stores built sooner by skipping the necessary reviews. I am pleased that the Mexican bribing issue is being formally investigated however any fines will be peanuts.

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Walmart Good or Bad

As a consumer I have the choice on where to spend my money for products, just another perk of living in the USA. Since I enjoy these freedom I don’t shop there because I don’t agree with how they do business; my money will not support what they do. I know tons of people that don’t care how that cheap shirt got to the rack, or the great deal on crackers, but I know how the prices got there and who the company exploited to make it happen.

For these reasons I think the company we see today is bad. I’m not old enough to remember how Sam Walton ran the company but I have heard from others that, if he were still alive, he wouldn’t be running his ship this way. Unfortunately his kids, who kind of took over when Walton passed away in 1992, seem to be more concerned about stuffing their pockets than taking care of their employees. This greed has made them some of the richest people in the US but it has also started to force some people to take a stand against the company because of their methods.

The sooner we all really understand what makes them tick the better for us all. What the company needs to do is step up and be responsible for taking care of their employees, instead of pushing this responsibility off on the states. With over sixteen billion dollars in profit in 2011 they’re good for it.


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    • kenneth avery profile image

      Kenneth Avery 3 years ago from Hamilton, Alabama


      Very enlightening. You gave me something to think about . Thanks.

      I will tell you the truth. I really love this hub. And here are the reasons why:

      1. This is an excellent piece of writing. Simply amazing.

      2, I loved the way you worded this hub.

      3. Graphics, superb.

      4. This hub was helpful, informative and very interesting.

      5. Voted Up and all of the choices.

      6. I loved your topic.

      You are certainly a gifted writer. Please keep up the fine work.


      Kenneth Avery, Hamilton, Alabama

    • aerospacefan profile image

      John M 3 years ago from Chicago

      Interesting and informative hub. You made a lot of good points I never thought about!

    • fpherj48 profile image

      Paula 3 years ago from Beautiful Upstate New York

      David.....I do know these facts about WalMart, but enjoyed reading your informative Hub anyway. It's always nice to know that others are up on this information about WalMart. I dislike the blatant greed.....always have, always will.

      I make every effort to stay away from WalMart. It's somewhat troublesome for most people because no matter where one lives, there seems to be a WalMart close by. The convenience and lower prices understandably pull consumers in. It's difficult to fight this, especially in the current economic situation American families struggle with.

      I know it's been a creative journey for me to find various stores where I can shop for what I need and want and still save as much as possible.

      I do it though, because if only for my self and my family, I have this need to make my statement.

      Thanks for this interesting hub....."Paula"......Up/shared, pinned & tweeted

    • autochess profile image

      unknown 4 years ago from usa

      I have worked for the Sam club at doral city on Florida and when the new year start they start to cut budget and those with the higher pay rate are those that are shaking their position at this company,

      They prefer a new guy starting pay 9.oo than an veteran on about 15 per hour

    • Londonlady profile image

      Laura Writes 4 years ago

      I definitely remember watching a documentary on Walmart a while ago, it even prompted me to write a similar hub like yours. Good info here, voted up!

    • adjkp25 profile image

      David 5 years ago from Northern California

      movingout - Good point. I think that your example is just another reason of how they take advantage of the system. Since they are so massive they can lower their prices to beat out local businesses and close their doors.

    • movingout profile image

      movingout 5 years ago from Georgia

      I love their low cost approach! They let the "Competitor" run the ad and they will "Match it?" So they spend nothing on advertising and people fall for that ploy? I wonder if they ran more ads if they would match it? Support local ma & pa businesses! The backbone of this country!

    • adjkp25 profile image

      David 5 years ago from Northern California

      DIYmommy - As your husband found out, things are not the same after Sam Walton passed away. I wouldn't beat yourself up too much, Walmart does everything that they can to remind you about their low prices and that is all that should matter. Hopefully more people continue to see through their veil of prices and see what their business practices are really leading to. Thanks for sharing your story and commenting.

    • DIYmommy profile image

      Julie 5 years ago

      This is a very interesting hub. I've done my fair share of shopping at Wal-mart, but, admittedly, I never really considered that there could be potential shady dealings behind their operation and execution of their business model. Maybe I was naïve. With great growth and influence, it is easy to see that they could succumb to using that to their advantage in some shady ways. For one of his master's classes, my husband did just complete reading a book about Wal-mart's founder, Sam Walton, and the principles he applied to making Wal-mart great. Leadership and management "by walking around", and truly caring about employees and customers appears to have taken a bit of a backseat, since Mr. Walton's passing.

    • adjkp25 profile image

      David 5 years ago from Northern California

      billybuc - I drive by them and feel like I need to wash my hands. The rudeness doesn't bother me because that happens at every retailer, even the grocery chain I work for. Their business practices are what upsets me. I really wish that people would understand that they are paying for the "low prices" by subsidizing the employees who are not being taken care of by the rich folks back in Arkansas.

    • billybuc profile image

      Bill Holland 5 years ago from Olympia, WA

      I would expect quite a few comments on this one and they certainly showed up, didn't' they?

      I literally hate everything about WalMart and will not shop there. I have found the employees rude, the management rude and their business practices obscene. Other than that they are a pretty great place. LOL

    • adjkp25 profile image

      David 5 years ago from Northern California

      Entrance - They do leave a bit to be desired don't they? Thanks for the comment

    • adjkp25 profile image

      David 5 years ago from Northern California

      talfonso - I'm not handy enough with a sewing machine to even think about making clothes. I am glad that you are aware of their issues, some people aren't at all and it is unfortunate. Thanks for taking the time to comment.

    • talfonso profile image

      talfonso 5 years ago from Tampa Bay, FL

      Well, I still shop at Walmart, but when I succeed in my network marketing venture I'd shop somewhere else. I'm aware of the problems with Walmart, in particular the clothes made from sweatshops. Thus, I plan to design clothes that are bought from thrift shops. They're a lot cheaper, more environmentally-friendly, and very creativity fostering.

    • adjkp25 profile image

      David 5 years ago from Northern California

      CarNoobz - That way of life is certainly in the minority these days. Thanks for the comment.

    • CarNoobz profile image

      CarNoobz 5 years ago from USA

      My grandpa was an entrepreneur. Chicken farm, vending machines, fresh produce. That way of life is becoming extinct.

      Voted up

    • adjkp25 profile image

      David 5 years ago from Northern California

      Timetraveler2 & johnsmitht - In the long run there is economic harm unfortunately. The impression is that you are making a great buy there but after factoring in everything that your tax dollars pay for the deal doesn't look too sweet. Thanks for commenting.

    • johnsmitht profile image

      johnsmitht 5 years ago

      As a consumer, Walmart allows me to purchase items at a cheaper price. But in the long term haul, I agree with some economists that they will likely be harmful to the economy, which in effect may further increase the spike in prices of consumer items.

    • TIMETRAVELER2 profile image

      Sondra Rochelle 5 years ago from USA

      I actually read "The Walmart Effect" and it was a real eye opener. Companies like this really do harm us, but they seem to be here to stay. Great hub and voted up.

    • adjkp25 profile image

      David 5 years ago from Northern California

      movingout - I know a few economists have tried to put a dollar amount to it and the amount of millions being spent by the local and state governments is sad. A company of this size could use that size to get fairly decent healthcare, if they wanted to. Thanks for commenting.

    • movingout profile image

      movingout 5 years ago from Georgia

      I agree, education limits, etc. There employees cost the states a lot of money in medical care. In many states their employees are the biggest users of indigent care. Not to mention the paupers insurance policies they take out on employees. Just how much money does this BIG employer need? They could provide healthcare to all of the employees and hardly, if at all, realize the cost.

    • adjkp25 profile image

      David 5 years ago from Northern California

      FSlovenec - Some people cannot get better employment because of schedules, education limits, etc but that is not the real problem with Walmart to me. My biggest beef with them is that cities and states have to pitch in to cover the Walmart employees because the pay and benefits are so poor. Why are my tax dollars being used to subsidize Walmart employees because the executives in Arkansas want an extra billion to put in their pockets?

      I do concur with your love of baseball though.

    • FSlovenec profile image

      Frank Slovenec 5 years ago from San Francisco, CA

      If people are being underpaid then they should find work elsewhere. Why is it the companies that employ the most people seem to catch the ire of the masses. The job creators get bashed it is America if people do not like working in a place they can go somewhere else. For the most part Walmart employees are happy with even proud of their employer. I ask them all the time. I love Baseball the only real sport...

    • adjkp25 profile image

      David 5 years ago from Northern California

      Zakk - I have to be honest, I haven't been near a Walmart in years because I will not spend my money at a company that does business the way that they do. I can say that I have heard from others that mirror the complaints that you have shared though.

    • profile image

      Zakk 5 years ago

      I absolutely agree. How often have any of you gone into Walmart only to stand in a line of ten or fifteen people because there are only two or three registers open on a Saturday night? And half of the self-checks are out-of-service? It seems they don't even hire enough employees to run their stores properly, much less make up for the number of jobs they destroy. It's very disturbing.

    • adjkp25 profile image

      David 5 years ago from Northern California

      Chinaimport - They are definitely a very successful retailer, that is even more reason why they could be doing so many things better but have made the decision not to. For as many billions in profit they make better wages and benefits for their employees wouldn't be too difficult but they would rather line their executives' wallets. I get even more upset knowing that my tax dollars are subsidizing this behavior, it is very unfortunate.

    • Chinaimport profile image

      Kamal Mohta 5 years ago from Guangzhou

      Walmart has been in news for wring reason but they are still one of the most successful retailer.

    • adjkp25 profile image

      David 5 years ago from Northern California

      yankeeintexas - I have heard and seen many stories where Walmart does force out the competition and it is sad. I wish more people would get educated on the problems with the way the do business. Thanks for the comment.

    • yankeeintexas profile image

      yankeeintexas 5 years ago from Lubbock, Texas

      Well, I have always believed that Wal-mart is to big, and not good for local economy. Unfortunately, when they establish themselves in a community it is not long before you have no choice but to shop since they shutdown most local business.

    • adjkp25 profile image

      David 5 years ago from Northern California

      nisargmehta - Thanks for sharing your local story. These large corporations have the ability to improve things but they won't because the bottom line is all that matters to them.

    • adjkp25 profile image

      David 5 years ago from Northern California

      Rosie - I have seen that documentary and it is sad that these employees are treated the way that they are, especially from the world's biggest retailer.

    • nisargmehta profile image

      NISARG MEHTA 5 years ago from SURAT, Gujarat, India

      @adjkp25: Not only Walmart but most companies, esecially one's operating at National or multinational scale are having the same issue or to say Strategy. 2nd and lower level Employees are considered non-productive due to which even a graduate appointed at such post will have to suffer the standards-in this case lower standards of wages. However here in India there is a small supermarket - just like Walmart who is giving hard time to such companies in its city even though it is at local level only. I may do some research and come up with its strategy and such other aspects soon.

      Thanks for sharing. [Smiles]

    • Rosie writes profile image

      Rosie writes 5 years ago from Virginia

      There is a documentary on television, "Walmart: the High Cost of Low Price"; I watched it about a week ago. Part of it was about how Walmart buys its products overseas from countries where mostly women are forced to work long hours for almost no money. It showed a Walmart employee who was fired for revealing the poor conditions to Walmart. He thought they would want to fix it.

    • adjkp25 profile image

      David 5 years ago from Northern California

      movingout - Your thoughts certainly have merit. For me I see how they affect communities and it bothers me. I also disagree with they way they try to monopolize areas. Thanks for sharing your comment.

    • movingout profile image

      movingout 5 years ago from Georgia

      Haven't shopped there since Sam Walton passed away! Can't shop at a store that sells caskets and urns! They want your money coming into this world, growing old in this world, and on the way out of this world! And they aren't cheaper! They claim to save you $3,000.00 a year!Want to save money? Stay out of the big box stores! They claim saving money? Not really, they know most of us are inpulse buyers. Meaning if you go their once a week thru out the year each trip you will blow $70.00 on stuff you otherwise wouldn't buy! That's $3,620.00 you blew on stuff!

    • adjkp25 profile image

      David 5 years ago from Northern California

      Marcy - The negativity has been around for a while now, I don't see it going away unless they change the way they do business. I don't see it happening.

    • Marcy Goodfleisch profile image

      Marcy Goodfleisch 5 years ago from Planet Earth

      I know Wal-Mart has had quite a bit of negative coverage lately - I do hope the issues get ironed out. Thanks for the information you've shared here!

    • adjkp25 profile image

      David 5 years ago from Northern California

      Georgie - I have heard similar stories about rural areas but I have seen them also undercut other companies in these rural communities to force that business to fold. They can afford to be in the red on a store for a while if it means getting the competition to go away.

      Here in California I know our supermarkets pay better than Walmart, it isn't even close either. I remember seeing a full page ad about 8 years ago when I still lived in Sacramento about Walmart bragging they paid almost twice the federal minimum wage, it was $5.15 at the time. Down the street In-N-Out was hiring people to flip burgers for $9 an hour.

      Thanks for your comments.

    • adjkp25 profile image

      David 5 years ago from Northern California

      greeneryday - This is the less than flattering side of their company. Opposing sides will always try to put these issues on the front burner when they are fighting a new Walmart in their community. Obviously Walmart will do their best to counter these issues. Thanks for commenting.

    • Georgie Lowery profile image

      GH Price 5 years ago from North Florida

      Love it or hate it, Walmart is one of the largest employers (if not THE largest) in many small, rural communities. I have friends and family that have worked there, and their wages are often higher than any of the other employers in the area.

      Also, Walmart is not the only company that doesn't pay a living wage with today's inflation. Supermarkets, fast-food restaurants and small retailers pay wages at rates often lower than Walmart. It's not the wages that are causing people to live below the poverty line, it's the prices of goods and services.

      I do not agree with their negotiating tactics, as you stated. I've read a bit about them and think that they're unfair business practices but, as long as suppliers continue to deal with Walmart, the company will keep doing it.

    • greeneryday profile image

      greeneryday 5 years ago from Some tropical country

      I have never know that walmart has this side of story, interesting!


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