Wal-Mart’s Effect on America
A familiar sight in suburban and rural towns is the Wal-Mart big box store. It is not unusual for the residents of these communities to think of Wal-Mart as a provider, provider of household goods and jobs. What is unclear is the cost to every resident of every community of the installation of a Wal-Mart store, supercenter or distribution center. Wal-Mart has lowered the national standard for wages and working conditions, increased the tax burden on the middle class and supplanted jobs with better wages and working conditions.
Wal-Mart has also done some positive things for the people of the US. It is the largest private corporation to introduce environmentally friendly products to the American consumer. Wal-Mart has developed efficiencies and logistics that are a model for companies globally. These efficiencies have reduced energy consumption and waste providing environmental benefit. Wal-Mart is large and powerful enough that it could establish trends that would improve the national economy and conditions for most American workers. To date, Wal-Mart has had a negative impact but there are indications Wal-Mart may improve life for many Americans.
According to the AFL-CIO in 2006, job based health coverage is disappearing. The AFL-CIO surveyed 23 states and found that Wal-Mart is the top employer in the United States of employees needing poverty health care. Medicaid costs increased 58.7 percent from the year 2000 to 2006 the AFL-CIO report also found. According to this same report, this is the time frame of Wal-Mart’s explosive growth to 1.39 million workers. Wal-Mart is America’s largest employer. AFL-CIO points out that the cost of health care for most of the Wal-Mart employees is paid by the American taxpayer. In addition to the poverty health care expense to taxpayers, over one billion dollars in economic development assistance from state and local governments has been paid to Wal-mart to construct facilities in the past 20 years also reported by AFL-CIO.
The UC Berkeley Center for Labor Research and Education studied the potential impact of a higher living wage paid to Wal-Mart employees in December of 2007. It also examined the impact to the consumer if the increased cost was completely absorbed by increased prices. Those that struggle the most from Wal-Mart policies are the Wal-Mart wage earners. If the poor and low income workers received a wage increase to a minimum of $10.00 per hour, the annual earnings would increase between $1020 and $4640 per year depending on total hours worked and current average wage. The same report also stated that almost half the Wal-Mart employees earn an average of $7.68 per hour and these estimates are based on an average wage of $10.00 per hour If the wage increase were absorbed by price increases alone and no profit reduction from Wal-Mart. Even the highest spending Wal-Mart shoppers(who are also the shoppers at 200% or less of the Federal Poverty level or lower) would pay only $1.47 more per $164.00 purchase or an average of $7.33 per month. This would also reduce the cost to the American taxpayer of the earned income credit.
In December, 2009, Harold Myerson of the American Prospect reported that in 1962, President John Kennedy followed through on a campaign promise to extend the minimum wage to retail workers and increase their hourly wage to $1.15 per hour to conform with the rest of the nations workers. Wal-Mart was paying its retail workers as little as $.50 per hour. Walton divided his stores into smaller companies to be excluded from this law. A federal court ordered him to pay his workers the accumulated back pay and a double time penalty. The checks were distributed at a special meeting, but at the same meeting he told his employees he would fire anyone who cashed the checks.
Wal-Mart has done remarkable things. It has revolutionized logistics on a global scale. Quality products and food are delivered quickly and safely around the globe. When Hurricane Katrina devastated the Gulf Coast, the Wal-Mart Corporation was the first provider at ground zero delivering food and supplies to the Katrina victims. Jessica Lecavalier noted extraordinary capabilities in Wal-Mart Logistics:
Even before the the storm made landfall, the company had anticipated supply shortages and had trailers loaded and ready in their Brookhaven, Mississippi, distribution center. Right after the storm, Wal-Mart dispatched trucks stocked with supplies to affected areas in Louisiana and Mississippi—often ahead of the National Guard. As one local church official noted, “If the American Government would have responded like Wal-Mart has responded, we wouldn’t be in this crisis.” (6)
In addition to Wal-Mart’s ability to deliver needed supplies quickly with its unequaled logistics systems, Wal-Mart is also making an effort to sell healthier food. Mr. Dach, of Wal-Mart, reports that food reformulations are coming at the request of Wal-Mart’s own customers. Wal-Mart plans to save Americans who are Wal-Mart shoppers approximately $1 billion per year on fresh produce.
The best and worst aspects of Wal-Mart are its size and power. Wal-Mart’s employees number the population of a country and any good change within Wal-Mart would be good for America. Michael F Cannon, a reporter who shared a taxi-cab with a Wal-Mart lobbyist who told him that Wal-Mart supported "employer mandate" which is the government requiring that employers provide health-care to employees in various ways. It seems that Wal-Mart may have been in favor of an employer mandate if the government could assist with cost controls. If there was a government mandate, all employees would receive healthcare and all employers would contribute.
Wal-Mart has the power to influence the way America delivers healthcare, increase wages paid to the working poor and shrink the tax burden on the middle class. America has the power to influence Wal-Mart.