The Blog

Walmart Day Parade. Anyone?

We're finally having a discussion about income inequality and the enormous disparity in wealth in this country. Is it really a surprise to anyone that Walmart is the go-to example of what's wrong in this country?
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We're finally having a discussion about income inequality and the enormous disparity in wealth in this country. Is it really a surprise to anyone that Walmart is the go-to example of what's wrong in this country? They are, by some accounts, one of the most hated companies in America.

Walmart recently made the news when the National Labor Relations Board (NLRB) filed a complaint, similar to an indictment, for illegally disciplining, threatening, surveilling, and wrongfully firing workers in response to protests on Black Friday 2013.

Organizing isn't the only way to get fired from Walmart, Megan Durisin at Business Insider put a list together that includes, among other ludicrous reasons, praying with a crying customer, defending yourself against an attack, stopping a shoplifter, calling in sick, and saving a puppy.

Incidentally, Occupy Wall Street, got hold of internal Wal-Mart documents about the company's campaign against OUR Walmart. According to Gawker, these include a PowerPoint presentation on the "Duty of Loyalty" of managers to "Support Walmart's position on how we treat people" and suggests that associates, "Report union activity to the Labor Relations Hotline immediately."

The document, which reads uncomfortably like a weird 1940s propaganda piece, includes a list of "Early Warning Signs" including workers "speaking negatively about wages and benefits" or "ceasing conversations when leadership approaches."

The reason employees were protesting was, of course, wages. Low wages. Wages so low that many people can't live on them. Can't afford rent, clothes, food. Wages so low that Walmart held a food drive in their store during the holidays for their employees to donate food to other employees.

Coworkers aren't the only ones being asked to pony up and subsidize Walmart employees. The American taxpayer is forking over an estimated $900,000 to $1.75 million per store, or $6000 per year per employee. As a result of the low wages and hours well below 40 per week, Walmart employees frequently rely on taxpayer subsidized assistance. According to a 2013 report by the Democratic staff of the House Committee on Education and the Workforce, one Walmart supercenter with 300 employees could cost taxpayers at least $904,000 annually in Welfare, food stamps, heating assistance, healthcare, etc. -- whether you shop at Walmart or not.

Walmart's employees receive $2.66 billion in government help every year, or about $420,000 per store. They are also the top recipients of Medicaid in numerous states. Why does this occur? Walmart fails to provide a livable wage and decent healthcare benefits, costing U.S. taxpayers an annual average of $1.02 billion in healthcare costs. This direct public subsidy is being given to offset the failures of an international corporate giant who shouldn't be shifting part of its labor costs onto the American taxpayers.

Walmart's PR department somehow thought no one knew how to navigate a simple math problem when they released a statement claiming that over 475,000 of their associates earned more than $25,000 - there's no mention about how much more than $25,000 they make and as far as anyone knows it could be $25,001, and that's still not a living wage in a large part of the country. Walmart also employs another 525,000 employees that I guess don't earn anywhere near $25,000.

Sure, you could argue, and many people do, that a lot of these employees may be part time and could get a second job. In fact part time workers are what Walmart likes since they don't have to offer them health benefits. But they can't get a second job. As Rick Unger at Forbes writes:

Because the company obligates you, as a condition of employment, to be available to work on just a few hours' notice. Even the Walmart defense forces would have to acknowledge that it is awfully hard to take a second job when your primary employment requires you to be on-call 24/7 or risk losing your job.

You could also argue (and I hear this a lot) that no one is forcing these people to work at Walmart. Tim Worstall at Forbes wrote a delusional and absurd piece last year, in which he asked, "If WalMart Jobs Are So Terrible, Then Why Do So Many People Want One?" He asks that question as if these people should stop complaining and become doctors instead. My favorite response to idiotic statements like this comes from Unger again, who says:

If Chemotherapy Is So Terrible Why Do So Many Cancer Patients Want It? Just as most appreciate that, despite the terrors of chemotherapy, one will submit to it when the alternative is far worse, most Americans are adequately equipped to understand that people who want and need to work will take virtually anything available to them when the alternative is no work at all--even if that job pays outrageously low wages, the occasional unsafe work environment and renders a second job all but impossible.

It's no wonder they made the list of most hated companies. It stands to reason when employees are treated like pond scum, that they would only pass that on to customers. Unhappy employees generally breed contempt for the people around them and customers generally end up bearing the brunt of that animosity.

In other lists, Walmart's CEO, Michael Duke, made it on to Alternet's "10 Greediest People in America," coming in at number eight - although all ten could have easily tied for number one. Duke reportedly makes just under $7,000/hour, nearly 800 times the amount of an average Walmart employee and is sitting on $113.2 million in retirement assets, thanks to a tax loophole that lets corporate execs annually set aside unlimited sums, tax-free, into their retirement accounts.

The Walton family members, Jim, Alice, Robson, Ann, and Nancie, who own Walmart, have a combined worth of over $100 Billion - more than the combined wealth of 40 percent of the Country. Forty-nine million people in this country could throw all of their money into a big pile and the six Waltons would still have more.

There's nothing wrong with anyone having that much money, in fact it's great that they do and they should be able to do whatever they want with their money. I'm certainly not suggesting that they give people handouts. As people on the right have pointed out, things like unemployment and food stamps just gives people the incentive to sit on the couch getting fat and taking drugs. Apparently, you can do a lot with $4.00 per day.

No one is asking the Walton's to give up their money or to dip into their pockets. In fact, they don't. By comparison, the Walton's are notoriously cheap when it comes to charity. Compared to Bill Gates and Warren Buffet, who give 48 and 78 percent respectively, the Walton's 2 percent isn't much. In fact, even when the Waltons built the Crystal Bridges Museum in Arkansas in 2005, they had a bill passed in the state that gives the family tax breaks. In 2008. A potential estimated $15 million in tax revenue from the museum were shouldered by taxpayers.

When you have that much money and that much power over people's lives, how you treat them is a choice. You can't argue that your bottom line and your ability to feed your own family will be affected.

The Waltons could easily pay their employees a living wage and allow the people who work for them a way out of poverty and a way for the rest of us to stop subsidizing their business. Doing so would set an example for other low wage employers across the country. People would have money to shop in the store, money would return to the economy and we would probably see the economy recover sooner than later.

According to a report by Demos think tank, if Walmart were to reinvest in its employees rather than spending $7.6 Billion a year buying back its own stock, all 1.3 million employees could be making $25,000 per year of full time work.

An alternative to that would be to raise prices and pass on the additional cost to the consumer, thereby allowing the Waltons to continually game the stock prices and further enrich themselves. This is a possibility that drives the mathematically challenged opposition wild and causes them to make idiotic statements like, "Do you want to pay that cashier $25,000 per year out of your own pocket?"

No, I don't. But I'll pay an extra 46 cents per trip to Walmart to make sure that someone checking me out is making a living a wage and isn't so miserable and disgruntled that they'd purposely pack the breakable stuff at the bottom of the bag, throw change at me, or stab me in the face with a spork.

Even if Wal-Mart decided to pass 100 percent of the cost on to customers, store prices would still only increase by 1.1%," Fairchild writes. Because the average customer spends $1,200 per year, that would amount to about $12 annually.

Walmart is one of the most hated companies in America right now, making the Waltons probably among the most hated families in America. It's hard for the rest of us to understand why anyone with that much money would not want to do some good and have the people working for them respect and maybe even like them. There's no financial reason to keep people impoverished and desperate.

The Rockefeller's were notoriously greedy and cruel to their employees. Workers were often subjected to barbaric, slave labor-type conditions. They were, at the time, probably the most hated family in the country. Now, they are known for their philanthropy, foundations and the good they have done.

By comparison, Costco has been treating employees well for years. CEO and president, Craig Jelinek, has endorsed raising the minimum wage to $10.10 per hour - they start employees at $11.50 and average $21. In addition, 88 percent of Costco employees have health benefits. As a result they have a turnover rate of less than six percent. In 2013 Walmart saw a pathetic 1.2 percent raise in sales, while Costco's went up five percent. "I just think people need to make a living wage with health benefits," Jelinek said in a Bloomberg interview. "It also puts more money back into the economy and creates a healthier country. It's really that simple."

So, it can be done and it is a choice.

If they made that choice, the Walton's could leave behind a legacy of having made changes that left this country in better shape. One in which employees are valued and a middle class is thriving. They could be on the winning side of history. They could set an example for the rest of the country to treat employees fairly and give them the opportunity to pursue a lifestyle out of poverty. For now, they're nothing more than a warning of, "Do you want to work at Walmart," from parents to kids who don't do their homework.

Who knows? Maybe they will make that choice and maybe someday we'll name a bridge after them or have a Walmart Day parade.

For my next piece, I'm working on a post about two brothers from MIT worth $70 billion who are trying to take over the world by changing legislation and paying for elections. They wake up one morning after a dream and realize that oppressing people and poisoning the system is wrong and decide to put more effort into community programs and education. I might call it, "Have a Koch and a Smile."