Criticism of Wal-Mart

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Several groups have criticised Wal-Mart's policies and/or business practices, including community groups, grassroots organizations, labor unions,[1] religious organizations,[2][3] and environmental groups. In particular, several labor unions have specific concerns regarding the company's anti-union stance, as well as several employee relations issues. Other areas of concern include the corporation's extensive foreign product sourcing, treatment of employees and product suppliers, environmental practices, the use of public subsidies, and the impact of stores on the local economies of towns in which they operate.[4][5][6]

In 2005, labor unions created several organizations to confront these issues, including Wake Up Wal-Mart (United Food and Commercial Workers) and Wal-Mart Watch (Service Employees International Union). By the end of 2005, Wal-Mart launched Working Families for Wal-Mart to counter the criticisms of the other two groups. Additional efforts to counter criticism include launching a public relations campaign in 2005 through their public relations website,[7] as well as several television commercials. The company retained the public relations firm Edelman to respond to negative media attention,[8] and has started interacting directly with bloggers by sending them news, suggesting topics for postings, and even inviting them to visit their corporate headquarters.[9]

In August 2006, the company initiated a voter education program by sending a letter to its 18,000 Iowa associates about the decision of a few elected leaders and candidates for office to attack the company at union-funded publicity events in the state.[10] They also plan to send similar letters to associates in other key states, including South Carolina, New Hampshire, and Nevada, and to invite various candidates to tour their stores and meet associates.

Several independent critics have suggested that Wal-Mart is a success in the system of free enterprise because it sells products at low prices that people want to buy, satisfying customer's needs, but at the same time their lower prices draw customers away from established business, "hurting the community."[11][12] Others argue that Wal-Mart is attacked simply because it is a "leader of the Fortune 500 list," "the largest employer in America," and a, "free-market success story."[13]

Contents

[edit] Local Communities

[edit] Store openings

Wal-Mart opened its Teotihuacán Superstore 1.9 miles from the Pyramid of the Moon (shown) amid community protests.
Wal-Mart opened its Teotihuacán Superstore 1.9 miles from the Pyramid of the Moon (shown) amid community protests.

When Wal-Mart plans new store locations, affected communities are often concerned. People oppose new Wal-Mart store openings in their areas cite concerns such as traffic problems, environment problems, public safety, absentee landlordism, bad public relations,[14][15] low wages and benefits, and predatory pricing.[16][17][18] Those who defend Wal-Mart cite consumer choice, economic studies,[19] and the underlying political response.

Opposition sometimes includes rejections for developer applications from city councils and protest marches formed by activists, unions, and even religious groups.[20][21][22] In some instances, activists demonstrated opposition by causing property damage to store buildings or by creating bomb scares.[23][24]

One such controversial store location was a Wal-Mart Superstore that opened in 2004 in Mexico, 1.9 miles away from the historic Teotihuacán Pyramid of the Moon and archaeological excavation site.[25] During construction, a 3 foot square ancient altar was uncovered 1 foot beneath the grade where the store's parking lot is now located.[25] The store proposal received much international media attention. Opposition to the store opening included local community resistance, environmental groups, and anti-globalization policy groups, which protested the store opening.[26] Homero Aridjis, one of the store's lead opponents in the community characterized the opening as "supremely symbolic" and "...like planting the staff of globalization in the heart of ancient Mexico."[27] Other critics compared the store opening to Hernan Cortés and the Spanish conquest of Mexico. The Wal-Mart location was supported by Mexico's national anthropology institute, the United Nations and the Paris-based International Council on Monuments and Sites.[28]

[edit] Economic impact

This Bizarro comic is an example of the commonly cited criticism that Wal-Mart forces smaller, locally-owned stores out of business.
This Bizarro comic is an example of the commonly cited criticism that Wal-Mart forces smaller, locally-owned stores out of business.

As one of the largest corporations in the world, the presence of Wal-Mart in local communities has a significant impact on their local economies. Studies indicate both positive and negative effects. For example, a study at Iowa State University in 1997 found that small towns can lose almost half of their retail trade within ten years of Wal-Mart opening.[29] A subsequent study in collaboration with Mississippi State University indicated that there are "both positive and negative impacts on existing stores in the area where the new supercenter locates."[30]

A June 2006 article published by the Ludwig von Mises Institute suggests that the economic effects of Wal-Mart are overwhelmingly positive, and that all of the fundamental complaints of Wal-Mart's critics are based on profound ignorance of Wal-Mart's actual economic significance.[31] Wal-Mart's low prices cause some existing businesses to close, but also create new opportunities for other small business, and so "the process of creative destruction unleashed by Wal-Mart has no statistically significant impact on the overall size of the small business sector in the United States."[19]

A study by Global Insight commissioned by Wal-Mart claims that its stores' presence saves working families more than $2,329 per year, while creating more than 210,000 part time, minimum-wage jobs in the US.[32][33] From 1985 to 2004, Wal-Mart was found to be "associated with a cumulative decline of 9.1% in food-at-home prices, a 4.2% decline in commodities (goods) prices, and a 3.1% decline in overall consumer prices."[34] The study also indicated that, "nominal wages are 2.2% lower, but given that consumer prices are 3.1% lower, real disposable income is 0.9% higher than it would be in a world without Wal-Mart."[34]

Another study at the University of Missouri examined Wal-Mart's impact on local employment, and found that a new store increases net retail employment in the county by 100 jobs in the short term, half of which disappear over five years as other retail establishments close.[35]

Wal-Mart's low prices also increase in real income. For example, one study showed that Wal-Mart's discounting on food alone boosts the welfare of shoppers by at least $50 billion per year.[36] A study in 2005 at Massachusetts Institute of Technology measured the effect on consumer welfare and found that the poorest segment of the population benefits the most from the existence of discount retailers.[37]

But while Wal-Mart provides more jobs and its low prices provide advantages in the marketplace, its low wages increase the burden on taxpayer-funded services. A 2002 survey by the state of Georgia's subsidized healthcare system, PeachCare, found that Wal-Mart was the largest private employer of the parents of children enrolled in its program, one quarter of the employees at Georgia Wal-Marts qualified to enroll their children in Medicaid.[38] A 2004 study at the University of California, Berkeley found that Wal-Mart's low wages and benefits resulted in an increased burden on the social safety net, costing California taxpayers $86 million.[39][40] A Pennsylvania State University study, in 2004, showed that US counties with more Wal-Mart stores showed evidence of increasing rates of poverty relative to those with fewer stores.[41] This could be due to the displacement of workers from higher-paid jobs in the retailers that are driven out of business, Wal-Mart providing lower levels of local philanthropy than the replaced businesses, or a shrinking pool of local leadership and reduced social capital due to a reduced number of local independent businesses.[41]

[edit] Government funds

Some US critics point to more than $1 billion in taxpayer-supported developmental incentives that Wal-Mart has received in the US[42] Critics call such development incentives "Corporate welfare", a pejorative term for "special favorable treatment" by governments, such as bestowal of grants and/or tax breaks for corporations.[43]

[edit] Allegations of predatory pricing and supplier issues

Wal-Mart has faced several accusations of "predatory pricing" (intentionally selling a product below cost in order to drive competitors out of the market). In 1995, in the case of Wal-Mart Stores, Inc. v. American Drugs, Inc., American Drugs accused Wal-Mart of intentionally selling individual items below cost for the purpose of injuring competitors and destroying competition. While the lower court ruled in favor of American Drug, the Supreme Court of Arkansas ruled in favor of Wal-Mart, saying that their pricing strategies, including the use of loss leaders, did not constitute predatory pricing.[16] In 2000, the Wisconsin Department of Agriculture, Trade, and Consumer Protection accused Wal-Mart of selling butter, milk, laundry detergent, and other staple goods below cost, with the intention of forcing competitors out of business and gaining a monopoly in local markets.[44] Crest Foods filed a similar lawsuit in Oklahoma, accusing Wal-Mart of predatory pricing on several of its products, in an effort to drive their own company-owned store in Edmond, Oklahoma out of business.[45] Both cases were settled out of court, with no fine and no admission of wrongdoing. But there was a stipulation in the Wisconsin case that Wal-Mart would face double or triple fines for any future violations.[44]

In 2003, Mexico's antitrust agency, the Federal Competition Commission, investigated Wal-Mart for "monopolistic practices", prompted by various charges that the retailer has abused its market power by pressuring suppliers to sell goods below cost or at prices significantly less than those available to other stores.[46] Later, in 2003, the German High Court ruled that Wal-Mart's below cost pricing strategy undermined competition and violated the country's antitrust laws.[18]

Wal-Mart has been accused of using monopsony power to force its suppliers into self-defeating practices. For example, Barry C. Lynn, a senior fellow at the New America Foundation, argues that Wal-Mart's constant demand for lower prices caused Kraft Foods to "shut down thirty-nine plants, to let go [of] 13,500 workers, and to eliminate a quarter of its products." Kraft's cost of production had gone up due to higher energy and raw material costs. Lynn argues that in a free market, Kraft could have passed those costs on to its distributors and ultimately consumers.[47]

[edit] Employee and labor relations

With close to two million employees worldwide, Wal-Mart has faced several issues with regards to its employees and workforce. These issues involve low wages, poor working conditions, inadequate health care, as well as issues involving the company's strong anti-union policies. One of Wal-Mart's biggest issues is their high turnover rate – approximately 70% of its employees leave within the first year, primarily due to lack of recognition and inadequate pay.[48]

[edit] Wages

Wal-Mart employees earn less than those performing similar jobs at other stores. For example, in 2001, the average supermarket employee earned $10.35 per hour, versus an average of $8.23 per hour for stock clerks at Wal-Mart. The company has paid low wages since its inception. Wal-Mart founder Sam Walton once said, "I pay low wages. I can take advantage of that. We're going to be successful, but the basis is a very low-wage, low-benefit model of employment."[49] Wal-Mart managers are judged by upper management based on their ability to keep payroll at a strict percentage of sales, which some say that puts extra pressure on higher-paid workers to be more productive.[50] "You keep people making $10 an hour to a high standard," putting more pressure on them for small mistakes, says Lyndol Jackson, a Wal-Mart manager until he left for another job in 1998.[50] Often, those workers quit and can be replaced less expensively.

Additionally, Wal-Mart's low wages have indirectly increased the costs of many social services programs, as many of its employees are forced to apply for government-funded health care, food stamps, and other programs to make ends meet. A 2004 estimate of the costs to California taxpayers was approximately $82 million per year.[51] A report by U.S. Democratic Congressman George Miller cited that a 200-employee Wal-Mart store may indirectly cost federal taxpayers $420,750 to finance free-lunch and health-care programs for children of low-income Wal-Mart employees, tax credits for low-income families, and similar programs.[52]

In 2005 and 2006, in a move that some critics of Wal-Mart say was and appeal to said critics, CEO Lee Scott has called on Congress to increase the federal minimum wage, arguing that many of its customers are low-income families that would benefit from increased wages because they struggle month-to-month.[53]

In August 2006, Wal-mart announced that it would roll out an average pay increase of 6% for all new hires at 1,200 U.S. Wal-Mart and Sam's Club locations, but the same time would institute pay caps on veteran workers.[54] While they claim that the measures are necessary to stay competitive, critics claim that the salary caps are primarily an effort to push higher-paid, veteran workers out of the company.[54]

[edit] Working conditions

Wal-Mart has also faced several accusations involving poor working conditions of its employees. For example, a class action lawsuit in Missouri approximately 160,000 to 200,000 people who were forced to work off the clock, were denied overtime pay, or were not allowed to take rest and lunch breaks.[55] In 2000, Wal-Mart paid $50 million to settle a class-action suit that asserted that 69,000 current and former Wal-Mart employees in Colorado had been forced to work off-the-clock.[55] The company has also faced similar lawsuits in other states, including Pennsylvania,[56] and Oregon.[57] Class-action suits were also filed in 1995 on behalf of full-time Wal-Mart pharmacists whose base salaries and working hours were reduced as sales declined, resulting in the pharmacists being treated like hourly employees.[58]

On October 16, 2006, approximately 200 workers on the morning shift at a Wal-Mart Super Center in Hialeah Gardens, Florida walked out in protest against new store policies and rallied outside the store, shouting "We want justice" and criticizing the company's recent policies as "inhuman."[59] This marks the first time that Wal-Mart has faced a worker-led revolt of such scale, according to both employees and the company.[59] Reasons for the revolt included cutting full-time hours from 40 to 32 per week, a new attendance policy which many associates view as unfair, pay caps that the company imposed in August 2006, compelling workers to be available to work any shift (day, swing or night), such that an employee might work one shift one week and an entirely different shift the following week, shifts would be assigned by computers at corporate headquarters and not by local managers.[59]

The report by Congressman Miller alleged that in ten percent of Wal-Mart's stores, nighttime employees were sometimes locked inside, making them unable to leave.[52] There has been some concern that Wal-Mart's policy of locking their nighttime employees in the building has been implicated in a longer response time to dealing with various employee emergencies, or weather conditions such as hurricanes in Florida.[60] Wal-Mart has claimed that this policy was made both to protect the workers of stores in high-crime areas, as well as to reduce the risk of employee theft.[60] The issue has become less of a problem with the increase in the number of twenty-four hour stores.

[edit] Child labor violations

In January 2004, the New York Times reported on an internal Wal-Mart audit conducted in July 2000, which examined one week's time-clock records for roughly 25,000 employees.[61] According to the Times, the audit, "pointed to extensive violations of child-labor laws and state regulations requiring time for breaks and meals," including 1,371 instances of minors working too late, during school hours, or for too many hours in a day.[61] There were 60,767 missed breaks and 15,705 lost meal times.[61] Wal-Mart’s vice president for communications, Mona Williams, responded that company auditors had determined that the methodology used was flawed. "This audit is so flawed and invalid that we did not respond to it in any way internally."[61]

[edit] Illegal use of undocumented workers

Wal-Mart has been accused of using undocumented immigrants in many of its stores and work locations. In one case, Wal-Mart executives did know that contractors were using illegal aliens as they had been helping the Federal government with the investigation for the previous three years.[62] Some critics argued that Wal-Mart personally hired illegal aliens, while Wal-Mart claims they were employees of contractors who won bids to work for Wal-Mart.[63]

On October 23, 2003, federal agents raided 61 Wal-Mart stores in 21 states, in a crackdown known as, "Operation Rollback," resulting in the arrests of 250 nightshift janitors who where undocumented workers.[64] Following the arrests, a grand jury convened to consider charging Wal-Mart executives with labor racketeering crimes for knowingly allowing undocumented workers to work at their stores.[64] The workers themselves were employed by agencies Wal-Mart contracted with for cheap cleaning services.[64] While Wal-Mart executives have tried to lay the blame squarely with the contractors, federal investigators point to wiretapped conversations showing that executives knew the workers were undocumented.[64] The October 2003 raid was not the first time Wal-Mart was caught using undocumented workers. Earlier raids in 1998 and 2001, resulted in the arrests of 100 undocumented workers at Wal-Mart stores around the country.[65]

Later, in November 2005, 125 alleged illegal immigrants were arrested while working on construction of a new Wal-Mart distribution center in eastern Pennsylvania.[66] According to Wal-Mart, the workers were employees of Wal-Mart's construction subcontractor.

[edit] Health insurance

As of October 2005, Wal-Mart's health insurance covered 44% or approximately 572,000 of its 1.3 million U.S. workers.[67] In comparison, Wal-Mart rival Costco insures approximately 96% of its eligible workers.[68] Wal-Mart spends an average of $3,500 per employee for health care, 27% less than the retail-industry average of $4,800.[69] Wal-Mart CEO Lee Scott acknowledged benefits could improve by claiming Wal-Mart employees can get better value from taxpayer-funded health care than from Wal-Mart's own health plans: "In some of our states, the public program may actually be a better value - with relatively high income limits to qualify, and low premiums."[70] Many critics of Wal-Mart, including those in "Wal-Mart: The High Cost of Low Price" argue that employees are paid so little they cannot afford health insurance.

According to a September 2002 survey by the state of Georgia, one in four children of Wal-Mart employees were enrolled in PeachCare for Kids, the state's health-insurance program for uninsured children, compared to the state's second-biggest employer, Publix, had one child in the program for every 22 employees.[71] A December 2004 nationwide survey commissioned by Wal-Mart showed that the use of public-assistance health-care programs by children of Wal-Mart workers was at a similar rate to other retailers' employees, and at rates similar to the U.S. population as a whole.[72]

On October 26, 2005, a Wal-Mart internal memo sent to the firm's Board of Directors advised trimming over $1 billion in health care expenses by 2011 through measures such as attracting a younger, implicitly healthier work force by offering education benefits.[73] The memo also suggested giving sedentary Wal-Mart staffers, such as cashiers, more physically demanding tasks, such as, "cart-gathering," and eliminating full-time positions in favor of hiring part-time employees who would be ineligible for the more expensive health insurance and several policy proposals which may violate the Americans with Disabilities Act of 1990.[73] The memo also accused Wal-Mart's lower paid employees of abusing emergency room visits, "possibly due to their prior experience with programs such as Medicaid," whereas such visits may actually be due to the reduced ability of uninsured or underinsured people to make timely appointments to see a regular physician.[73] Critics point to this story as evidence that Wal-Mart purports to be generous with its employee benefits, while in reality the company is working to cut such benefits by reducing the number of full-time and long-term employees and discouraging supposedly unhealthy people from working at Wal-Mart.

On January 12, 2006, the Maryland legislature enacted a law requiring that all corporations with more than 10,000 employees in the state spend at least 8% of their payroll on employee benefits, or pay into a state fund for the uninsured.[74] Wal-Mart, with about 17,000 employees in Maryland, was the only known company to not meet this requirement before the bill passed. On July 7, 2006, the Maryland law was overturned in federal court by U.S. District Judge Frederick Motz who held that a federal law, the Employee Retirement Income Security Act (ERISA), pre-empted the Maryland law. In his opinion, Motz said that the law would "hurt Wal-Mart by imposing the administrative burden of tracking benefits in Maryland differently than in other states."[75]

On January 19, 2006, the, "Fair Share Health Care," legislation in Wisconsin was defeated. Wal-Mart spokesperson Nate Hurst stated, "that this bill failed even to make it out of committee in the Wisconsin Assembly is a big setback to the Washington, D.C. union leaders driving these state-by-state attacks against large employers. We're hopeful that more state legislators across America -- like those in Wisconsin -- will come to realize that these bills are harmful to working families. Not only will they do nothing to control the cost of health care or improve access to health coverage, they will cost jobs and hurt economic growth. The American people want their legislators to resist special interest pressure and instead work with colleagues and businesses of all sizes to solve the health care challenges facing America."[76]

On April 17, 2006, Wal-Mart announced it was making a health care plan available to part-time workers after 1 year of service, instead of the prior 2 year requirement.[77] One criticism of the new plan is that it provides benefit only after a $1,000 deductible is paid ($3,000 for a family). These deductibles may financially be out of reach for eligible part-time workers. Wal-Mart estimates this change can add 150,000 workers to health coverage plans, if all who are eligible take part. By January 2007, the number of workers enrolled in the company's health care plans increased by 8%, which Wal-Mart attributed to the introduction of less expensive insurance policies.[78] However, even with this increase, less than half of Wal-Mart's employees, or 47.4%, received health insurance through the company, with 10%, or 130,000, receiving no coverage at all.[78]

[edit] Labor union opposition

Wal-Mart has been criticized for its policies against labor unions. In North America, Wal-Mart has been successful thwarting unionization via anti-union tactics such as managerial surveillance and pre-emptive closures of stores or departments who choose to unionize.[79] Wal-Mart states that it is not anti-union but, "pro-associate," arguing that its employees do not need to pay third parties to discuss problems with management as the company's open-door policy enables employees to lodge complaints and submit suggestions all the way up the corporate ladder.[80] In 1970, company founder Sam Walton resisted a unionization push by the Retail Clerks International Union in two small Missouri towns by hiring a professional, John Tate, to lecture workers on the negative aspects of unions.[81] On Tate's advice, he also took steps to instruct his workers on how the company had their best interests in mind, encouraging them to air concerns with managers and implementing a profit-sharing program.[81] A few years later, Wal-Mart hired a consulting firm, Alpha Associates, to develop a union avoidance program.[81]

In March 2005, Tom Coughlin was forced to resign from Wal-Mart's Board of Directors, facing charges of embezzlement.[82] Coughlin claimed that the money was used for an anti-union project involving cash bribes paid to employees of the United Food and Commercial Workers Union in exchange for a list of names of Wal-Mart employees that had signed union cards.[82] He also claimed that the money was unofficially paid to him, by Wal-Mart, as compensation for his anti-union efforts.[82] Wal-Mart has denied that such an anti-union project ever existed, and maintains that the evidence points to the fact that Coughlin was simply stealing money from the company.[82]

In 2000, meat cutters in Jacksonville, Texas voted to unionize. Wal-Mart subsequently eliminated in-house meat-cutting jobs in favor of prepackaged meats on the claims that it cut costs and was a preventive measure to lawsuits.[83] Wal-Mart claimed that the nationwide closing of in-store meat packaging had been planned for many years and was not related to the unionization.[83] In June 2003, a National Labor Relations Board judge ordered Wal-Mart to restore the meat department to its prior structure, complete with meat-cutting, and to recognize and bargain with the union over the effects of any change to case-ready meat sales.[84]

Wal-Mart's anti-union policies also extend beyond the United States. The documentary Wal-Mart: The High Cost of Low Price, shows one successful unionization of a Wal-Mart store in Jonquière, Quebec (Canada) in 2004, but Wal-Mart closed the store five months later claiming the store had become unprofitable.[85][86] In September 2005, the Québec Labor Board ruled that the closing of a Wal-Mart store amounted to a reprisal against unionized workers and has ordered the company to compensate former employees.[87]

Wal-Mart has also had some run-ins with the German Ver.di labor union as well.[88] These issues, combined with cultural differences and low performing stores, led Wal-Mart to pull out of the German market entirely in 2006.[89]

In August 2006, Wal-Mart announced that it would allow workers at all of its Chinese stores to become members of trade unions, and that the company would work with the state-sanctioned All-China Federation of Trade Unions (ACFTU) on representation for its 28,000 staff.[90][91]


[edit] Imports and globalization

As the single largest customer to most of its vendors, Wal-Mart openly uses its bargaining power to negotiate lower prices from vendors. Specifically, in its negotiations with suppliers, Wal-Mart requires that prices go down from year to year.[92] If a vendor does not keep prices competitive with other potential Wal-Mart suppliers, they risk having their entire brand removed from Wal-Mart's shelves in favor of a lower-priced competitor or a less expensive store brand.[93] Critics argue that this pressures vendors to shift manufacturing jobs to China and other third world nations, where the cost of labor is less expensive.

In the mid-1990s, Wal-Mart had a "Buy American", campaign, which was eventually cancelled. By 2005, about 60% of Wal-Mart's merchandise was imported, compared to 6% in 1995.[93] In 2004, Wal-Mart spent $18 billion on Chinese products alone, and if it were an individual economy, the company would rank as China's eighth largest trading partner, ahead of Russia, Australia, and Canada.[94] One group estimates that the growing US trade deficit with China, heavily influenced by Wal-Mart imports, is estimated to have moved over 1.5 million jobs that might otherwise be in America to China between 1989 and 2003.[95] According to the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), "Wal-Mart is the single largest importer of foreign-produced goods in the United States", their biggest trading partner is China, and their trade with China alone constitutes approximately 10% of the total US trade deficit with China as of 2004.[96]

While the company certainly imports many products, it points out that it purchases goods from more than 68,000 US vendors, spending $137.5 billion in 2004, and supporting more than 3.5 million supplier jobs in the US[97]

[edit] Overseas labor concerns

There are many concerns from critics over Wal-Mart's use of foreign labor, particularly over allegedly inadequate supervision over its foreign suppliers, as well as incidents of products have been made using sweatshops or alleged slave labor. For example, in 1995, Chinese dissident Harry Wu discovered that Wal-Mart was contracting prison labor in Guangdong Province.[98] There have also been reports of teenagers in Bangladesh working in sweatshops approximately 80 hours per week at $0.14 per hour, for Wal-Mart contractor Beximco. In 1994, Guatemalan Wendy Diaz reported that she had been working for Wal-Mart at $0.30 per hour at age 13.[98] The documentary, Wal-Mart: The High Cost of Low Price, also claims that the factories that produce goods for Wal-Mart are in poor condition and that factory workers are subject to abuse and conditions the documentary producers consider inhumane.

According to Wal-Mart and many self-described advocates of free trade, comparisons of wage levels between vastly different countries is not a useful way to assess the fairness of a trade policy. The company also points out that wages paid to overseas workers are comparable to or exceed local prevailing wages. In that case, the company claims that the overseas manufacturing jobs it creates are often an improvement in the quality of life for its employees. They have also drawn attention to the fact that factory jobs with its suppliers are often safer and healthier than local alternatives, which may include prostitution, the drug trade or scavenging.

Wal-mart currently uses in-house monitoring, which, critics say, leaves outsiders unable to verify reforms. Since no external agency, such as Social Accountability International or the Fair Labor Association, is involved and Wal-Mart will not release its audits or even factory names, outside organizations are left to simply take Wal-Mart's word.[99] In 2004, Wal-Mart began working with Business for Social Responsibility, a San Francisco-based nonprofit organization, to reach out to groups active in monitoring overseas plants. BSR President, Aron Cramer, said: "Wal-Mart is at an early stage and it's likely that they, like most companies that engage in these processes, will adapt their approach over time."[100]

[edit] Product selection

Wal-Mart's product selection has been criticized by some groups in the past, primarily as viewed as a promotion of a particular ideology or as a responses to their original rural, religious target market. For example, in 2003, Wal-Mart removed certain men's magazines from their shelves, such as Maxim, FHM, and Stuff, citing customer complaints regarding their racy content.[101] Later that year, they decided to partly obscure the covers of Redbook, Cosmopolitan, and Marie Claire due to "customer concerns", and refused to stock an issue of Sports Illustrated's swimsuit special because it took exception to one photograph.[102]

Since 1991, Wal-Mart also has not carried music albums marked with the Recording Industry Association of America's (RIAA's) Parental Advisory Label, although they carry edited versions of such albums, with obscentities removed or overdubbed with less offensive lyrics.[103] In one example in 2005, Wal-Mart rejected the original cover of Willie Nelson's reggae album, Countryman, which featured marijuana leaves, in an apparent pro-marijuana statement. To satisfy Wal-Mart, the record label, Lost Highway Records, issued the album with an alternate cover, without recalling the original cover. Wal-Mart has never carried Marilyn Manson albums, solely because of the controversy surrounding the group, but recently began selling Nine Inch Nails albums after rejecting them for years.[104]

In 1999, Wal-Mart announced that it would not stock emergency contraception pills in its pharmacies, not citing any particular reasons, except for a, "business decision," that was made earlier.[105] The move was criticized by family planning advocates, citing that women in small towns where Wal-Mart pharmacies had little competition, would have greater difficulties in obtaining the drug.[106] The decision was challenged in 2006, as three Massachusetts women filed suit against the company after they were unable to purchase emergency contraception at their local Wal-Mart stores,[105] resulting in a ruling that required Wal-Mart to stock the drug in all of its pharmacies in Massachusetts.[106] Expecting that other states would soon do the same, Wal-Mart reversed its policy and announced that they would begin to stock the drug nationwide,[106] while at the same time maintaining its conscientious objection policy, allowing any Wal-Mart pharmacy employee who does not feel comfortable dispensing a prescription to refer customers to another pharmacy.[106]

Wal-Mart has also been criticized for some of the products that it carries. For example, it was criticized for selling the notoriously anti-Semitic text The Protocols of the Elders of Zion on its website. Most scholars consider the text to be a forgery, but Wal-Mart's product description suggested the text might be genuine. Wal-Mart stopped selling the book in September 2004, but many other booksellers still sell it in the interests of freedom of speech.

In October 2004, Wal-Mart canceled its order for The Daily Show's America (The Book) after discovering a page that depicts each US Supreme Court judge nude. A week later, it returned copies of George Carlin's When Will Jesus Bring the Pork Chops?, with a cover recreating The Last Supper with Jesus' seat empty and Carlin seated next to it. The company claimed that the copies were shipped to it by mistake and a Wal-mart spokeswoman said she "didn't believe this particular product would appeal" to its customer base.[107]

In January 2006, Wal-Mart was criticized for the recommendation system on its website which suggested that some African American-related DVDs, such as Introducing Dorothy Dandridge and documentaries on Martin Luther King, Jr. were similar to the Planet of the Apes television series DVD box set. It quickly corrected the page, saying that it was a software glitch, but ultimately blamed the matter on human error.[108]

While Wal-Mart's product selection may be seen by some as censorship, others view this from an allegedly free enterprise standpoint, that criticism of Wal-Mart's product selection is misguided because Wal-Mart is free to carry and sell whatever products it chooses and that customers are free to shop elsewhere, and would do so if they were in disagreement with its perceived moral values.[109]

[edit] Taxes

Until the mid-1990s, Wal-Mart took out corporate-owned life insurance policies on low-level employees, such as janitors, cashiers, cart pushers, and stockers. This type of insurance is usually purchased to cover a company against financial loss when a high-ranking employee dies, and is usually known as "Key Man Insurance". But the policies that Wal-Mart took out on its rank-and-file workers were derided as "Dead Peasants Insurance" or "Janitor Insurance". Critics (such as the US Internal Revenue Service) charge that the company was trying to profit from the deaths of its employees, and take advantage of a loophole in a tax law which allowed it to deduct the premiums. The practice was stopped in the mid-1990s when the federal government, which had previously called the financing scheme "tax arbitrage", closed the tax loophole and began to pursue Wal-Mart for back taxes.[110]

[edit] See also

[edit] References

  1. ^ Kabel, Marcus. "Wal-Mart, Critics Slam Each Other on Web." Washington Post. July 18, 2006. Retrieved on July 31, 2006.
  2. ^ Sellers, Jeff M. "Women Against Wal-Mart." Christianity Today. April 22, 2005. Retrieved July 31, 2006.
  3. ^ Sellers, Jeff M. "Deliver Us from Wal-Mart?." Christianity Today. April 22, 2005. Retrieved on July 31, 2006.
  4. ^ Copeland, Larry. "Wal-Mart's hired advocate takes flak." USA Today. March 13, 2006. Retrieved on July 31, 2006.
  5. ^ Rodino Associates. "Final Report on Research for Big Box Retail/Superstore Ordinance." Los Angeles City Council. October 28, 2003. Retrieved on July 31, 2006.
  6. ^ Smith, Hedrick. "Who Calls the Shots in the Global Economy?" PBS. Retrieved on July 31, 2006.
  7. ^ "walmartfacts.com (official public relations website)." Wal-Mart. Retrieved on August 1, 2006.
  8. ^ Barnaro, Michael. "A New Weapon for Wal-Mart: A War Room." New York Times. November 1, 2005. Retrieved on August 1, 2006.
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Key People: Sam Walton | David Glass | Lee Scott | Jim C. Walton | Bud Walton | S. Robson Walton | Douglas Daft

Assets: Amigo Supermarkets | ASDA | Sam's Club | Wal-Mart Discount Stores | Wal-Mart Neighborhood Market | Wal-Mart Supercenter | Walmex
See Also: Criticism of Wal-Mart | History of Wal-Mart | List of assets owned by Wal-Mart Stores, Inc. | List of Wal-Mart brands | Wal-Mart: The High Cost of Low Price

Annual Revenue: $288 billion USD (10% FY 2005) | Employees: 1.7 million | Stock Symbol: NYSE: WMT | Website: www.walmartstores.com
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