Wal-Mart: An Unneccesary Evil

Last weekend Britt and I checked out some documentaries from the library here in Boise and we check out one excellent documentary called: "Wal-mart- The high cost of low prices". I was kind of skeptical at first because I am usually disappointed with documentaries that are highly critical of an institution or a certain side of an issue (because there is obvious bias, but even more so because those documentaries often have major logical fallacies within the arguments they make), but I have to say that this documentary FAR exceeded my expectations. It was a great eye opener to what the consequences of Wal-mart are to the average citizen and for the business community as a whole. Most people are already aware of the monopolistic effect that Wal-mart has on the small communities it enters, so I won't delve into that area of the debate, but I would like to address some issues (in the documentary, and some of my own personal thoughts) about the major problem that Wal-mart poses to international well-being. I want to talk about 2 major problems that I see with Wal-mart's activities to simplify things: 1. The abusive (and intentional) use of national, state, and local government funding 2. Human rights, especially in regard to China.
First, Wal-mart has lower prices than other retailers because they intentionally use taxpayers dollars to pay a large part of their expenses, including health care. According to New York Times article published last year, 10,000 children of Wal-mart employees were on Medicaid because Wal-mart does not give health care coverage to their employees (they have to buy into the plan, which most can't do because they make less than $10 an hour). It is estimated that Wal-mart is costing Georgia over 10 million taxpayer dollars. California is spending over $86 million is used for Wal-mart employees and their families in Medicaid costs and other public assistance. The list goes on. Wal-mart encourages employees to apply for public assisstance like Medicaid, foodstamps, and TANF (Temporary Assistance for Needy Families aka. welfare). One of the ex-manager of Wal-mart, Jon Lehman, who is now fighting for unions for their workers, said, "that he actively encouraged and assisted his staff with applying for public assistance. "I thought I was doing a good thing at the time, he said. "Now, when I look back, I think, 'Wow, that's incredibly poor that the company doesn't care enough about its workers to pay them a living wage and to help them with their medical costs, to pay their medical expenses and things like that'." I think he put it well. A company that posted $100 billion in profit in the 4th quarter of 2008 (during an economic recession), has plenty of money to provide its employees with excellent health insurance. Yet, even when Wal-mart employees buy into the plan that Wal-mart supplies, they are still obligated to pay 1/3 of all medical costs in premiums! Considering the average Wal-mart employee makes $8.23 an hour (or $13,861 a year), how are they supposed to pay for medical care? or food for that matter? In 2008, Massachusetts is the first state to fight back by requiring companies like Wal-mart (who employ more than 2,500 workers) to pay state taxes on every employee that is not covered by health insurance to the Medicaid program. That came out to over $7.2 million in 2007. Think of how much Wal-mart has cost tax-payers throughout the United States. It is estimated that each Wal-mart store costs the national and state governments $420,000 in public assistance costs and with 3700 stores, the total is more than $1.5 billion dollars each year! Think about what our health care and education systems would look like if we had $1.5 billion extra every year! This abuse of state social services that are intended to be safety nets, not insurance programs for companies that cut costs, is unacceptable for any company, espeically one that employs so many people.
As a side-note, each Wal-mart store contributes about $42,000 a year back to community organizations, which they disperse in small amounts to organizations and churches. This reduces the number of enemies that Wal-mart has in the community even though they destroy the local economy. Although $42,000 seems like a large number, it is less than 11% of what Wal-mart takes out of the system through abuse of the public assistance programs. Although all 5 Walton family members each worth around $18 billion, they give less than 1% of their wealth to charity, while Bill Gates has given 58% of his, yet they spent $3.2 million lobbying for conservative candidates in 2006. It gets worse. Wal-mart has a Critical Need Fund, which allows employees (that make 13,800 a year) to donate money to other employees that are in need of help with their expenses. In 2004, Wal-mart employees donated $5 million to the fund, while the Walton family (worth $90 billion collectively) donated $6,000!!!! After seeing these numbers it is even more clear to me why a progressive tax system of taxing the rich to help the poor is essential. The 2003 Bush Tax Cuts gave the Walton's millions more, while lowering the tax bracket even further.
Second, Wal-mart runs factories in China and Central America that represent human rights abuses in the commerical sector. For those interested in the conditions that these people work in, here is a link to the part of the video that talks about Chinese labor, http://www.youtube.com/watch?v=Y6Z9i8272jY&feature=related .

Wal-mart imported $18 billion this year from China, where the average hourly pay for a woker is 32 cents. On the YouTube video you can watch part #8 which talks about the problems in Central America. Although many companies use cheap foreign labor to make their products, I think it is important to realize that one of the reasons Wal-mart is cheaper is because they exploit people around the world. They have the same abusive practices in other countries, but there aren't public assistance programs to help those people out.
I know this is already very long, so I will just say that I think that everyone should watch this documentary and to research the topic so that you can become educated about it. After seeing the movie I have vowed to stop shopping at Wal-mart, and I hope that you will too. There prices aren't that much lower, and the damage that they are doing to our nation, and the world, is massive. Wal-mart is a despicable excuse for a 'community-serving' company. It's practices are horendous and they remind me of why free-market capitalism was regulated in the first place. Hopefully our country can move in a better direction with new leadership to prevent abuses of the economic system that have hurt this country, and the world, so much.