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News :: Political-Economy |
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Wal-Mart Actions Call For Increased Scrutiny |
Current rating: 0 |
by Neal Peirce
(No verified email address) |
29 Oct 2003
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Reported to be coming to Urbana soon, let's hope that the world's largest corporate criminal is closly scruntinized every step of the way and that NO taxpayer dollars go to subsidize a company that can clearly pay its own way. |
Why would the world's biggest retail firm, America's largest private employer, a company adding "Supercenters" at pell-mell pace and registering a staggering $6.67 billion in profits last year, knowingly stoop as a federal jury in Pennsylvania is now being told to hiring janitorial firms staffed by meagerly paid, benefit-denied, illegal immigrants?
Last week's raids and the charges that Wal-Mart broke federal law with knowledge of high executives ought to be a total surprise. But they aren't. Call it, if you will, the price or consequence of a no-holds-barred drive for supremacy.
This amazing corporation, now employing 1.4 million Americans, is the dominant retail force in most of the regions where its 1,512 retail stores, 53 "neighborhood markets," 1,344 Supercenters and 528 Sam's Clubs operate. It represents one of the great success stories of American capitalism.
With assets of about $20.5 billion each, the widow and four children of founder Sam Walton constitute the richest family on Earth, Forbes magazine reports.
Not since the 19th century robber barons, whose ruthless bids for monopoly power paved the way for the nation's antitrust laws, has any single firm impacted America quite so deeply.
The story is already legend: communities coast-to-coast drawn, like moths to a flame, by Wal-Mart promises of phenomenally low prices, new jobs and enriched local tax coffers.
Many communities even coughed up financial incentives to attract Wal-Mart and still do, like a vote last month in little Tawas City, Mich., to pledge as much as $1 million in foregone property taxes in exchange for a new Wal-Mart facility. Local officials ignored citizen queries of why the world's richest firm couldn't finance its own expansion.
All along, critics have groused that Wal-Mart stores imperil historic Main Street retail areas and exacerbate sprawling development patterns. But Americans' love of low costs goods as much as 40 percent cheaper than the competition's has muted opposition.
Still, as Wal-Mart grows, its impacts like the alleged employment of miserably paid illegal immigrants are likely to be getting much more attention.
Why? First, there's the Supercenter boom. Begun in the early '90s, Supercenter expansions, making Wal-Mart not just America's prime retailer but its prime grocer, are so rapid that in some regions the stores are popping up everywhere. The virtually total geographic coverage of these superstores suggests disturbing single-firm dominance in the nation's food chain.
Then there's pay. Known for its dead-end jobs, Wal-Mart is clearly dragging down pay and benefits for millions of workers. The company doesn't release figures, but start-up Wal-Mart workers aren't likely to get more than $6.25 to $8 an hour. A big chunk are part-time clearly by design and an amazing 500,000 quit each year. Nearly half the company's workers make less than $15,300 a year, the federal annual poverty income for a family of three.
Result: Wal-Mart workers must often turn to food stamps, apply for the federal government's Earned Income Tax Credit and turn to states for child support payments. Wal-Mart gets to "sell for less" because it shifts the costs to all taxpayers. When you buy for less at Wal-Mart, you're paying: it's just a question out of which pocket.
Then there's health. Part-time Wal-Mart workers have to wait two years, full-time employees six months, for insurance and even then the coverage has high premiums and deductibles. The result, charges United Food and Commercial Workers (AFL-CIO), which has been trying to organize Wal-Mart: "Nearly 700,000 Wal-Mart workers are forced to get health insurance from government or through spouses' plans, driving up health costs for all of us."
As insurance for all Americans turns into a hot political issue, Wal-Mart's dereliction on health coverage for its army of workers will be hard to ignore.
Realism says it will be tough to deter a retailer so huge it's able to pressure suppliers for extra-low prices. Globally, Wal-Mart buys so many goods produced by inexpensive foreign labor that it's become the world's largest importer of Chinese-made goods.
Nor will it be easy to prevent potential "Wall-Mart-ization" of food retailing now especially acute in Southern California, where 70,000 grocery workers are striking major local chains (Vons, Pavillions, Ralphs and Albertsons). The companies are demanding a 50 percent cut in workers' medical coverage, plus a two-tier wage system denying new employees the rather solid middle-class wages now paid the region's grocery workers. Though still highly profitable, the companies claim potential Wal-Mart competition is forcing their hand.
Unionists now fear that Wal-Mart, globalized and dominant, is poised to lead a downward spiral of worker wages and benefits across the United States. Labor's chances of organizing Wal-Mart itself seem dim given the firm's overwhelmingly unskilled, fast-turnover work force.
But the raids by federal immigration authorities are a reminder: Eventually, through all of American history, unfettered power gets curbed.
Copyright 1996-2003 Knight Ridder
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