Walmart has been the whipping boy for a while now. I'll admit, I had never been in a Walmart until I was 15. I now do the majority (by total dollars) of my shopping at Walmart and own stock in the company. So I am hardly an unbiased defender of the Great Smiley Face. But I'll do it anyway. When I lived in New York, there was a town near where we lived that was possibly going to get a Walmart. The people were divided and post smiley faces or frowny faces on their lawn based on how they stood on the issue. Recently, I ran across the Wake-Up Walmart (WUW)website. They have a page of "facts" that I would like to present with my refutation.
1. A Substantial Number of Wal-Mart Associates earn below the federal poverty line - This could be said of any retailer. The retail business requires a large amount of unskilled labor. Someone can be taught how to stock shelves, sweep floors, operate a cash register in about an hour. More over, just about anyone can be taught these skills. To support this statement, WUW cites that the average pay of an associate is $19K per year which is $2K below the poverty line for a family of 4. Well, OK, except that they don't say that the average Walmart associate is supporting a family of 4. Since I frequent Walmart, I have spoken with many associates there. If my Walmart is indicative of others, then probably 80-90% of Walmart associates are made up of the following types of people: high school students, college students (usually single or married with both working), mothers with kids in school (husband works so Walmart is 2nd income), retired or near retired persons (hardly supporting a family of 4 and usually with other income from SS or pensions). Are there thousands of Walmart associates who are supporting families of 4? Probably, but this is more a result of the magnitude of numbers. Walmart employees more than 2 million people. If only 1 percent are supporting a family of 4 than that is 20,000. It is still the exception. WUW also says that the CEO makes 1551 times what the average associate makes. So? There are 2 million associates and 1 CEO, maybe they should be paying him more. This type of argument exists solely for the jealous and greedy who believe they are in someway entitled to a larger portion of other people's possessions and earnings. If you are one of these. You're not entitled. You're just a greedy jealous person.
2. Walmart Associates don't earn enough to support a family. OK, this is completely up to interpretation. I supported a family on less than $20,000. Sure, you don't get all the bells and whistles in life on that amount, but it is certainly doable. WUW cites that the average family budget is $39K while the average associate makes only $19K. I say, if you are in this situation cut out some of your expense, and have the other spouse go to work. Maybe Walmart Associates who are supporting families of 4 should quit trying to live like Boeing engineers who are supporting families of 4. Walmart does not, and never has marketed the average associate as being able to support a family of 4. This is an Associate's problem, not Walmart's.
3. Walmart wages are not designed to support a family. Guess what, they don't and Walmart fully admits it! What's even funnier is they cite Walmart as saying that 2/3 of associates are not trying to support a family (i.e. not primary breadwinner). So, if Walmart says their wages are not designed to support a family, and people are not forced to work for Walmart, why are people complaining about exactly what they knew before getting into the situation?
4. Walmart can afford wage increases. Yeah, and they could "afford" to buy a nuclear submarine. That has nothing to do with it. WUW shows by some irrelevant math that if prices only went up 0.5% then everyone could get an $1800 raise. First, based on what is above, why stop at 0.5%. If the goal is to raise the average wage to support an average family, then why not increase prices by 6%? That would at least keep the page consistent. But then, people start to get funny about increases of more than 1%. Case in point, see the uproar of the public about increases in the sales tax. Wages are not set by the cost of products. Wages are set by what the market demands. If Walmart needs 100 workers and there are 5000 workers willing to work for $8/hour, why should Walmart raise wages? The fact is, the skill set needed to work at Walmart is very low and generally held by everyone in the population, hence, there is no demand to drive wages up.
5. Walmart wages are lower than other retail wages. This may be true. However, just because competitors offer to pay more is no reason for Walmart to. Wages are based on supply on demand. If Walmart has 100 positions at $8 per hour and competitor X has 100 positions at $10 per hour and there are 200 potential workers, then competitor X will probably get the most talented and motivated of the 200, and Walmart will get the leftovers. That is how a free market is suppost to work. WUW cites one stat that Walmart associates make 16% less than the average retail employee. Yeah, so what. A significant portion of retail employees make less than the average, a significant portion make more than the average. When Walmart opens a new store, I have never heard of them having trouble finding employees. Just because you think you should make more money doesn't mean you should.
6. Walmart's health care plan fails to cover 700,000 employees. Maybe because 700,000 of their employees don't work enough hours to qualify for it or choose not to participate (for any number of valid reasons). The fact that 700,000 employees are not covered by Walmart's plan in no way means 700,000 are not covered by health insurance.
7. Walmart's health care plan is too costly. This is completely subjective. WUW cites a some worst case statistics of what an employee would have to pay in costs even with the health plan. The fact is, whether you make $19K a year or $500K a year, going to the doctor costs the same amount. Most companies actually do subsidize their lower paid workers (through charging higher premiums to higher paid workers) even though study after study have shown that lower paid workers are more likely to make lifestyle choices (alcohol and tobacco use) which increase their health care costs. Frankly, I would say, if you are young and healthy, don't get health insurance and pay as you go. Even looking at my family situation right now, if we knew we weren't having any more children, then buying health insurance (besides catestrophic) would be a waste. Health insurance costs money (and roughly the same amount) regardless of how much money one makes.
8. Walmart's health insurance falls far short of the industry average. And then WUW makes the bait and switch. After talking about the retail industry, they now start talking about large firms (more than 1000 workers). So we go from comparing Walmart with other low skill, primarily part time, retail companies, to companies including Boeing and Ford whose workers are highly skilled, almost exclusively full time, and in most cases a significant portion are unionized. Why would they do this? Oh yeah, because if they kept with the retail comparison, Walmart looks like roses. Walmart covers a larger percentage of their employees than most all other retailers. This is one of the reasons Walmart decided to get behind the Universal Health Care plans in Congress. Because it would cause a larger increase in costs to their competitors. Hey, if you are going to get screwed, make sure your competitors are getting screwed more.
9. Walmart forces employees to rely on public assistance to cover health care costs. No, Walmart doesn't force anyone to do anything. Walmart doesn't have the power to force people. The government has the power to force people. Criminals (temporarily) can force you to do something. Walmart can ask, encourage, or cajole people into doing things. They do say that in 21 of 23 states "Walmart forces more employees to rely on taxpayer funded health care than any other employer." That is probably true as well (except for the "forcing" part). What is also true is that in all 23 of those states, Walmart is the largest employer of low-skill (hence low wage), part time employees by a large margin. So from a strickly absolute numbers point Walmart is the "most" in all sorts of areas (Walmart employs more red heads than any other retailer - true, but it has absolutely nothing to do with anything).
10. Walmart admits public assistance is a better value. And from the mouth of Walmart CEO himself. I agree with this statement completely, if it is qualified as being for the individual. Gosh, isn't it great when you have a leviathan government that can arbitrarily set prices (because the actual costs are subsidized with taxpayer dollars). Is it any surprise that when said government "competes" with a publicly held corporation (such as in providing health insurance), the cost to the individual is less using the government option? Why not just let the government provide everything then?
11. Your tax dollars pay for Walmart's greed. Actually it is those who believe Walmart has ill gotten gains that are greedy, but I digress. Supposedly, $2.5 billion in public assistance programs are because of Walmarts low wages and such. Good thing Walmart pays $7 billion in income taxes. I guess the government is still $4.5 billion ahead. So let's pretend that Walmart ceased to exist tomorrow. The government would lose $7 billion a year and public assistance programs would now be supporting an additional 1.4 million workers (I know, that is an exaggeration and completely not realistic, but if it is good for the goose ...). Much better situation.
12. Your local Walmart costs your community up to $420,000 per year. Uh-huh. (This is a re-hash of #11, just on the community level).
13. Your tax dollars subsidize Walmart's growth. Well, my tax dollars subsidize pretty much all businesses in the form of tax subsidies. WUW says that Walmart has received up to $1.2 billion in tax subsidies. That's great, care to say how many billions in sales tax, income tax, wage taxes, and other taxes are generated each year by Walmart (hint: it is many multiples of $1.2 billion). Most new businesses request tax subsidies when they move into an area. The larger the business (like Walmart), the more they ask for and get. This is because of the increased economic activity more than offsets any subsidy the locality approves. Oh yeah, and they used a "loophole" to get out of paying some taxes. Frankly there is no such thing as a loophole. Every entities' goal (from business on down to individual) is to legally minimize the amount of taxes paid to the government. When you deal with tax codes from hundreds of jurisdictions, there are bound to be "loopholes." The question should be, while they avoided $2.3 billion, could they have avoided $2.5 billion? If so, then their accountants need to be fired. BTW, I avoided thousands of dollars in taxes the last few years by using one of those nefarious "loopholes." Its called the Child Tax Credit! I keep having children (OK, so my wife actually does), and my taxes keep getting lower!
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