Tuesday, October 6, 2009

WalMart - Evil Incarnate! Or Maybe Just a Really Good Company - Part 3

Part 1 and Part 2 began my rebuttal of the "facts" that the Wake-Up Walmart (WUW) website presents. I continue:

24. Walmart cares little for the safety of its workers. The cites given start to bring out an important point. Walmart (or any corporation or organization for that matter) is not a living breathing entity. It is a piece of paper that allows a group of people to work together and be taxed as a separate entity. So, Walmart doesn't care. Period. Now, if we want to talk about people caring, that is a different story. Two of the cites given are about the doors being locked (at night) or emergency exits blocked. These are at a minimum fire code violations. However, if the standard for caring about safety is a single (or multiple) fire code violations, then few large companies care about worker safety. Why would managers lock workers inside at night. Well, 1) they have a job to do and the manager may have had trouble with people taking breaks when they weren't supposed to. 2) That Walmart happens to have a large amount of inventory (read money) in the story and may have had problems with thiefs coming in at night. 3) The manager may have been boneheaded. If you want to convince a reasonable person that Walmart doesn't care about their workers, then show that they have a significantly higher number of "unsafe" practices than a comparable retailer. Their third cite tries to do that by pointing out that they are in an "adverse risk" pool for workmen's comp in WV. Being in an adverse risk pool means that employees have high accident rates. This could be caused by 1) Walmart not caring, 2) Low skilled employees doing stupid things or 3) Employees lying about their accidents (I know, its hard to believe that anyone would lie to get money). Frankly, Walmart not caring is the least likely since being in an adverse risk category means their insurance rates go up (and that negatively affects Rule #1 - see, safety is all about money).

25. Walmart takes a combative approach to workers' compensation claims. And most businesses do. Somebody has to be the most aggressive, and in this case it is Walmart. Perhaps the type of people that Walmart hires (because of their low skill level) has a disproportionate number of loafs, cheaters, and hooligans. Notice I didn't say the majority of them are, just a disproportionate number in comparison to the entire population. If you did a study, I bet you would find that the higher someone is paid (i.e. the more skills they have) the less likelyhood of claiming workmen's comp for jobsite injuries. Why? Because workmen's comp doesn't replace all of one's income, and there is no possibility for bonuses/pay increases on workman's comp. So, for low wage workers, workman's comp is a pretty good deal - 50-80% of the pay for 0% of the work. And if your caught, since the actual money amounts aren't much, you'll probably just get a slap on the wrist. Besides, more workmen's comp claims mean insurance rates go up (or in the case of self insured - more money out of the pot), which negatively affects Rule #1.

26. Walmart gives its managers and other non-hourly associates a disproportionate amount of its profit sharing, stock incentives, and other benefits. Yeah, as does every other company that has these programs. First, 401K, stock incentives, and profit sharing programs are usually based on how much an employee is willing to contribute and/or their position in the company. Since we have already established that most Walmart associates are making "poverty" level wages for a family of 4, do we really expect them to sock away some money in a 401K or profit sharing plan? Certainly not when that new LCD TV at Walmart is on sale for $600! (And don't try to tell me that "poor" people can't afford $600 TVs). The fact is salaried people are usually working full time. Plus, they more than likely have a higher wage (hence more "extra" money to contribute) and they are more likely in positions of responsibility (hence a higher payout rate of incentives).

27. What Walmart gave to hourly associates pales in comparison to what Walmart gave to its top five executives. The lesson learned then is if you want to be paid millions of dollars, work your butt off and become the CEO. They aren't going to give you the position just because you think you deserve it, but you also won't be breaking new ground. Many CEOs started at the bottom and worked their way up. If you want to just be a greedy jealous person, continue on with your life the way it is.

28. Walmart's statement on profit sharing highlights Walmart's low pay. Does anyone thing that they are going to get rich being an hourly associate at Walmart? How about K-Mart? Or McDonald's? You aren't even going to get rich working for the socially conscious Ben & Jerry's! 2% being contributed to both profit sharing and 401K is probably about average for a company. That is about what the company I work for contributes. In fact, that is about what the last three companies that I worked for contributed.

29. The average profit sharing/401K contribution for all Walmart employees was $517 dollars per worker in 2007. The cites talk about how little hourly associates make (which is fair since their work is low skilled and in high supply), and breaks it down to as little as $1.42 per day for retirement. If Walmart matches just 50% (since they are so cheap elsewhere, why expect more?), then that means the workers are also contributing $2.84 a day to their retirement. Doesn't sound like much, right? WRONG!!! The beauty of compound interest is that a little amount becomes humongous! An hourly associate who started working at Walmart at age 18 and kept working in the same position, never getting a single raise, but contributing $2.84/day with Walmart adding $1.42/per day would have more than $800,000 if the market grew at only 8% per year (which historically it has, even with all of the recessions and depressions). He or she would then be able to convert this to tax free municipal bonds at 3%, and take out $36000 of the balance each year to live on, and be able to live until age 100. So in retirement they would have twice as much income as while working, and that isn't even counting Social Security. I take back what I said before about an hourly associate at Walmart not being able to get rich.

30. Walmart closes down stores and departments that unionize. Walmart closed a store in Quebec after they unionized. Of course, the store might not have been profitable before. Or Walmart might not have wanted to run a unionized store. Guess what? That is OK. Some businesses have found ways to work with the unions and still operate a profitable business. Some have not. Some don't want to try. Just like the government says you have the right to unionize, Walmart has the right to close down stores. Even if the Labour Board of Quebec fines them. As for the unionization of a small meatcutting department causing Walmart to phase out its in store meatcutting company wide, I would guess it is more coincidence. Meatcutting is a service oriented business (because the meat is the same price whether it is whole or cut at most stores I have gone to). Some stores provide better service and try to sell themselves on that (and may have higher prices to compensate). Frankly, if you are trying to be the low price leader (which Walmart is), then there isn't much room for extra service. No one has accused Walmart of great service. Besides, are we really to believe that the unionization of 5-10 workers in Podunkville, TX caused the corporate big wigs to have an emergency meeting in Bentonville, AR and decide to cut out meatcutting all across the country? Isn't it more likely that data from 6-12 months of operations with and without meatcutting was looked at and found that meatcutting wasn't helping the bottom line (and when your profit margin is only 3-4% you need all the help you can get)? The Texas unionization might have sped up of the process (so there weren't more grievances to deal with from more unionized labor).

31. Walmart has issued "A Manager's Toolbox to Remaining Union Free." Yep, let's be open about it. Walmart doesn't want to pay the increased costs of dealing with a unionized workforce. That is their perogative. They are fully within the law to try to forgo unionization.

32. Walmart is committed to an anti-union policy. Cites from all sorts of unfair labor practices. Heck, Walmart has 1.4 million employees in the US. For comparison sake, why not show how they are so much worse than other similar non-unionized retailers rather than just trying to scare me with "100 charges" or "60 complaints." Oh yeah, and lets be sure to compare actual violations not just charges or complaints. Why not do that if the "evidence" is so damning? Maybe because it is not. As before, many companies (most in the US) don't want to deal with unions. Unions haven't exactly been the choirboys in labor/management relations in the past (and present).

1 comment:

  1. Thanks for combating the anti-Wal-mart haters. The other thing I love is "Wal-Mart is so dirty". Actually, Wal-Mart is just as clean as the other retail stores (i.e. Target & K-mart to name a few). Heck, one grocery store in South Carolina felt extremely dirty compared to the Wal-Mart.

    The other argument against is there is no help on the floor. I've found that to be true of every place I've shopped except Best Buy and Lowe's.

    I think most of the anti-Wal-Mart people are anti-profit. Or they are snobs who think they are better than the people who shop at Wal-Mart.

    I loved when the campaign season suggested that Wal-Mart shoppers are value conscious.

    As far as being anti-Union, I am anti-Union. Why? Because of the troubles they cause? Care to explain why someone who works in computers with a computer engineering degree can not plug in and install their own new computer because his company has to have the unionize 'technician' doing it for them? And, the unionized person never is available when the computer comes in, so the computer engineer (and therefore the company) looses time and money waiting on the union person?