Why I Still Don't Shop at Wal-Mart

One of my daughters wanted to know why I do not shop at Wal-Mart. Here are some of the thoughts I shared with her. I could be wrong, but I don't think so.

A recent in depth study of Wal-Mart, The Wal-Mart Effect by Charles Fishburn, is a tremendous book that outlines the impact of Wal-Mart’s way of doing business on the United States and other developing countries.

Another book is called How Wal-Mart is Destroying America (and the rest of the world). If you Google "WalMart Effect" you will be able to find these books and other information, including an LA Times three part series on WalMart from 2003.

Many employee unions have fought the impact of Wal-Mart on the US economy, particularly loss of jobs, lowering of wages in competitive stores, loss of benefits, and a general degradation of employees.

I like to refer to this impact as follows: "Wal-Mart: making America a third world country one payroll at a time."

Union web sites will often have information on how Wal-Mart has impacted the economy, particularly in a given town or region. While union membership is at its lowest point in the last 50 years, due in no small part to the effect of Wal-Mart business practices by other companies, unions have been instrumental in pointing out to America that, for example, the cost to provide health care to an uninsured Wal-Mart employee is borne by the local county or by a state or the federal government. In other words, a sick Wal-Mart employee who seeks health care at a local emergency room is not going to be denied health care, even though she may not be able to pay for it and has no insurance to pay for it.

But, somebody pays. Usually it’s the taxpayer through social programs designed to provide some level of health care for unemployed or underemployed workers. It’s a given that employees will get sick from time to time, and responsible employers provide for a means to pay for health care for those employees. Wal-Mart provides some health care insurance, and claims on its current (October, 2008) website that 92 percent of its employees are covered by health insurance, either through Wal-Mart or another insurer. Every time you pay a health cost or pay taxes, part of what you are paying is helping to offset the cost of providing health care to those who cannot afford it or do not have it provided for them: to a great extent, these are Wal-Mart employees. (Wal-Mart is one of the largest employers in the US).

I like to refer to this impact as follows: "Wal-Mart: your government subsidized store."

Wal-Mart makes tons of money for its shareholders. The largest shareholders include descendants of Sam Walton (I don’t shop at Sam’s Club either). The Walton children are the wealthiest family in America, and individually, each of the children and Sam’s spouse are among America’s wealthiest. Their money comes from selling large volumes of product at pennies over cost, and using every available method to lower their cost. One method is to monopolize a means of production in a country, then go back time and again to require the foreign factory owners to lower their selling costs to Wal-Mart or Wal-Mart will take its business elsewhere. Another method is to employ its workers in the US at less than full time, thus saving Wal-Mart from paying those workers certain benefits, giving them certain breaks during the shortened work day, and so forth. Wal-Mart has also practiced forcing employees to work "off the clock" i.e. making employees work after they have "punched out" on the time clock, or before they punch in.

Of course, Wal-Mart shareholder wealth also comes from the stock market. Stock prices are a reflection of how investors see a company’s ability to produce a profit for the shareholders. Investors see a good return for Wal-Mart stock, and business analysts think highly of the profit making practices of Wal-Mart. Even in this weakened economy (October,2 008) Wal-Mart stock has maintained a value in excess of its May, 1999 or even August, 2007 lows. (Price ranged from approximately $42/share to $60/share from 1999 to 2008. Approx $48/share at this writing.)

Costco, by the way, treats it employees comparatively well, and its CEO is one of the lowest paid CEOs in North America for the size of the company. Those are choices he and his board have made regarding the way they wish to do business and how they wish to treat their employees. Fred Meyer and Safeway also treat their employees comparatively well, thus not draining tax dollars from the rest of us in order to subsidize their workers’ health care costs and maximize profits for their shareholders.

I don't pretend that spending my dollars at stores other than Wal-Mart will affect anything. I just don't spend my money at Wal-Mart.