Enter the Walmart empire. Walmart is largest retailer in the world, with more than $316 billion in annual sales. The top six executives raked in at least $10 million each in compensation last year. Yet, the average hourly Walmart worker earns a meager $8.81 per hour for a 34-hour week or $15,500 per year, which is 16 percent lower than federal poverty level for family of three. Of the 1.4 million Walmart employees, 57 percent are women. With respect to fairness, too few at Walmart profit too much at the expense of too many retail employees. What has happened to the American ideal of life, liberty, and the pursuit of happiness?
As Walmart goes, so goes entire retail industry.
The Walmart era, in large part over the past 20 years has produced a nightmare for American retail workers. In particular, Walmart has infamously influenced a downward spiral in wages, fewer small businesses, and an epidemic proportion of underemployment.
More Americans work in the retail industry (24 percent) than any other. The average wage for non-supervisory retail workers is $13.50, with 6 percent earning below the federal minimum wage for a family of three. Thirty-one percent of retail workers are part-time employees, and earn one-third the pay of full-time workers. Fifty-seven percent of Walmart workers are female, many with children.
Why are such statistics important? Walmart has reduced “full-time” hour to 34 per week, unlike the American tradition of 40-hour work week. As more employees work less, company benefits are reduced, and Walmart profits increase. Moreover, a “race for the bottom” in wages and benefits influences how other retail employers treat their employees.
Only 40 percent of American retail workers have health insurance. Tragically, at Walmart, many workers cannot afford health benefit plans offered by the company because the cost of medical insurance in many cases consumes more than 75 percent of employees’ gross income. So, it is no surprise that, in 21 out of 23 states that release state-provided healthcare enrollment data, Walmart has more employees on the public rolls than any other employer. Worse still, in 2011, Walmart pulled the plug on health-insurance for part-time employees working less than 24 hours per week, and raised premiums for workers by as much as 63 percent. Unlike the words of the movie, “The Godfather II,” Walmart workers are given a health insurance offer they have to refuse.
Of course, in a depression-like American economy, many say saving money on relatively cheap prices at Walmart is more important than how Walmart treats its employees and negatively impacts entire retail industry. However, the low price of Walmart goods is costly for the good of the nation. The low prices at Walmart are created in many ways from small businesses being forced out of the market because of Walmart’s economy of size. By snuffing out small businesses in small communities Walmart unfairly becomes virtually the only retail employer for a given region. No Ph.D in economics is needed to know that reduced retail competition favors the larger employers, thus driving down wages and benefits.
For example, in Chicago, 82 enterprises went out of business after Walmart opened a store in the West Side neighborhood of Austin, drastically changing the retail landscape. And as existing jobs are replaced with Walmart jobs, the effects of depressed worker wages and benefits can be felt throughout a labor market. A 2009 study estimated that the aggressive entry of big box stores, such as Walmart, to Southern California could lead to as much as $2.8 billion in lost wages and benefits.
Sadly, the “company line” from Walmart’s fairy tale reports suggest its workers have good lives, are free to choose organize, and pursue happiness as well as any other American worker. Not true.
Politically, the reward-the-rich-and-penalize-the-poor philosophy of Walmart executives seems to be in line with that of presumptive Republican nominee Mitt Romney. According to the Center for Responsive Politics, since the 2000 federal election, the Walton family and the Walmart PAC have spent more than $15 million, with more than $11.3 million (74 percent) going to Republican candidates. In 2012, the Waltons have given $550,000 to Republican-supportive Super PACs, mostly to the Romney campaign.
If the American retail industry is to improve the life options and wages of its workers, Walmart must patriotically lead the way in fairness for the good of the nation. Not to do so is un-American.
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