Wal-Mart Controversy- Lower prices for the Consumer, but at what cost?
“Always Lower Prices” “Always Lower Ethics.” In the past several years, Wal-Mart has been gaining a lot of controversy in the media, due to their unethical ways of doing business. Wal-Mart store practices, when broken down to its core elements are simply cruel and vicious. Many unanswered questions arise to the controversy that exist in Wal-Mart Corporations. Is the controversy surrounding the fact that Wal-Mart pays lower wages to their non-union employees than most retail stores? Perhaps it is that Wal-Mart stores support highly unethical offshore outsourcing corporations? Or maybe the controversy is that Wal-Mart is facing the largest number of gender discrimination cases in history?
I don’t normally shop at Wal-Mart, but a few weeks ago I decided to go to Wal-Mart to purchase a notebook I needed for class. I figured that on my way back from school I’d just stop by the Wal-Mart located on University Street, before heading on to the 215 freeway, back home. I entered Wal-Mart with the intention of simply getting my notebook and leaving, since money is normally not an issue for me, I usually just buy items without looking at the price, and head on to the cash register. As I picked up the notebook, my eyes couldn’t help to notice the price. A 5-Subject Notebook for only $2.75! This was unheard of. Only hearing from other people about low prices at Wal-Mart, my amazement was evident in my gesture as I stood in the middle of the wide-aisle with the item on my hand, with my eyes opened wide and mouth wide open dropping to the floor. Indeed, a remarkably shocking moment for me at the low price of this item. Being an entrepreneur and business major, a thought occurred in my head, “How does Wal-Mart manage to have items such as these, as such a low price, and continue to be regarded as the number 1 employer in the nation? Keeping their cost extremely low and at the same time managing many people to want to work there? “
The answer later came to me seconds later as I switched from being tuned into the low price of the notebook to now being tuned into the Wal-Mart atmosphere and overall environment. Standing in line getting my purchases situated, I couldn’t help but recognize the environment I found myself in. It was a Wednesday afternoon, and what I witnessed that afternoon was something so surreal almost in a form of what some may regard as an “epiphany” of sorts. The site of Discontented, struggling Mothers dressed in clothes they haven’t washed in seemingly days on end, children dressed in clothes that mainstream would render as clothes for poverty stricken children on welfare, with bodies that appeared as lack of proper nutrition. The not so pleasant site of Un-kept Drug attics and disabled people not on their medication, searching around the store for the low prices on basic necessities such as soap, food, and water. Oh, and the employees, the look of struggle and worry in their eyes, a feeling of lack and a struggle for survival in the eyes of the workers stood out so vividly in my mind. Working in such harsh conditions, and why?
According to an October 2006 article written by Gogoi, Pallavi a reporter for Business Week Online, “About 200 employees at the Wal-Mart Super Center in Hialeah Gardens, Florida, walked out on October 16, 2006 due to unfair policies involving low salary, discrimination against women, and overtime work without compensation. The protest was provoked by Guillermo Vasquez and Rosie Larosa, two department managers at Wal-Mart who felt the company’s policies are going overboard “(p.1).
What is happening here is that ther Rich are taking from the poor. Although Wal-Mart is considered to be the number 1 employer in the nation, Unethical business practices is allowing Wal-Mart to profit in substantial numbers. According to Brian Hansen (2004) a reporter from CQ Researcher states, “Critics complain that the much-touted “everyday low prices” of big-box stores like Wal-Mart actually carry many hidden costs for taxpayers, the community at large and the environment, including: driving smaller stores out of business and turning downtown shopping areas into boarded-up ghost towns” (p.1).
Wal-Mart Corporation strategically places their stores in low income neighborhoods so that the unemployed could work there (with very low pay) thus lowering the prices on Wal-Marts goods they sell for other lower-income people can buy. So on one hand yes, the poor’s needs are being met but at the same time do you see the vicious cycle taking place? The poor are are working so hard and buying things at lower prices just to meet their basic needs being stuck in the system that was created by Wal-Mart. The employee can’t pass up that low paying job at Wal-Mart because he needs to eat and have a roof over his head.
Sam Walton creator of knew that this was the case.
According to Frank T.A, a reporter from The Washington Monthly, “Although he (Walton) was ranked as the richest man in the United States by the 1980s, he continued, it is said, to have his hair cut by the local barber, a $5 expense that he never supplemented with a tip (Perhaps he wasn’t satisfied.)”(1). Sam Walton’s thriftiness was not any different in how he did business. Sam Walton understood that a major requirement for keeping costs down was controlling his payroll. According to his autobiography in 1992 Made in America, Walton contends “No matter how you slice it in the retail business, payroll is one of the most important parts of overhead, and overhead is one of the most crucial things you have to fight to maintain your profit margin” (p.45).
So he created the system to capitalize on the situation. Welcome to America! The land of the free (only if you are rich).
Wal-Mart is undoubtedly the most successful and most profitable retail store in the country. Their lower prices surpasses their competition by numbers that stagger the imagination. Lower prices for consumers? Yes. The cost? The cost of humanity and ethics…
+Baker
