Saturday, February 27, 2010

Walmartization of America...

Out of all the places of which I could shop, Wal-Mart is probably the biggest on my "no-no" list. I encourage everyone to think long and hard before they make their weekly (or daily) trip to the new god of America.

There are many reasons to avoid Wal-Mart and while they are all great reasons, I want to first discuss the one that finally flipped the switch for me. Did you know that Wal-Mart actually has a say in which products are manufactured and which products are scrapped? For example, a company who makes yogurt decides to market a new flavor. If Wal-Mart likes it, that flavor will stay around. If Wal-Mart doesn't like it, that flavor will end up on the cutting room floor. The reason is that Wal-Mart is now the largest purchaser of grocery products in America. So if they don't buy it, there is really not an economical reason for the company to make it. Do you really want this giant company having that large of an influence on what is on the market? Should that not be up to the customer base instead?

These business practices have also people on a local scale. One Toledo company used to produce Crayola crayons. Its biggest customer was Wal-Mart; but when Wal-Mart refused to pay three extra cents per box, the company was ran out of business and many people lost their jobs. Wal-Mart took its business to Mexico

In 1994, Rubbermaid was one of the most admired company in the United States -- but five years later, its fortunes fell so hard that the company had to sell to a competitor. When the price of a key component of its products went up, Rubbermaid asked Wal-Mart for a modest price increase -- but Wal-Mart said no, and stopped sales of Rubbermaid products. At a Rubbermaid factory in Wooster, Ohio, that meant the loss of 1,000 jobs. [PBS Frontline, 11/23/04]

With Wal-Mart, there is no room for negotiation. They tell you what they will pay you for your product. If you don't like it, they will buy it elsewhere and most likely, you will be out of business.

Wal-Mart perpetuates the cycle of poverty. They drive other stores out of business because their prices are so low. Thriving downtown areas turn into ghost towns. Their prices are so low because of their unethical practices. But with the other stores gone, the wages driven down and nowhere else to shop the people are pretty much forced to shop there. If not forced, they are definitely not given an incentive to go elsewhere.

While Wal-Mart kills family retail businesses and pushes out jobs that pay well, it also forces suppliers to relocate their plants overseas to meet its low-price demands. Wal-Mart is the single largest importer of Chinese goods, buying some $18 billion in merchandise in 2004, nearly 10 percent of all Chinese goods sold in the United States, which currently has a $124 billion trade deficit with China?
And in its own category of general merchandise and groceries, Wal-Mart no longer has any real rivals. It does more business than Target, Sears, Kmart, J.C. Penney, Safeway, and Kroger combined. Wal-Mart is not just the world's largest retailer. It's the world's largest company--bigger than ExxonMobil, General Motors, and General Electric. The scale can be hard to absorb.

Something else that is very disturbing is the unethical means they use to produce their inexpensive items. Something that I read really struck a nerve with me. "Close your eyes. Think about the shirt you are wearing. Trace it back through the store, back past being packaged, past being shipped, and to the place it was stitched and sewn together. I’m terrified when I do that and I see a small child, dirty and weary from 18 hours a day of labor, looking into my eyes and awaiting an explanation. What will I say to that little girl? What does taking responsibility mean for me there?

So while the poor stay poor, Wal-Mart's owners, the five members of the Walton family split the profits equally, and their total net worth is somewhere around $100 billion. The Waltons prefer to take a passive role in the company, so they may not be the people making the decision to use their workers to make a buck.
If the Waltons are worth more than 100 billion dollars, why will they not pay three cents extra for a box of crayons? Why can't they provide decent wages and benefits to its employees? Wages are notoriously low at Wal-Mart. Not only that but they hire many employees as "part time" help which means they do not have to provide insurance benefits. How ethical is it to take advantage of people this way while the people who own the company are five of the ten richest people in the country?

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