Wal-Mart employees at grand opening celebration
Wal-Mart employs more people than any other company in the United States outside of the Federal government, yet the majority of its employees with children live below the poverty line. "Buy American" banners are prominently placed throughout its stores; however, the majority of its goods are made outside the U.S. and often in sweatshops. Critics believe that Wal-Mart opens stores to saturate the marketplace and clear out the competition, then closes the stores and leaves them sitting empty. Freedom of speech issues also come into play. Musicians are at the mercy of Wal-Mart's stringent content rules, forcing many to create "sanitized" versions of their albums specifically for the discount chain.
The sentiment behind Wal-Mart founder Sam Walton's promise of a "better life for all" belies questionable business practices - many that have been challenged by employees, unions, environmentalists, recording artists and human rights organizations.
Forbes magazine, polling business executives (not employees) has ranked Wal-Mart among the best 100 corporations to work for. Yet the employees on average take home pay of under $250 a week. The salary for full-time employees (called "associates") is $6 to $7.50 an hour for 28-40 hours a week, which is typical in the discount retail industry. This pay scale places employees with families below the poverty line, with the majority of employees' children qualifying for free lunch at school. When closely examined, this amounts to a form of corporate welfare, as the taxpayer subsidizes the low salaries. One-third are part-time employees - limited to less than 28 hours of work per week - and are not eligible for benefits.
The company is staunchly anti-union. New employees are shown videotapes explaining that instead of unionizing, they benefit from the open door policy, allowing them to take their complaints beyond the supervisors to higher management. When the United Food and Commercial Workers tried to organize workers across the country, labor experts were brought in for "coaching sessions" with personnel who support unionization. Employees complained that these were intimidation sessions. Many such complaints are currently on file with the National Labor Relations Board.
Whereas Wal-Mart employees start at the same salary as unionized employees in similar lines of work, they make 25 percent less than their unionized counterparts after two years at the job. The rapid turnover - 70 percent of employees leave within the first year - is attributed to a lack of recognition and inadequate pay, according to a survey Wal-Mart conducted. Yet this can work to the company's advantage, since it is more difficult for unions to organize when there is constant employee turnover.
Full-time employees are eligible for benefits, but the health insurance package is so expensive (employees pay 35 percent - almost double the national average) that less than half opt to buy it. Another benefit for employees is the option to buy company stock at a discount. Wal-Mart matches 15 percent of the first $1800 in stocks purchased. Yet most workers can't afford to buy the stock. In fact, not one in 50 workers has amassed as much as $50,000 through the stock-ownership pension plan. Voting power for these stocks remains with Wal-Mart management.
Made in the U.S.A?
Despite a well-publicized "Made in the U.S.A." campaign, 85 percent of the stores' items are made overseas, often in Third World sweatshops. In fact, only after Wal-Mart's "Buy American" ad campaign was in full swing did the company become the country's largest importer of Chinese goods in any industry. By taking its orders abroad, Wal-Mart has forced many U.S. manufacturers out of business. The chain was broadly criticized for being the primary distributor of many goods attracting controversy, including Kathie Lee Gifford's clothing line, Disney's Haitian-made pajamas, child-produced clothing from Bangladesh and sweatshop-produced toys and sports gear from Asia. Difficult working conditions also exist in the United States: In 1991, labor inspectors found labels for Wal-Mart brands being made in Manhattan's Chinatown. There, 16 and 17 year-old Chinese immigrants without permits had been working for one month without being paid.
View a chart profiling Wal-Mart and other U.S. companies' working conditions in Chinese factories.
Story | Small Towns | Big Stores | Sprawl
Talkback | Film | Resources | For Teachers | ITVS