Wal-Mart Defends Its Discounting Practices
Friday, November 04, 2005
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PAUL KANGAS: The worlds largest retailer, Wal-Mart, is fighting back tonight, fighting growing criticism of how it runs its business. The retailing giant sponsored a conference in Washington today to examine its impact on the American economy. As Stephanie Dhue reports, Wal-Mart says its commitment to low prices has paid off for both consumers and workers.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Critics charge Wal-Mart has lowered wages, forced jobs overseas and shifted health care costs to taxpayers. To fight back, Wal-Mart hired the research firm Global Insights to study the retailer`s impact on the economy.
ROBERT MCADAM, CORPORATE AFFAIRS, WAL-MART: We thought this was about time that we sort of put a stake in the ground and said this is the kind of study that really matters and that this is the kind of study that contains the objectivity where you can really get a good look at it.
DHUE: Global Insights found Wal-Marts lower prices saved families an average of $2,329 last year. The study also shows Wal-Mart created 210,000 jobs nationwide over two decades. The study shows the savings come from Wal-Marts distribution and inventory control, imports and efficiencies in its supply chain, not lower wages for employees.
CHRIS HOLLING, ANALYST, GLOBAL INSIGHT: We see evidence that they are paying the market wage, the wage that balances the supply of labor with the required skills, education, experience, et cetera to the demand for the labor.
DHUE: But another study highlighted at the conference found Wal-Mart increases claims for the earned income tax credit and increases Medicaid expenditures by nearly $900 per worker. That`s because many Wal-Mart workers cant afford the company`s health insurance. Critics are pressuring Wal-Mart to be a more responsible corporation.
PAUL BLANK, CAMPAIGN DIRECTOR, WAKEUPWALMART.COM: On every issue that the American people care about -- wages, health insurance, discrimination-- Wal-Mart has a poor record. And this is not a small mom and pop company struggling to get by. This is the largest corporation in America and it should reflect our values.
DHUE: Wal-Mart dismisses the campaign as a union effort to organize its workers. Analysts say it`s important for Wal-Mart to improve its image as it expands from rural and suburban locations into more urban areas.
JOSEPH BEAULIEU, SENIOR STOCK ANALYST MORNINGSTAR: They need to show that they do take care of their employees and this is both to lower resistance from municipalities when they`re moving stores and also to gain motivated, good employees.
DHUE: Wal-Mart will continue to be under fire. A new documentary, Wal- Mart, the High Cost of Low Price, premieres this weekend in New York and Los Angeles. Wal-Mart calls the movie an error-ridden propaganda video that wont have broad appeal. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.
