The New York Times reported yesterday that Wal-Mart has a new tactic for trying to finagle its way out of having to provide its employees with health care in order to cut costs. In a nutshell, a Wal-Mart corporate memo was leaked that describes how the company believes it can cut employee benefit costs by arranging "all jobs to include some physical activity (e.g., all cashiers do some cart-gathering)....These moves would...dissuade unhealthy people from coming to work at Wal-Mart."
Wal-Mart is notorious for shafting its employees on health care plans and regularly schedules many (if not most) employees to work less than 40 hours a week in order to avoid having to supply them with benefit packages. Now this "family friendly" retailer is going to cut costs by discriminating against "unhealthy" (whatever that's supposed to mean) and disabled workers.
But cutting costs doesn't seem to be that much of a priority for the mega-retailer. A CNN article the other day said that Wal-Mart is planning to open 270 - 280 new stores in 2006 which will amount to an 8% increase in the chain's total retail space. How is that going to help cut costs exactly? One thing that it's sure to do is further quash smaller retail and grocery outlets in the areas that Wal-Mart is planning to expand into as well as drive down the wage rates.
And speaking of wage rates, the BBC reported yesterday that Wal-Mart is calling for a minimum wage hike in the US (oddly enough I didn't see this story on any American media sources). Now, your average person might think Wal-Mart would want this in order to benefit its employees. But that assumption would be completely inaccurate. Wal-Mart's reason: the retailer's chief executive, Lee Scott, said that customers were struggling to make ends meet, so if the minimum wage was raised then it would help business out because the customers would have more money to spend. Of course he also stated that Wal-Mart had no intentions of raising the wage rate of its employees.
Article comments
— go to most recent comments1 - Nancy
Surely this is a gross violation of every discrimination law on the books? Yet I haven't seen any references to the various human rights organizations rising up in outrage about this, let alone state attorney generals or governors, who I would think would be concerned about Walmart shoving off their corporate (and basic human) responsibilties onto the taxpayers. The story about the minimum wages, btw, ran in the business section of the Washington Post this past week (don't remember exact day).
Walmart really is the epitome of corporate chutzpah. Lee Scott is a monster - altho doubtless he'd just consider that a compliment.
2 - Phillip Winn
This sounds very shady, and should be investigated, certainly. However, at least one point in your article is odd.
"But cutting costs doesn't seem to be that much of a priority for the mega-retailer." On the basis that they're opening new stores?
There are two ways to improve profits: reduce costs or increase revenue. Opening new stores increases revenue more than it raises costs, obviously, or they wouldn't keep doing it. Opening new stores doesn't mean that reducing costs isn't important to a company, or a person, for that matter.
You harm your otherwise-excellent rant against Wal-Mart with this bit of nonsense, I think.
3 - Nancy
But doesn't it take a ton of money to open a new store? I think what is being said is, that Walmart is pouring money into expanding, all the while shafting their employees by nickel-&-diming them & generally behaving like some Dickensian workhouse.
4 - Matt
Wal-Mart is paying a competitive wage. If not, the workers wouldn't be there. Would you rather the workers be unemployed? Why don't you talk to the workers before deciding what is good for them?
5 - Nancy
I'm not deciding anything for them, but I sure will support them if they try to organize, & I hope they will.
6 - TylerNewton
"why are we still shopping at Wal-Mart?"
Exactly. If people really want to make a difference, they would shop elsewhere.
But in actuality, people moan, complain, and then go shopping at Wal-Mart.
7 - Nancy
No, some of us don't.
8 - Dave Nalle
As far as I can tell this is an effort to make sure their workers are healthy, thereby reducing the overhead for health insurance. Is it now a bad thing to have healthy workers?
Dave
9 - Phillip Winn
Nancy, that line of reasoning only makes sense if one assumes that Wal-Mart is in business primarily to ruin people's lives, and only secondarily to make money.
We (rightly in my view) are upset at the idea that they're deliberately setting false standards for hiring, but why are they doing that? They're doing it for the same reason they do everything else: to increase profits. And along that line, it makes perfect sense to open more stores.
10 - Nancy
You're what, a teacher? A writer? This is comparable to telling you that in order to hold your desk job, you also have to run the 4-minute mile. Labor totally, blatantly unrelated to your actual job of writing, put there solely to ensure that Walmart doesn't have to offer you insurance or pay you a decent wage.
If there's any justice (which there doesn't seem to be) Lee Scott will spend the rest of his life in abject, cowering, crawling poverty, neglect, & want.
11 - Dave Nalle
>>Do these people not think that maybe their customers are having a hard time making ends meet because most of them are working for companies like Wal-Mart - companies that refuse to pay their employees a competitive wage?<<
You clearly have NO idea what they're paying at WalMat. The average hourly salary is well over $10 an hour and starting salaries are a couple of dollars higher than minimum wage. Advancement in pay is also quite rapid.
Dave
12 - Nancy
There was a big article about Walmart salaries in the W. Post business section today. Salaries start at minimum, and only the store management ever makes it as high as $9/hr.
13 - Dave Nalle
Odd, that doesn' t match previous coverage of their salaries or what they're paying employees in local stores right now.
Here's a statement by a WalMart employee about wages in their stores: LINK
There are other comments there from WalMart workers that bear out the figures. And note that this is an anti-WalMart, pro-union site.
It suggests that starting pay averages about $8 an hour and that average pay is just under $10 - but the info is a year old, so wages should be slightly higher now, as some of the more recent comments there suggest. One fellow started his WalMart job at $8.60/hr.
Dave
14 - Sherrie
Wow! A whopping $8.60 per hour. Does Walmart provide health insurance coverage? Does he have children? Does he own a car (insurance, fuel, repairs)? If you (anyone) live on $8.60 per hour or less can you explain how you do so?
15 - J. Michael Parker
I don't know about you...but the last time that I made $10/hour and had to worry about my own health care, I was barely able to scrape by month to month. Now imagine you're a single mother and the only job you can get is at Wal-Mart. Or, you're a disabled person and the only job you could potentially get is at the local Wal-Mart (if they will hire you). So the point is...$10/hour (or near it) is not enough to get by this day and age. I'm sorry, but I've tried and I think there are a lot of people out there that would agree with me.
16 - Nancy
Absolutely I do. What people who argue for lower US wages to compete internationally lose sight of is that costs in the US are so high. I can well understand one drives the other, but the corporations, who are best able to afford lowering prices, are the ones who keep their prices so high. Usually artificially - especially in the matter of heating, transportation, (in the DC area) housing, and/or medical care.
To me, Lee Scott calling for higher minimum wage, so people can shop at Walmart, yet scrooging his own employees on their wages & medical coverage & screwing the taxpayers while he's at it, is a monstrous hypocrisy & outright vile figure of greed & callous corporate evil.
17 - JELIEL
I avoid Wal-Mart like the plague
Also, CBC and BBC showed the report on minimum wage and the memo but I didn't hear it mentionned on MSM news networks. Fark.com of course had it covered. Wonder if TDSwJS will take a crack at it.
18 - J. Michael Parker
Thanks for pointing out prices Nancy. One thing that few people seem to realize about Wal-Mart is how they kill their competition and keep their prices so low. Wal-Mart's tactic is to buy in such incredible volumes that their suppliers are forced to cut them huge discounts. Wal-Mart can then slash their prices so low that the local competitors cannot hope to compete (Naomi Klein talks about this in great length in her book NoLogo). The bottom line is that Wal-Mart cares nothing about its labor force. They are an expense just like any other and they will continue to use and abuse their employees until someone steps in and forces them to change their ways. This is the 21st century and I find it rather sad that workers are still having to fight for basic rights like decent pay and health coverage (especially in the United States).
19 - brandon weber
What I find particularly disturbing is this: whenever another piece of news about how horrible Wal-Mart really is hits the media, apologists seep out of the sewers they live in and try to feed us the corporate line of BS. "WM treats its workers just fine and everyone there has that smiley face on, and stop attacking such a 'Great American' company," blah blah blah.
It's as if WM paid people to come to these blogs and write stuff, much like the Republicans do. Whaddya think, would they stoop to that level? Of course not...
Yeah, right.
20 - brandon weber
For some reason, the URL for our website did not come through with my post, so it is here
21 - J. Michael Parker
Thanks Brandon. Looking through your site it jumped out at me that the Wal-Mart section is rather lengthy. The case against this company is enormous...anyone who tries to deny this fact is either blind or simply in denial. It flat out amazes me that this company is still allowed to operate. Of course, I'm sure the fact that Wal-Mart's annual revenues make up 2% of the US GDP has something to do with it.
22 - guppusmaximus
Excellent point Brandon!! Wal-Mart has been dishonest since their inception stating that they only sell"US Made" products when they happen to be the biggest importing company in the US.
They also can get away with low wages because they hire illegal immigrants and immigrants that have no experience so they don't have to hire Americans at the wages we deserve. This trend has drifted to Target and other retail giants...
23 - Dave Nalle
>>Wow! A whopping $8.60 per hour. Does Walmart provide health insurance coverage? Does he have children? Does he own a car (insurance, fuel, repairs)? If you (anyone) live on $8.60 per hour or less can you explain how you do so?<<
I have previously gone over in exhaustive detail how it's possible to live on less than $8 an hour and live decently. I lived for several years on $12 an hour working 20 hours a week and had health insurance and a car. I even had dental. WalMart does offer a health insurance plan for its lower level workers. It's not great, but it covers the basics.
Remember, your job at WalMart isn't a career, it's a starter job. This is why there's so much turnover, why they encourage workers to leave with educational incentives, and why they hire their workers young. If you find yourself working at WalMart for more than 3 years you've chosen the wrong life path.
Dave
24 - brandon weber
>If you find yourself working at >WalMart for more than 3 years you've >chosen the wrong life path.
And that's what the WM memo is telling the world: we don't want these people for more than 1 year, since there is "no difference in his or her productivity" after one year (taken straight from the horse's mouth, page 5, para 3).
I've been going to my local Costco for 4 years. There is a very, very high retention rate there, and I still see most of the same employees as I did when I started going. There's a lot to be said for spending my dollars at that kind of a place.
25 - Chris
You seem to have some misconceptions. The truth is:
- Wal-Mart provides the best health and benefits package in the retail industry. Sure, retail isn't great, but at least Wal-Mart is better than others.
- Wal-Mart doesn't schedule people under 40 hours to avoid paying them benefits. In fact, they give full time benefits to all employees who work over 33 hours/week. Who else will give people full time benefits even if they work hours like that?
- Wal-Mart pays almost no one minimum wage and in fact pays its employees on average more than twice the minimum wage. Why would they raise their already-above-average retail wages even higher?
The retail industry isn't the best in terms of benefits... but Wal-Mart more or less is the best in the industry in terms of benefits. Instead of picking on someone who is above average, why not pick on the certain other discount retailers with worse records.