Wal-Mart Stories

I have been hearing a lot about Wal-Mart lately that is disturbing.

One of the first things I read was that seven cents out of every dollar spent in the US goes to Bentonville, Arkansas, the home of Wal-Mart. That's a staggering figure! Take my weekly paycheck, say, about $250. That means about $17 a week of my hard earned dough goes to Wal-mart. (I'm thinking that's low! There the only place in Fredericksburg that sells video games. :)

Then I read about the folks at Vlasic, the pickle people, have had to create a special package for Wal-Mart, a gallon jar. Vlasic had never put pickles into a gallon jar until Wal-Mart demanded it a year or so ago. Then, because Wal-Mart requires its suppliers to reduce prices every year, it had to make the product cheaper than smaller jars available in the supermarket down the street.

For years, Vlasic has been advertising heavily to get consumers to spend more for their pickles that other brands. In one fell swoop, Wal-Mart has undercut decades of brand building. Vlasic is now a "bargain" brand in Wal-Mart.

Also as a result of their "Falling Prices" program, more and more suppliers are having to move their production facilities overseas to keep lowering their prices. Wal-Mart used to be the home of the "Made in America" items. Now, very little of what they sell is made here. While Congress complains about the exportation of jobs from this country, Wal-Mart keeps slashing their prices!

I have heard stories about how Wal-Mart treats its employees. For instance, I had heard that Wal-Mart did not have any full time employees, apart from the store managers. I had even heard about one Wal-Mart manager instructing his employees how to apply for food stamps rather than giving them a raise. I had always taken these stories with a couple of grains of salt. Lately, though, news stories have come out that have made me reconsider.

On January 9, Wal-Mart settled a lawsuit over its practice of taking out life insurance on employees and making itself the beneficiary. Wal-Mart never told workers about the life insurance policies. According the the Associated Press article, "Wal-Mart is one of many large U.S. companies in recent years that have taken out policies on the lives of employees, ranging from executives to workers on the bottom rungs of the pay ladder, with the goal of collecting benefits when the employees die. Companies term the policies corporate-owned life insurance, or COLIs. Critics call them dead-peasant policies. Wal-Mart set up a trust in 1993 and named itself as beneficiary on policies for 355,000 employees." In 2000, the IRS took away tax advantages of the program and Wal-Mart discontinued the program.

On January 13, Reuters ran a story that revealed Wal-Mart had conducted an internal audit of their labor policies. The report indicated that employee records at 128 stores showed extensive violations of child-labor laws and state regulations. According to the story, "The audit -- now under court seal [my emphasis] -- of one week's time-clock records for about 25,000 employees found 1,371 instances in which minors worked too late at night, worked during school hours or worked too many hours in a day, the paper said. It also found 60,767 apparent instances of workers not taking breaks, and 15,705 apparent instances of employees working through meal times." There are currently 40 lawsuits charging Wal-Mart with making employees work without pay through lunch and rest breaks.

Just this week, I read about another group of employees suing Wal-Mart for locking them inside the stores at night while they stock. The only way the employees can leave are through the emergency fire doors, and unless there is a fire, they can be reprimanded or dismissed for using them. Wal-mart instituted this policy to reduce shrink. (Shrink is a retailing term for losses as a result of employee theft.) In one instance, a worker was pinned under some fallen machinery, and had to wait three hours for someone with a key to come down and let EMS in. (I wish I could find that article.) A Wal-Mart spokesman did say that it was common practice in high crime areas, but blamed most of the excesses on "rogue managers."

Before Christmas of 2002, one of these rogue managers removed all the donated toys from a "Toys for Tots" bin in the lobby of his store because it was full. He put the toys back on the shelves for resale. (That means that the store is going to sell some of the toys twice!) When the organization arrived to collect the toys, there were none, even though the organizer of the event had been in the store a couple of days earlier and seen the overflowing bin. The manager explained that he thought the bin was too full and he didn't know when they were going to be picked up. The organizer explained that a full bin makes people donate more, and that the pick up date was on the "freakin' sign, for crying out loud!" (Actually, I made that quote up. She had spoken to one of the minimum wage slaves at the customer service counter and told them she would be back in a couple of days.)

In a related story, Wal-Mart is being sued by a group of illegal aliens arrested at 60 Wal-Marts in 21 states. They were not Wal-Mart employees, but worked for outside cleaning contractors hired by Wal-Mart. The aliens claim they worked for below minimum wage (imagine my surprise at illegal aliens being paid below minimum wage) and worked up to 56 hours a week and did not receive any overtime pay (ditto). They are suing Wal-Mart because they say Wal-Mart had to know that they were illegals and that they were being paid below minimum wage. Wal-Mart says that they hired a contractor to do the work, and he was the lowest bidder. (In Wal-Mart's defense, they are not required to check the work status of contractors' employees. But it wouldn't surprise me if Wal-Mart knew, and actually looked for, these contractors.)

As Wal-Mart continues is inexorable spread across the retailing landscape, destroying countless mom and pop stores, smaller chains and entire downtowns and Main Streets, we'll see more of these stories. With fark.com's help (That's where I found links to these stories.), I'll bring as many of them to you as I can.