(Always? How could it be plausible without any sacrifice?)
Walmart, the biggest private employer in America, employs an astounding 1.4 million citizens of the U.S.A., and its global sales have already crossed $400 billion in 2009. Walmart, specifically designed for customer’s convenience in shopping is still extending its realm across the world by aiming to provide customers with the best variety of products with good services and low prices. Now, consumption of Walmart customers represents the consumption of overall population in the U.S.A. the economy of Walmart is miniature version of total U.S.A’s economy. Yet, even more pitiful, the average wage of “Associates”( specific name for the workers of Walmart) earn only about $11.75(according to Business insider article written by Henry Blodget) an hour which produce annual earnings that, in a one-earner household, below the $22,000 poverty line. Thus, Walmart is subject to criticism by various groups and individuals for many different reasons. Although the CEO of Walmart or its managers try to argue that it’s not true, and that what Walmart really aims for is “to look for a better world”, there are facts and interviews that degrade Walmart’s good image and confuse people’s notions towards the company. Now, it’s time to scrutinize the truth about Walmart so that this could clear up all the controversies: mainly in an aspect of economy, and health insurance.
(CEOs of Walmart Sam Walton, Lee Scott, Mike Duke from the left to the right)
Before talking about the problems entwined with Walmart, knowing is necessary. As already mentioned, Walmart is the biggest private employer in the U.S.A and an average of 1.4 million people purchase 140,000 products in Walmart per year; that is, customer consumption sampling in Walmart will allow us to predict the consumption of citizens of America based on the sample. Although there are a lot of requisites that Walmart gratifies, the core stimulus of Walmart’s success are, according to CEO of Walmart, Mike Duke, the fact that Walmart concerns a lot about its consumer and their low price policy. Throughout an interview with Michael Moore, Mike Duke tries to show positive aspects of Walmart and we see Walmart’s psychological product displaying. For instance, by the end of the month, people only have few dollars to spend, therefore they prefer smaller quantity goods than wholesale goods; this is why, according to Mike Duke, Walmart provides both on the same shelf. In a similar way, Walmart allows convenient shopping and facilitates consumers’ consumption. Furthermore, Walmart is widely distinguished for its objectives to keep products at a low price as much as possible. This, of course, attracts consumers, and wielding an exclusive monopoly helps low income families, which are about 15% of the total American population. Overall, all these efforts of Walmart to attract its consumers eventually led them to $400 billion sales internationally.
(More Money? Hell Yes!)
Unfortunately, however, Walmart is causing problems globally because of its distinct features; although Sam Walton’s main concern was to keep its price low for customers, the company’s policy to achieve this are unjust: continuously curtailing its employee’s payment while keeping high salary for its CEO, and achieving its work by using over-time with its employees earning about $11.7 an hour. Regarding the fact that Walmart is a worldwide private giant with sales of $400 billion, if at least its $22 billion annual pre-tax income is compensated for its workers, Walmart most likely does not need to cut its employee’s income and can also keep its low price. Though compensating part of Walmart’s income to its employee is not plausible, an exclusively high salary for its CEO still doesn’t make sense. The previous CEO of Walmart, Lee Scott, had an annual salary of about $1.3 million and did not get any bonus. The current CEO of Walmart, Mike Duke, gets an base annual salary of $6.3 million and an executive income of $23.3 million. Yet, even considering Scott’s comparatively low annual income without any bonus, Scott contributed to Walmart’s expansion and was considered as a successful CEO. While the quality of a Walmart CEO neither decreased nor increased significantly, the salary has increased a great amount, and the salary for Walmart associates has been static or curtailed as time passed. There is no way that Walmart could explain this odd and paradoxical situation: even though Walmart’s main concern is to keep its low price, they increased their CEO’s salary while just cutting income for its associates. There’s no way that this situation could be explained except for saying that the way Walmart is working is clearly unjustifiable.
Furthermore, another significant issue regarding Walmart is the health insurance problem. As for October 2001, Walmart’s healthcare insurance covered about 44% of its employees. In comparison, Costco the wholesale rival of Walmart covered 96% of its eligible workers. Furthermore, to look at Walmart’s investment on its own employee’s health insurance, it’s about $3,500 for each employee, which is about 27% less than the average spending of retail industries’ budget set for their employees’ health insurance. Not only in the financial aspect, Walmart is also criticized for its quality of health insurance: employees often choose state insurance rather than Walmart’s insurance because of the quality, generosity, and price of health insurance. Even regarding this problem, the previous CEO of Walmart Lee Scott has acknowledged this fact that in some states, their state insurance benefits are more generous or better in quality compared to the insurance of Walmart. Although there has been various attempts to resolve the conflicts regarding health insurance of Walmart, most of the attempts from outside of the cooperation have failed and only a few more percentage of workers are able to take Walmart’s health insurance, which is still less than 50% of total Walmart associates. Yet, current CEO, Mike Duke, in his interview, condescendingly claimed about 95% of Walmart associates take Walmart healthcare insurance. Though we still don’t know, it is obvious that at least the CEO no longer interested in amending the health insurance system. The fact that there are controversies shows that at least there are conflicts or points where managers and employees should come to a compromise. Regarding this fact, current executives’ attitude towards Walmart health insurance problem is plainly absurd.
In a nutshell, it seems like Walmart needs to at least show its efforts to improve its
working environment and its problems: problems including financial irrationality and company healthcare insurance. Although we are not sure whether problems have been exaggerated or not, there are clear irrationalities within Walmart management, and Walmart needs to change its attitude in dealing with those controversies. As one of cooperates that represents the U.S.A., and Walmart has an obligation to address employees, even with the trivial problems.
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Source:
“Walmart Employs 1% Of America. Should It Be Forced To Pay Its Employees More?”. http://articles.businessinsider.com. Business Insider. September, 20, 2010
“WalMart CEO Mike Duke is the voice of the common man”. http://youtube.com. You Tube. April, 22, 2009.
“Walmart CEO paid $23.3 million in fiscal 2007”. http://article.marketwatch.com. Market Watch. April, 20, 2007.
“Criticism of Walmart”. En.wikipedia.org. Wikipedia. Last modified on 26, February, 2012.
