Off the Hill | Brown University | The real cost of Walmart
Published: Tuesday, February 26, 2013
Updated: Tuesday, February 26, 2013 01:02
Where’s the only place where one can easily purchase a dress shirt, a basketball and a tomato? The neighborhood Walmart, of course. The world’s largest corporation and retailer has expanded at a rapid clip since its first store opened in Arkansas. The company, which celebrated its 50th anniversary last year, has come to exemplify the distinctly American corporate ethos, yet it is arguably one of the most un−American things that exists today. By its mere existence, Walmart is a prime example of the dangers of unbridled growth. Consumers may benefit, but don’t let Walmart’s slogan of “everyday low prices” mislead you. There’s a much higher price to pay for frequenting this corporation.
After all, why support local businesses and pay more for a slightly higher−quality good when we can just go to Walmart? Why bother about the plight of the Walmart workers? If these workers find the conditions so difficult, can’t they just leave their jobs and let others who are more willing fill in for them? In the end, Walmart’s just a store, right?
These arguments fuel the Walmart machine. The perennial top dog of the Fortune 500, Walmart reaps profits of approximately $50 million each day and would rank among the world’s 25 largest economies if it were a country. These statistics are the result of Americans’ begrudging acceptance of Walmart as necessary to maintain their standards of living. The obvious reason why people shop at Walmart is to obtain everything they need in one place at low prices.
But local businesses aren’t the only ones hurt by the perpetuation of this cycle. Employees are made to work unreasonable hours without overtime pay, especially during days like Black Friday. Workers’ health benefits are nearly useless, and their market−driven wages make it impossible for them to support themselves or their families. As a result, many workers who depend on their jobs at Walmart for sustenance and cannot quit are forced to go on government welfare programs. The Winning Words Project estimates that with a dollar increase in wages for Walmart workers, millions of tax dollars could be saved.
If left unchecked, Walmart will continue to stem local business growth and eventually stamp out the unique characteristics of the places where it sets up shop. Recent failed nationwide strikes against Walmart indicate that nothing short of a massive consumer exodus from Walmart or government intervention will have any impact on its unchecked growth and dominance. It actually isn’t an extreme thought to conceive of Walmart as a monopoly, similar to Standard Oil in the early 20th century. We find no legitimate reason as to why one family can amass the same wealth as the bottom 41.5 percent of U.S. families combined. Each heir of the Walton fortune would need to spend more than $350 million a year for the next 40 years to exhaust the family’s $89.5 billion net worth.
Every member of society has an inalienable right to opportunity and life. But Walmart doesn’t actually do society a service. It does society a convenience, and it’s time that we learned that convenience sometimes comes at a cost.
Hopefully Walmart can learn from Jim Sinegal, the chief executive officer of Costco, who takes prides in the retailer’s policy of paying an average hourly wage of $17 and the fact that it boasts one of the lowest rates of employee turnover for a retail store. Sinegal doesn’t even claim that Costco’s treatment of employees is motivated by “altruistic” reasons. Rather, he said it is simply “good business.” Walmart, by wielding such outsized power, would do society more than enough good by reaching out to the less fortunate and paying their workers a decent wage.