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Behind the Wal-Mart PR

September 20th, 2005 · No Comments

There has been mounting criticism of Wal-Mart in recent years. Critics charge they kill off small local businesses, they contribute to urban sprawl, they squeeze suppliers into bankruptcy, they discriminate against female employees, they hire illegal aliens and fire union organizers.

Last January, Wal-Mart fought back with a multi-million-dollar massive public relations blitz, including full-page advertisements in more than 100 newspapers, a new round of television commercials featuring happy blue-vested Wal-Mart workers, and a web site called (as an antidote to critical sites such as

One of the arguments Wal-Mart makes is that America should sing the praises of the company, since it helps poor people. “A UBS Warburg study found that Wal-Mart grocery prices are 17 to 20 percent lower than other supermarkets, which has the greatest benefit for a community’s low-income families,” the company reports on its web site.

The site continues, “According to a study done by the Los Angeles Economic Development Corporation, Wal-Mart potentially saves individual families more than $500 a year. This is money that can be used to buy food, gas or any other priorities for that family.”

Wal-Mart’s pricing sounds like a good thing, given that almost 13 percent of the U.S. population lives at poverty level. These are people largely missing in action in the mass media (when is the last time you heard stories about poor people?) until the recent devastation of Hurricane Katrina reminded the country that ignoring poverty doesn’t make it go away.

But there’s more to the story about Wal-Mart and low-income America. One “fact” you won’t find on the web site is a study released last year by the Democratic staff of the U.S House Committee on Education and the Workforce. The report reminds us that Wal-Mart is not only the nation and world’s largest retailer who offers us “Everyday Low Prices,” they are also the nation and world’s largest private employer who offers “Everyday Low Wages.”

According to the study, “Sales clerks at Wal-Mart made only $8.23 per hour on average, or $13,861 per year, in 2001.” That fell below that year’s federal poverty line of $14,630 for a family of three. Moreover, less than half of Wal-Mart workers are insured by the company’s health care plan, and out-of-pocket costs are so high that the lowest wage workers can hardly afford the coverage.

So, the community’s low-income families who Wal-Mart says benefit from its low prices might actually be Wal-Mart workers themselves.

One might wonder, well why don’t the Wal-Mart workers work together to fix the situation? Unfortunately, they’ve already tried countless times and have learned that Wal-Mart is of the worst union-busters in the country, with a record of conducting surveillance on workers and firing those who try to organize.

Because of Wal-Mart’s sub-par wages and compensation, the rest of us end up subsidizing their hard-working but poorly compensated employees. The House study calculated that “one 200-person Wal-Mart store may result in a cost to federal taxpayers of $420,750 per year–about $2,103 per employee.”

Our subsidies include free and reduced cost lunches for employees’ children, Section 8 housing, low-income tax credits, low energy assistance, and state health care for the employees’ families. As journalist Bill Moyers reported in 2003, some Wal-Mart personnel offices are even kind enough to direct their employees to apply for charitable and government assistance to cover Wal-Mart’s own well-known shortcomings.

Mind you, these employees are the people who do the majority of the work for a company that surpassed a record $10 billion in net profits last year. So, don’t begrudge Wal-Mart employees, who are doing their jobs and doing them well. Instead, we should be asking why one of the richest companies in the world doesn’t share the wealth and compensate its employees more fairly.

Tags: Labor News · Public Relations

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