This video explains some of the common issues surround Wal-Mart, including the treatment of employees, wages, and a discussion of the "wickedness" of Wal-Mart.
Thursday, June 14, 2012
A Short Video on Wal-Mart
This video explains some of the common issues surround Wal-Mart, including the treatment of employees, wages, and a discussion of the "wickedness" of Wal-Mart.
Wal-Mart--Bullying Manufacturers and the Connection with China
As I watch news about companies shipping manufacturers overseas, I always wondered why. After watching a Frontline special report titled "Is Wal-Mart Good for America?" I know why. According to the report, China has about 6,000 global suppliers. It turns out that 80% of suppliers are from China. How did Wal-Mat grow so dependent on China?
In 1992, Sam Walton, the founder of Wal-Mart died and the company's stock took a huge nose dive. With sales declining, the company decided to try a new approach. They began importing goods from overseas and the margins on these items were anywhere from 60-80% compared to about 20% from American manufactured goods. Towards the late 1990's Wal-Mart became dependent on low cost Asian imports. China is the largest exporter to the American economy in consumer goods categories and Wal-Mart imports around 15 billion dollars a year of Chinese goods. Frontline asked a Wal-Mart VP about why they have become to dependent on China, to which he responded, "For us to remain a viable company in the future, we have to be able to compete."
The dirt cheap manufacturing costs in China put American manufacturers in a squeeze. Wal-Mart started demanded cheaper good from American manufacturers, with prices on par with Asian goods. However, many times these companies just don't have the resources to produce at a lower price point. In the special report, many American manufacturers express that when Wal-Mart buys from suppliers, there is no negotiation. In fact, one of them states that Wal-Mart's motto is "If you want to do business with us, if you want to stay in business, you better do it our way."
A dramatic example of Wal-Mart's influence over the success and failure of its suppliers occurred in the small town of Circeville, Ohio. The town is home to a Thomson Consumer Electronics Plant, a manufacturer of TV sets. In its prime around 1999, it produced about 10 million units a year. However, in 2003, they lost a huge amount of orders from Sanyo. That's because Wal-Mart told Sanyo that they were only going to pay certain amount for a TV and then Sanya had to go back to their suppliers to look for price compromises. However, manufacturers could not reduce their prices and Sanyo had to turn to China to compete. In fact, manufactures such as Thomson could buy glass for TV components from their Chinese competitors for cheaper than they could produce it. As a consequence of this, Thomson had to shut down its plant and 1,000 workers lost their jobs.
Wal-Mart has gained the ability to literally destroy other business. People have coined the term "destructive capitalism" to describe Wal-Mart. In Ruth L. Ozeki's My Year of Meats, the issue with regards to destruction of American business and culture is addressed several times. As Jane, the main character travels around and witnesses that Wal-Mart has taken over low-income, small towns. Just like Wal-Mart has done to the suppliers, they make the members of the small community dependent on Wal-Mart by putting nearby shops out of business. Jane even goes on to express how each person living a small town spends their days at Wal-Mart.
Nowadays, American consumerism has grown synonymous with the cultural phenomenon of American consumerism. In fact, Jane even states that "To a Japanese person, Wal-Mart is awesome, the capitalist equivalent of the wide-open spaces and endless horizons of the American geographical frontier" (35). We as Americans have given into consumerism and forgotten the value of small businesses, paying for quality, and a sense of culture. Although the costs of goods themselves are cheaper than we could have ever previously imagined, it also comes at a high cost to communities.
Source:
[quote]
In 1992, Sam Walton, the founder of Wal-Mart died and the company's stock took a huge nose dive. With sales declining, the company decided to try a new approach. They began importing goods from overseas and the margins on these items were anywhere from 60-80% compared to about 20% from American manufactured goods. Towards the late 1990's Wal-Mart became dependent on low cost Asian imports. China is the largest exporter to the American economy in consumer goods categories and Wal-Mart imports around 15 billion dollars a year of Chinese goods. Frontline asked a Wal-Mart VP about why they have become to dependent on China, to which he responded, "For us to remain a viable company in the future, we have to be able to compete."
The dirt cheap manufacturing costs in China put American manufacturers in a squeeze. Wal-Mart started demanded cheaper good from American manufacturers, with prices on par with Asian goods. However, many times these companies just don't have the resources to produce at a lower price point. In the special report, many American manufacturers express that when Wal-Mart buys from suppliers, there is no negotiation. In fact, one of them states that Wal-Mart's motto is "If you want to do business with us, if you want to stay in business, you better do it our way."
A dramatic example of Wal-Mart's influence over the success and failure of its suppliers occurred in the small town of Circeville, Ohio. The town is home to a Thomson Consumer Electronics Plant, a manufacturer of TV sets. In its prime around 1999, it produced about 10 million units a year. However, in 2003, they lost a huge amount of orders from Sanyo. That's because Wal-Mart told Sanyo that they were only going to pay certain amount for a TV and then Sanya had to go back to their suppliers to look for price compromises. However, manufacturers could not reduce their prices and Sanyo had to turn to China to compete. In fact, manufactures such as Thomson could buy glass for TV components from their Chinese competitors for cheaper than they could produce it. As a consequence of this, Thomson had to shut down its plant and 1,000 workers lost their jobs.
Wal-Mart has gained the ability to literally destroy other business. People have coined the term "destructive capitalism" to describe Wal-Mart. In Ruth L. Ozeki's My Year of Meats, the issue with regards to destruction of American business and culture is addressed several times. As Jane, the main character travels around and witnesses that Wal-Mart has taken over low-income, small towns. Just like Wal-Mart has done to the suppliers, they make the members of the small community dependent on Wal-Mart by putting nearby shops out of business. Jane even goes on to express how each person living a small town spends their days at Wal-Mart.
Nowadays, American consumerism has grown synonymous with the cultural phenomenon of American consumerism. In fact, Jane even states that "To a Japanese person, Wal-Mart is awesome, the capitalist equivalent of the wide-open spaces and endless horizons of the American geographical frontier" (35). We as Americans have given into consumerism and forgotten the value of small businesses, paying for quality, and a sense of culture. Although the costs of goods themselves are cheaper than we could have ever previously imagined, it also comes at a high cost to communities.
Source:
Smith, Hedrick. "Frontline: Is Wal-Mart Good for America?" Frontline. PBS. Boston, MA, 16 Nov. 2004. Television.
[quote]
Hope for the Future
The constant attack of Wal-Mart in mainstream media makes for bad business. Wal-Mart has realized this and they are working on changes so that people alter perception of Wal-Mart. According to the 2007 report on the State of the World by the Worldwatch Institute, "Wal-mart launched a long term sustainability initiative with leaders and executives from virtually every branch of the company formed into entrepreneurial teams focusing on areas such as packaging, real estate, energy, raw materials, and electronics waste"(Worldwatch Institute 155).
Wal-Mart's CEO set three new goals for the company in 2005:
Wal-Mart's CEO set three new goals for the company in 2005:
- Rely 100% on renewable energy
- create zero waste
- sell products that sustain resources and the environment
It was actually Wal-Mart who petitioned before Congress to impose required carbon caps on their business in April 2006. To add to that, Wal-Mart has become the most abundant supplier of organic food. This allows Wal-Mart to both reduce its carbon footprint and make organic food more affordable. (Worldwatch Institute 155-156).
The part about organic food is very promising because many people cannot afford to shop at places like Whole Foods. After reading, My Year of Meats, I have been discouraged to eat sources of meat that have been treated with hormones. However, it is hard to tell as a consumer where my meat is actually coming from. The only option to truly know about the quality of the meat that you are buying is to buy organic. Unfortunately, the prices of organic food at places like Whole Foods are too high for a college student such as myself. Since these goals were announced a few years ago, I decided to do some additional research to see if they actually came to fruition.
The Sierra Club, which is America's largest environmental organization, has come out with a report titled "What's is Wal-Marts True Environmental Footprint?" to address the feasibility of these 2005 goals. According to the Sierra Club, there are "fundamental contradictions between Wal-Mart's business model and environmental sustainability." For example, the daily energy usage of a Walmart Supercenter is on par with the energy usage of 1,095 residential houses. Not only that, but Wal-Mart's business model depends on selling products that have been produced in foreign countries such as China. China is considered the largest carbon exporter in the world. These fast-growing countries have less restrictions on greenhouse emissions than American companies do, so they can produce huge quantities of goods without worrying about their effect on the environment. Next, the goods must be shipped from China on huge container ships, which add a billion tons of carbon emissions per year.
In the end, it doesn't seem that Wal-Mart is making the progress that they had first promised. Although their greenhouse emissions have dropped, many other factors such as the recent economic downturn seem to be the major reason for this drop instead of improved efficiency. Also, sales of groceries of Wal-Mart have increased from 49% in 2009 to 54% in 2011. Groceries entail less of a carbon footprint that manufactured goods (about 4% less), so the slight drop in emissions can also be linked to merely a change in the area of sales. To make a sizable difference, Wal-Mart will need to take much more aggressive steps.
Source:
What Is Wal-Mart's True Environmental Footprint. San Francisco: Sierra Club, June 2011. PDF.
[Online research]Random Poetry
Locate the love of your life
Where in your hear this lies
Teeth grinding as their eyes scrutinize
We make this love known to them
It takes a brave person
To want to find what makes them happy
Litte support, but we must keep going
What they say cannot deter us
Where in your hear this lies
Teeth grinding as their eyes scrutinize
We make this love known to them
It takes a brave person
To want to find what makes them happy
Litte support, but we must keep going
What they say cannot deter us
Employee Relations with Wal-Mart
The in-class survey that I conducted seemed to indicate two-thirds of class though that Wal-Mart regularly mistreated their workers. In my interview, I even spoke to someone who said that their sister had trouble getting a promotion due to gender bias. I wanted to research the specific topic of Wal-Mart employees some more.
Another reason why I found this topic interesting is because mistreatment of employees by Wal-Mart was highlighted in My Year of Meats, by Ruth L. Ozeki. For the production of one of the episodes of "My American Wife," the director Jane visits the Bukowsky family. Their daughter, Christina, has been paralyzed by an accident with a Wal-Mart delivery truck that ran over her as she was riding her bike and crushed her limbs. Mrs. Eleanor Bukowsky, her mother, works at Wal-Mart and asks for time off in order to help her daughter recuperate. However, Wal-Mart denies her request because "granting her request would be admitting liability for the accident" (133). Then, Mrs. Bukowsky asks her boss to at least fire her so that she can take care of her daughter and collect unemployment. However, he also denies this request, stating that "it would be bad publicity for Wal-Mart to first crush the daughter, then to fire the mom" (133). Finally, Mrs. Bukowsky decides to quit in order to take proper care of her daughter.
The events that happened in the book, although fictional, seem entirely plausible in real life situations. because we always hear news about Wal-Mart abusing its workers. This story represents the sort of cold, profit-driven approach that one would expect from Wal-Mart. They could have easily helped the family out, whose lives will forever be changed, but decided not to. I want know whether Wal-Mart would allow such atrocities happen in the first place.
Sources:
I searched around the web and found an independent news website called alternet.org. The website is appropriate because their stated goal is to help people "navigate a culture of information overload and providing an alternative to the commercial media onslaught." Their aims also include inspiring "advocacy on the environment, human rights and civil liberties, social justice, media, health care issues, and more." On it, there was a particularly interesting article about unfair treatment of women workers.
In the recent case Dukes v. Walmart Stores, 1.5 million female Walmart employees pursued billions of dollars in damages for discriminatory management practices. Also, in a poll conducted by Lake Research Partners, 65% of men and 75% of women reported that their income was poor or just fair. Also, Wal-Mart's rating on topics of discipline procedures, fairness, employee insight, and healthcare benefits was "just fair" or poor. The stores have introduced a system called Task Manager, which tracks employee efficiency when it comes to amount of freight they can process. People report losing "respect for the individual to just only caring about the amount of freight we can handle."
Of course, when workers try to unite and make a change, Wal-Mart responds with retaliation. According to an article written by Charlie Cray on the Center for the Advanced Studies of American Institutions and Social Movements website, Wal-Mart chose to start using "case-ready meat" and cut its meat packaging business at 180 stores after a group of ten butchers in a Wal-Mart store in Jacksonville voted to unionize their department. The company stated that their actions were not a form of retaliation, but rather "part of a long-term plan to sell prepackaged beef cuts instead of preparing on-site." However, this response is faulty because the Jacksonville butchers argue that the company had just spent $40,000 on a new meat wrapping machine for their store.
Now, the stories in My Year of Meats don't seem fictional at all. They are just retellings of a story of corporate greed that has been purely profit-driven. Wal-Mart's goal is not to improve the quality of life for their workers. Not only that, but after reading My Year of Meats, the switch to case-ready meats worries me. The book explained the usage of growth hormones such as DES to hasten the growth of cattle for slaughter in unsanitary conditions. When Wal-Mart got rid of its butchers, people were no longer exactly where there beef was coming from and how it was being processed. Now, when we buy meat in prepackaged foam containers with saran wrap covering, we are left to wonder just how it got there in the first place.
Sources:
-Bernd, Candice. "Wal-Mart's Women Workers Still Face Unfair Treatment, Low Wages, Struggle For Better Conditions." AlterNet.org. N.p., 15 July 2011. Web. 13 June 2012. <http://www.alternet.org/story/151622/wal-mart's_women_workers_still_face_unfair_treatment,_low_wages,_struggle_for_better_conditions/?page=1>.
Cray, Charlie. "Atelier 8, Article 1." Center for the Advanced Studies of American Institutions and Social Movements, Apr. 2000. Web. 14 June 2012. <http://dimension.ucsd.edu/CEIMSA-IN-EXILE/ateliers2/a8/art8-1.html>
[online research / quotes]
A More Personal Look
Hearing a myriad of statistics can only reach so far. Sometimes personal stories can make the biggest impact. I decided to interview the TA for my critical thinking class because his sister actually works at Wal-Mart. Here is how the interview went:
Me: How often do you shop at Wal-Mart?
Him: Not much, only a few times a year.
Me: You mentioned that your sister works at Wal-Mart. What does she tell you about her experience working there?
Him: Well she has told me on numerous occasions that her managers a gender-biased. She has not been able to get promoted while others around her have. What happens is that people create both gender and racial cliques. So the white employees gather around the white manager, Mexicans around the Mexican manager, etc. They create these groups to help protect each other.
Me: Many often view Wal-Mart as a close-fisted and greedy corporation. In your opinion, does this ring true?
Him: I absolutely believe that is is the case. Wal-Mart knows that people want the basics staples including food, clothing, furnishings, and other products. They take advantage of this by offering the lowest prices in town as compared to a mom and pop. A mom and pop store does have the volume that a giant retailer like Wal-Mart does, which means that they can't order around manufacturers where as Wal-Mart can demand lower prices and refuse to budge.
Me: Is that what makes people so critical of Wal-Mart?
Him: I can tell you from my own personal experience. When I worked for a trucking company, I fulfilled an order to deliver a few thousand cartons of orange juice from Florida to the Houston area. When I got there, somehow 4 cartons of orange juice were missing and Wal-Mart refused to accept the order. They warned me that if I did not go back to Florida and pick up 4 cartons of orange juice they would never do business with our company again. So I had to drive back there and pick it up, which ended up costing us thousands.
Me: I know the effects of a Wal-Mart opening nearby a small business from my own personal experience. My parents own a convenience store in Mountain View and a few years ago a Wal-Mart opened a few blocks away After that, revenue fell drastically and we just haven't been able to get back to the levels we were once at.
Him: That's exactly what I'm talking about. You're not in a position to tell your suppliers that they must meet your price or else. They can bully around others and drive them out of business.
Me: Yes, you make a really good point. Well that's all I had to ask today. Thanks for your time.
Him: No problem.
[primary research / interview]
Me: How often do you shop at Wal-Mart?
Him: Not much, only a few times a year.
Me: You mentioned that your sister works at Wal-Mart. What does she tell you about her experience working there?
Him: Well she has told me on numerous occasions that her managers a gender-biased. She has not been able to get promoted while others around her have. What happens is that people create both gender and racial cliques. So the white employees gather around the white manager, Mexicans around the Mexican manager, etc. They create these groups to help protect each other.
Me: Many often view Wal-Mart as a close-fisted and greedy corporation. In your opinion, does this ring true?
Him: I absolutely believe that is is the case. Wal-Mart knows that people want the basics staples including food, clothing, furnishings, and other products. They take advantage of this by offering the lowest prices in town as compared to a mom and pop. A mom and pop store does have the volume that a giant retailer like Wal-Mart does, which means that they can't order around manufacturers where as Wal-Mart can demand lower prices and refuse to budge.
Me: Is that what makes people so critical of Wal-Mart?
Him: I can tell you from my own personal experience. When I worked for a trucking company, I fulfilled an order to deliver a few thousand cartons of orange juice from Florida to the Houston area. When I got there, somehow 4 cartons of orange juice were missing and Wal-Mart refused to accept the order. They warned me that if I did not go back to Florida and pick up 4 cartons of orange juice they would never do business with our company again. So I had to drive back there and pick it up, which ended up costing us thousands.
Me: I know the effects of a Wal-Mart opening nearby a small business from my own personal experience. My parents own a convenience store in Mountain View and a few years ago a Wal-Mart opened a few blocks away After that, revenue fell drastically and we just haven't been able to get back to the levels we were once at.
Him: That's exactly what I'm talking about. You're not in a position to tell your suppliers that they must meet your price or else. They can bully around others and drive them out of business.
Me: Yes, you make a really good point. Well that's all I had to ask today. Thanks for your time.
Him: No problem.
[primary research / interview]
Wednesday, June 13, 2012
Is Wal-Mart Good for America?
Wal-Mart is constantly portrayed as a large, evil, and greedy corporation in Ruth L. Ozeki's My Year of Meats. The book's main character, Jane, is a Japanese-American director that travels across the United States filming "My American Wife," an early morning show in Japan. Every week, a new family is featured on the show and they show how to prepare a meal using different types of American meat (mostly beef). The show is sponsored by BEEF-EX, a meat industry lobbying organization. At point, she travels to Quam, her hometown and she
"found that all the local business from my childhood [have] been extirpated by Wal-Mart. If there is one single symbol for the demise of regional American culture, it is this superstore prototype, a huge capitalist boot that stomped the mom and pops, like soft, damp worms, to death" (Ozeki 56).
"found that all the local business from my childhood [have] been extirpated by Wal-Mart. If there is one single symbol for the demise of regional American culture, it is this superstore prototype, a huge capitalist boot that stomped the mom and pops, like soft, damp worms, to death" (Ozeki 56).
This attitude towards Wal-Mart has been adopted throughout the book, with constant references to destroying American culture. Jane is also a documentarian and she states that
"to a documentarian, Wal-Mart is a nightmare. When it comes to towns, Hope, Alabama, becomes as Hope, Wyoming...and in the end, all that remains of our pioneering aspirations are the confused and self-conscious simulacra of relic culture" (Ozeki 57).
The author has obviously put a cynical twist on the growth of Wal-Mart and their corresponding business practices. I decided to do some library research and look more into the topic of just how Wal-Mart grew into such an immense power and what it means for the average American. I first wanted to look the jobs that Wal-Mart creates. This is a hotly debated issue and many contests and many actually argue that Wal-Mart destroys more jobs than it creates.
In the book The Wal-Mart Effect, authored by Charles Fishman reports the findings of a study conducted by Emek Basker, an economist with a Ph.D. from MIT. She studied whether the arrival of Wal-Mart had a real effect on retail jobs in nearby areas. According to her data, an average of 100 new jobs are added the first year after a Wal-Mart opens. Although a typical Wal-Mart employees anywhere from 150 to 350 workers,when a new Wal-Mart opens, it is replacing other neighboring businesses, which means that 50 people are laid off. In one year, that is a net gain of 100 jobs. A few years after, retail employment drops and the net total drops to 50 jobs. This is because the boom of Wal-Mart is dependent upon beating out existing retailers. Within five years of a gran opening of Wal-Mart about four stores go out of business and 250 lose their jobs. So within a time frame of five years, the opening of a new Wal-Mart only results in a net gain of about 30 jobs (Fishman 143-145).
This data points shows that all the new buzz and excitement surrounding the opening of a new Wal-Mart store may not be so enticing after all. One would expect a greater positive impact on neighboring communities with regard to jobs. Wal-Mart consistently promotes that it is a provider and active member for the community, but the evidence shows that this claim has no real basis. This a threat towards Wal-Marts ethos, their credibility in the eyes of the customer.
[library research / quotes]
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