Wal-Mart: the Local, the National, and the Global

Wal-Mart: the Local, the National, and the Global

  • Names ______Date ______Hour __
  • Wal-Mart: The Local, the National, and the Global
  • Explain the significance and implications of the groups of facts listed below in terms of local, national, and/or global impact. (Note that the sources of each are listed in brackets)
  • 1. In 2008, the average full time Associate (34 hours per week) earns $10.84 hourly for an annual income of $19,165. That’s $2,000 below the Federal Poverty Line for a family of four. [
  • Last year, Wal-Mart CEO Lee Scott earned $29.7 million in total compensation, or 1,551 times the annual income of the average full time Wal-Mart Associate. [
  • 2. The national median family budget for a family of four (two parents and two children) in 2005 was $39,984, more than twice the average full-time Associate’s annual income of $19,165. [Sylvia A. Allegretto, Basic family budgets: Working families' incomes often fail to meet living expenses around the U.S 2005]
  • Wal-Mart spokesperson Mona Williams was quoted in 2004 for admitting that, "More than two thirds of our people... are not trying to support a family that’s who our jobs are designed for." [PBS Newshour, 23 August 2004]
  • Wal-Mart could give each of its workers a $1 per hour raise without affecting their annual $12 billion profit margin, by raising prices only one half of one penny per dollar. For instance, a $2.00 pair of socks would then cost $2.01. That half of a cent would add up to a $1,800 raise for each employee. [Analysis of Wal-Mart Annual Report 2005]
  • A 2007 study found that Wal-Mart could increase its starting wage to $10 per hour, and even if were to pass 100 percent of the cost onto customers, it would only need to increase prices by 0.9%. This works out to $0.36 per shopping trip, or $9.70 per year, for the average Wal-Mart customer. [Arindrajit Dube, Dave Graham-Squire, Ken Jacobs, and Stephanie Luce, Living Wage Policies and Wal-Mart: How a Higher Wage Standard Would Impact Wal-Mart Workers and Shoppers 2007]
  • 3. Wal-Mart reports that its health insurance covers only 50.2% of their employees. Wal-Mart has nearly 1.4 million US employees. [UFCW analysis of Wal-Mart health plan, March 2008]
  • If an average full-time Wal-Mart employee chooses the least expensive family coverage plan, they would have to spend over 20% of their income before the health insurance provided any reimbursement.[ EBRI Issue Brief October 2007]
  • An average full time Wal-Mart Associate faces a serious family health issue. They have to pay the entire out-of-pocket maximum for the least expensive health plan, which adds up to pay 53% of their income. [ EBRI Issue Brief October 2007]
  • On average, large firms (1,000 or more workers) insure 65% of their employees. If Wal-Mart was to minimally reach the average coverage rate, Wal-Mart would cover an additional 210,000 workers. [ EBRI Issue Brief October 2007]
  • Despite over $12 billion in profits, President and CEO Lee Scott admits, "In some of our states, the public program may actually be a better value - with relatively high income limits to qualify, and low premiums". [Transcript Lee Scott Speech, 4 May 2005]
  • 4. Through a loophole in many state tax codes, Wal-Mart avoided paying $2.3 billion in state income taxes between 1999 and 2005 alone. ["New Research Shows Wal-Mart Rigs the System to Skip Out on $2.3 Billion in State Taxes," Citizens for Tax Justice, 4/16/07]
  • In Virginia, for example, 60 cents of every dollar spent downtown, stays downtown--compared to just six cents for every dollar spent at a big-box stores like Wal-Mart. [Rocky Mountain Institute]

In 2005, Wal-Mart real-estate manager Jeff Doss spoke about an oft-cited remark by company founder Sam Walton that Wal-Mart would not build stores in towns if the residents did not want them. "Were that the case," he said, "we'd never build a store anywhere". [Kenneth E. Stone, "Impact of the Wal-Mart Phenomenon on Rural Communities," 1997]

  • 5. 70% of the commodities sold in Wal-Mart are made in China. [China Business Weekly, November 29, 2004]
  • As of 2008, if Wal-Mart were its own country, it would rank as the eighth largest importer of Chinese goods, ahead of Russia and India. ["US-China Trade Statistics and China's World Trade Statistics," US-China Business Council, 2008]
  • 6. As of early 2008, only 26% of Wal-Mart's factory inspections are unannounced, providing managers the opportunity to coach workers on what to say and hide violations. In contrast, 100% of the audits conducted by Target, one of Wal-Mart's chief competitors, are unannounced. [T.A. Frank, "Confessions of a Sweatshop Inspector," Washington Monthly, April 2008]
  • Wal-Mart was also fined $205,650 for 1,436 violations of child labor laws in Maine between 1995 and 1998. The settlement represents the largest number of citations as well as the largest fine ever issued by the Maine Department of Labor for child labor violations. [Weinstein, Joshua, "Wal-Mart fined $205,650 in child labor case", March 2, 2000, Portland Press Herald]

Wal-Mart agreed to pay $135,540 for breaking child labor violations charges in January 2005 in 24 separate incidents.["Wal-Mart Agrees to Pay Fine for Violating Child Labor Laws; Company Signs Settlement Agreement with Labor Department," February 14th, 2005, U.S. Newswire ]

  • 7. In 2003, federal authorities arrested 250 undocumented immigrants who were employed by janitor contracting services and hired by Wal-Mart in 21 states. Many of the janitors - from Mexico, Russia, Mongolia, Poland and a host of other nations - worked seven days or nights a week without overtime pay or injury compensation. Those who worked nights were often locked in the store until the morning. [Wall Street Journal, 11/5/05, CNN Money, "Wal-Mart pays $11m over illegal labor", 2005]
  • In March 2005, Wal-Mart agreed to pay $11 million to settle federal allegations it used undocumented immigrants to clean its stores. This was the largest immigration related fine ever levied. [CNN Money, "Wal-Mart pays $11m over illegal labor", 2005 and Wall Street Journal, 11/5/05]
  • 8. In 2001, women managers on average earned $14,500 less than their male counterparts. Female hourly workers earned on average $1,100 less than male counterparts. [Drogin 2003]
  • Wal-Mart settled a Minnesota wage-and-hour lawsuit for $54 million. Had Wal-Mart continued with the penalty phase of the trial, they could have owed over $2 billion in penalties to the State of Minnesota. [New York Times, 12/9/08]
  • One plaintiff, Nancy Braun, wasn't allowed bathroom breaks while working as the only server and cook at an in-store restaurant. As a result, Ms. Braun "ended up soiling herself several times." [New York Times, 12/9/08]
  • Wal-Mart's $54 million settlement represents the company's profit in the last 37 hours and 10 minutes. [Calculations based on Wal-Mart’s 3rd quarter 2008 sales disclosed on Form 10-Q, filed 12/9/08]
  • 9. One of every 25 containers shipped to the United States in 2005 was destined for Wal-Mart. At that ratio, Wal-Mart's imports accounted for 695,118 cargo containers that year, with an average of one arriving to a U.S. port every 45 seconds. [Forbes, 7/5/06]
  • Incredibly, even after 9/11, our nation's ports remain vulnerable since only a small fraction of containers imported into the United States are actually scanned. As Senator Robert Menendez stated publicly last year, "only 5 percent of the containers passing through our ports are scanned." [Sen. Robert Menendez, April 25, 2006]
  • Even at some of the busiest ports in America, for example Long Beach and Los AngelesHarbors, only about 6% of the containers they carry are selected to be scanned on the docks with X-ray machines and hand-held radiation detectors, officials say. Then about 6% of those are selected to be unloaded for inspection at customs facilities. [Los Angeles Times, September 11, 2006]
  • Sen. Charles Schumer: Concluding his comments on adopting technology used at one Hong Kong port which scans 100 percent of containers, Schumer said, "My nightmare, Mr. Chairman, has been, ever since 9/11, that somebody somehow smuggles a nuclear weapon into one of our cities -- not just a dirty bomb, but a real nuclear weapon. ... It's worth a little extra effort and a few extra dollars to make sure that doesn't happen." [Charles Schumer, Press Conference, 4/25/06]
  • "In August 2006, the Rand Corporation released a report concluding that 'a nuclear explosion at the Port of Long Beach could kill 60,000 people immediately, expose 150,000 more to radiation and cause 10 times — 10 times the economic loss of the September 11th attacks.'" [Los Angeles Times, September 11, 2006]
  • The Wall Street Journal, in a "Washington Wire" blurb March 24, 2006 made it clear: "Wal-Mart resists efforts in Congress to dramatically tighten port security in wake of Dubai-ports furor. The company argues examining all containers or even a fixed percentage of them could impede shipping and boost costs." [Wall Street Journal, 3/24/06]
  • "Wal-Mart and other big businesses have been lobbying against 100-percent scanning, alleging that it will slow their massive import operations." [US Fed News, 4/26/06]
  • 10. Asa Hutchinson left his job as under secretary of the Department of Homeland Security to lobby for companies on security issues at Venable, one of Washington's oldest lobbying law firms and another of Wal-Mart's Washington partners. [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to BlockPort Security," April 2006]
  • Hutchinson was connected to Wal-Mart long before he took the nation's No. 2 security post. In his brief stint as congressman from Arkansas' Third Congressional District—home to Bentonville and Wal-Mart's global headquarters—Hutchinson had taken more than $12,500 from Wal-Mart's Political Action Committee, and at least $7,000 more from top Wal-Mart executives and Walton family heirs. Wal-Mart's previous CEO, David Glass, has been a long-time patron to Hutchinson. [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to BlockPort Security," April 2006]
  • Hutchinson's brief tenure at the Department of Homeland Security saw the creation of Customs' voluntary supply-chain security program and a controversial decision not to bring criminal charges against Wal-Mart for its abuse of illegal immigrants hired to clean its stores. The workers' lawyer said, "They generally worked seven nights a week, 364 days a year, and they were often locked in the stores." Wal-Mart instead was fined $11 million. Wal-Mart even denied being fined, calling the payment "voluntary." [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to BlockPort Security," April 2006]
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