In Chapter 8 of the book The Big Squeeze: Tough Times for the American Worker, Greenhouse talks about how Wal-Mart has set new standards in lowering employee pay and benefits. Now Answer the...

In Chapter 8 of the book The Big Squeeze: Tough Times for the American Worker, Greenhouse talks about how Wal-Mart has set new standards in lowering employee pay and benefits.

Now Answer the following: Why do you think this is important for the public to know and given what you know about Wal-Mart, how would you characterize them has an employer?  

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mwestwood's profile pic

mwestwood | College Teacher | (Level 3) Distinguished Educator

Posted on

In concurrence with what is written above, Wal-Mart is typical of other businesses like them. But, some of the fault also goes to the Walton family, the younger generation who does not have the ethical standards of their patriarch, Sam Walton, who worked his way up the retail ladder. With a loan from his father-in-law, Walton opened a Ben Franklin store in Newport, Arkansas.

Having worked for Wal-Mart in the late 1980s and having met Mr. Walton personally and talked with him, this educator's opinion of him is that he was a decent and fair man. He gave everyone at least 40 hours a week, health insurance, profit-sharing, even the opportunity to buy up to 3 shares in the company back then when it was "getting off the ground" in areas outside of Arkansas. (Imagine what those shares are worth today if someone had held onto them.) However, after his death, conditions at Wal-Mart changed drastically when his heirs assumed the control of the company. Therefore, one can logically conclude that Wal-Mart is doing more than simply trying to "get by." Wal-Mart made $17 billion in profits last year (2013). It can afford to give its workers--many of whom are women on their own--more hours, better wages, and, certainly, much needed health insurance.

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pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

It is important for the public to know about Wal-Mart’s employee pay and benefits practices because Wal-Mart is such a huge part of the American economy.  Wal-Mart is by far the biggest retailer in the entire world.  Greenhouse claims that Wal-Mart had nearly 2 million employees in 2008 and that 82% of American households will shop at Wal-Mart in any given year.  Because this chain is such a large part of American life, it has an impact on many Americans.  For example, Greenhouse argues that Wal-Mart’s compensation practices are brought up by competing retailers of all sorts when they are negotiating with their workers.  They ask workers to take cuts in pay because they say they will not be able to compete with Wal-Mart if they cannot cut labor costs.  As another example, if Wal-Mart’s many employees often have to get government benefits to supplement their low pay, it can have a significant impact on government budgets across the country.  Since Wal-Mart’s practices have such a great impact on our overall economy, it is important for us all to know something about those practices.

Given what I know about Wal-Mart, I would simply say that they are a typical employer in our economic system.  In our economic system, companies do not survive unless they can offer the mix of price and quality that their customers want.  A company will die if its competitors can, for example, give the same quality of goods and services at a lower price.  This is because consumers will go after the lower prices if all other things are equal.

Because of this, I do not think that Wal-Mart is at fault.  Instead, American consumers and the American government are at fault.  If we want Wal-Mart to compensate their employees more fairly, we have two choices.  First, we can make laws that require them to pay what we consider to be a living wage to more of their employees.  Second, we regular American consumers can shop at stores that treat their employees more fairly.  If we truly care about how employees are treated, we should be flocking to stores that offer decent pay and benefits.  Once American consumers did this, Wal-Mart would have to change its practices in order to compete.

In other words, I would say that Wal-Mart is simply trying to get by in a capitalistic economy in which many customers only care about the price of the goods they are buying.  Wal-Mart certainly engages in practices that are arguably unethical, but they are essentially encouraged to do so by the behavior of American consumers.  

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