Wal-Mart: The High Cost Of Low Price

Released in theaters November 4th, 2005, WAL-MART: THE HIGH COST OF LOW PRICE is a feature length documentary that uncovers a retail giant's assault on families and American values. The film dives into the deeply personal stories and everyday

Released in theaters November 4th, 2005, WAL-MART: THE HIGH COST OF LOW PRICE is a feature length documentary that uncovers a retail giant's assault on families and American values.

The film dives into the deeply personal stories and everyday lives of families and communities struggling to fight a goliath. A working mother is forced to turn to public assistance to provide healthcare for her two small children. A Missouri family loses its business after Wal-Mart is given over $2 million to open its doors down the road. A mayor struggles to equip his first responders after Wal-Mart pulls out and relocates just outside the city limits. A community in California unites, takes on the giant, and wins!

Producer/Director Robert Greenwald and Brave New Films take you on an extraordinary journey that will change the way you think, feel -- and shop.

If you don't already understand what's wrong with Wal-Mart, this film will fill in the blanks for you, and if you haven't already, hopefully you'll support the Wal-Mart employees as they strike on Black Friday for fair wages, and fair treatment.

The richest people in America: The owners of Wal-Mart -- six members of the Walton family -- are all on the list of Forbes 400 richest people in America. Combined, the Waltons have a net worth equal to the bottom 30 percent of all Americans. They are all children or children-in-law of the founders of Walmart. Six people. As much wealth as 30 percent of all the people in America. The Waltons are now collectively worth about $93 billion, according to Forbes.

Wal-Mart employs more people than any other company in the United States outside of the Federal government, yet the majority of its employees with children live below the poverty line.

Critics believe that Wal-Mart opens stores to saturate the marketplace and clear out the competition, and they do. Small businesses are crushed, they simply cannot compete with the chain of super stores that buy in mass quantities and sell far cheaper than an ordinary business. The small businesses go broke, and buildings are left empty.

The sentiment behind Wal-Mart founder Sam Walton's promise of a "better life for all" belies questionable business practices - many that have been challenged by employees, unions, environmentalists, recording artists and human rights organizations.

Forbes magazine, polling business executives (not employees) has ranked Wal-Mart among the best 100 corporations to work for. Yet the employees on average take home pay of under $250 a week. The salary for full-time employees (called "associates") is $6 to $7.50 an hour for 28-40 hours a week, which is typical in the discount retail industry. This pay scale places employees with families below the poverty line, with the majority of employees' children qualifying for free lunch at school. When closely examined, this amounts to a form of corporate welfare, as the taxpayer subsidizes the low salaries. One-third are part-time employees - limited to less than 28 hours of work per week - and are not eligible for benefits.

The company is staunchly anti-union. New employees are shown videotapes explaining that instead of unionizing, they benefit from the open door policy, allowing them to take their complaints beyond the supervisors to higher management. When the United Food and Commercial Workers tried to organize workers across the country, labor experts were brought in for "coaching sessions" with personnel who support unionization. Employees complained that these were intimidation sessions. Many such complaints are currently on file with the National Labor Relations Board.

A study by researchers at UC Berkeley's Labor Center has quantified what happened to retail wages when Wal-Mart set up shop, drawing on 15 years of data on actual store openings. The study found that Wal-Mart drives down wages in urban areas, with an annual loss of at least $4.7 billion dollars in earnings for retail workers.

And in 2004, a study released the UC Berkeley Labor Center found that "reliance by Wal-Mart workers on public assistance programs in California comes at a cost to taxpayers of an estimated $86 million annually; this is comprised of $32 million in health related expenses and $54 million in other assistance. Source: Ken Jacobs and Arindrajit Dube, "Hidden Costs of Wal-Mart Jobs" [PDF file], UC Berkeley Labor Center.

Wal-Mart dismissed the findings of the UC Berkeley study, "Hidden Costs of Wal-Mart Jobs," as a "union hit piece." However, text from Wal-Mart's own internal memo substantially corroborates their findings.

An excerpt from the memo states:

"We also have a significant number of Associates and their children who receive health insurance through public-assistance programs. Five percent of our Associates are on Medicaid compared to an average for national employers of 4 percent. Twenty-seven percent of Associates' children are on such programs, compared to a national average of 22 percent. In total, 46 percent of Associates' children are either on Medicaid or are uninsured."

Source: Wal-Mart Internal Memo [PDF File], via New York Times

A few statistics on exactly how many children of Wal-Mart of employees receive state-funded health care, and the cost to those states:

- FLORIDA: 12,300 WAL-MART Workers and their Dependents on Medicaid

- GEORGIA: 10,261 Children of WAL-MART Employees are Enrolled in PeachCare for Kids

- WISCONSIN: 1,252 WAL-MART Employees and Dependents on BadgerCare

Why are states subsidizing health care for Wal-Mart employees when the Walton family are all in the top ten wealthiest people in the entire nation? I'm not complaining that these families are getting health care, everyone deserves health care, but the Walton's should be ashamed that they aren't providing it.

WAL-MART Costs Taxpayers $1,557,000,000,00 to Support its Employees

"The Democratic Staff of the Committee on Education and the Workforce estimates 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. Specifically, the low wages result in the following additional public costs being passed along to taxpayers:

- $36,000 a year for free and reduced lunches for just 50 qualifying Wal-Mart families.
- $42,000 a year for Section 8 housing assistance, assuming 3 percent of the store employees qualify for such assistance, at $6,700 per family.
- $125,000 a year for federal tax credits and deductions for low-income families, assuming 50 employees are heads of household with a child and 50 are married with two children.
- $100,000 a year for the additional Title I expenses, assuming 50 Wal-Mart families qualify with an average of 2 children.
- $108,000 a year for the additional federal health care costs of moving into state children's health insurance programs (S-CHIP), assuming 30 employees with an average of two children qualify.
$9,750 a year for the additional costs for low income energy assistance."

The total figure is based on the average $420,750 per-store figure, multiplied by 3700 (the approximate number of stores currently in the United States).

Source: Rep. George Miller / Democratic Staff of the Committee on Education and the Workforce, "Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart", February 16, 2004.

You can tell Wal-mart to give their employees the basic respect they deserve by signing the declaration here. Or donate to help the striking workers here, and check here for solidarity actions planned in your area here.

About Diane Sweet

Diane Sweet's picture
Senior Editor, Lives in a gerrymandered district in Michigan.

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