This Part II of the Exposing the Sorcerers series’ examination of the colossal Walmart by TheTruthSource.org reveals certain casualties caused by Walmart and how the world’s largest corporation was made. WALMART: American to Global Capitalist – Timeline Part I looked at the company’s origins and history through a timeline. This will examine the affect Wal-Mart had on its workers, communities, politics of business, and countries; and Part III will address how the Walton family came to be the richest family in the world – worth as much as the poorest billion people on Earth.
“Those who deny freedom to others, deserve it not for themselves” –Abraham Lincoln; “I… hate the corrupt, slaveholding… partial and hypocritical Christianity of the land.” – Fredrick Douglass
|“…And as our private economies become more abstract, the mutual, free helps and pleasures of family and community life will be supplanted by a kind of displaced or placeless citizenship and by commerce with impersonal and self-interested suppliers… Thus, although we are not slaves in name, and cannot be carried to market and sold as somebody else’s legal chattels, we are free only within narrow limits. For all our talk about liberation and personal autonomy, there are few choices that we are free to make… The great enemy of freedom is the alignment of political power with wealth. This alignment destroys the commonwealth – that is, the natural wealth of localities and the local economies of household, neighborhood, and community – and so destroys democracy, of which the commonwealth is the foundation and practical means.” Wendell Berry, The Art of the Commonplace|
Walmart: the Casualties
Whether a single worker trampled to death by a Black Friday mob, a thousand ‘slave-laborers’ killed in a sweat-shop fire, a hundred thousand former local town sole proprietor store owners, a million underpaid workers, or billions lost in taxes; all are examples of the casualties of Walmart. And this is no small matter pitting stockholders, politicians and money versus ethics, citizens and justice. Perhaps the death of Jdimytai Damour, is an example of the Wal-Mart way. That way seems to be priorities is this order: Profits, Sales, Pressure Manufactures for deep discounts, Customers, and then the Workers.
Jdimytai Damour, no small man, was literally trampled to DEATH by a mob of ‘Black Friday, doorbuster’ shoppers at a Long Island Wal-Mart the day after Thanksgiving in 2008. Why is this an example of Walmart’s practices? Because Walmart puts out their calling for people’s money, community shoppers, advertising ‘we have the lowest prices’ on what you desire; then lusting for sales and profit, they either don’t have to foresight or the compassion for their employees to set up proper measures to care for them.
After Jdimytai was killed due to the negligence and greed of both the shoppers and Walmart, the Monstrous Walmart fought a $7,000 fine for years, spending more than a million dollars ($1,000,000) in legal fees to fight fine as a matter capitalist principle – the largest corporations are always right. Walmart’s team of lawyers argued in part that the 34 year old employee stampeded was employed only a week and lacked training and acted on his own in a manner that put him at risk. And though Walmart argued that it was unforeseeable that 2,000 shoppers in small area trying to be first to the big screen TVs might crush to death or even injure one of their workers – a large adult male or a petite elderly female; in the end OSHA’s general duty of care for workers rules prevailed. By the way, Jdimytai was 6 feet 5 and 270 pounds, and a pregnant woman who was also injured, testified that Jdimytai tried to help her before he was trampled. Nassau County District Attorney filed felony reckless endangerment charges against Walmart; but Walmart settled the case with Jdimytai’s family and four other victims for $400,000 to avoid criminal prosecution.
To Union or not to Unionize
Researching history and truth reveals how corrupt mankind is, whether in charge of church or state, the people or the purse, we find that even that which beings in goodwill is almost always later used for self-ambition and unjust enrichment. And though the same can be said for Labor Unions; it seems when standing up to giant corporations, the worker has few options. We find those caught in the middle – the true casualties – are the workers.
In 2015, a former Walmart store manager informed the corporate headquarters that a union flyer was discovered in the men’s room. The next day a corporate jet swooped in town and dispatched to team of anti-union specialists to handle the matter. Does that sound dramatic; well consider the following. In 2000, after a group of Wal-Mart butchers in Texas voted to unionize; about a week later Walmart announced that it would sell prepackaged meats. It then closed the store and eliminated another 179 butchers.
In 2015, Wal-Mart closed five stores and let go about 2,200 employees in Texas, California, Florida and Oklahoma. Walmart cited that the 5 stores were temporarily closed for six months for ‘extended repairs’ and plumbing problems. Workers told reporters that they were notified just hours before losing their jobs. One of the stores was the Pico Rivera, CA store, where in 2012 employees joined protesters against Walmart due to low wages.
How to take TWO BILLION DOLLARS from your employees
Employees would often work ten to twenty (20) extra minutes, some an extra hour per week and some 30 or 40 extra hours a year – thus Walmart getting a free week from them x hundreds of thousands of employees. In Texas and Colorado, lawsuits were filed between 2002 and 2010 were on behalf of about 267,000 workers. And according to ClassAction.org there is “a $350 million settlement against Walmart to resolve 60-plus lawsuits that claimed the company forced its employees to work off the clock.”
OFF the CLOCK hours over 20 years: (200,000 workers x 20 hours a year or less than 20 minutes a week) x their average pay of $8.80 an hour = $ 8.8 million a year x 20 years = $ 704 million ($ 35.2 million year – less than the amount of money spent at Wal-Mart worldwide every hour in 2016), factoring in 10% interest on savings per year (Walmart’s average ROE last 20 years is over 20%; ROI over 17%; and Average Rate of Return 1980-2000 was 31%) = $2,227,000,000 or $2.23 billion over 20 years.
Walmart worker’s would have to work 50.4 hours a week, all 52 weeks of the year to past the Federal poverty line for a family of four (or single parent with 3 children) is $23,050; but the average worker gets about 34 hours a week (according to their 2006 memorandum) and low wages. (50.4 x $8.81) x 52 = $ 23,089. And 34 x $ 8.81 = $299.54 a week (less taxes) and at 52 weeks is $ 15,576 which is much less than the poverty line for a parent with two children – $19,090. Let’s not forget all the while the Walton’s – one family – is worth more than $107 billion or worth the assets of a billion of the world’s poorest citizens.
According to the Consumerist.com (12/2014) the Pennsylvania Court “awarded the plaintiffs $151 million in damages (plus millions in legal fees and costs) to more than 187,000 workers.” The lawsuit paying employees for ‘off the clock’ hours, took 12 years to get to that decision; the nytimes.com did one of the original articles on the story in 2002. In their June 2002 story, the New York Times began the article saying, “after finishing her 10 p.m. to 8 a.m. shift, Verette R… clocked out and was heading to her car when a Wal-Mart manager ordered her to turn around and straighten up the store’s apparel department… she spent the next hour working unpaid… other times after clocking out, she was ordered to round up shopping carts in the parking lot… ‘They wanted us to do a lot of work for no pay,’ said Ms. R… who worked from 1995 to 2000 at a Wal-Mart…”
|The article continued to report, “Two years ago, Wal-Mart paid $50 million to settle a class-action suit that asserted that 69,000 current and former Wal-Mart employees in Colorado had worked off the clock. But legal papers and interviews with workers suggest that the off-the-clock problems go far beyond Colorado. In depositions and in interviews with The New York Times, Wal-Mart employees in 18 states described these types of off-the-clock work: Former employees at stores in California, Louisiana, New York, Ohio, Oregon and Washington said that many evenings when their stores closed, managers locked the front door and prevented workers — even those who had clocked out – from leaving until everyone finished straightening the store. Workers said these lock-ins, which aim to prevent theft, forced many employees to work an hour or two unpaid and enraged parents whose school-age children worked at Wal-Mart. ‘We worked off the clock pretty much every shift,’ said Shannon S…, who worked two years ago …at a Wal-Mart in Paso Robles, Calif. ‘The manager said if our jobs were not finished, we had to clock out and finish our jobs so no overtime would show up’.”
April 22, 2012: NYTimes.com ran an article, “Wal-Mart Abroad: How a retail giant fueled growth with bribes, Vast Mexico Bribery Case Hushed Up by Wal-Mart…” It spoke of a 2005 e-mail from Walmart’s “largest foreign subsidiary, Wal-Mart de Mexico.” The Times reported: The email explained how “Wal-Mart de Mexico had orchestrated a campaign of bribery to win market dominance. In a rush to build stores; the company had paid bribes to obtain permits in virtually every corner of the country… Wal-Mart dispatched investigators to Mexico City, and within days they unearthed evidence of widespread bribery. They found a paper trail of hundreds of suspect payments totaling more than $24 million. They also found documents showing that Wal-Mart de Mexico’s top executives not only knew about the payments, but had taken steps to conceal them from Wal-Mart’s headquarters in Bentonville, Ark.
In a confidential report to his superiors, Wal-Mart’s lead investigator, a former F.B.I. special agent, summed up their initial findings this way: ‘There is reasonable suspicion to believe that Mexican and USA laws have been violated.’ The lead investigator recommended that Wal-Mart expand the investigation. Instead, an examination by The New York Times found, Wal-Mart’s leaders shut it down. Neither American nor Mexican law enforcement officials were notified. None of Wal-Mart de Mexico’s leaders were disciplined. Indeed, its chief executive, Eduardo Castro-Wright, identified by the former executive as the driving force behind years of bribery, was promoted to vice chairman of Wal-Mart in 2008. Until this article, the allegations and Wal-Mart’s investigation had never been publicly disclosed…”
Come in towns; bring hope and then lay off workers
January 2017, Walmart cut 1,000 jobs at its corporate headquarters in Bentonville, Arkansas. Though Walmart reported over $118 billion in revenues the third quarter (3 months) of 2016; it will be shutting down some stores and laying off tens of thousands this 2017. It says, The Limited closed all its U.S. stores, Macy’s announced January 2017 it was closing 68 stores, and at the same time Sears announced it was closing 150 stores and selling off the Craftsman Tool division. It sited Amazon and other online sales. Well we do understand that. However, we will understand that Walmart came into thousands of small and medium towns and cities and made promises, put many small businesses and the owners out of business, hired workers at low wages, then cut and run when it is no longer profitable.
Walmart kills Small Businesses and Communities
December 2015, The Harvard Kennedy School, Shorenstein Center, put forth the article The impact of big-box retailers on communities, jobs, crime, wages and more, which revealed, “1962: that one year, the first Walmart, Target and Kmart stores opened… Shoppers would arrive by car, not foot, so what mattered was highway access, acres of parking and massive scale. In five decades since, the American retail landscape and built environment have been profoundly altered. At the end of 2015, Wal-Mart had 4,614 stores and Supercenters in the United States, while Target operated 1,805… While some big-box retailers stumbled in recent years, the rise of Internet commerce and the increasing appeal of cities has helped them remain a powerful force: Wal-Mart alone is estimated to employ approximately 1 percent of the American workforce and reported nearly $486 billion in revenue for fiscal year 2015.”
The article continues to show, “A 2008 study from the Massachusetts Institute of Technology (MIT) indicates that Wal-Mart’s rapid expansion in the 1980s and 1990s was responsible for 40% to 50% of the decline in the number of small discount stores. According to 2014 research in Social Science Quarterly… on average, within 15 months of a new Wal-Mart store’s opening, as many as 14 existing retail establishments close. Other research has found that the arrival of Wal-Mart …increased obesity of area residents…”
The Harvard article stated, “a study of more than 2,500 stores found that 73 percent of mall anchors paid no rent. Instead, mall owners use their presence to attract smaller retailers that pay elevated rates in the hope of benefiting from the big stores.” This is significant in several ways, namely the reduction of local taxes due to incentives and the unjust pressure on smaller retailers which many trends show lead to the collapse of the Mall.
Walmart makes people fat and increases Medical Costs
The Harvard article was citing a study in ScienceDirect, Vol. 69, March 2011, Supersizing Supercenters? The impact of Walmart …on B. M. I. and obesity; which found ‘an additional Supercenter per 100,000 residents increases average BMI by .24 units and the obesity rate by 2.3%. These results imply that the proliferation of Walmart Supercenters explains 10.5% of the rise in obesity since the 1980s, but the resulting increase in MEDICAL EXPENDITURES offsets only a small portion of consumer’s saving from shopping at Supercenters.” Thus, not only is Walmart a significant direct cause of obesity; but the money it claims it saves consumers, it cost citizens and taxpayers in Medical, Medicare and Medicaid cost. It should also be noted that neighbor Albertson’s, Winn-Dixies and Kroger’s; specials, discounts to seniors, and buy one get one free weekly offerings are often less costly than the same product at Walmart.
Wal-Mart brings Poverty and Higher Crime rates to Communities
Oxford’s, British Journal of Criminology (January 2014), found as show in their article, Rolling Back Prices and Raising Crime Rates? The Walmart Effect on Crime in the United States, that “concentrating on the 1990s, results reveal that Wal-Mart is located in U. S. counties with higher crime rates, net of robust macro-level correlates of crime… If Wal-Mart did not build in a county, property crime rates fell by an additional 17 units per capita from the 1990s to the 2000s… To be sure, Wal-Mart is not an ordinary retail store. The company is the largest private employer in the United States, with …1.3 million employees, stores located within 15 miles of 88% of the population and product sales to 84% of Americans in 2005 (Pew Research 2005; Basker 2007a)… The United Kingdom chain ASDA was acquired by Wal-Mart in 1999 and has become Britain’s second largest supermarket, with nearly 600 retail locations… We examine the impact of Wal-Mart growth within the United States counties during the 1990s on property and violent crime rate trends over a 19-year period…’
The British Journal article continued, stating “Expansion of Wal-Mart into local communities can be theoretically linked to aggregate crime patterns in several ways. First, consistently with the social disorganization tradition, structural disadvantages inhibit communities’ ability to realize common goals and engage in self-regulation (Sampson & Groves 1989; Bursik and Grasmick 1993; Parker and McCall 1999; Stucky and Ottensmann 2009; Pyrooz 2012). …Based on the research described above, Wal-Mart may increase poverty in communities by reducing the overall number of employment opportunities (Goetz and Swaminathan 2006). Residential turnover may also ensue if Wal-Mart pushes residents to search for employment elsewhere after forcing local business closures… Given that poverty, residential instability and diminished social capital are some of the most robust structural correlates of crime (Pratt and Cullen 2005), Wal-Mart is likely associated with crime rates by way of any detrimental effect it has on such community structural conditions… Given that poverty, residential instability and diminished social capital are some of the most robust structural correlates of crime (Pratt and Cullen 2005), Wal-Mart is likely associated with crime rates by way of any detrimental effect it has on such community structural conditions.”
“A second theoretical linkage centres on the empirical research guided by Wilson’s (1987; 1996) dual labour market thesis. …According to Wilson, the exodus of manufacturing jobs outside of metropolitan areas left only unstable, low-skill, low-wage service-sector jobs for residents whereas professional, high-wage occupations moved to the suburbs. The bifurcated labour market, as Wilson points out, sends disadvantaged communities with residents too poor to follow better jobs into further decay. Evidence suggests that Wal-Mart’s introduction into particular communities may support a dual labour market structure by over-saturating the area with low-wage occupations and minimizing access to middle-class jobs (i.e. through the reduction of manufacturing and wholesale-sector employment). This is important because research reveals the presence of locally oriented retail and small manufacturing establishments is associated with higher average income levels, lower poverty and unemployment, and greater social capital (Tolbert et al. 1998; Tolbert 2005; Lee 2008). Wal-Mart may be associated with unfavorable changes in crime rates given the dire structural conditions brought on by the displacement of such local businesses and the creation of a weak labour market structure…”
Walmart decreases wages, retail employment and Tax revenue to Cities
Another ScienceDirect.com article from Vol. 63 of the Journal of Urban Economics, March 2008, The effects of Wal-Mart on Local Labor Markets reported, “a Wal-Mart store opening reduces county-level retail employment by about 150 workers, implying that each Wal-Mart worker replaces approximately 1.4 retail workers. This represents a 2.7 percent reduction in average retail employment. The payroll results indicate that Wal-Mart store openings lead to declines in county-level retail earnings of about $1.4 million, or 1.5 percent…”
Local Government shows Wal-Mart is a bad return for subsidies
A January 2011 East-West Gateway, Council of Governments paper on …Fiscal Impacts of the Use of Development Incentives in the St. Louis Region, reported that “in the last 20 years local governments in the metropolitan St. Louis region have diverted more than $5.8 billion in public tax dollars to subsidize private development through the use of various financial incentives, including tax increment financing (TIF), special taxing districts and tax abatements. Municipalities, counties and states used these development incentives in the competition to lure tax-generating businesses to their specific jurisdiction… In addition to the $2.5 billion documented in East-West Gateway’s Interim Report, this Final Report provides estimates of the additional tax revenue forgone through tax abatement programs in both states as well as tax revenue allocated to private development in the region through the use of state tax incentive programs…’
‘More than $2 billion of the $5.8 is through tax increment financing and more than $500 by special taxing districts… Local governments in the region are under fiscal stress… The use of tax incentives has exacerbated economic and racial disparity in the St. Louis region. …The total amount of tax dollars collected to-date is an estimated $3.6 billion dollars… the total dollars committed in current and future revenues are …at least $6.4 or $7.2 billion… An examination of sales and property tax revenues records for municipalities in the region found a significant number of communities saw a decrease in sales tax and/or property tax revenue …1993 to 2007. …Between 2003 and 2007, 52 municipalities, 14 fire protection districts, 16 school districts and several other types of taxing districts experienced declining real property tax revenues in St. Louis County… Municipal governments are in a fiscal crisis…”
Walmart cost Taxpayers Billions
According to the April 2014 Forbes article, Report: Walmart Workers Cost Taxpayers…, “Walmart’s low-wage workers cost U.S. Taxpayers an estimated $6.2 in public assistance including food stamps, Medicaid and subsidized housing… Americans for Tax Fairness… 2013 study… ‘estimated the cost to Wisconsin’s taxpayers of Walmart’s low wages and benefits… it found that a single Walmart Supercenter cost taxpayers between $904,542 and $1.75 million per year, or between $3,015 and $ 5,815 on average for each of 300 workers…’ ‘Walmart told analysts last year that the company has captured 18% of the SNAP market’ …we estimate that the company accounted for $13.5 billion out of $76 billion in food stamp sales in 2013.”
In the next Part III, TheTruthSource.org will look primarily examine how the Walton family came to be the richest family in the world.