November 24, 2012

The Case for Boycotting Walmart


1) Walmart does not take care of its workers.

According to IBISWorld, an independent market research company, the average Walmart worker makes $8.81 an hour.[1], [2] This is less than workers make at many competing companies. The average cashier at Costco, for example, makes $15.50 an hour.[3]

Because Walmart workers make so little, many of them cannot afford to buy health insurance. In 2009, just 52% of workers had employer-sponsored insurance. Given that Walmart has since increased premiums and eliminated insurance for part-timers, this number is undoubtedly much lower today.[4]

The company's low wages and inadequate benefits also affect non-employees. For instance, a 2007 study by the UC-Berkeley Labor Center concluded that its low wages drive down wages in competing retail stores.[5] Its low wages also have the end result of placing a heavy burden on taxpayers. Because they’re paid so little, a disproportionately large number of Walmart workers depend upon such government programs as Medicaid, food stamps, and subsidized housing.[6]

Many Walmart workers have in the past fought to improve their situation by organizing, only to be stymied time and again. Human Rights Watch, among others, has documented how Walmart has employed numerous tactics, some legal, some illegal, to deprive workers of this basic right.[7]

2) Walmart can afford to take care of its workers.

The Walton family is unbelievably wealthy, holding as much wealth as the bottom 41.5 percent of American families combined. Yes, you read that right: The Walton family holds as much wealth as the bottom 41.5 percent of Americans families, that is, 49 million families.[8]

Scholars at the Economic Policy Institute have shown that Walmart could easily increase worker pay while retaining its edge against competitors. Walmart currently has a profit margin of 3.57%. If it reduced its margin to its 1997 level (2.9%),it would still have a significantly higher margin than Costco (1.72%). If Walmart took this money and gave it to non-supervisory workers, each worker would receive an annual raise of 13 percent or $2,100.[9]

One study showed that if Walmart instead decided to charge higher prices in exchange for higher wages, consumers wouldn’t be greatly affected. If, for instance, Walmart bumped up worker wages to $12 an hour, the average consumer would pay an additional $0.46 per trip or $12.49 per year.[10]

3) Walmart, therefore, should take care of its workers.

Just elementary morality here.

4) Since Walmart refuses to take care of its workers, we must pressure it to do so. 

And a boycott is probably the most effective way to do this. 

* * * * *

Two Caveats: First, I feel the need to point out that this boycott isnt intended to destroy Walmart. Rather, it’s intended to help Walmart workers and in so doing to make Walmart itself a better company. 

 Second, I don’t think the poorest Americans should feel guilty for shopping at Walmart. It’s true that Walmart has “Always Low Prices,” and people with limited means have to do what they have to do to get by. But I think that those of us who can afford to pay slightly more for, say, a second Blu-ray player, really should make an effort to shop elsewhere.


* * * * *

One Counterargument: The most common argument given by Walmart defenders is that Walmart’s low prices make up for its low wages. Instead of dealing with that argument here, let me refer you to Bernstein et al.’s “Tradeoffs Between Profits, Prices, and Wages.”

* * * * *

Notes

[1] Courtney Gross, “Is Wal-Mart Worse?Gotham Gazette, February 14, 2011.

[2] The company’s CEO, by contrast, was paid a salary of $18 million last year (Anne D’Innocenzio, “Wal-Mart’s CEO paid $18.1 million in 2011,” Associated Press, April 16, 2012).

[3] The UC-Berekely Labor Center for Research and Education concluded in a 2004 study that “Wal-Mart workers in California earn on average 31 percent less than workers employed in large retail as a whole” (Arindrajit Dube and Ken Jacobs, “Hidden Costs of Wal-Mart Jobs: Use of Safety Net Programs by Wal-Mart Workers in California,” August 2, 2004). Gross, “Is Wal-Mart Worse?

[4] Steven Greenhouse and Reed Abelson, “Wal-Mart Cuts Some Health Care Benefits,” The New York Times, October 20, 2011.

[5] Specifically, the study found that between 1992 and 2000 every additional Walmart store that opened in a given county caused overall retail wages to drop by 1.5 percent. “With an average of 50 Wal-Mart stores per state, the average wages for retail workers were 10 percent lower, and their job-based health coverage rate was 5 percentage points less than they would have been without Wal-Mart’s presence” (Arindrajit Dube, T. William Lester, and Barry Eidlin, “A Downward Push: The Impact of Wal-Mart Stores on Retail Wages and Benefits,” UC Berekely Center for Labor Research and Education, December 2007).

[6] Jordan Weissmann, “Who’s Really to Blame for the Wal-Mart Strikes? The American Consumer,” The Atlantic, November 22, 2012. A 2004 study concluded that each year Californians pay $86 million annually for public assistance programs being used by Walmart employees. “The families of Wal-Mart employees in California utilize an estimated 40 percent more in taxpayer funded health care [and “an estimated 38 percent more in other (non-health care) public assistance programs”] than the average for families of all large retailers” (Dube and Jacobs, “Hidden Costs of Wal-Mart Jobs: Use of Safety Net Programs by Wal-Mart Workers in California”).

[8] “Today the Walton family of Walmart own more wealth than the bottom 40 percent of America,” PolitiFact.com, July 22, 2012; Josh Bivens, “Inequality, exhibit A: Walmart and the Wealth of American families,” The Economic Policy Institute Blog, July 17, 2012.

[9] Jared Bernstein, Josh Bivens, and Arindrajit Dube, “Tradeoffs Between Profits, Prices, and Wages,” Economic Policy Institute, June 14, 2006.

4 comments:

Don Emmerich said...

I'm proud to say that I participated in a Walmart protest today, Black Friday. From the Denver Post:

More than 150 demonstrators marched outside a Walmart store in Lakewood Friday morning to protest working conditions at the giant retailer.

The protesters, almost all of them carrying signs and chanting slogans, appeared to outnumber shoppers at the supercenter.

At 9 a.m., usually the peak of the Black Friday shopping spree, only seven of the 36 checkout lanes were open inside, and there were no lines. The parking lot at the store at Colfax Avenue and Wadsworth Boulevard was mostly empty.

The rally was organized by OURWalmart — Organization United for Respect at Walmart — with support from United Food and Commercial Workers Union Local 7 and other labor groups.

Community leaders, religious leaders and neighbors also attended.

Signs carried by the protesters read: "Walmart: Always low wages. Always," "Pay us enough to raise a family," "Give us full-time hours and affordable health care," and "Walmart: Stop bullying workers who speak out."

They chanted "Shame on Walmart," "They say cutback, we say fight back" and "Give them a raise."

Mark Belkin, organizing director for UFCW who led the marchers, said some current and former Walmart workers joined the rally, but Walmart officials declined to comment.

Asked about the few shoppers, Belkin said, "We appreciate getting the support of the shoppers, but we're not here to hurt Walmart. We're here to make Walmart a better employer, a better neighbor, to treat its workers fairly."

Belkin said many Walmart associates were upset at having to leave their dinner table on Thanksgiving to begin work at 8 p.m. Thursday when the store and several others launched their Black Friday sales.

After the rally, the group planned to disperse to other Walmart stores in the area.

http://www.denverpost.com/breakingnews/ci_22053746/demonstrators-march-lakewood-support-walmart-workers

Don Emmerich said...

From the AP:

Business was brisk but quiet around Colorado as shoppers headed out to take advantage of Black Friday deals.

An exception was a Walmart in Lakewood , where more than 100 protesters marched outside the store in support of the workers. Some held signs accusing the retailing giant of corporate greed and underpaying its workers.

A union-backed group called OUR Walmart was staging demonstrations and walkouts at hundreds of stores on Black Friday.

The Lakewood Walmart parking lot was half-empty by mid-morning, but shoppers were going in and out of the Walmart without incident.

http://finance.yahoo.com/news/co-black-friday-shopping-traffic-172104274.html

Don Emmerich said...

A video from a local news station (off on one of its claims--as both the Denver Post and AP testified, the protest died deter many shoppers from entering the store):

http://www.thedenverchannel.com/news/local-news/anti-walmart-demonstrators-protest-outside-lakewood-walmart

And some pictures from HuffPo:

http://www.huffingtonpost.com/2012/11/23/walmart-black-friday-strikes_n_2177291.html#74_look-stand-up-live-better

Don Emmerich said...

http://blogs.westword.com/latestword/2012/11/walmart_black_friday_protest_lakewood_photos.php