Wal-Mart: The High Cost of Low Price

Walmart is one of the biggest brand names in the US. When it comes to retail, the company almost always posts record profits and pays out dividends to their shareholders and is consistently growing every year. It has branched out to several other countries like Mexico and Germany and is planning further expansion. The company offers retail prices that are unmatched in comparison to other retailers in the US and provide their customers and investors with services that are a good value for money. Walmart is located in almost every state and city in the US, and the low price policy has transformed it into one of the strongest retail brands in the US providing jobs and opportunities all over the country and in the places where they are located.

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The company has an effective PR team that effectually launders its image and brings it across the populace as a serious business that has its best interests at heart. It provides local amenities like access to roads and street lighting to the places where its stores are located. In general, Walmart is a great and well-managed company that provides goods at affordable prices and offers jobs to locals in the communities where they are located. However, every aspect and phenomenon in the world has its upsides and disadvantages. Therefore, this seemingly perfect organization has a couple of issues that bears looking into.

After watching the movie Walmart: The High Cost of Low Prices a number of issues were raised that put the company in a new light. From a strictly plus and minus (financial) point of view, the company is a model of prudent financial, human resource and public relations management. The problem with this, however, is that the success that this company shows to America and the world is just one side of the story. From the other hand, however, while doing a considerable number of good things, Walmart is a perfect example of all imperfections of todays America. Thus, Walmart has a negative influence on America.

The first myth about Walmart is that it gives a boost to local economies. Apparently, the PR team of the Walmart group hinges this claim on the fact of jobs it provides for these local economies. However, the average Walmart store provides employment in different cadres, namely management, security, construction, sales personnel, inventory specialists, cashiers, cleaners and the like. At first glance, this should be applauded, but a closer look reveals this is far from the case. In every small town or community where Walmart situated its stores, there has been an almost complete shutdown of small businesses that offer similar services. For instance, mom-and-pop shops have all been shut down the moment a Walmart store opened on the premises of the town (Sobel & Dean, 2006). Consequently, this leads to the absolute destruction of family legacies and small economies of these areas, reducing the number of jobs that can be provided. However, it does not make any sense for the entire middle class to be wiped out so that one big player could show growth and maintain its bottom line.

The second thing that Walmart claims to be providing these local communities with is job opportunities. The founding fathers of this great nation established it on the principles of fairness and equity. Thus, adherence to these principles requires that a man/woman is paid for the job they do. In the US, workers are paid an hourly rate, and this is not only a principle of normal human interaction but also a law in the US (Wage and Hour Division). The US Employment Law clearly states that any job that takes more than 40 hours, which is the US normal maximum, should be paid at a premium rate. Most workers in responsible firms actually use overtime pay to provide themselves with luxuries. However, Walmart has made it a policy that their workers do not earn overtime pay by ensuring that they are understaffed; in some cases they doctor financial reports so that workers cannot claim overtime pay. In fact, this behavior is unconscionable and immoral.

It is also worth considering Walmarts poor reputation as a fiercely aggressive anti-union establishment since in order to maintain its bottom line the company is consistently opposing every form of collective bargaining that is provided to the workers as members of a union. Moreover, this company is consistently spending millions of dollars of its income on fighting real and imaginary union activities in any of its stores. Thus, it used pay rise freezes, intimidation tactics, character assassination, installing of monitoring devices and espionage in its relentless hunt for unions. The effect of this is wage cuts for its staff (Basker).

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Another thing is that the United States prides itself on the provision of equal opportunities for all sexes by accident or design (the evidence points to the later). Walmart has institutionalized a systemic discrimination policy against its female staff and has shown an appallingly low level of pay, little chances of promotion and representation of women in higher management across board in comparison to other US establishment. As a result of this, there are several class-action law suits against the company in various states of the US (Wicks-Lim). Currently, it remains inexplicable why a company that claims to pride itself on core American values is so blatant in showing disregard for the same values.

In fact, Walmart is the biggest retailer in the world and sells products at low prices, which is a thing of pride for the directors of the company. At the initial stage of Walmarts existence, one of their advertising campaigns had such sentence in it ... we know that a made-in-America product means a job for an American family... which is very true. However, if to consider the current policy of Walmart stores, it is evident that the products they retail are not locally produced perishable items but the ones manufactured and imported from Asian countries like China and Bangladesh. These countries and the factories where they are produced are synonymous with poor working conditions, paltry pay and flagrant disregard or active suppression of workers rights.

Under these inhumane conditions, Walmart and its partners are able to produce worthless articles and sell them at bottom prices in the US stores. Walmart: The High Cost of Low Prices provided evidence that workers in sweatshops of Bangladesh work for about 18 cents per hour without a day off or overtime pay in humid, uncomfortable and unsafe conditions. The reason is that owing to this draconian production cost suppression, Walmart stores are able to provide goods at shockingly low prices. What is more, for every sweatshop operated in Asia, an American is put out of a job and deprived of the means to provide his/her family with food, medication and education. The executives of Walmart will claim that giving the same job to the American will cost nearly ten times as much in wages and benefits. Therefore, for Walmart to sell goods to American families and gain considerable profit, they have to deprive millions of Americans in order to purchase cheap goods. Moreover, it is their common practice to appoint workers to jobs where there is no government supervision so that they can be brought back to the US to provide retail jobs with benefits to Americans.

While examining all the downsides, Walmart provides their employees with some benefits. Among the standard benefits that an employer offers to his/her employees are Medicare and a pension plan. From the film it is apparent as well that Walmarts benefits package is deeply flawed. The staff of the retailer is unable to meet the demands of the Medicare and welfare package due to its exorbitant cost. As a matter of fact, they are encouraged by management to make use of the states welfare package. The report shows that Walmart employees are the highest employed users of the governments welfare system (Mattera).

In the light of all of the above facts, it is clear beyond any shadow of doubt that the existence of Walmart has worsened America and its reputation.

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