Wal Mart's Prices Depend on Socialism

Michael Shuman writes in The Small-Mart Revolution that there are so many Wal-Mart workers below the poverty line that they receive a combined $2.5 billion in federal welfare assistance, with similar sums coming from state assistance as well. So according to Shuman, taxpayers are footing the bill for Wal-Mart's low prices. In addition, all Wal-Mart store managers receive booklets on how to prevent their employees from organizing titled "Manager's Toolbox to Remaining Union Free."

I am new to understanding the nuances of how big box retail takes wealth from communities, so this is the beginning of a dialogue for me. According to a Business Week article, the average wage of a Wal-Mart sales person was $8.23 in 2001. According to Wal-Mart it rose to $9.68 in 2005 and is now at $10.83, for "full-time workers". However, according to Shuman, Wal-Mart hires more employees to fill part-time positions rather than fewer full-time employees to reduce the company costs of providing benefits. I did a tiny bit of research. At full time, $10.83 is just shy of the 2008 $21,200 poverty line for a family of four.

So, Wal-Mart exploits the labor of its employees, systematically discouraging employee organizations (when the meat-cutters department in a Texas store voted to unionize in 2000 the entire group was promptly fired) and denying benefits. However, Wal-Mart is working within a system that not only allows these business practices, they are supported by political leaders. While Wal-Mart is paying their employees $10/hour, the federal minimum wage is $6.55, rising to $7.25 in July of this year. With no deductions, that wage meets the poverty line of $14K for a two person household. Try supporting two people off of that wage in a city. Or try living in a suburban or rural community and paying for all the costs involved in owning a car. Need to get a check-up or flu vaccination? Sorry, Wal-Mart doesn't promote the health of its workers because they are just that expendable. The leaders of this country--who get elected on the premise that they are looking out for the well being of their constituents--think that it is an acceptable cost of business to set wages so low that workers cannot provide for themselves. They set policy that clears employers of the responsibility of providing basic services to their employees (often access to the very products the company sells). Then the costs of social programs to clean up the messes that the corporate and government collaborations have created is put onto everyone.

Digressing takes a lot of effort. What I want to investigate is that corporations that that claim to provide low prices to the consumer and thus need to rely on a low wage labor model are relying on the public perception that this is the only viable model and that it actually makes sense. There are two issues here. Low wage labor leads to increased costs for society, thus the prices to consumers are higher than the listed price tag. There are alternative business models that keep wealth circulating in communities and provide a higher quality of life for employees, producers, and consumers. Small, for-profit businesses guided by an ethic of promoting local and global human health relies less on social welfare programs and less on global exploitive and extractive businesses. Local is also generally going to be more ecologically responsible because they are relying on resources and ecosystems from their region.