A Wal-Mart Economy

Before Wal-mart, the trend in the American workplace was to internalize the cost of doing business. American companies tried to compete with everything from higher wages, to better health care benefits, to limiting the work-week to 40 hours. In its ruthless pursuit of cheaper products, Wal-mart has reversed the trend, by externalizes its costs anyway it can. These costs are first explicit in nature, by receiving tax breaks to operate in some cities or the tax dollars that Wal-mart employees utilize for health care/public assistance. The costs are implicit as well; these big box stores destroy local economies, are known as a bad neighbor and are also harmful to the environment.
When General Motors was at the top of its game, it operated in a comparatively gentle, competition-free environment. It could afford to be generous. Today, the Big Three show what happens when a company continually raises benefits while failing to grow. Blaming Wal-Mart for America's wage stagnation is unfair. Retail is an industry not known for developing employee skills. No matter how much it needs workers, Wal-Mart won't offer defined benefit pension plans or health insurance coverage for retirees. And neither will virtually any retailer that relies largely on low-skilled, temporary workers.

The problems with Wal-Mart begin with its supply chain, where many of the workers who make its products pay the price for low-cost items by laboring in sweatshop conditions. Wal-Mart has been in the courtroom many times defending its labor standards in many different countries; they all allege the same thing—that Wal-Mart ignores its own “standards for suppliers” and tolerates abuse of workers in its supply chain. “As the world’s largest retailer, Wal-Mart has the power to set high ...
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