PRINCETON, NEW JERSEY – Wal-Mart has attracted controversy for decades: Its supporters laud its low prices and market efficiencies, while its opponents charge that the company exploits workers, destroys local economies and pollutes the environment.
Now, despite warnings from the retailer that it would reconsider its plans to open three stores in Washington, the District of Columbia Council has passed a living-wage bill that would require Wal-Mart to pay its workers here at least $12.50 per hour.
Let’s examine a few of these impressions about the world’s largest retailer.
1. Upper-income people don’t shop at Wal-Mart.
Wal-Mart sells lots of cheap stuff, so it’s no surprise that low- and middle-income shoppers are the store’s most regular customers. However, upper-income people are among the more than 60 percent of Americans who shop at Wal-Mart each month. A 2005 Pew Research Center survey found that more than three-quarters of respondents from households earning more than $75,000 a year thought Wal-Mart was a good place to shop, and nearly 80 percent of them had shopped at Wal-Mart in the previous year. Of customers in this income group, 38 percent described themselves as regular Wal-Mart shoppers.
2. Critics just want to unionize Wal-Mart workers.
Most of the efforts to improve working conditions and compensation at Wal-Mart are led by union-funded groups that have been branded as allies of Big Labor seeking only to line their pockets with more union dues. But practically, none of these efforts has focused on formally unionizing Wal-Mart’s unorganized domestic workforce.
Instead, as early as 2005, groups such as Walmart Watch and Wake Up Walmart waged a largely successful campaign focusing not on Wal-Mart workers’ union status but on their compensation and benefits. A year after Walmart Watch was founded, the retail giant lowered premiums on its health insurance policies and allowed part-time workers to obtain medical coverage for their children.
The newer group Our Walmart has coordinated recent worker strikes in a similar attempt to put pressure on the retailer in the court of public opinion, but still explicitly says that it does not intend to represent Wal-Mart workers in formal negotiations with their employer.
3. Wal-Mart is great for low-income Americans.
Low-income shoppers need low prices because the manufacturing jobs with living wages that might have sustained them in earlier generations have been moved to sweatshops overseas, leaving poorly paid service jobs in their wake. Wal-Mart’s low-income customers thus have more in common with foreign workers than they may realize: Both are caught in a global economy that has discounted their labor in the name of cheap consumption.
Prioritizing consumption (what we pay for goods) over production (what workers earn for making goods) means that even low-income families whose economic futures have been jeopardized by the outsourcing of manufacturing jobs can see Wal-Mart as a savior, not a villain.
Yet the retail giant’s genius lies in camouflaging its exploitation in terms that frame its relentless cost-cutting as a kind of benevolence.
For example, the company in 2006 declared itself “a lifeline” for millions of Americans facing harsh and uncertain economic times, adding that “perhaps more than any single company in America, Walmart is providing the opportunity for a better life for poor and working families.”
Still, even if Wal-Mart’s low prices help low-income Americans make ends meet at the cash register, the low wages offered by Wal-Mart (and other comparable retail service jobs) do little to help low-income families shoulder the burden of other rising costs, such as health care and housing.
4. Wal-Mart is bad for the environment.
The Environmental Protection Agency has repeatedly sued Wal-Mart for faulty stormwater management and illegally dumping hazardous chemicals and pesticides at its retail sites, among other offenses. As recently as May, for instance, Wal-Mart agreed to pay nearly $82 million in fines for violating environmental regulations in California and Missouri.
But the truth about the chain’s environmental record is more complex, simply because Wal-Mart has such unmatched power to promote change on the consumption end of its business operations. The company is good at lowering prices, and it turns out that many forms of conservation are also good business. When something helps the bottom line — be it developing more fuel-efficient trucks or demanding that suppliers develop lighter, low-waste packaging — conservation measures are a no-brainer.
Moreover, consumer blocs seeking environmentally friendly products can create changes that ripple throughout the food and grocery industry, given Wal-Mart’s unparalleled market clout.
When the retailer announced in 2008 that its store brand of milk would come from cows not treated with synthetic hormones, it credited consumer demand. The intense environmental scrutiny on Wal-Mart has also led the company to pursue additional sustainability measures. Wal-Mart’s most recent Global Responsibility Report notes that its stores and distribution centers drew more than one-fifth of their electricity from renewable sources.
5. Washington’s living-wage bill shows that communities can stand up to Wal-Mart.
It’s true that living-wage ordinances like the one the D.C. Council passed recently can potentially boost wages for the employees of large retailers. But such legislation is frequently defeated or vetoed, or struck down in federal court. For example, in 2006, Chicago’s city council passed a measure similar to D.C.’s that required big-box retailers to pay well above minimum wage, and to spend additional money on benefits. Less than two months after it passed, Mayor Richard Daley vetoed it, citing the promise of economic development that Wal-Mart could offer some of Chicago’s poorest neighborhoods.
Similarly, the Maryland Senate approved legislation in 2005 that required large employers to spend a set portion of their payroll on health benefits or contribute to state Medicaid coffers. (Although not mentioned by name, Wal-Mart was effectively the bill’s only target.) Then-Gov. Bob Ehrlich promptly vetoed the measure — and even after the state Senate overturned his veto, the legislation was found illegal in federal courts.
Local governments are probably more effective in keeping out Wal-Mart than they are in garnering concessions on wages and benefits.
Rebekah Peeples Massengill, author of “Wal-Mart Wars: Moral Populism in the Twenty-First Century,” teaches writing and sociology at Princeton University.