The newest Walmart lawsuit is not true

STORY HIGHLIGHTS

This is just another stab at Walmart.


NEW: "Walmart is an excellent place for women to work," company says

Lawsuits say company paid women less and promoted them less

Hundreds of thousands of current, former works can band together to fight this senseless lawsuit

A decision against world's largest retailer could cost billions. What do you think?



Washington (CNN) -- A federal appeals court has certified the largest class-action employment lawsuit in U.S. history, in a long-standing dispute against retailer Walmart Stores Inc. over alleged gender bias in pay and promotions.



The divided 6-5 ruling by the San Francisco-based 9th U.S. Circuit Court of Appeals on Monday allows the combined multiparty litigation to move ahead to trial, where a decision against the company could result in billions in damages. The Arkansas-based chain of stores has the option of appealing Monday's ruling to the U.S. Supreme Court for review.



At issue is whether more than a million current and former Walmart employees can band together in their claims of discrimination, which they say has occurred over the past decade, at least.



The plaintiffs allege that women were paid less than, and were given fewer opportunities for promotion than, their male counterparts. They seek back pay and punitive damages against the world's largest retailer.



The lawsuit alleges that the company's "strong, centralized structure fosters or facilitates gender stereotyping and discrimination."



The workers bringing suit also say women make up more than 70 percent of Walmart's hourly work force but in the past decade made up less than one-third of its store management.



The suit was first filed by Betty Dukes, a store greeter in Pittsburg, California, along with five of her co-workers in 2001.



"It has taken a very long time, and a tremendous amount of work, but it looks like we're finally going to get our day in court," Dukes said after the ruling was announced. "That's all we've ever asked for."



"We disagree with the decision of the sharply divided 6-5 court to uphold portions of the certification order, and are considering our options, including seeking review from the Supreme Court," Walmart said in a statement. "We do not believe the claims alleged by the six individuals who brought this suit are representative of the experiences of our female associates. Walmart is an excellent place for women to work and fosters female leadership among our associates and in the larger business world."



The federal appeals court concluded that there was enough merit in the claims to proceed to trial on a class-action track. Since the lawsuit was filed, both sides of the dispute have held so-called discovery hearings, in which preliminary testimony was taken to establish facts.



Judge Susan Graber of the appeals court said that although "the size of this class action is large, mere size does not render a case unmanageable."



The company has protested the size of the class action, which it called "historic" in scope, saying it would be too onerous to litigate. The company has more than 3,400 stores in 41 regions.



Declaring class-action status for the lawsuit raises the financial and judicial stakes considerably, since more individual plaintiffs can now join, and creates greater potential liability for the company being sued. In federal courts, such certification must generally follow well-established principles to ensure that it does not become so large as to be impracticable and allows the parties to fairly represent the common interests of the larger class of plaintiffs.



"Walmart tries to project an improved image as a good corporate citizen," said Brad Seligman, a Berkeley, California, lawyer representing the female workers. "But no amount of [public relations] is going to work until it addresses the claims of its female employees."



Walmart has been accused in separate lawsuits of discrimination against African-American truck drivers and workers with disabilities. In 2001, the company settled 13 lawsuits by paying out $6 million.



Most workplace discrimination lawsuits fail to reach a court for resolution, according to data compiled by the federal Equal Employment Opportunity Commission.



In 2003, when the Walmart litigation was in its preliminary court stages, about 27,000 sex discrimination claims were resolved administratively by the EEOC, little changed from the prior decade. More than 57 percent -- 15,000 claims -- were ruled administratively to have "no reasonable cause," and those usually were dismissed.



Just over 10 percent were judged to have merit, resulting in a total of $94.2 million in settlements, or $34,200 on average per case, according to the data.

My Thoughts

I think Walmart will be fine. I have worked at Walmart for 8 years and most of my bosses have been women. My wife also works for Walmart as an Assistant Manager. Her boss is a woman and most of the management team are women in her store. Walmart is still a great company to work for with endless opportunities for women. Everyone wants a slice of the Walmart legacy. Maybe, people should try to work for a living instead of trying to look for ways to bring down Walmart. Let me know how you feel about this.

Why Walmart is good for America

Over the past year, I've listened as various sides have weighed in on the issue of Walmart. A few weeks ago, a Federal judge overturned a Maryland law that would have required the company to invest a specific amount of its payroll in medical benefits for employees. Given the fact that this debate seems to grow ever-larger each year and that Walmart is one of the most important stocks in the world as both a member of the Dow Jones Industrial Average and as an economic indicator for the broader market, I thought I would weigh in with my position.




The American Economic System

We have been extraordinarily blessed to live in one of the wealthiest and inclusive societies in the history of the world. Although we still have a tremendous amount of ground to cover, the American civilization has been one of ever-striving for greater equality and, above all, individualism. It was formed, and continues to operate, on the bedrock that a man is responsible for himself and that he, and only he, has the empowerment and ability to build or destroy his own life. The bridge, as we know, is education; the ability to impart knowledge and synthesize it in a way that allows individuals to blossom as a person intellectually and emotionally, and put data to use in a way that results in a greater income for themselves.

Economics has been called the dismal science because in its true, unadulterated form, it doesn't seek to answer what is morally right or wrong; instead, it strives to discover how individuals, groups, and society chooses to allocate scarce resources among themselves. Today, we use a form of currency that is printed on green paper and has numbers engraved on either side. Likewise, sexual attraction, political connections, etc., are all a form of capital that can be exchanged as a claim check on society to fulfill ones own desires and wishes. The extension of this is the simple, basic truth that the wage situation in any given field is a result of the supply and demand curve. A cashier, for example, requires far less skill than, say, a neurosurgeon, creating a much larger pool of potential applicants to fill the former position.





The Gap Between the Rich and the Poor

This brings us to the point of transience within a society. At different times throughout our lives we occupy different rungs of the socio-economic ladder. In our early twenties, for example, a young couple with children is going to fall within the lowest levels of wealth. As time goes on, however, they are likely to buy a house, begin building equity by paying down the mortgage, and establishing a retirement fund in the form of a 401k. The traditional statistics, however, don't show this migration through the various layers of wealth and is partly why it is dangerous to rely on the figures espoused from politically interested parties on the nightly news.

The gap between the rich and the poor doesn't bother me in and of itself. What I think we should be concerned about as a society is the absolute well being of the poorest among us - not their relative wealth level (if given the option, I'd gladly double the gap between the rich and the poor if it meant the poorest were to experience a 100 percent increase in their standard of living). In other words, what really matters in a society is the standard of living experienced by the average citizen (which, for better or worse, is typically measured as Gross Domestic Product [GDP] per capita). In the 1950's, gas, as a percentage of household income, was far more expensive than it is today; middle class automobiles didn't boast things such as air conditioning, let alone CD players, heated seats, and navigation systems. Yet, here we are, lamenting the growing disparity between classes! We're spending so much time envious of the size of the other kid's pizza we fail to realize that in the last fifty years, the pizza has gone from a medium to a large so that in an absolute sense, even the poorest among us is far better off than they were just a short time ago.





People vs. Walmart

That brings us to the philosophical case of People v. Walmart. The cold, hard fact of the matter is that every occupation has a lifestyle associated with it. Retail clerks serve the social function of a migratory bridge between classes. To work their way through college, young students may choose to take a job at the checkout counter to help pay for textbooks. After retirement, a couple may choose to work together at a local store to generate extra income and become socially engaged in the community. The position also serves as an excellent gateway to move up the management chain. Take, for example, the Walmart district managers who now make hundreds of thousands of dollars a year; virtually all started as an hourly sales associate.

wakeupwalmart.com sucks

Maybe wakeupwamart.com should get their fact straight before they go up against the number one retailer in the world. I'm a Manager for Walmart and my associates love me because I treat them with respect. What does wakeupwalmart.com do?????? Walmart is the greatest company to work for. I started unloading trucks and now look how far I made it. WakeUpWalmart.com, suck it!!!!!!

The Rebuttal To Wake up Walmart

Maybe Wake up Walmart needs to eat their own words!

Over the past year, I've listened as various sides have weighed in on the issue of Walmart. A few weeks ago, a Federal judge overturned a Maryland law that would have required the company to invest a specific amount of its payroll in medical benefits for employees. Given the fact that this debate seems to grow ever-larger each year and that Walmart is one of the most important stocks in the world as both a member of the Dow Jones Industrial Average and as an economic indicator for the broader market, I thought I would weigh in with my position.




The American Economic System

We have been extraordinarily blessed to live in one of the wealthiest and inclusive societies in the history of the world. Although we still have a tremendous amount of ground to cover, the American civilization has been one of ever-striving for greater equality and, above all, individualism. It was formed, and continues to operate, on the bedrock that a man is responsible for himself and that he, and only he, has the empowerment and ability to build or destroy his own life. The bridge, as we know, is education; the ability to impart knowledge and synthesize it in a way that allows individuals to blossom as a person intellectually and emotionally, and put data to use in a way that results in a greater income for themselves.

Economics has been called the dismal science because in its true, unadulterated form, it doesn't seek to answer what is morally right or wrong; instead, it strives to discover how individuals, groups, and society chooses to allocate scarce resources among themselves. Today, we use a form of currency that is printed on green paper and has numbers engraved on either side. Likewise, sexual attraction, political connections, etc., are all a form of capital that can be exchanged as a claim check on society to fulfill ones own desires and wishes. The extension of this is the simple, basic truth that the wage situation in any given field is a result of the supply and demand curve. A cashier, for example, requires far less skill than, say, a neurosurgeon, creating a much larger pool of potential applicants to fill the former position.





The Gap Between the Rich and the Poor

This brings us to the point of transience within a society. At different times throughout our lives we occupy different rungs of the socio-economic ladder. In our early twenties, for example, a young couple with children is going to fall within the lowest levels of wealth. As time goes on, however, they are likely to buy a house, begin building equity by paying down the mortgage, and establishing a retirement fund in the form of a 401k. The traditional statistics, however, don't show this migration through the various layers of wealth and is partly why it is dangerous to rely on the figures espoused from politically interested parties on the nightly news.

The gap between the rich and the poor doesn't bother me in and of itself. What I think we should be concerned about as a society is the absolute well being of the poorest among us - not their relative wealth level (if given the option, I'd gladly double the gap between the rich and the poor if it meant the poorest were to experience a 100 percent increase in their standard of living). In other words, what really matters in a society is the standard of living experienced by the average citizen (which, for better or worse, is typically measured as Gross Domestic Product [GDP] per capita). In the 1950's, gas, as a percentage of household income, was far more expensive than it is today; middle class automobiles didn't boast things such as air conditioning, let alone CD players, heated seats, and navigation systems. Yet, here we are, lamenting the growing disparity between classes! We're spending so much time envious of the size of the other kid's pizza we fail to realize that in the last fifty years, the pizza has gone from a medium to a large so that in an absolute sense, even the poorest among us is far better off than they were just a short time ago.





People vs. Walmart

That brings us to the philosophical case of People v. Walmart. The cold, hard fact of the matter is that every occupation has a lifestyle associated with it. Retail clerks serve the social function of a migratory bridge between classes. To work their way through college, young students may choose to take a job at the checkout counter to help pay for textbooks. After retirement, a couple may choose to work together at a local store to generate extra income and become socially engaged in the community. The position also serves as an excellent gateway to move up the management chain. Take, for example, the Walmart district managers who now make hundreds of thousands of dollars a year; virtually all started as an hourly sales associate.

How Walmart Works

Now that Wal-Mart is so huge, it has unprecedented power to shape labor markets globally and change the way entire industries operate. In this article, you will learn the key reasons that Wal-Mart has been able to keep its prices low -- cutting-edge technology, a frugal corporate culture and a push to make suppliers sell merchandise at cheaper and cheaper prices. We'll also take a look at the scope of Wal-Mart's impact on the economy and the controversies surrounding Wal-Mart, as well as the future of the company.



Sam Walton described Wal-Mart's beginnings in his autobiography.


First, let's start with a little history. Sam Walton opened his first five-and-dime in 1950. His vision was to keep prices as low as possible. Even if his margins weren't as fat as competitors, he figured he could make up for that in volume. He was right.



In the early 1960s, Walton opened his first Wal-Mart in Rogers, Arkansas. The company continued to grow, going public in 1970 and adding more stores every year. In 1990, Wal-Mart surpassed key rival Kmart in size. Two years later, it surpassed Sears.



Walton continued to drive an old pickup truck and share budget-hotel rooms with colleagues on business trips, even after Wal-Mart made him very rich. He demanded that his employees also keep expenses to a bare minimum -- a mentality that is still at the heart of Wal-Mart culture more than a decade after Walton's death. The company has continued to grow rapidly after his death in 1992 and now operates four retail divisions -- Wal-Mart Supercenters, Wal-Mart discount stores, Neighborhood Market stores and Sam's Club warehouse.


To get a sense of just how big Wal-Mart is today, consider these facts:



Wal-Mart employs 1.6 million people. To give you an idea of just how many people that is, Idaho, the 39th most populous state, is home to 1.4 million people.

Wal-Mart had sales of $312.43 billion in its most recent fiscal year, which ended January 31, 2006. By comparison, the second-largest retailer in the country, Home Depot, posted sales of $81.5 billion.

Wal-Mart has 6,200 retail outlets. In contrast, Home Depot has 2,040.

What made Wal-Mart so big, powerful and successful? Let's look at some of its strategies, including its sophisticated use of technology, its corporate culture of watching every expense, and above all else, its mission to keep prices low.



Wal-Mart Strategy

Let's start with technology. Wal-Mart pushed the retail industry to establish the universal bar code, which forced manufacturers to adopt common labeling. The bar allowed retailers to generate all kinds of information -- creating a subtle shift of power from manufacturers to retailers. Wal-Mart became especially good at exploiting the information behind the bar code and is considered a pioneer in developing sophisticated technology to track its inventory and cut the fat out of its supply chain.



Recently, Wal-Mart became the first major retailer to demand manufacturers use radio frequency identification technology (RFID). The technology uses radio frequencies to transmit data stored on small tags attached to pallets or individual products. RFID tags hold significantly more data than bar codes. During the first eight months of 2005, Wal-Mart experienced a 16 percent drop in out-of-stock merchandise at its RFID-equipped stores, according to a University of Arkansas study (as reported in Fortune Small Business magazine).


Wal-Mart's headquarters in Bentonville, AR





The frugal culture, established by Walton, also plays into Wal-Mart's success. The company has been criticized for the relatively meager wages and health care plans that it offers to rank-and-file employees. It has also been accused of demanding that hourly workers put in overtime without pay. Store managers often work more than 70 hours per week. They are are expected to pinch pennies wherever they can, even on things like the heating and cooling of the stores. In the winter, stores are kept at 70 degrees Fahrenheit, and in the summer, they stay at 73.



This culture is also present at the company's headquarters. Wal-Mart is headquartered in Bentonville, Arkansas, instead of an expensive city like New York. The building is drab and dull. You won't catch executives in limousines and you won't see them dragging into work at 9:30 a.m. Executives fly coach and often share hotel rooms with colleagues. They work long hours, typically arriving at work before 6:30 a.m. and working half-days on Saturdays.

Why Walmart is Successful

For many years, I've been a loyal Walmart customer, and still am currently for the obvious convenience of a one-stop shopping environment. Where else can you buy a dozen eggs, a gallon


of two-percent milk, a 30-inch, flat-screen LCD monitor, and a new pair of underwear hanging off your shopping cart, all in one trip? Almost everything you need is blessed by the convenience of proximity with each other at competitive prices. Walmart employees are relatively nice with always several cashier lanes ready to serve. However, at one point I was challenged with the notion, that shopping at Walmart may be hazardous to my self-image of being a social responsible consumer. This all began after watching Frontline's documentary: Is Walmart good for America?




Frontline's documentary addressing the controversy around Walmart's great success brings up legitimate concerns, and the possible negative effects on the U.S. economy. In fact, the documentary invoked my anti-corporation humanitarian hippie side of my personality, and inspired me to change where I was grocery shopping. This inspiration was short lived after a series of frustrating experiences filled with hairline receding anxieties from shopping at any grocery store other than Walmart.



It is well known that Walmart is very competitive when pricing its products. It's equally known there's an increasing trend of consumers practicing social responsible shopping. These consumers don't have any problems paying higher prices as a means of protesting against what they deem as the unethical alternative, or anything that's a good cause-like buying Free-Range chicken eggs-and/or avoiding products produced in third world sweat shops. It's interesting that Walmart's competitors haven't tapped into this trend in consumer culture as an attempt to counteract Walmart's huge success. But rather have the audacity in this Walmart era of ultra-efficiency and low prices to push customers in signing up for a rewards card that's required to receive discounts on products that's usually more expensive than their evil Walmart rival.

Walmart Commerial

Walmart TV commercial highlighting their efforts for designing stores that are over 20% more energy efficient and their commitment to one day powering every store in America with 100% renewable energy. How could this be so bad?

My Walmart Story

My name is Tim and I started my Walmart career in July of 2002. I was hired by the Store Manager to unload trucks in the receiving department of the store. I worked really hard and within three months, I was the unloading lead. I held this position for another three months and was then promoted to Support Manager of all the receiving teams after the former Support Manager went to Garden Center. I loved this new position because it gave me responsibility and an opportunity to expand on my management skills. Walmart has given me a vast amount of experience and opportunity to be successful. Then in 2004 Walmart was opening another store only 25 miles from my house. I was asked to go supervise the set up of the new store. I accept the offer, excited to learn even more knowledge about how Walmart works. I transferred to the new store, holding the same position as Support manager. I worked in that position for five more months and then was asked if I would run the Expanded Food Department. I accepted the position as yet another challege and opportunity to learn. In this position I learned all aspects of sales, profit, and merchandising. I was very successful in this position. I was running a 13% of total store sales in just a little Walmart food department. It eventually caught the attention of the Market Manager who suggested to the Store Manager that I would be a perfect candidate for the Assistant Manager program. I went through the interview process and was promoted yet again to another journey through my Walmart career. I have held this position as Assistant Manager since 2005. Walmart has provided me a career and a better lifestyle. Not one time has Walmart ever asked me to do anything that was not ethical. I have worked for Walmart for 8 years and plan on being there until I retire. Walmart is a great company to work for.

Walmart Goes Green

Walmart just made what could be the biggest-ever step forward for sustainable business – a revolution in labeling that might permanently alter the way you shop.




Walmart will assign “green” ratings to every product on its shelves, starting in two to five years. While the metrics have yet to be determined, the labels will factor in greenhouse gas emissions; waste output and water use; raw material purchasing; and “ethical production.” If all goes well, this process will spit out an easy-to-understand, readily comparable tag attached to every item in the store.



Think of it like nutrition facts for the environment. Just a decade ago, hardly anyone knew, or cared, how many calories were in a Big Mac. Now it’s almost impossible to eat anything without facing the reality of calorie counts. This has spurred chains to advertise healthier food for consumers, like Jared at Subway and salad options at fast-food chains.



The labeling will likely be imperfect at first, just as a calorie count doesn’t reveal bad ingredients like high-fructose corn syrup. Walmart says it will release the raw data, like carbon-dioxide emissions and supply chain information, allowing citizens, sustainable investors, and activist groups to do their own analysis – and let Walmart know if the labeling system is skewed.



The impact of Walmart’s program could be huge -- so much that the “Walmart effect” might be the new “California effect” in private environmental regulation.



California has historically set its auto emissions standards higher than other states and even the federal government. Carmakers would have lost money by making one car for California and another for the other 49 states, so they often changed their production practices. Additionally, the federal government has tried to keep up with California’s stricter regulation, leading to a “race to the top” for environmental standards. David Vogel, a business professor at UC Berkeley, called this “upward harmonization” of regulations the “California effect.”



The “Walmart effect” will drag other companies to environmental-labeling plans, whether they like it or not. Walmart will require environmental-impact disclosure at its 100,000 suppliers, who will push their other customers to adopt green ratings so that they are not at a competitive disadvantage. Walmart and its suppliers will also have an incentive to push for more regulation: if every retailer had to do green labeling, Walmart would be ahead of the curve and wouldn’t be the only one spending more money.



How do we know that green labeling will be meaningful? The strength of the proposal is that Walmart shifts the cost burden of compliance onto its suppliers. Walmart simply acts as a judge of suppliers’ sustainability. Walmart will face higher prices in the short run as its suppliers try to pass on increased costs, but its huge bargaining power can keep these to a minimum and eke out efficiencies. Pressure from NGO’s and government will be important to ensure the labeling system works properly.



Why is Walmart doing this, anyway? Its board is certainly worried about “optics,” or public perceptions, of Walmart as a soulless corporate behemoth. Dozens of labor lawsuits around 2004 led to tough political rhetoric, and their CEO was tasked with burnishing the company’s image. The company has come a long way since then: promoting energy-efficient lightbulbs, selling only concentrated detergents, and donating to Democrats. Recently Walmart said it would support an employer mandate for health insurance, a big enemy for other business groups.



Another reason is profitability. Walmart could pre-empt more restrictive environmental legislation by writing its own. It could capitalize on growing environmental-movement goodwill, in dollars and decreased resistance to store expansion. The Wall Street Journal theorizes that Walmart’s environmental progressiveness will mute support for the Employee Free Choice Act, a pro-union bill that might hurt Walmart’s bottom line. Or perhaps Walmart has figured out that, as a market heavyweight, it often doesn’t do badly for itself to do good.

The next step is for Walmart to include sustainability commitments in its contracts with suppliers. After Nike and other apparel companies got slammed for their suppliers’ sweatshops, they made sure to write in contractual obligations with suppliers for their labor practices. More private regulation is the best way to push sustainability in the absence of government leadership. And for companies like Walmart, making their own rules – rather than having rules shoved on them by a discordant Congress – is a lot easier. It is up to citizens’ group and the government, however, to make sure these rules are enough.

The Truth about Wamart wages

Perhaps the favorite complaint of the critics is that "Walmart lowers wages." Walmart's critics believe that a warm and fuzzy employer will pay his employees more, while a cold-hearted exploiter will pay his employees less. The critics believe that Walmart is an unusually malicious cold-hearted exploiter, and that it gained a large part of its advantage by immorally "squeezing" money out of its employees. They believe that this will encourage other companies to start squeezing their employees, and thus an epidemic of meanness to employees and lower wages will occur throughout the economic system.




This view, which is so central to their belief system, couldn't be more wrong. An employer is not a caretaker of his employees; he is a purchaser of the services they are selling. Companies do not have arbitrary power over the wages that they pay their workers. Any rational company should want to pay its employees as little as possible to adequately perform the job, and any rational employee should want to be paid as much as possible. If an employer does not offer enough money to a potential employee, the potential employee will choose not to work for him. If an employee insists on more money than the employer can find another qualified worker for, the employer will choose not to hire him. An arrangement that is acceptable to both parties is where they must end up in order for them to agree to work together. The level of pay is determined by all the factors that go into supply and demand, just as with all other goods.



"The fact that human beings 'always want more,' no matter how wealthy they become, is often cited as if it were a sad fact of human nature. But it is this fact that guarantees that we will never run out of employment opportunities."



The economics of selling labor services can be accurately compared with the economics of selling a used car. When selling a used car, the relevant factors in determining market price are the supply of the type of car for sale, and the demand for that type of car. Individuals who are interested in selling their cars wish to receive as much as possible, just as individuals selling their labor services wish to receive as much as possible. At any given point in time there is a certain number of used cars of any specific type available for sale. The supply of that type of car is a given, and the sellers desire to maximize their selling price is a given. So how is the market price determined? It is determined by the competition of buyers for that limited supply of cars. In some circumstances, that competition will be more intense, and in other circumstances it will be less intense. When a person sells his car, he gives it to the party that makes the highest offer, just as people do when selling their labor services. To successfully purchase a car, even though a buyer wants to pay as little as possible, he must bid higher than every other potential buyer of that car. It makes no difference how nice or mean a potential buyer is; his bid is what counts. He must be the highest bidder to acquire the car.

Walmart's critics worrying about Walmart driving wages down, is as preposterous as worrying that some group that buys cars will decide to drive the prices of cars down. Every car buyer would love to drive the prices of cars down, but they can't. If some buyer tried to be mean to sellers of cars by refusing to outbid other potential buyers of those cars, the sellers of those cars would cease selling them to that buyer. The same thing can be said about employers purchasing labor services. They don't pay their employees a certain amount because they're nice or mean. They pay their employees the least they can to outbid competing businesses. If their offer isn't enough, the potential employee is free to try getting a higher offer somewhere else.



Walmart's critics get the economics of the labor market confused when they see examples of Walmart paying employees less than competitors for similar type positions. They mistakenly believe that this proves Walmart has arbitrary power over wages and chooses to pay less. If it is the case that Walmart workers receive lower wages than workers with similar positions at other businesses, it doesn't mean that it is "squeezing" its employees' incomes. A number of market forces can cause this to happen. It can mean that there are too many employed in the industry and that the lower wages are a signal to workers to do something else, or that Walmart has simplified the necessary jobs to run a Walmart store and can use less qualified job applicants. In the case of Walmart, simplified jobs are probably at least partially responsible. As Walmart has advanced technologically and organizationally, on average, its employees' jobs have become less complicated than its competitors. Because less qualified individuals need to accept lower wages to be able to compete with more qualified individuals, Walmart can pay less than competitors if it is able to use less qualified workers.



For example, by using an elaborate computer system integrated with suppliers, Walmart has radically simplified the demands on employees to track and order new inventory. Every time a cashier processes the sale of any product, the exact effect on store inventory is instantly recorded electronically, and a computer program manages reordering. Imagine what it would take to manage inventory in a store like Walmart without the aid of computers. It would no doubt require the efforts of many far more capable people working around the clock. To attract such people it would have to offer much higher wages, but Walmart has made the system ingenious so its employees don't have to be. This is why it's very common to see individuals with modest qualifications working for Walmart, such as teenagers and those with little education or experience. In spite of their modest qualifications, they can still be relied upon to perform the relatively simple jobs that Walmart requires.



This does not represent a driving down of wages, but a driving up of less qualified individuals' ability to accomplish more productive tasks. Walmart's simplification and automation of processes could go so far as to one day eliminate the need for most of the human labor presently employed in Walmart stores. Cashiers will probably be the next position to be completely automated. One day machines may even take over the stocking of inventories. This would be beneficial in the same way that eliminating our need to expend labor on horsewhips and buggies was beneficial. The workers who no longer worked at Walmart would then quickly find more productive things to do and total wealth would thereby increase.



It is a waste of time for the Walmart critics to worry about average wages falling too low. Average nominal wages on an economy-wide basis will always tend towards the level of full employment. If average wages go higher or lower than this point, the market automatically works to bring them back to this level.



"Progressively rising capital accumulation is responsible for our rising levels of productivity and standard of living."



At any given time, there is a certain quantity of total dollars of demand for labor services by all employers in the entire economic system. Average wages at full employment will be at the level of the total amount of monetary demand for labor services divided by the total number of people who choose to sell their labor services. When the average wage rate is forced above the full employment level there is not enough total monetary demand for labor to pay all those who want to work at this higher average. If, for example, in a hypothetical small economy, the total monetary demand for labor is $1 billion, and the total number of workers seeking employment is one million, the average wage must be $1,000 to reach full employment. If the average wage is forced higher than this point — say to $2,000 — then employers could only hire 500,000 workers. Without artificial interference with average wages, such as minimum wage laws or labor union coercion, unemployed workers would outcompete the employed by accepting lower wages. If the average wage was $2,000, an unemployed person could outcompete an employed person by offering his services for $1,500. The next unemployed person could get a job by accepting $1,400. As wages fell, employers could hire more total workers. This would happen throughout the economic system until the average wage rate was back at $1,000, at which point there would be enough total monetary demand to hire all one million workers. Freedom in the labor market is all that is required to reach full employment.



It is in the self-interest of employers to keep wages from falling below the point of full employment because any lower wage would cause a shortage of labor services for employers. The lower average wage would allow employers who couldn't previously obtain employees to be able to afford them. This would leave many employers who were willing and able to pay higher wages without the employees they desired. In response to this imbalance, the employers who needed more labor services, and were willing and able to pay higher wages, would simply offer higher wages and outbid the employers who weren't able to pay the higher wages. This would happen throughout the economic system until the average wage was back up at the point of full employment.



The critics grand idea for fixing the non-existent problem of economy-wide falling wages is essentially the same as that of labor unions, namely, to harass, intimidate, or force companies — in this case Walmart — into handing over higher nominal wages to their employees. Not only is such a practice morally repugnant, it is ineffective as a way to improve the lot of wage earners. Artificial increases of nominal wages cause unemployment, and by attacking the producers, the labor unions and Walmart critics attack the economic system's ability to accumulate capital and produce wealth. They may succeed in getting certain favored groups more wealth in the short-term, but this is at the cost of less wealth for everyone in the long-term.



Walmart's critics are far too focused on nominal wages when they should be focused on production, for it is the capacity of businesses as producers that can make us all richer, and not their capacity as employers. As stated before, there are two parts to real income, nominal wages and prices. Just as Walmart's critics are ignorant of the possibility of creating more total wealth and of the existence of potentially unlimited employment opportunities, they are also ignorant of the fundamental effect of prices on real incomes. The part that they myopically focus on — nominal wages — is the part that it is useless to focus on changing. Prices are the part that can change in a significant way to make us all increasingly richer. While increased production can cause prices of goods to fall, raising everyone's real incomes potentially without limit, it is impossible to make every wage earner wealthier by causing everyone to receive higher nominal wages. Everyone cannot get a raise without an increase in the total quantity of money. But an increase in the total quantity of money does not increase real incomes one bit. No extra wealth has been produced by such an increase. Prices would rise as much as dollar incomes and thus real incomes would be left unchanged. If the critics want to help wage earners, they should find ways to increase production. Probably no company has accomplished this in recent years to a greater degree than Walmart.

Walmart Critics

In spite of Walmart's outstanding achievements and tremendous benefits to the public, a determined group of Walmart critics has appeared on the scene. These people have made it their life's mission to smear and obstruct Walmart at every turn, many of them behaving with the same passion that one might expect from religious fanatics. The critics are utterly ignorant of economics, yet they pretend to be authorities on the subject, and loudly proclaim such things as: "Walmart causes unemployment," "Walmart lowers wages," and "Walmart reduces access to healthcare." In addition to these alleged economic sins, they say: "Walmart destroys communities," "Walmart treats its female employees unfairly," "Walmart causes greedy consumerism," "Walmart desecrates sacred ground." To listen to these critics, one might think that Walmart was the source of all evil.




Every time Walmart tries to open up a new store, there is a good chance that these anti-Walmart crusaders will be there to interfere, attempting to persuade zoning boards and local governments to intervene and make it impossible for Walmart to operate. They've created websites such as Wakeupwalmart.com and Walmartwatch.com that provide "public education" on their incorrect version of the economic effects of Walmart. They've held anti-Walmart demonstrations, and put out advertisements, books, and movies. They've called for crippling regulation of Walmart, and increased taxes on Walmart. One of their favorite activities is to point to someone who they believe has been, or could be, negatively affected by Walmart's success — no matter how temporarily — misinterpret the meaning of this phenomenon, and proceed to work themselves into a frenzy because they are convinced that this proves that Walmart is destroying the world.



All of their objections are based on profound ignorance of Walmart's actual economic significance, and their behavior is destructive to themselves and everyone else. The huge amount of media attention given to these critics by many willing accomplices has strengthened their negative influence. The critics have succeeded in making themselves impossible to ignore. They have dragged Walmart's good name through the mud, causing the general public to associate Walmart with the endless list of accusations, rather than with the incredible service they provide.



High profile individuals such as Theresa Heinz Kerry, who came very close to being first lady of the United States, have taken public stances in favor of these critics. According to a recent Zogby poll, 56% of Americans now believe that "Walmart is bad for America."



Walmart managers now have a new challenge; not only do they have to run one of the biggest organizations in the world; they have to do it with an army of fools waging a constant war of propaganda against them. They are forced to waste an increasing amount of their time and company's resources defending their highly efficient, very successful, and perfectly legitimate organization against these vicious saboteurs.

Pro Walmart

Walmart is one of the great shining examples of what a market economy can achieve. If I were to give a tour of the United States to visitors from a socialist country, who are used to experiencing chronic shortages of almost everything, Walmart would be one of the first places I would take them. It is a perfect symbol of one of the most remarkable things that we have — an enormous variety of high quality, low cost products that are available to virtually everyone throughout the United States.




Walmart stores are indeed impressive sights, housed in gigantic structures, capable of serving many thousands of customers every day. Walmart's most common type of store — the Supercenter — offers customers an indoor, air-conditioned shopping area larger than three football fields. These shopping behemoths provide so much — such a staggeringly huge range of well-made products — that a person could practically live his whole life without having to shop anywhere else.



Walk into a Walmart Supercenter and look around; the place is amazing! It boggles the mind to think of the enormous complexity that must be involved in running a store that accomplishes all this, which is truly responsible for an improvement in our standard of living. For Walmart to provide so much, for so many, as efficiently, reliably, and inexpensively as it does is an economic miracle. Never in human history have so many people had such affordable and convenient access to all the products that Walmart offers, and the number of people with this access is growing all the time. As Walmart's late founder Sam Walton said:



"…we'll lower the cost of living for everyone, not just in America, but we'll give the world an opportunity to see what it's like to save and have a better lifestyle, a better life for all. We're proud of what we've accomplished; we've just begun."



This is a company that deserves to be praised and admired the world over.

The bottom line about Walmart

Walmart is one of the world's largest, most successful, and most vilified corporations. It was ranked number four in the Fortune 500 from 1995 through 1998, reached number one in 2002 and stayed there until 2009, when it fell behind Exxon Mobil. It's also the only firm in the top four of the Fortune 500 that is not an energy company.




The concentrated public-relations campaign against Walmart has been moderately successful, and the company has drawn criticism from all sides: Commentators on the left criticize the company for its alleged impact on wages and jobs; those on the right criticized its decision to join the National Gay and Lesbian Chamber of Commerce and to offer “abortion pills” in 2006. Recently, Walmart announced support for mandatory health coverage by large employers, bringing more criticism. Walmart's handling of the attacks has been less effective than the company would have liked, and its attempts to defend itself have been a distraction.



The criticisms too often rely on anecdotes or statistical comparisons that are difficult to interpret. When one considers that Walmart is the world's largest corporation, with revenues of about $300 billion and almost two million employees, anecdotes that cast the company in a good or bad light are not particularly surprising. Similarly, a simple comparison of employment (or wages) in a city with a Walmart to a city without one is only minimally informative because such comparisons often fail to control for other explanatory characteristics. Current research suggests that the economic, political, and social case against Walmart is exaggerated. Further, Walmart's “Every Day Low Prices” do not come at an unacceptable social cost in the form of negative spillovers not reflected in prices. Walmart is certainly imperfect, and there are reasons to view the company with a critical eye, but the usual criticisms of the company collapse under the weight of the evidence.

Sam Walton

When Sam Walton, opened his first Walmart store in Rogers, Ark., in 1962, no one imagined he was introducing a retailing formula that within a generation would impact the lives of millions of people.
Sam firmly believed in “having a heck of a good time” while working hard. As an example of his fun-loving leadership style, Sam Walton wore a grass skirt and did the hula on Wall Street after losing a bet.
Many associates (Walmart employees) fondly remember meeting Sam or the early days of working at Walmart. He was well known for crediting Walmart’s success to the associates and made sure information about the company’s objectives was shared among all the associates.
A few weeks before Sam passed away, President George H. W. Bush presented him the Medal of Freedom on March 17, 1992, for his success in life as in business.

Walmart History

History

The birth of discount retailing

Most people think discount retailing began in 1962 – the year that Kmart, Target, and Walmart first opened. But actually, the chain of variety stores Sam Walton owned during the 1950s faced stiff competition from many regional discount stores.

1962 – Walmart begins

Before opening Walmart, Sam traveled the country studying everything he could about discount retailing. He became convinced American consumers wanted a new type of store. Trusting his vision, Sam and his wife Helen put up 95 percent of the money for the first Walmart store in Rogers, Ark.

1972 – Walmart goes public

Discounters such as Kmart quickly expanded in the 1960s, while Sam only had enough money to build 15 Walmart stores. In 1972, Walmart stock was offered for the first time on the New York Stock Exchange. With this infusion of capital, our company grew to 276 stores in 11 states by the end of the decade.

The 1980s – Walmart comes of age

In 1983, the first Sam’s Club members-warehouse store opened. The first Supercenter opened in 1988, featuring a complete grocery, and 36 departments of general merchandise. By 1989, there were 1,402 Walmart stores and 123 Sam’s Club locations. Employment had increased tenfold. Sales had grown from $1 billion in 1980, to $26 billion.
The 21st century – one of the most successful retailers in the world
Today, 8,424 stores and club locations in 14 markets employ more than 2.1 million associates, serving more than 176 million customers a year. Our history is a perfect example of how to manage growth without losing sight of your values. Our most basic value has always been, and always will be, customer service.
Sam’s secret — give your customers what they want

In his autobiography, Sam said, "… if you think about it from the point of view of the customer, you want everything: a wide assortment of quality merchandise; the lowest possible prices; guaranteed satisfaction; friendly, knowledgeable service; convenient hours; and a pleasant shopping experience. You love it when a store exceeds your expectations, and you hate it when a store inconveniences you, gives you a hard time, or pretends you're invisible."

5 GOOD THINGS ABOUT WALMART

Five good things that Wal-Mart does

1) It employs handicapped and elderly people who probably couldn’t get a job anywhere else.

2) Its hours permit customers (like myself) to pick up emergency household items at a time when other stores have already closed.

3) It allows countless manufacturers/producers to introduce themselves and their products to a considerable amount of people.

4) It offers lower income families the chance to clothe their kids in decent, new clothes for less money.

5) It’s a national name that you can trust: need something but not sure where to find it? Wal-Mart is generally nearby.