In a world where corporations are made out to be the bad guys, one of the most attacked "villains" is Walmart. Walmart has ranked number one in the Fortune 500 for the last two years. The discount store earns hundreds of millions each year and continues to create a decent profit in the current economic state. But instead of being praised for its success, Walmart has been criticized as greedy, manipulative, irresponsible, and monopolistic.
A leading campaign against Walmart is WakeUpWalmart.com. It criticizes Walmart for its practices in many areas. Let's look.
First is Walmart's treatment of its employees. Wake Up Walmart cites the average wage for a Walmart employee in 2001 ($8.23 per hour) is below poverty level. It also claims that Walmart employees are encouraged to work off the clock, have costly and insufficient health insurance, and are denied meal breaks. The site references several lawsuits against Walmart for wage and labor law violations. In short, Walmart abuses its employees by denying them good wages, full health care coverage, lunch breaks, and forces employees to work unpaid hours off the clock.
The major premise of all these complaints is that workers have rights to things like health care, good wages, and breaks. Despite what the law may say, workers have no such rights. Ayn Rand said, "The concept of a “right” pertains only to action—specifically, to freedom of action." There are no rights to acquisition, only action. A worker may act to secure a job with good benefits, but he has no right to those benefits.
The employer/employee relationship is a completely voluntary one. Employees are not forced to work at Walmart and they are not forced to stay. If the working conditions are not suitable, a person has the ability to quit and find a new job. If a worker remains with Walmart despite the conditions, it is their choice.
Granted, there may be few job options for a person. Walmart may be the best job available in an area. However, it is not a business's responsibility to provide completely for it's employees lives. The purpose of a business is to garner a profit, which Walmart does well. And if Walmart's conditions are so horrible, why are there almost 2 million people working for them?
Second, Walmart is criticized for destroying communities. They claim when Walmart comes to town, it does harm to the business of the community. Local mom and pop stores go out of business, unable to keep up with Walmart's low prices. Walmart increases traffic in towns, and violates environmental codes. And employees' low wages prevent them from spending more within the community, which means other people earn less money.
Mom and pop stores go out of business because they cannot compete with Walmart's prices. It's a simple fact of business: consumers will go for the better deal. Would the anti-Walmart folks prefer that people pay higher prices, simply to keep a quaint shop in business? It's not practical for those tight on money, as many are in these communities.
A large corporation like Walmart must have an effect on the environment. Man takes raw materials from the earth and shapes them for his purposes. If he didn't, he would die. To criticize Walmart for using resources for production is anti-progress.
The traffic and low wage allegations are just asinine. Increased traffic means more people in an area, which means growth. How is that bad? And to say that Walmart's low wages causes reduced business in a community is pushing it. Walmart is creating jobs for people who may not have had one otherwise. It brings business and wealth to a community.
Third, the group claims that Walmart costs taxpayers billions. Many Walmart employees cash in on reduced lunches, housing assistance, tax credits, and federal health care.
I'll assume the group implies that taxpayers make up for the living expenses that Walmart does not, and that is their problem. Still, Walmart is not at fault, the government is. All that taxpayer money is wasted because the government forces citizens to pay, not because Walmart doesn't pay enough.
To sum up, Walmart is criticized for creating 2 million+ jobs, in which employees are free to leave if they don't like the conditions. It is criticized for being competitive in business and offering low prices, which some business cannot beat. It is is criticized for effectively using resources and bringing wealth to towns. It's blamed for wasting taxpayer dollars, rather than the real culprit, the government.
Walmart should not be condemned for being excellent in business. It should be praised for it's competitiveness and it's overwhelming success. And yes, it's profits. Walmart deserves every penny for it's good business practices.
Tuesday, April 14, 2009
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3 comments:
If you haven't watched it, Penn & Teller do a great job defending Walmart on their Showtime program, "Bullshit!".
You are absolutely correct in your analysis of Walmart.
Good post. You're right to praise Wal-Mart.
You and your readers might be interested in how Wal-Mart fares outside the US: Wal-Mart in Honduras: A Capitalist Success Story.
Yeah, it's a shameless plug of one of my posts, but it's interesting to see how the business practices that are successful here have been successful in one of the poorest countries in our hemisphere. On top of that, the liberal press even acknowledged the positives!
I am basically in agreement with your post, but have 2 notes:
1 -- workers being "forced" to work off the clock could be viewed as a violation of the de facto employment contract between the company and the employee. As such, an Objectivist should disapprove of the practice.
2 -- The traffic issue is a classic "externality" in basic economics. As such, it isn't priced meaningfully, and therefore may represent a source of disutility.
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