The Hidden Costs of
Wal-Mart’s Low Prices
Julie, Jason, Brandon,
Riordan, Susie, Dan
Good on the Surface
 Claim to fame:
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Low prices
Friendly, caring people
Everything you need under one roof
 Strong foundation laid by Sam Walton
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Respect for the individual
Service to customers
Continuous striving for excellence
Truth
 Many corrupting realizations have been
discovered, as we will show
 Many issues seem to continually be swept
under the rug
 *It’s definitely time to look at the reality of this
enormously powerful corporation’s deceitful
practices, and in particular employee benefits
(or lack thereof)
High Costs to Employees
 Low prices come at an extremely high cost to
employees seeking full-time positions and healthcare
benefits
 General managers are always expected to have a
higher profit than the previous quarter
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Sales can only do so much before expenses have to be
cut
One way in which Wal-Mart reaches these lofty goals is by
cutting the healthcare coverage provided to workers:
 Coverage that actually do provide is exclusive to full-time
employees. However, even if hired on full-time, new
employees are required to wait anywhere from six months
to 2 years before they can even sign-up for the benefits
plan
 *also, retirees are not covered at all.
High Costs to Employees
 Full-time positions?
 While Wal-Mart promises full-time positions they find loop
holes to cut hours and also refuse overtime.
 Full-time status is considered 34 hours per week, just
recently moved up from 28 hours per week, obviously in
order to decrease the chances of employees being
eligible for healthcare benefits
 *My Wal-Mart experience
 Basically getting screwed out of overtime pay time and
again
 We would work over by an hour or two on a given night, and
then come in the next night and pretty much be forced to leave
early even if there was a lot that needed to get done.
High Costs to Employees
 Employees often asked to put in extra hours, which they
are not compensated for
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At times made to feel that their job is threatened if they do
not comply
 Also, asked to take extra breaks, off the clock of course,
in order to decrease hours
 *In some instances managers are given false
usernames that are used to go into the computer system
and change the hours of the workers.
- A court-ordered expert found 7,000 instances
during a one-year period
- basically showed that Wal-Mart managers
had used false id’s to delete large blocks of time from
employee payroll records by erasing overtime hours and
penalizing those who neglected to clock back in after
meals
Other Costs
 Despite $10 billion in profits, President and CEO Lee
Scott said, “In some our states, the public program
may actually be a better value-with relatively high
income limits to qualify, and low premiums.”
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Wal-Mart openly encourages their employees to signup for welfare benefits and keeps forms for WIC,
Medicare, and Welfare on hand
 Florida: 12,310 workers and dependents on Medicare
 Arizona: 2,700 workers on Medicaid
 Tennessee: 9,617 workers on TennCare(Tennessee’s
State Medacaid program)
Other Costs
 While the # of employees on governmental
healthcare is on the rise, so is the cost of Wal-Mart’s
company premiums
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Basically, this is sending even more workers to have
the taxpayers foot the bill that Wal-Mart should
rightfully be paying
 Cost of premiums has risen 169 % for single
coverage and 117 % for family coverage since 2000
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If a full-time employee elected for family coverage, an
average employee would have to spend 27% of their
average earnings before the health insurance covered
any costs
More Problematic Numbers
 Only about 47 % of Wal-Mart’s employees are
covered by the company’s healthcare plan
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National average of workers covered by
employer health insurance in 67 %
 In 2003, Wal-Mart spent around only $0.75 an
hour per employee, which accounted for
approximately a whopping half-percent of
their $259 billion in sales for that year
Problematic Numbers
 Most money is going towards advertising, as
opposed to actually taking care of employees
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$290 million increase on advertising spending
Only $215 million increase on healthcare for
same period
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Rest of the cost left to government plans
 **The hidden price in Wal-Mart’s low prices is
given to the American taxpayers in the
amount of $1,557,000,000 per year for
healthcare costs that Wal-Mart should be
covering
Minority Discrimination
 Female African-American employee
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Promised a management position upon being hired
Worked overtime and did everything asked of her time
and time again
When she approached management about the
situation she was told that “her kind” wasn’t what they
needed
She asked them if they meant black and female and
they responded with “two out of two isn’t bad”
The situation was ignored by corporate headquarters
as not to cause bad publicity
Discrimination cont.
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Female discrimination has been a problem that has
confronted Wal-Mart in a big way
 Sex-discrimination lawsuit was filed against Wal-Mart
in 2004
 Statistical analysis that shows Wal-Mart paid female
workers less and gave them fewer promotions than
men.
 Little has been done to improve opportunities for
the female employees of Wal-Mart
Anti-Union
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Wal-Mart uses training videos to “brainwash”
new employees into seeing the negative
effects that unions create
Managers are trained from the home office to
specifically detect the possibility of an
employee moving to unionize
Employees that are suspected are typically let
go before they can cause a disturbance
Illegal surveillance equipment is used to
monitor activity inside and outside of stores
 Hidden costs make the low prices less
appealing after everything is exposed
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Wal-Mart coming to town usually means the
exiting of small town businesses
A low price is not worth the abuse of millions
of employees as well as a lack of respect for
the surrounding environment
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Wal-Mart moving into Upper Sandusky right now
 Hometown businesses already making plans as to
how to stay in business, some are even considering
closing before Wal-Mart opens or moving to another
town
Changes
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Equal treatment for all people regardless of
gender, race, and title
Health-care benefits need to be available for
all full-time employees
Employees deserve the right to be in a union if
they choose so that they aren’t exploited for a
profit
What Can We Do?
 Inform people who may not already know of
the practices of Wal-Mart through:
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Conversations
Protests
Pamphlets
Websites
Writing politicians to spark legislation
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By being involved politically we can have a say in
how things are run in our society, including laws
dealing with big businesses such as Wal-Mart
One Voice
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Wal-Mart can easily overlook one voice but if
we all stand together to see change in the way
they operate they will be forced to do
something
People will always love a low price but if they
see what goes into making that price low they
can make a better decision about where to
shop
http://www.ufcw.org/press_room/fact_sheets_a
nd_backgrounder/walmart/benefits.cfm