The Hidden Costs of Wal-Mart’s Low Prices

1. The Hidden Costs of Wal-Mart’s Low Prices Julie, Jason, Brandon, Riordan, Susie, Dan

2. Good on the Surface • Claim to fame: • Low prices • Friendly, caring people • Everything you need under one roof • Strong foundation laid by Sam Walton • Respect for the individual • Service to customers • Continuous striving for excellence

3. 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)

4. 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 • 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.

5. 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.

6. High Costs to Employees • Employees often asked to put in extra hours, which they are not compensated for • 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

7. 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.” • Wal-Mart openly encourages their employees to sign-up 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)

8. Other Costs • While the # of employees on governmental healthcare is on the rise, so is the cost of Wal-Mart’s company premiums • 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 • 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

9. More Problematic Numbers • Only about 47 % of Wal-Mart’s employees are covered by the company’s healthcare plan • 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

10. Problematic Numbers • Most money is going towards advertising, as opposed to actually taking care of employees • $290 million increase on advertising spending • Only $215 million increase on healthcare for same period • 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

11. Minority Discrimination • Female African-American employee • 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

12. Discrimination cont. • 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

13. Anti-Union • 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

14. Hidden costs make the low prices less appealing after everything is exposed • 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 • 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

15. Changes • 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

16. What Can We Do? • Inform people who may not already know of the practices of Wal-Mart through: • Conversations • Protests • Pamphlets • Websites • Writing politicians to spark legislation • 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

17. One Voice • 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_and_backgrounder/walmart/benefits.cfm