Wal-Mart has acquired among numerous labor activists, environmentalists, progressive groups and community activists a terrible reputation for being an unfeeling, destructive behemoth (Tilly,2007; Palast, 2004; Greenwalt, 2005). This reputation, like all reputations in the public eye, is comprised of a mix of fact and fiction, mythology and accuracy, so it must be considered carefully. The Global Business Standards Codex was created not only as a guideline for companies to adopt but also as a barometer for critics to be able to adequately measure the morality of a company. It is an eight-pronged set of principles, at least five of which apply to workers: Dignity, Transparency, Citizenship, Fairness and Responsiveness (Paine et al, 2005). Wal-Mart grossly violates the basic tenets of all five principles. Its illegal strike-breaking, obscenity and sometimes criminally low wages, usage of the dole to subsidize their operations, usage of sweatshops in China and the developing world, demeaning and insulting treatment of workers and the way that it encourages a culture of criminal dependency where the only thing that Wal-Mart employees can afford is Wal-Mart food violates the principles of Dignity, Fairness and Responsiveness.
Ethical Violations and Rebuttal of Dissenting Arguments
Fairness is perhaps the most key elements that Wal-Mart routinely undermines. Fairness can only be understood under contexts of equal treatment. This includes equal treatment under the law: All workers expect the same treatment, and companies should not try to circumvent employment laws that workers are expecting to be protected by. After all, companies benefit from laws too, and workers have entered into an implicit social contract with them that balances responsibilities and rights. A company abusing its workers is the same as a shoplifting employee: They are violating the implicit and explicit social contracts between workers and employers and the law. Wal-Mart’s violations of labor law are so routine as to be business practice, part of their departments (Greenwalt, 2005; Palast, 2004; FOX News, 2005; UNI Global Union, 2002). Wal-Mart has had to pay fines for its rampant hiring of illegal immigrants, a transparent violation of United States labor law (FOX News, 2005). And their union-busting activities are infamous and utterly illegal. “The reasons are clear: Wal-Mart wants to continue to pay sub-standard wages and deny workers proper medical insurance. Union busting operatives fly out from the Bentonville headquarters whenever there are signs of trade union activity in a store. And they do not just come there to talk with workers. Intimidation, pressure and threats are the agenda. In twenty-five US states, the company has had to face legal complaints about violations of workers’ rights” (UNI Global Union, 2002). Their strike-busting team is a specifically employed department akin to the Pinkerton Detectives of yore. It is obscene that there are defenders of a company that has a department specifically devoted to lawbreaking.
Wal-Mart’s managerial practices are famous for being rigidly authoritarian, insulting to their many elderly workers and demeaning, thus violating Dignity (Greenwalt, 2005). In fact, many of those who have tried and failed to create unions in U.S. Wal-Marts expressed that one of their primary motivations was just to be heard, to have better treatment as workers and to be treated as human beings. “…Wal-Mart has an atrocious record concerning workers’ rights violations. Allegations have surfaced everywhere – from Alabama to California to Pennsylvania – that Wal-Mart has overworked its employees, failed to pay these employees for hours spent on the job, provided poverty-level wages, created unsafe working conditions, engaged in rampant gender discrimination and broken child labor laws” (Zambrello, 2006).
Wal-Mart’s managerial staff do not respond to these concerns honestly. They instead try to protect the company from liability. They do not treat their workers as citizens (Greenwalt, 2005; Zambrello, 2006). Even creating a company mandate to have honest feedback, refusing to engage in gender discrimination and rooting it out, and treating their senior workers with the respect due to the elderly would go a long way towards making them an ethical company.
The arguments put forth by Wal-Mart’s defenders are so weak that they actually read as if written by an opponent of the company in satire. Hemphill (2008, 29) actually argues, “Not surprisingly, if competitive wages were not being paid to employees, why would 8,000 applications be received for 300 new Wal-Mart jobs in Kearny, New Jersey, or 4,200 job applications… in affluent White Plains, New York?” By this reasoning, there must have been no labor exploitation in the 19th century either, with 60-hour 6-day weeks, child labor, company stores and not even. But, of course, Hemphill’s argument is also racist and culturally supremacist, since he ignores one of the main complaints of labor activists: That Wal-Mart brutally exploits a population of Third World Chinese laborers (Greenwalt, 2005). This is vital, as Tilly (2007) notes, because Wal-Mart does not treat its workers uniformly across the globe, and has indeed failed in many areas such as international expansion (compared to European competitors), having had to pull out of many countries and failing to grow as rapidly as it did in the US. Greenwalt (2005) examines at every level why: Wal-Mart is a parasitic organism that can only grow to the degree it does in the United States due to public subsidy, broken promises to towns and municipalities that end up eating the cost of a huge unzonable section of real estate as well as the roads and energy they often provide at taxpayer cost, America’s awful minimum wage, and so forth. The big-box store is an obviously failed system: It requires scale at all levels that are simply unsustainable. Hemphill’s weak arguments deserve no further comment: They do not reach the level of parody.
Fishman, meanwhile, argues that all of the company’s profits would not get all of its workers to $12 an hour (2006, 12). This argument has numerous obvious answers, the primary one being this: If you can’t go into business paying your workers enough, you don’t belong in business. Other grocery stores like Safeway, Raley’s and others can tolerate unions and pay their workers a decent wage, and they are not collapsing. Fishman claims that to raise prices would “[violate] the fundamental mission of the company” (2006, 12). But this idea is based on the absurd notion that a company has no responsibilities but to offer low prices. Basic ethical standards like the Codex requires companies to take into account stakeholders such as citizens, communities, workers, host nations and other businesses. Fishman is in essence conceding that Wal-Mart is an unethical company while defending it.
Further, Fishman’s argument is absurd on the face of it. Could they not afford a.50 cent increase? Couldn’t the top brass endure a massive pay cut? The Waltons are worth billions: Why do they not invest that back into the workers who work hard for them (Greenwalt, 2005)? Defenders of Wal-Mart point to their charitable work, but in fact Wal-Mart is one of the stingiest corporations and the Waltons one of the stingiest families among the richest families in the world (Greenwalt, 2005). Bill Gates, meanwhile, gives massive portions of his wealth to charity. Also, Fishman is ignoring, as all Wal-Mart defenders do, that Wal-Mart requires extensive government subsidy into infrastructure, subsidized health care, and so forth (Greenwalt, 2005). His, and Hemphill’s (2006), arguments are premised on the idea of a fair marketplace where ruthless behavior can be justified because there is no outside intervention. But Wal-Mart can compete because it has found a way to exploit U.S. economic and labor policies. If it is true that $12 an hour wages would bankrupt the company, they should be bankrupt (Sklar, 2001). “The real value of the minimum wage peaked in 1968 at $7.92 per hour (in 2000 dollars). Since then, worker productivity went up, but wages went down. Productivity grew 74.2 percent between 1968 and 2000, but hourly wages for average workers fell 3 percent, adjusting for inflation. Real wages for minimum wage workers–two-thirds of whom are adults–fell 35 percent. If wages had kept pace with rising productivity since 1968, the average hourly wage would have been $24.56 in 2000, rather than $13.74. The minimum wage would be $13.80–not $5.15 [as of 2001]” (Sklar, 2001). Further, some indicators pointed to an even higher minimum wage! Wal-Mart is preying upon the fact that the American minimum wage has been kept far below productivity thanks to government policy. This is not to mention the simple logical point that, if they paid their workers more, their workers would likely end up spending most of their additional paycheck at Wal-Mart, leading to almost no net loss (Greenwalt, 2005).
Wal-Mart is not just a violator of the Codex, but as an archetype for exactly how arrogant, oversized companies can use criminal tactics and exploit government and market failures as a parasite. They are not just unethical, they are anti-ethical.
List of References
Fishman, C. 2006, ‘The Wal-Mart Effect and a Decent Society: Who Knew Shopping Was So Important’, Academy of Management Perspectives.
FOX News. 2005, ‘Wal-Mart Settles Illegal Immigrant Case for $11M’.
Greenwalt, R. 2005, Wal-Mart: The High Cost of Low Price, Brave New Films, USA.
Hemphill, T.A. 2008, ‘Demonising Wal-Mart: What Do the Facts Tell Us?’, Journal of Corporate Citizenship, vol. 31.
Palast, G. 2004, The Best Democracy Money Can Buy, Penguin Books, New York.
Paine, L., Deshpande, R., Margolis, J.D., and Bettcher, K.E. 2005, ‘Up to Code’, Harvard Business Review.
Sklar, H. 2001, ‘Minimum Wage – It Just Doesn’t Add Up’, Knight Ridder/Tribune News Service.
Tilly, C. 2007, ‘Wal-Mart and Its Workers: Not the Same All Over the World’, Connecticut Law Review, vol. 39 no. 4, 1805-1823.
UNI Global Union. 2002, ‘Wal-Mart’s union busting operator named by US authorities for illegally threatening workers’.
Zambrello, B. 2006, ‘Employee Abuse At Wal-Mart Intolerable’, The Daily Campus.