QUOTE(christopher @ Mar 14 2004, 10:35 PM)
Simply put if you lose your spot at Wal Mart your gonna lose a fortune.
They keep costs down and profit UP. To a capitalist they are almost perfect.
Christopher, for some vendors that's true. For others, not so much.
As the story link in my previous post points out, Wal-Mart doesn't just ask for cost or profit concessions, it demands them, year after year. A lot of companies have had to close US factories, and move to cheap overseas labor, just to stay in business. Others have gone bankrupt. Having a spot on Wal-Mart's shelves may look impressive on paper as far as your supposed "market share" goes. But, if you can no longer afford to pay the bills, all the market share in the world won't help you.
QUOTE(christopher @ Mar 14 2004, 10:35 PM)
The down side is they treat their employees like garbage. Low wages, no healthcare, and those who do get it pay very high costs and it is alleged they target those people for removal when costs need to come down.
Actually, it's quite a bit worse than even what you list, Christopher. Or, at least, it used to be. Ever hear of "dead peasant" insurance? Here's how it works.
Wal-Mart used to offer either $5,000 or $10,000 life insurance to it's employees, at a nominal monthly fee. The amount depended on whether you were an hourly worker, or in management. The payroll deduction was was only $10 to $20 a month and Wal-Mart had signed up nearly 90% of it's 350,000 employees. What's the big deal right?
Well, when Wal-Mart obtained the insurance for the employee, it also obtained a second policy, purchased without the employees knowledge, in amounts from $50,000 to $500,000 with Wal-Mart named as the beneficiary. So, when one of their employees died, the insurance company paid out twice. Once to the employee's estate, for barely enough to cover the funeral, and once to Wal-Mart, for a lot more. In some cases, 50 times more than what the employee's estate was paid.
It gets better. Reportedly, the insurance payouts that Wal-Mart received, went into the executive's and director's retirement fund. Nice huh? Pay for your rather lavish retirement on the backs of your deceased employees.
Now let's add insult to injury. The insurance purchased by the company was paid for through a complicated series of business loans, which were fully tax deductible. So, they were charging their employees for insurance that it wasn't costing them anything to begin with, and then profiting off of said employee's death.
Wal-Mart didn't stop obtaining the additional "dead peasant" insurance until 2000, when some deceased employee estates found out about it, and started suing to get the payouts that Wal-Mart had received. Additionally, many states began closing loopholes in their insurance laws that allowed for this kind of policy, or at least disallowed the tax break, so it became unprofitable. By the way, other companies have used this insurance as well, including Enron, Dow Chemical, Olin Mills and Shell Oil.
As one columnist in Texas, R.H. Meyer wrote in January 2003:
QUOTE
Several years ago Wal-Mart embarked on a television ad campaign featuring older semi-retired employees in an apparent attempt to recruit older folks into their employ. Is it possible that Wal-Mart valued its older "associates" in a more sinister way?
The ghoulishness of this practice speaks to the utter disregard - indeed contempt - that Wal-Mart holds for its "associates". Executives enriching themselves on the death of their employees. How low can one sink?
Apparently quite a bit lower.
In a class action suit filed in 2002, thousands of employees and former employees alledge that Wal-Mart doctors employees payroll records deliberately to keep payroll costs down.
In some testimony I read, payroll personnel stated they were told by store managers to go into the payroll system and "erase" overtime hours of some employees, or to show break times for employees, even if they took no break, to keep their payroll budget in line.
In other cases, managers told employees to clock out, and then called them back to their department to do additional work. Or, asked them to come in early, and then would not permit them to clock in for a couple of hours.
Behavior like this is not just illegal, it's morally bankrupt. R.H. Meyer again, from a different column:
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You can ask "so why should I be concerned?" Well, this is why: Kmart is currently in chapter 11 bankruptcy, in large part because of competitive pressures from Wal-Mart. Many, many locally owned retail businesses have been run out of business by Wal-Mart's predatory business tactics. In my own community, Wal-Mart enjoys a virtual monopoly with regard to many items. When a company is allowed to cheat its way to the top, everyone else suffers. Free markets only work if there is a reasonably level playing field, otherwise the least ethical of the competitors will rise to the top and through cheating, lying, and stealing, and will establish a monopolistic position. Companies like Wal-Mart that cheat their way to the top will eventually have their customers at their mercy. This is already the case in many smaller communities. How many times have you heard "Yes, I shop at Wal-Mart. I don't like it, but it's the only place in town to shop now?"
So, what should be done about it? Well, stealing is stealing, whether its by mearly taking someones property or by deceptive time-keeping practices. It's clearly time for the U.S. Justice Department and the Department of Labor to get involved and pursue the criminal aspects of these cases. Heretofore, corporations such as Wal-Mart have been insulated from criminal prosecution through a facade of "civil' remedies. It's time for the Attorneys General of the various states to pursue criminal actions against Wal-Mart, its executives, and its board of directors. Reasonable suspicion has been established. Every Attorney General needs to launch an investigation into possible criminal activities by Wal-Mart. Civil actions alone will be insufficient to deter Wal-Mart from continuing its practice of stealing from its employees. Unless this practice is stopped, competitive pressures will force Wal-Mart's competitors to adopt similar practices. If that happens, more folks suffer.
If convicted, Wal-Mart executives, directors, and corporate managers, in addition to jail time and heavy fines, need to be sentenced to stand in front of their stores wearing sandwich signs that read "Wal-Mart - Bringing you low prices by stealing from our employees."
Hey, truth in advertising. I don't normally go to Wal-Mart if I can help it, but I'd certainly make an exception to see executives with those sandwich boards.