Friday, May 9, 2008

Why Not Shop at Wal-Mart?

I have boycotted Wal-Mart for many years now. It's been a pleasure to seek out local businesses to support. I have never found the need to return to Wal-Mart other than redeeming a gift card someone gave my son. Admittedly, I do live in a mid-to-large size city, so my options are more numerous than those who live in small cities that have had Wal-Mart come to town and put all the little guys out of business.

So, why do I not shop at Wal-Mart?

They put locally-owned shops out of business. That's just capitalism, you say? I don't agree. Wal-Mart is one of the most powerful companies in our country, and they use their weight to strong-arm their suppliers into meeting their price requirements. There is no way smaller companies have that type of leverage, so they are subsequently put out of business. Yes, all companies are in business to make a profit, but this type of bullying just doesn't set well with me. A true "fair market" is going to your local farmer's market where you get to choose what quality you purchase, and the vendor is allowed to set their own price for their own product.

They demand suppliers to produce their products overseas. The effect of Wal-Mart's strong-armed demands for low prices from manufacturers forces those manufacturers to move their production plants to third-world countries in order to produce their products cheap enough to meet Wal-Mart's demands. Thus, not only are we contributing to sweat-shops and child labor violations, but thousands, if not millions of Americans lose their jobs.

They pay sub-standard wages. But Wal-Mart employs millions of people, you say? Yes, they do, but at sub-standard wages and little or no insurance. The average Wal-Mart employee makes less than $20,000 a year, contributing to our weakening economy.

They do not offer adequate health care to their employees. Fewer than half of their employees are covered by insurance. They have a purposeful part-time policy set in place so that their employees are not eligible for insurance. The average wait for an employee to be eligible for insurance is six months, compared to 1-3 months in the average retail market. A family's deductible is $3,000 per year. Their health care plan is filled with additional charges. Employees pay 41% of their insurance costs compared to the national average of 16%. They spend 40% less than the average for all other U.S. companies on their employee's health care; On average, U.S. employers spend $5,600 per worker on health care annually. Wal-Mart spends only $3,500.

They shift their burden to the taxpayer. 46% of employee's children are on welfare. In 24 states, Wal-Mart leads the list of companies with the most employees and dependents enrolled in state-funded health care programs. Wal-Mart causes an increase in state Medicaid spending by as much as $898 per person.

They use ethically-questionable means to avoid paying taxes. Despite $375 billion in annual revenues, Wal-Mart is one of the most frequent recipients of economic development subsidies from state and local governments across the country.

Wal-Mart retained 8 lobbyists in 2007. Some of their aims were: blocking legislation that would force it to pay its fair share in state income tax; lobby against H. 3756 “Act Improving the Fairness of the Tax Laws” which contained a provision that would require Wal-Mart to pay millions of dollars in state income taxes that the retailer has dodged by creating “sham transactions” that it pays to itself (H. 3756 would close this tax loophole, forcing Wal-Mart to pay as much as $5 million in state taxes that it has previously dodged).

It sets up Real Estate Investment Trusts through which it pays rent to itself, and then that rent shows up as an expense on state tax forms, and is thus deducted from its taxable revenues. The REITs are owned by Wal-Mart subsidiaries which are registered in Delaware, a state that has no corporate income tax. Wal-Mart gets the benefit of the rent expense, but also gets the benefit of the non-taxed dividend, on the same monies. The dividends escape taxation, and the original rent that created the dividends is deducted from taxable income in the states where the “expense” is incurred. The rent, in essence, goes from one Wal-Mart pocket, into another.

So what? By distorting its income, Wal-Mart shifts its own tax burdens to individuals and small businesses that are unable to set up such elaborate systems.

Don't all companies avoid paying taxes?
"While other companies do in fact work to minimize their tax payments, none approach the scale to which Wal-Mart has done so. Considering Wal-Mart’s size – the nation’s largest private employer and many states’ largest private employer - the impact of these various tax avoidance methods is much larger and more widespread than that of other corporations. These tax strategies combined with Wal-Mart’s relentless pursuit of building subsidies and tax breaks, and the retailer’s systematic challenge of property tax assessments results in substantial damage to states and local communities. " Quote taken directly from here.

And if all that doesn't make you sick enough, read here how Wal-Mart sued an employee's family, attempting to take their accident settlement when their Mom was left crippled and brain damaged in an accident!

And my final reason: Wal-Mart made me sick! Literally. I don't know if it's the air-circulation system, the walking for miles on concrete floors, or my senses being bombarded with the cacophony--probably all three--but shopping there made me physically ill.

If you're interested in reading more, here are some sites to check out: Wal-Mart Watch, from which much of my information came from, 1 World Communication, Indy Week, Boycott,


Anonymous said...

Thanks for that post. I have not stepped foot in a Walmart for 2 1/2 years, for many of the same reasons you gave you in your post. I think my friends and family think I've gone a little overboard, but with a family of seven, we spend a considerable amount on food and STUFF, and I can't stand the thought of one of those dollars going to Walmart. Way to go for sacrificing convenience for what you believe!

Latte: said...

I pray I can get to this point one day...sad thing is every other place I can think of to go a major franchise. Almost seems to defeat the purpose...But I still have hope.


Kim said...

I do shop at other chain stores when necessary; however, I have not discovered that their practices are as grievous as Wal-Mart. I find the level of dishonesty, manipulation, and substandard treatment of their employees to be so harmful to America that I cannot shop there on principle alone.

Wal-Mart is the biggest, and they set the tone. They have built themselves up as so good for America, but, I believe, are one of the major contributors to this nation's failing economy.

WE are the one spaying for their "low prices." I don't think we can afford to shop at Wal-Mart!