Wal-Mart And Unions

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This website was built to help share the term paper and presentation we created as part of our final project in microeconomics. We hope it helps spread some of the interesting information and insights we gained as we researched Wal-Mart's business, structure, and effect on communities and our economy as a whole. Paper and presentation were written by Roberto Garcia Jr, Fabian Renteria, Desiree Sanchez and Daniel Scrivner — who currently attend Victor Valley Community College.

Video Clips

Confessions of a Wal-Mart Hit Man
A great clip from the hour-long documentary Wal-Mart: High Cost of Low Prices in which an ex-manager talks about life at Wal-Mart.
John Edwards on Wal-Mart and Unions
Great conversation between John Edwards and Chris Matthew's of Hardball about Wal-Mart's effect on small towns and the poor.
The Age of Wal-Mart
A great clip from the hour-long documentary Wal-Mart: High Cost of Low Prices about how Wal-Mart is dominating the retail industry.
Wal-Mart: Good for Third-World Workers?
Finally a view from the other side of the aisle. This author debates why he thinks Wal-Mart is doing an incredible job of alleviating poverty.
The Corporation - A Legal Person
Somewhat off topic, but a great video clip on what a corporation really is - showing the perspective from both sides of the spectrum.
The Corporation - Case Histories
Briefly talks about Wal-Mart, but focuses largely on the exploitation of Third World countries' employees for profit.

What We Learned

Just how big is Wal-Mart?

Wal-Mart does more annual business than Target, Home Depot, Sears, Kmart, Safeway, Ralphs and Food-4-Less (Kroger) combined. It posted world-wide revenues of more than $300 billion last year. It currently operates in 13 countries - mostly South of the U.S. border - and employs a total of more then 1.8 million people worldwide. It's the largest private employer in Canada, Mexico and the United States.

How much taxpayer subsidation does Wal-Mart receive?

Wal-Mart receives $2,103 annually per employee for food stamps, school lunches, medicaid, assisted housing, and low-income energy assistance. Each year taxpayers pay more than $3 billion in total just to subsidize Wal-Mart's employees, because over 80% of them live below the poverty line. Wal-Mart knows this, and even takes each new employee through the different social programs when they are hired. This is just one way in which we pay "back-end taxes" for Wal-Mart's signature low, low prices.

How much can union members benefit from union wages?

Because union members can negotiate wages through the collective bargaining concept, members can obtain wages that not only raise their standards of living - but can keep them from living in poverty. Unions were originally formed to strengthen the power and the voice of the worker - and to keep them from being taken advantage of by employers. And while this concept has morphed into something far less pure and ideal in many cases today, unions members still enjoy higher wages and better benefits in today's economy. Wal-Mart has staunchly resisted unionization in any of its stores since its inception.

On the positive side, what good has Wal-Mart done?

For starters, Wal-Mart is a very charitable company. It's the largest cash contributor in the United States. And last year alone it gave away over $245 million to various groups and causes. By some economists calculations Wal-Mart has also single-handedly raised American's standard of living, by saving consumers over $100 billion a year. While this number is contested, and may be blown out of proportion, it's certain that Wal-Mart has had a tremendously positive impact on the lives of America's poorest citizens.

Does Wal-Mart really have to choose between high prices or low wages?

"High prices vs. low wages" is a false dichotomy set-up by Wal-Mart's supporters to sound good. And it does, doesn't it? The problem is that it doesn't stand up to simple scrutiny. In Wrestling With Wal-Mart the Economic Policy Institute concluded that if Wal-Mart simply reduced its profits to their 1997 levels, they would have $2.3 billion to plough into improved wages without needing to raise prices. This would still leave them with a total profit margin double that of one of its biggest competitors - Costco - who posted a profit margin of 2% in 2005. The fact of the matter is that Wal-Mart has consistently chosen to pinch pennies and squeeze every last drop out of everything that it touches.