Development Studies: Socio-economic Development from an Interdisciplinary Perspective Saleha Erdmann |
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In retrospect: Wal-Mart is development issue. It contributes to economic, environmental, social and human rights condition all over the world--all in negative ways. In addition, the corporation has proven its immense political power and ability to bypass the law on many levels (local, state, national, international). If development should be positive society maintenance, then Wal-Mart is everything development should not be. (Note: some of my citations are incomplete because for this particular class we were not required to fully cite sources that we used in class.) Wal-Mart Econ 220--Pernecky, Interim 2005 Wal-Mart boasts on its official homepage its “3 Basic Beliefs”: 1) respect for the individual, 2) service for our customers, and 3) strive for excellence. According to their “Statement of Ethics,” these three basic beliefs were formulated by Sam Walton himself and the corporation remains “firmly committed” to them (Wal-Mart, i). And yet, Wal-Mart’s position as the world’s largest corporation has inspired the anger of people worldwide. Websites like www.walmartsucks.com and countless others attest to the genuine anger of anti-Wal-mart activists. Tenacious grassroots movements have sprung up all over the United States to oppose Wal-Mart and in particular to oppose the building of new stores. Community activists believe that the corporations “3 Basic Beliefs” are a sham and that this powerful discount superstore destroys local businesses and community values, degrades and abuses employees, discriminates against women and minorities, ultimately causes a loss of jobs, systematically violates laws, and relies on taxpayer money to pick up the tab when the company cut corners. Wal-Mart’s reputation and ethical status has become increasingly controversial. Is Wal-Mart’s business ethic and operations economically just? The answer would depend on whose definition one used, but despite the diversity of theory on economic justice, close inspection of the conflict one requires one to answer with a resounding no. No, Wal-Mart’s mode of operation is not economically just, and communities have every right to reject this monster corporation from entering. In the long run, the introduction of Wal-Marts to rural communities is devastating to the local economy and culture. While Wal-Mart claims to create hundreds of new jobs, provide convenient shopping and low prices, and bring in new revenue, its presence ultimately harms communities more than it helps. This is because the predatory tactics Wal-Mart uses force local businesses to shut down, which in turn hurt the economy and the job market. In addition, studies have shown that for every two jobs created by Wal-Mart three are lost in the community (Quinn, 5 and www.walmartwatch.com). Not only does Wal-Mart destroy jobs, but also degrades the quality of jobs available by replacing local jobs with low-paying, impersonal, unsatisfying work. Other ways in which Wal-Mart harms rural communities will be discussed later on. Many communities welcome Wal-Mart but after several years come to regret their former support when it becomes clear that the company’s presence is not in their best interest. Since the 1980’s, many people have come to recognize the harm Wal-Mart causes and have begun resisting the building of new stores. Communities have every right to oppose Wal-Mart, and given the facts, it would be irrational not to. On a larger scale, Wal-Mart affects all communities, whether it is present (yet) or not. As the largest retailer in the world it sets the standard for the rest of the industry and uses its weight to influence political decisions that affect all of us. Consider Marx’s theory of economic determinism, which states that society is made up of an economic base and a superstructure. The economic base dictates the values that shape the superstructure (made up of things like religion, family and law?). As the largest corporation in the world, Wal-Mart sets the standard for other economic players and thus plays a significant role in shaping the economic base, which in turns shapes our superstructure. Even more relevant in this case is Marx’s theory of exploitation and alienation, which expands the labor theory of value that originated with Locke and Smith. The labor theory of value states that the value of a commodity is equal to the amount and quality of human labor embodied in that commodity (i.e. an apple is worth the labor it took to pick the apple) (Locke, Smith). According to this theory Wal-Mart employees should be paid a wage that equals the labor they put into their service. Marx argues that in capitalism a worker is paid a subsistence wage, the amount of labor that the worker is not compensated for is the surplus value, which the capitalist unfairly takes for him/herself as profit (Marx, #). The capitalist’s unfair acquisition of the worker’s surplus value is exploitation. Marx considers this exploitation unethical and argues that it leads to alienation on many levels. According to Marx people can only be fully human through work, but when they are exploit or are expolited they become alienated from their work and consequently themselves, others, and capital. Wal-Mart’s treatment of employees is a prime example of exploitation and the process of alienation. Wal-Mart’s “low, low prices” are a direct result of its low, low wages. In 2002 the official poverty line was an income of $15,020 per year. That year Wal-Mart paid its sales associates on average $13,861 per year and its cashiers $11,948 per year. These wages are substantially lower than other discount store companies (Wal-Mart: Basic Facts and Figure), more importantly; these wages are below the poverty line. In this case Wal-Mart does not even pay the subsistence wage that Marx writes about. Moreover, employees are often not paid at all for their labor. According to a 2004 report by the US House of Representatives in 2001 Wal-Mart was forced to pay $50 million in unpaid wages to 69,000 workers in Colorado after they won a class action lawsuit. This is not an isolated case, apparently it is common practice for managers to work employees off the clock. By paying workers below the poverty line, Wal-Mart is exploiting the value of their labor, leading to alienation, which violates the basic right to human dignity. There are several other examples of Wal-Mart’s exploitation of workers, but it is important to first explore the concept of human dignity. Several influential philosophers have argued for the case of human dignity, perhaps the most well-known being Immanuel Kant’s. According to Kant one should never use other as means to an end because all people should be treated with dignity. Kant’s philosophy on human dignity continues to be a foundation for contemporary philosophy and ethical standards, including the US Bill of Rights. Robert Nash also argues that the justness of capitalism is based on the idea that capitalism provides choices for people, which gives them control over their lives, which allows them to have human dignity. And Arthur Okun presents human dignity as one of the three justifications for economic inefficiency (the other two are political liberty and pluralism). Kant, Nash and Okun all consider human dignity an important component of justice. Ironically, the Wal-Mart Statement of Ethics also appears to value human dignity, the first of its “Three Basic Beliefs” is “Respect for the individual.” However, Wal-Mart does not allow its employees to have human dignity, as has already been illustrated by its refusal to pay above the poverty line. Besides low wages, Wal-Mart’s exploitation of workers is also manifested in discrimination, inadequate and inaccessible health care, an anti-union stance and countless cases of abuse. Female employees at Wal-Mart are routinely discriminated against. Two-thirds of Wal-Mart employees are women (US House of Representatives), they make up 72% of the hourly workforce, but only 33% of managers and a mere 15% of store managers. This unequal distribution of female employees is despite longer average seniority and higher merit ratings for women than men. In addition, women are paid 5-15% less than their male counterparts. A lawsuit is being brought against Wal-Mart by 1 million current and former female employees for discrimination in pay and promotion (Wal-Mart: Basic Facts and Figures). Wal-Mart has also been found guilty of racial discrimination. For example, several cases have been reported where the company only enforced its dating policy, which forbid dating between employees, with interracial couples but turned a blind eye to same-race couples (Ortega). More than half of Wal-Mart employees are forced to use their spouse’s health care plan, government subsidized health care or simply go without. That is because Wal-Mart’s health care plan is inadequate and often inaccessible to its employees. About 41-47% percent of employees are enrolled in the company plan, which is much lower than the national average of 66-67% (US House of Representatives, Wal-Mart: Basic Facts and Figures). For most employees the plan is too expensive. In 2001, employees were forced to pay 42% of the costs (US House of Representatives). The company deliberately makes the program inaccessible to employees through its cost and ever-increasing restrictions to eligibility. Moreover, the quality of Wal-Mart’s health care is poor (Wal-Mart: Basic Facts and Figures). Unions would advocate for better working conditions for Wal-Mart employees, but the company is firmly anti-union. Not a single Wal-Mart store is unionized. Managers are even provided a hotline they can call to report suspicious activity among workers that might lead to organizing (Quinn). Without unions, workers have fewer venues through which they can advocate for themselves, and as Nash points out, without choices one’s dignity suffers. All these factors—low wages, discrimination, poor health care and no unions, not to mention an endless number of specific cases of mistreatment—illustrate how Wal-Mart exploits its workers and alienates all its employees. The manipulation does not stop there, though. Where Wal-Mart cuts corners the community is forced to pick up the slack in tax dollars. The 2004 report from the US House of Representatives states, “Because Wal-Mart wages are generally not living wages, the company uses taxpayers to subsidize its labor costs.” These subsidies include welfare, government subsidized health care, food stamps, free an reduced lunch for children of employees, housing assistance, tax credits and deductions, Title I expenses, and energy assistance. The report found that a 200-person Wal-Mart store could cost federal taxpayers $420,750 per year. So much for low, low prices. Utilitarian philosophers like Jeremy Bentham and John Stuart Mill argued that people maximize their utility when they pursue their own self-interest. And since society is made up of individuals, whatever brings the greatest good to the greatest number of people is what maximizes utility for that society. In the case of Wal-Mart not only are the employee, but the general public, is exploited. The only ones profiting are high up Wal-Mart executives. Clearly, this is not maximizing utility for the greatest number. Perhaps if Wal-Mart managed to act within the bounds of the law its abuse of employees and destruction of communities could be justified under the argument that the company has a right to pursue its own self-interest and compete within the market. Mill advocated rule utilitarianism—pursuing one’s self-interest is what’s best for society, but some rules are still necessary. It would seem that Wal-Mart agrees with this concept, considering its polished Statement of Ethics that charges employees to follow the “Guiding Ethical Principles” at all times. These 10 principles include, “Follow the law at all times;” and “Never act unethically, even if someone else instructs you to do so.” However, Wal-Mart does not even abide by federal law, not to mention its own codes of conduct. Of the many laws Wal-Mart has been charged with violating they include: immigration, trademark, child labor, equal opportunity laws, and the withholding of evidence in court (www.walmartswaronworkers.com). Every year hundreds of lawsuits are brought against Wal-Mart by employees, customers and the government with complaints that are more than just isolated cases. Wal-Mart systematically breaks the law and its own advertised rules, this disregard for rules only benefits a select few and is in no way justified. The presence of Wal-Mart directly harms the well-being of individuals and the communities they comprise. It is in their self-interest to oppose the presence of Wal-Mart and particularly to oppose the arrival of a new Wal-Mart. Not only is it in their self-interest, but it is their right to do so through political venues. If Wal-Mart is allowed to compete on its own behalf—although it should no be since it does so illegally—then so are communities.
Works Cited: Bentham, Jeremy. “Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart.” (16 February, 2004). A report by the Democratic staff of the committee on education and the workforce U.S. House of Representatives Representative George Miller (D-CA) , Senior Democrat. “The Impact of Discount Superstores on Small Business and Local Communities.” (10 August, 1994.) Hearing before the Committee on Small Business, House of Representatives, One Hundred Third Congress, second session, Washington, D.C. Kant, Immanuel. Okun, Arthur. Ortega, Bob. (1998). In Sam We Trust: the untold story of Sam Walton and how Wal-Mart is Devouring America. New York: Random House, Inc. Locke, John. Marx, Karl. Mill, John Stuart. Quinn, Bill. (2000.) How Wal-Mart is Destroying America (And the World), and what you can do about it. Berkeley: Ten Speed Press. Smith, Adam. Vance, Sandra S. & Scott, Roy V. (1994). Wal-Mart: A History of Sam Walton’s Retail Phenomenon. New York: Twayne Publishers. “Wal-Mart: Basic Facts and Figures.” Retrieved January 22, 2005, from www.walmartswaronworkers.com Wal-mart Stores, Inc. (1 November, 2004.) Wal-Mart: statement of ethics (Number PD-10). Retrieved January 22, 2005, from www.walmartstores.com
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