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Another Perspective on Wal-Mart
(August 29, 2006)
I am continually astonished (and of course gratified) by the high bandwidth, knowledge
and experience of this humble site's readers. You, the readers, provide information
to your fellow readers which is often unavailable elsewhere.
In that spirit, I offer you one executive reader's experience with that colossus of global
retailing, Wal-Mart. (My own view is encapsulated in the accompanying graphic.
Any corporation which relies on taxpayer-funded programs to provide medical care for its
employees while it makes billions in profits does not win any "good corporate citizen" awards
in my book. Let's call it what it is: a corporate leech on the body of the Republic/corporate
welfare recipient. If "always low prices" saddles we the taxpayers which billions in
additional expenses which competitors such as Costco somehow manage to pay themselves,
then are those "low prices" truly low or merely subsidized?
For a look into the inner workings of Wal-Mart, let's turn to our first-person account:
Approximately a year ago I was contacted about being the CFO for
Wal-Mart's real estate company. Just the annual capital budget ran approximately $6 billion.
It also had a large staff--approximately 150 people. Anyway after several telephone
interviews Wal-Mart asked me to fly out and meet them.
I ended up taking a flight out of a west coast airport that got me into Northern Arkansas
airport at something like 10:00. Let me tell you it is dark in Northern Arkansas at 10:00
P.M. and I got lost driving to Bentonville. Now this is kind of funny since I have lived
on four continents and travel the world with a map and hardly ever get lost. I currently
fly all over the country to some of its major cities and never get lost, but it was so
dark and the road signs if they existed at all were so small I could not see them. Anyway,
to make a long story short I get to my room at approximately 1:00 am.
It is a $50 room even though there is a Hilton Inn down the road which might cost $20 more
but would be a much better room. There is a lot of noise from pick-ups driving around at
night with modified exhausts (even though I live in a major city I am from a similar area
so I am not an elitist). Anyway I get up at 5:30 am so I am lucky to have 3 hours of sleep.
I drive to Wal-Mart and start the interviews at 8:00 am. These last for 8 hours. Lunch
is a bottle of water and a protein bar which I ate while walking down a hall. I finally
get out and have to drive to the airport. I make it back to the airport and have a raging
headache. I catch a flight somewhere around 7:00 am. I am worn out by the time I get back
to the west coast.
Now this is the kicker. I never ever hear back from them. Not even a “Thanks but no
Thanks” letter and even though they have my email address I don’t even receive a two word
email like "You suck." Nothing!
Now I have my own consulting business and at that time I was very busy. A chargeable day
could bring in a significant sum when I am working on a project like I was at that time.
So in my case time really is money. The HR department had a large number of executive
recruiters and support. What would it have taken to send an email?
In summary, I was very unsure about Wal-Mart. I knew they treated their staff even worse
than most retailers and they have a turnover of close to 50% or more a year. I also do not
support bringing in all of the goods from basically what I look at as slave labor camps
(I am a true believer that if people do not pay employees a decent wage there will soon
not be anyone in this country to buy anything). Finally, I find the quality of the goods
leaving much to desire. Also going from the west coast and NYC where we lived previously
to NM Arkansas would have been a big change.
With that said my mother had cancer surgery a few months before and I would have been
closer to where she now lives. We are both from the South Central part of the United
States and so it was not like we have never been in this culture before. Also, we are
kind of burned out with the West Coast and thought the change would be interesting.
But after never hearing anything from them, all I can think is if this is how you treat
let us say one of the top 30 or so executives in the organization then how do you treat
the bottom level of people who work in your stores. The whole of Wal-Mart is just an
extension of the slave labor environment in China.
To be fair, we have to ask: do Wal-Mart's global competitors, Carrefour (France),
Tesco (U.K.), Bailian Group (China) or Aeon Co and Ito-Yokado (Japan), treat their
executives and employees any better than Wal-Mart? We cannot easily reach an
answer, but we can be appalled by the shoddy treatment offered by Wal-Mart headquarters,
and note that all the go-go hype about China neglects to mention the tens of millions
toiling for less than $100 a month making all the goods which line Wal-Mart store shelves.
The term for this pervasive low wage is the high-falutin' sounding term "global wage
arbitrage." I would call it by a simpler name, exploitation, and
reckon that such distancing terms as global wage arbitrage are masking the brewing of
the next Chinese Revolution as 300 million underpaid, uninsured and pensionless workers
observe the prodigious inequality of their society, i.e. the vast wealth
being accumulated by the 30 million at the top.
As our correspondent observes, perhaps there is a link between Wal-Mart's standards for
its Chinese subcontractors and its U.S. employees: the true cost of "always low prices,
always."
Here are my previous entries on Wal-Mart:
That Price Isn't Cheap, It's Subsidized
The Most Hated Company in America
For more on this subject and a wide array of other topics, please visit
my weblog.
copyright © 2006 Charles Hugh Smith. All rights reserved in all media.
I would be honored if you linked this wEssay to your site, or printed a copy for your own use.
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