The Wal-Mart Report

All of the following has been taken from Wake-Up Wal-Mart. Excellent source, check it out.

Wal-Mart has become much more than just a small corner store in rural America. In the past 10 years, Wal-Mart has grown into the largest retailer in the world * number 1 among the Fortune 500 * and is America's largest employer. With more than 1.4 million employees and over $10 billion in profits, Wal-Mart is a giant company with giant responsibilities. First and foremost, Wal-Mart has a responsibility to all Americans to set the standard for customers, workers and communities, and to help build a better America.

The truth is that Wal-Mart has let America down by lowering wages, forcing good paying American jobs overseas, and cutting costs with total disregard for the values (by shifting health care costs onto American taxpayers). Wal-Mart has needlessly exploited illegal immigrants, faces the largest gender discrimination lawsuit in history, forced workers to work in an unsafe environment, and * incredibly * broken child labor laws.

America's largest employer must reflect America's values. But, Wal-Mart will never change on its own. Lee Scott, Wal-Mart's CEO, mistakenly thinks he only answers to a few wealthy shareholders who own Wal-Mart stock. Lee Scott is wrong.

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---Wal-Mart Wages
Below the Poverty Level. In 2002, the federal poverty line for a family of three was $15,020 (Department of Health and Human Services.) Using the above estimates, a vast majority of Wal-Mart employees would be eligible for government programs. By paying wages that are below the poverty line and therefore forcing employees to rely on government welfare programs, Wal-Mart shifts costs to taxpayers, communities, and responsible employers.

Determining Real Wal-Mart Wages. Wal-Mart does not report an average wage covering all of its hourly employees. The average supermarket employee makes $10.35 per hour (Charles Williams, “Supermarket Sweepstakes: Traditional Grocery Chains Mull Responses to Wal-Mart’s Growing Dominance,” The Post and Courier (Charleston, SC) 16E, 11/10,03). Sales clerks at Wal-Mart, on the other hand, made only $8.23 per hour on average, or $13,861 per year, in 2001. Some estimate that average “associate” salaries range from $7.50 to $8.50 per hour (“Unaffordable Health Care, Low Wages, Sexual Discrimination – the Wal-Mart Way of Life,” 1/26/04). With an average on-the-clock workweek of 32 hours, many workers take home less than $1,000 per month (Doug Dority, “The People’s Campaign: Justice@Wal-Mart,” Air Line Pilot 55, 2/03). Even the higher estimate of a $13,861 annual salary fell below the 2001 federal poverty line of $14,630 for a family of three (Anthony Bianco and Wendy Zellner, “Is Wal-Mart Too Powerful?” Business Week 100, 10/6/03).

This payroll analysis also reports that sales associates, which is by far the most common job classification, earn on average $8.23 per hour for annual wages of $13,861. This is about 15 percent less than the annual average of $16,202. Based on these figures, sales associates work approximately 32 hours per week on average. Cashiers, which is the second most common job, earn approximately $7.92 for annual wages of $11,948. This is about 26 percent less than the annual average of $16,202. Based on these figures, cashiers work approximately 29 hours per week on average. Combined, sales associates and cashiers account for more than a third of all Wal-Mart jobs (Drogin 2003).

Wal-Mart and family budgets. The federal poverty line is used to determine eligibility for government programs and is based solely on food costs and the share of income families spent on food in the 1950's. Therefore, the federal poverty line underestimates the current cost to live. “Basic family budget” estimates are more accurate by reflecting the income a family needs for a safe and decent standard of living. “Basic family budgets” calculate the costs for every major budget item, including housing, childcare, healthcare, food, transportation, and taxes. Using government data, the Economic Policy Institute (EPI) estimated that the national median family budget in the United States for a two person family (one-parent and one-child) in 1999 was $23,705 (“Poverty and Family Budgets” online at www.epinet.org).
Wal-Mart’s average annual wages clearly fall below this basic threshold. In fact, Wal-Mart’s average wages would not even adequately support a two-person family in rural North Dakota, which was the most inexpensive place to live in with a basic family budget of $17,067.

High Turnover Results in Lower Wages. The Company reports that its U.S. turnover in 2002 was 45%. Based on these figures, 500,000 U.S. employees will leave the Company in 2003, and 540,000 new employees will need to be hired just to maintain the existing size of their labor force. In past years, turnover was even more extreme — in 1999, Company turnover was 70 percent (“Is Wal-Mart Too Powerful?”, Business Week, 10/6/03).

Managers forced to lower wage costs by deleting hours or forcing employees to work off the clock. Joyce Moody, a former manager in Alabama and Mississippi, told the New York Times that Wal-Mart “threatened to write up managers if they didn’t bring the payroll in low enough.” Depositions in wage and hour lawsuits reveal that company headquarters leaned on management to keep their labor costs at 8% of sales or less, and managers in turn leaned on assistant managers to work their employees off-the-clock or simply delete time from employee time sheets.

Off the clock work. In Oregon, 400 employees in 27 stores sued the company for unpaid, off-the-clock overtime. In their suit, the workers explained that managers would delete hours from their time records and tell employees to clean the store after they clocked out. In December 2002, a jury found in favor of the workers (Associated Press, “Federal Jury Finds Wal-Mart Guilty in Overtime Pay Case,” Chicago Tribune, Business 3, 12/20/03).

Union retail wages raise community living standards. A study by the Institute of Women’s Policy Research (IWPR) of government-collected industry data reports that unionized retail food employees earn on average a third more in wages than their non-union counterparts (“The Benefits of Unionization for Workers In The Retail Food Industry,” IWPR 2002). In fact, cashiers on average earned 52% more.
One southern California study showed that in 1999 an area union retail worker earned on average $15.57 an hour and a total annual pay of $32,386-- not even including benefits. Taking benefits into account, a union retail worker earned an additional $2.68 per hour in employer health care and pension contributions for a total average of $18.25 an hour or $37,960 annually ( “The Impact of Big Box Stores in S. California,” Dr. Marlon Boarnet).
According to data released by the Bureau of Labor Statistics in January 2004, union workers earn median weekly salaries of $760, compared to non-union workers’ median weekly salaries of $599 – a difference of over 26%. In the supermarket industry, the union difference is even more pronounced, with union members making 30% more than non-union workers. (Bureau of Labor Statistics, Department of Labor, "Union Members in 2003," Table 1 (January 21, 2004)

The world’s largest and richest retailer can afford wage increases. Wal-Mart could pay each employee a dollar more per hour if it increased its prices by a half-penny per dollar. For instance, a $2.00 pair of socks would then cost $2.01. This minimal increase would annually add up to $1,800 for each employee (UFCW estimate using the Drogin 2003 study).


---Wal-Mart Health Care
Lack of Health Care Coverage for Employees. More than 60% of Wal-Mart's employees - 650,000 people - are not covered by the company’s health plan. Fewer than half – between 41 and 46% – of Wal-Mart’s employees are insured by the company’s health care plan, compared nationally to 66% of employees at large firms like Wal-Mart who receive health benefits from their employer (AFL-CIO, Wal-Mart: An Example of Why Workers Remain Uninsured and Underinsured, at 1 (October 2003).
Employees must pay $218 per month for family health care coverage from Wal-Mart.
In Wal-Mart's employee health plan, deductibles range from $350 to as high as $3,000 for family coverage.
Employee premiums increased in 2002 by 30% for all of the Wal-Mart employee health plan options.
Wal-Mart further restricted the number of associates eligible for coverage by requiring fulltime associates to work 6 months before becoming eligible to purchase Wal-Mart health insurance. The company also raised the number of hours new employees must work from 28 to 34 hours per week to be eligible to purchase the expensive health care coverage.

Below Industry Standards. Wal-Mart’s spending on health care for its employees falls well below industry and national employer-spending averages. A Harvard Business School case study on Wal-Mart found that, in 2002, Wal-Mart spent an average of $3,500 per employee. By comparison, the average spending per employee in the wholesale/retailing sector was $4,800. For U.S. employers in general, the average was $5,600 per employee (Panjak Ghemawat, Ken Mark, and Stephen Bradley, “Wal-Mart Stores in 2003,” case study, Harvard Business School, 1/30/04).
Far fewer Wal-Mart employees elect to take coverage than the national average. For all firms offering health-care coverage, on average, 67% of their employees are being covered by their health insurance plan (Kaiser/HRET Employee Health Benefits Survey 2002). In contrast, based on the Company figures, only about 47% of Wal-Mart’s employees are covered by the Company’s health care plan-- which is nearly a third less than the national average (“Basic Health being abused, some say,” AP, 3/28/03).
According to a Company spokesperson, Wal-Mart makes the health care coverage available to around three out of four employees, which is near the national average (“Basic Health being abused, some say,” AP, 3/28/03, Kaiser/HRET Employee Health Benefits Survey 2002).
However, compared to the national average, far fewer eligible Wal-Mart employees elect to pay for the overly expensive and inadequate health care coverage. On average, for firms that offer health care coverage, 84% of eligible employees elect to take coverage (Kaiser/HRET Employee Health Benefits Survey 2002). In Wal-Mart, according to a Company spokesperson, only 62% of employees elect to take coverage— which is a quarter less than the national average (“Basic Health being abused, some say,” AP, 3/28/03).

Wal-Mart's health plan is too expensive for the large majority of its employees. Fewer Wal-Mart employees elect health care coverage than the national average, largely because the Company plan is too expensive. Employees must pay on average $208 per month for family health care coverage from Wal-Mart, which is one-fifth of an average employee’s wages. In Wal-Mart's employee medical plan, deductibles range from $350 for single coverage to as high as $3,000 for family coverage (Wal-Mart Summary Plan Description [SPD] 1/2004).
Wal-Mart has had a decade of premium increases that have been more than double the rate of health care inflation. According to the Bureau of Labor Statistics, the measure of medical inflation in the CPI has increased just under 50% since 1993 while at the same time the premiums paid by Wal-Mart associates have increased from 104% to 244% depending on the rate (Bureau of Labor Statistics and Wal-Mart plan documents).
Wal-Mart’s health care premiums increased by 30% just in 2002, nearly triple the national average increase of 11%. In 2003, Wal-Mart’s health care premiums rose another 18% which was once again higher than the national average increase (Wal-Mart's Open Enrollment Bulletin 9/01 and 9/02, Kaiser/HRET 2002 and 2003).
In 1999, employees paid 36% of the costs. In 2001, the employee burden rose to 42%. Nationally, large-firm employees pay on average 16% of the premium for health insurance. Unionized grocery workers typically pay nothing (AFL-CIO, Wal-Mart: An Example of Why Workers Remain Uninsured and Underinsured, 10/03).
Wal-Mart employees who utilize their health care confront high deductibles and co-payments. A single worker could end up spending around $6,400 out-of-pocket – about 45% of her annual full-time salary – before seeing a single benefit from the health plan (AFL-CIO, Wal-Mart: An Example of Why Workers Remain Uninsured and Underinsured, 10/03).

Wal-Mart continues to further restrict health care coverage eligibility. In 2002, Wal-Mart further restricted the number of associates eligible for coverage by requiring full-time associates to work 6 months before becoming eligible to purchase Wal-Mart health insurance. Part-time workers need to wait two years for health care insurance. Moreover, part-time workers are ineligible for dependent coverage. In 2002, the Company raised the bar for new full-time workers from 28 to 34 hours per week to be eligible to purchase the health care coverage (Open Enrollment Bulletin 9/01).

Wal-Mart does not offer quality health care coverage. Wal-Mart is currently a defendant in a class-action lawsuit by female employees who challenged the Company’s policy of excluding contraceptive coverage in it its health insurance plan. The Wall Street Journal reports that four out of five employees in the U.S. covered by self-funded health plans get contraceptive-drug benefits (“Wal-Mart Cost-Cutting Finds Big Target in Health Benefits”, Wall Street Journal, 9/30/03). As part of the lawsuit a Company spokesperson explained in September 2002 that, “[Wal-Mart’s health insurance plan] is oriented toward catastrophic coverage, with very little in the way of preventative benefits, regardless of gender,” (Daily Labor Report, 9-9-02).

Wal-Mart’s shifts its insurance costs directly to communities. More than a half-million Wal-Mart workers are forced to get health insurance coverage from the government or through spouses’ plans-- or live without any health insurance. Company spokesperson Sarah Clark explains that only 50% of its employees are covered by Wal-Mart’s company plan with 40% of its employees, or approximately 400,000 employees, getting coverage through government programs such as Medicare, other employers, spouses, or parents (“Wal-Mart's impact on job market in question,” Gainesville Sun, 7/7/2003). This leaves 10% of their employees, or approximately 100,000 workers, not being covered by any health care and likely relying on expensive emergency room care to receive service.
By not offering adequate health care coverage, Wal-Mart shifts the cost of health care to taxpayers and other employers which drives up the health costs for all of us. In fact in February 2003, the state of Washington, which faces significant budget deficits, found that Wal-Mart had the most employees enrolled in their state Basic Health Care plan. This government program is intended to provide health care for the working poor. This led State Rep. Steve Conway to ask, “Why should they [Wal-Mart] be shifting their health-care responsibilities to the state?" (“Basic Health being abused, some say,” AP 3/28/03).

Union Members Receive Better Health Care. For UFCW members, approximately 80% of members working in supermarkets are covered by fully employer-paid health benefit plans. Sixty% of union workers have medical care benefits on the job, compared to only 44% of non-union workers. (Bureau of Labor Statistics, Department of Labor, “Employee Benefits in Private Industry, 2003,” Table 1 (September 17, 2003).

Wal-Mart could easily provide affordable health care for employees. One% of the Walton family wealth would provide adequate health care for all employees.


---Wal-Mart Non-Health Care Benefits
Wal-Mart fails to provide a secure retirement benefit for its employees. Wal-Mart sponsors two retirement plans — a profit sharing plan and 401(k) plan — neither of which guarantee workers a fixed monthly pension benefit. In addition, the Company has shifted risks to employees by concentrating in its own stock.

Wal-Mart shares little of their profits with employees. Wal-Mart has stated that it has contributed around 4 percent of its earnings to its combined profit sharing and 401(k) accounts. For 2003, this would come out to a $302 a year contribution per employee or a $25 a month contribution, or around $6 a week, or around 17 cents an hour for a full time employee.
Betting your retirement on one stock is a dangerous policy. Contrary to the notion that Wal-Mart stock is the ticket to becoming a millionaire, the reality is that Wal-Mart’s stock price goes up and down like other companies. In fact, from January 2000 to January 2003, the average adjusted share price of Wal-Mart’s stock lost nearly a fifth of its value (Standard & Poors Historical Stock Prices). By being concentrated in one security, employees retirement plans are subject to the whims of one stock rather than having the safety of a diversified portfolio.

Wal-Mart is against employee input about their own retirement plans. Wal-Mart opposed a Senate bill that would have given employees more say over their retirement plans. Introduced in the wake of the Enron debacle, where workers lost pensions because of excessive investment in Enron stock, this legislation would help employees diversify their 401(k) and profit-sharing investments.
In keeping with the Bentonville-knows-best mentality, Wal-Mart simply mouths standard employer arguments, such as the cost of communicating choices, while boasting of its world leadership in information technology. “We have 650,000 associates out of about a million in the country that participate in our [401(k)] plan,” said one Wal-Mart spokesperson. “We have about 11,000 in Bentonville, but the rest of our people are in stores -- 2,700, across the country. The cost of election would outweigh the benefits" (“Wal-Mart opposes legislation on stock,” Arkansas Gazette, 4/3/02).

Union members receive better non-health care benefits. For instance, 72% of union workers have guaranteed pensions with defined benefits, while only 15% of non-union workers enjoy such retirement security. (Bureau of Labor Statistics, Department of Labor, “Employee Benefits in Private Industry, 2003,” Table 1, 9/17/03).


---Wal-Mart Anti-Union Policy
In the last few years, well over 100 unfair labor practice charges have been lodged against Wal-Mart throughout the country, with 43 charges filed in 2002 alone. Since 1995, the U.S. government has been forced to issue at least 60 complaints against Wal-Mart at the National Labor Relations Board. (International Confederation of Free Trade Unions (ICFTU), Internationally Recognised Core Labour Standards in the United States: Report for the WTO General Council Review of the Trade Policies of the United States (Geneva, January 14-16, 2004).
In 2000, when a small meatcutting department successfully organized a union at a Wal-Mart store in Texas, Wal-Mart responded a week later by announcing the phase-out of its in-store meatcutting company-wide. Pan Demetrakakes, "Is Wal-Mart Wrapped in Union Phobia?" Food & Packaging 76 (August 1, 2003). Rather than comply, Wal-Mart is appealing this decision. (Dan Kasler, "Labor Dispute Has Historical Precedent," Scripps Howard News Service (November 3, 2003).
Wal-Mart has issued "A Manager's Toolbox to Remaining Union Free," which provides managers with lists of warning signs that workers might be organizing, including "frequent meetings at associates' homes" and "associates who are never seen together start talking or associating with each other."[7] The "Toolbox" gives managers a hotline to call so that company specialists can respond rapidly and head off any attempt by employees to organize. (Wal-Mart, A Manager’s Toolbox to Remaining Union Free at 20-21 (no date). Available online at: )


---Wal-Mart & Gender Discrimination
Despite having a primarily female workforce, Wal-Mart’s management continues to fail to treat women unfairly. Approximately 700,000 women work for Wal-Mart which makes the Company the largest private sector employer of women in the United States (Drogin 2003). Wal-Mart is currently being sued for gender discrimination in promotion and pay, in what would be the largest class action lawsuit in United States history (www.walmartclass.com).

Largest class-action law suit in history. In 2001, six women sued Wal-Mart in California claiming the company discriminated against women by systematically denying them promotions and paying them less than men. The lawsuit has expanded to potentially the largest class action in U.S. history – on behalf of more than 1 million current and former female employees. While two-thirds of the company's hourly workers are female, women hold only one-third of managerial positions and constitute less than 15% of store managers (Neil Buckley and Caroline Daniel, “Wal-Mart vs. the Workers: Labour Grievances Are Stacking Up Against the World’s Biggest Company,"” Financial Times 11, 11/20/03). The suit also claims that women are pushed into "female" departments and are demoted if they complain about unequal treatment. One plaintiff, a single mother of four, started at Wal-Mart in 1990 at a mere $3.85 an hour. Even with her persistent requests for training and promotions, it took her eight years to reach $7.32 an hour and seven years to reach management, while her male counterparts were given raises and promotions much more quickly. For this plaintiff, annual pay increases were as little as 10 cents and never more than 35 cents per hour (Sheryl McCarthy, "Wal-Mart – Always Low Wages for Women!" Newsday, 5/1/03).

Despite being more experienced and qualified, women are severely under-represented as managers. A statistical analysis of Wal-Mart payroll records shows that despite making up 72% of the hourly workforce, women only account for 33% of managers and only 15% of store managers. This is all despite women having on average longer seniority and higher merit ratings than their male counterparts. Ultimately, instead of moving up, women are concentrated and stuck in the lowest paying jobs, comprising 92% of cashiers and 76% of sales associates (Drogin 2003).

Wal-Mart women workers earn less than men for the same work. For the same job classification, women earn from 5% to 15% less than men, even after taking into account factors such as seniority and performance. This equates to nearly 40 cents less per hour for hourly workers or nearly $5,000 per year for managers. This divide in pay has been growing over time (Drogin 2003).

Wal-Mart women face harassment and promotion barriers. In one woman’s testimony, a female assistant manager in a Virginia store realized that women employees consistently made less than male employees in the same position. When she complained, she had three different supervisors tell her that it was because men “had families to support.” When she expressed a desire to move into higher management positions she was required to commit, in writing, to working overnight for a full two years-- which was neither a commitment nor a task required for men seeking higher positions. After working as an assistant manager for seven years, she was never promoted to a higher position (“Declaration of Kim McLamb in Support of Plaintiffs’ Motion for Class Certification,” Betty Dukes et al Vs. Wal Mart Stores, US District Court Case No. C-01-2252). These patterns of discrimination in promotion and pay were found in all regions where Wal-Mart operates in the United States (Drogin 2003).


---Costs to Taxpayers
Due to low pay and lack of health care, Wal-Mart employees are eligible for federal assistance. The estimated total amount of federal assistance for which Wal-Mart employees were eligible in 2004 was $2.5 billion (“Harper’s Index,” Harper’s Magazine, Vol. 310, No. 1858, 3/2005)
According to a study by the Institute for Labor and Employment at the University of California-Berkeley, California taxpayers subsidized $20.5 million worth of medical care for Wal-Mart in that state alone.[48] In fact, Wal-Mart personnel offices, knowing employees cannot afford the company health plan, actually encourage employees to apply for charitable and public assistance, according to a recent report by the PBS news program Now With Bill Moyers.[49]

Public Subsidies. For instance, the Southern California Association of Governments calculated that the Southern California wage multiplier was 2.08, meaning that for every $1 reduction in wages, the community lost an additional $1.08 in indirect impacts. The study done in Southern California calculated that, if area grocery workers were paid Wal-Mart wages, more than $1.6 to $3 billion per year would be lost (“The Impact of Big Box Stores in S. California,” Dr. Marlon Boarnet).
It is common for Wal-Mart, the world’s largest corporation, to expect and receive taxpayer-backed subsidies for building stores and distribution centers (“Millions in subsidies paid for Wal-Mart jobs”, Palm Beach Post, 8/30/2003). Economic development through taxpayer-backed incentives is a questionable policy. In fact, the National Governor’s Association passed a resolution stating that “The Governors believe that the public and private sectors should undertake cooperative efforts that result in improvements to the general economic climate rather than focus on subsidies for individual projects and companies.”
After conducting its own study, the Palm Beach Post reported that Wal-Mart has directly received at the minimum $150 million in direct incentives from municipal, county, state, and even federal governments to open 47 distribution centers in 32 states. The Palm-Beach Post reports that this figure is only a start--- and likely grows by tens of millions when less quantifiable breaks such as government bond financing and enterprise zones are taken into account (Palm Beach Post, 8/30/2003).
For example, the Palm-Beach Post reports that in Lewiston, Maine, provided Wal-Mart with $17 million in state and local incentives in February 2002 for a 400,000-square-foot food distribution center that is to employ 150 workers when it opens in 2005. The incentive package included free land and water and sewer improvements (Palm Beach Post, 8/30/2003).
For more information on taxpayer-backed subsidies and corporate accountability, visit Good Jobs First at www.goodjobsfirst.org.
The Democratic Staff of the Committee on Education and the Workforce estimates that one 200-person Wal-Mart store may result in a cost to federal taxpayers of $420,750 per year – about $2,103 per employee. Specifically, the low wages result in the following additional public costs being passed along to taxpayers:
$36,000 a year for free and reduced lunches for just 50 qualifying Wal-Mart families.
$42,000 a year for Section 8 housing assistance, assuming 3% of the store employees qualify for such assistance, at $6,700 per family.
$125,000 a year for federal tax credits and deductions for low-income families, assuming 50 employees are heads of household with a child and 50 are married with two children.
$100,000 a year for the additional Title I expenses, assuming 50 Wal-Mart families qualify with an average of 2 children.
$108,000 a year for the additional federal health care costs of moving into state children's health insurance programs (S-CHIP), assuming 30 employees with an average of two children qualify.
$9,750 a year for the additional costs for low income energy assistance.
_Wal-Mart freely acknowledges shifting its health care costs to taxpayers and responsible employers. A company spokesman said, "[Wal-Mart employees] who chose not to participate in [Wal- Mart's health plan] usually get their health care benefits from...the state or federal government" (UPI, 12/2/98).


---Community Impact
Lower wages mean less money for the community. Experts explain that the surrounding community suffers when employers pay low wages. When an employer pays low wages to its employees, the employees have less money to spend on goods and services in the community, which in turn reduces the income and spending of others in the community. In other words a reduction in wages has a multiplier impact in the surrounding area.

Iowa Study. One of the most cited studies on Wal-Mart's impact on local communities was performed by economist Kenneth Stone at Iowa State University in 1993. Stone looked at the impact of Wal-Mart on small towns in Iowa. He found a 3% spike in total retail sales in communities immediately after a Wal-Mart opened. But the longer term effects of Wal-Mart were disastrous for nearby independent businesses. Over the course of the next several years, retailers' sales of mens' and boys' apparel dropped 44% on average, hardware sales fell by 31%, and lawn and garden sales fell by 26%. Likewise, a Congressional Research Service report in 1994 explained that Wal-Mart uses a saturation strategy with store development. In other words, it builds stores in nearby connected markets in order to stifle any competition in the targeted area by the size of its presence.[54]

By not offering adequate pensions along with wages, Wal-Mart shifts retirement cost onto communities. When employees retire without adequate savings and benefits, they are less able to pay for health care, housing, and food. Communities and taxpayers bear the cost as retirees make up the difference through programs such as Medicaid. Other employees, recognizing the inadequate retirement benefit, may be forced to continue working past retirement age, increasing their risk for injury, and increasing the chance that they will end up in a hospital at community expense.

Wal-Mart has vacated stores in hundreds of communities. The Dallas Morning News reports that Wal-Mart Realty, the real estate division of Wal-Mart, explained that the Company's rapid expansion of Supercenters, which are discount stores combined with a full-size grocery store, and Sam's Clubs, which are membership warehouse clubs, has contributed to hundreds of vacated stores for lease or for sale across the country (“Wal-Mart site: Use as is or rebuild?”, Dallas Morning News, 2/20/02). When Wal-Mart decides to convert a discount store into a larger Supercenter, it is often cheaper or easier simply to relocate entirely. In fact, retail expert David Brennan, associate professor of marketing at the University of St. Thomas, in St. Paul, Minn, notes that Wal-Mart stores relocate so regularly that, “it is not uncommon to relocate right across the street" (“Home Depot to Move from Old to New Store Next Door,” Providence News-Journal, 8/17/03).
Other experts point out the economic volatility of the discount retail industry leads to a greater chance of vacancy: “Big box retailers will most likely enter a community, boosting overall retail sales and tax revenues, only to be among the first to consolidate or fold when conditions begin to change” (“The Impact of Big Box Stores in S. California, ” Dr. Marlon Boarnet).

Wal-Mart’s stores are uselessly large for other tenants. An average discount store is 96,883 square feet, which is the size of two football fields. Wal-Mart’s Supercenters are on average nearly twice as large at 186,495 square feet. Sam’s Clubs are on average 125,000 square feet or the size of three football fields (Wal-Mart Annual Report 2003). Wal-Mart plans on relocating or expanding 140 Supercenters and 20 Sam’s Clubs in 2004 (Wal-Mart Press Release 10-03).

It is not easy to fill a vacated Wal-Mart store. Few non-retail companies need the large space of an empty Wal-Mart store. Real estate brokers explain that Wal-Mart will not sell or lease these empty stores to what it considers as competitors. A president of a major real estate developer in Dallas explained that when Wal-Mart moves out of a store, “They're not going to be very receptive to any retailer going into it and even if they sell it, they might put a non-compete clause in there. Why would they want more competition when they're fixing to build a mega-million store around the corner. They're going to be very protective of who goes in there” (Dallas Morning News 2/20/02 Wal-Mart site: Use as is or rebuild?). A president of a real estate brokerage firm in New York City succinctly explained, “They're not going to lease to Kmart” (Arkansas Democrat-Gazette, 1/28/01).

These relocations add up to millions of vacant square feet. In 1999, Paul Carter, the President of Wal-Mart Realty, reported that Wal-Mart will “vacate about 5 to 6 million square feet this year” (“Wal-Mart, Communities Find Uses for Stores,” New Orleans Times-Picayune 4/8/1999). This amounts to Wal-Mart vacating more retail space in 1999, than the entire 110-story Sears Tower. These vacated stores accumulate each year. In 2001, the Arkansas Democrat-Gazette reported that Wal-Mart controlled around 30 million square feet of vacant retail space through ownership or leases (Arkansas Democrat-Gazette, 1/28/01). To put it another way, Wal-Mart has enough empty retail shells to fill all of the offices of the Pentagon-- five times over. In fact, in 2003, The Orlando Sentinel reported that Wal-Mart was trying to lease 400 vacant stores (“Many Smaller Retailers to Feel Effects of Kmart Closures”, Orlando Sentinel, 2/3/2003). This represents more than a tenth of its entire store base.

Hundreds of jilted communities are left paying the price. A vacant property drains the value from the surrounding area, whether it be commercial or residential. For instance, in Elizabethtown, Kentucky, Wal-Mart deserted an 83,000 square foot discount store for a larger Supercenter. The empty discount store has remained empty four years later and counting. The property manager of the former Wal-Mart location explained that Wal-Mart ignored the property, “Wal-Mart walked off and didn't seem to care what happened to the store they're still paying rent on...the disarray of the way the store looked on the inside, it looked like a disaster.” Ultimately, the manager explained that, “It leaves the perception that we're not taking care of things out here, and that's not the case at all” (Arkansas Democrat-Gazette, 1/28/01).
The Los Angeles City Council commissioned a report in 2003 on the effects of allowing Wal-Mart Supercenters into their communities. The report, prepared by consulting firm Rodino and Associates, found that Supercenters drive down wages in the local retail industry, place a strain on public services, and damage small businesses.
The findings of the Rodino report are alarming. The labor impacts of a Wal-Mart Supercenter on low-income communities include:
"Big box retailers and superstores may negatively impact the labor market in an area by the conversion of higher paying retail jobs to a fewer number of lower paying retail jobs. The difference in overall compensation (wages and benefits) may be as much as $8.00."
"Lack of health care benefits of many big box and superstore employees can result in a greater public financial burden as workers utilize emergency rooms as a major component of their health care."
"A study conducted by the San Diego Taxpayers Association (SDCTA), a nonprofit, nonpartisan organization, found that an influx of big-box stores into San Diego would result in an annual decline in wages and benefits between $105 million and $221 million, and an increase of $9 million in public health costs. SDCTA also estimated that the region would lose pensions and retirement benefits valued between $89 million and $170 million per year and that even increased sales and property tax revenues would not cover the extra costs of necessary public services."
"[The threat of Wal-Mart's incursion into the southern California grocery market] is already triggering a dynamic in which the grocery stores are negotiating with workers for lowered compensation, in an attempt to re-level the `playing field.'
"One study of superstores and their potential impact on grocery industry employees found that the entry of such stores into the Southern California regional grocery business was expected to depress industry wages and benefits at an estimated range from a low of $500 million to a high of almost $1.4 billion annually, potentially affecting 250,000 grocery industry employees ... [T]he full impact of lost wages and benefits throughout Southern California could approach $2.8 billion per year."[52]


---Wal-Mart & Child Labor
In January 2004, the New York Times reported on an internal Wal-Mart audit which found "extensive violations of child-labor laws and state regulations requiring time for breaks and meals."[36] One week of time records from 25,000 employees in July 2000 found 1,371 instances of minors working too late, during school hours, or for too many hours in a day. There were 60,767 missed breaks and 15,705 lost meal times.[37]
According to the New York Times report: "Verette Richardson, a former Wal-Mart cashier in Kansas Ci ty, Mo., said it was sometimes so hard to get a break that some cashiers urinated on themselves. Bella Blaubergs, a diabetic who worked at a Wal-Mart in Washington State, said she sometimes nearly fainted from low blood sugar because managers often would not give breaks."[38]
A store manager in Kentucky told the New York Times that, after the audit was issued, he received no word from company executives to try harder to cut down on violations: "There was no follow-up to that audit, there was nothing sent out I was aware of saying, `We're bad. We screwed up. This is the remedy we're going to follow to correct the situation.'"[39]


---Wal-Mart & Illegal Immigrants
In March 2005, Wal-Mart agreed to pay $11 million to settle federal allegations it used illegal immigrants to clean its stores.
Since 1997, federal authorities have uncovered the cases of at least 250 illegal immigrants who were employed by janitor contracting services and hired by Wal-Mart in 21 states. Many of the janitors - from Mexico, Russia, Mongolia, Poland and a host of other nations - worked seven days or nights a week without overtime pay or injury compensation. Those who worked nights were often locked in the store until the morning.


---Studies Done on Wal-Mart
According to a 2004 report released by Congressman George Miller (D-CA), Wal-Mart’s rock bottom wages and benefits cost taxpayers hundreds of millions of dollars a year in basic housing, medical, childcare, and energy needs that the retailer fails to properly cover for its employees. Read a summary or download the report here.

Over the last two years, 13 states have disclosed employers that are major users of state provided health insurance programs which are aimed at low-income families. Wal-Mart has topped the list in all the states, except Massachusetts where it was second and Wisconsin, which did not disclose the usage of employers other than Wal-Mart. Read more of this summary and read the individual state reports here.

Wal-Mart is the largest employer in the United States, with over one million workers. It is the largest food retailer and the third largest pharmacy in the nation. The company employs approximately 44,000 workers in California, and has plans to expand significantly in the state over the next four years. Wal-Mart workers receive lower wages than other retail workers and are less likely to have health benefits. Other major retailers have begun to scale back wages and benefits in the state, citing their concerns about competition from Wal-Mart. Click here to download and view the full UC Berkeley report (PDF).