To many Americans, Wal-Mart seems as American as apple pie. After all,
could be more American than a company started by retail legend Sam
who successfully pioneered America's biggest buy American retail
History may be correct and compelling in this regard, but today's
bears little resemblance to Sam's original vision of old, except the low
prices. The low prices remain, but unless we are to accept that the end
justifies the means, today's Wal-Mart deserves a closer look at just how
they maintain their popularity and seemingly unshakeable reputation as
To be quick to the point, Wal-Mart's buy American campaign is a complete
sham. However, most people looking for the cheapest bargain possible
attention to little else than price, and it is quite possible the thing
remember most about America's number one retailer is, besides the low
prices, that they pretty much stock mostly made in U.S.A. goods wherever
whenever possible, which is entirely untrue. Were they to visit stores
Mexico or Canada in the mid-1990's, however, they would find buy Mexican
buy Canadian campaigns just as prominent as the buy American campaign
Furthermore, after Wal-Mart acquired 122 Canadian Woolco stores in 1994,
they ran full-page ads claiming "Wal-Mart is a Canadian company, managed
Canadians and staffed with Canadian Associates." But the fact is that
Wal-Mart is an American company, whose profits are sent to Bentonville,
and whose taxes on those profits are paid to the American government.
In the 1980's, Wal-Mart passed Sears and Kmart to become America's
retailer. Their economic prowess ranks them bigger than Poland, if they
to be considered a nation rather than a company. Not only did they
the largest retailer, they surpassed General Motors as the United
largest employer. And, as of 1992, Wal-Mart employed more Americans than
General Motors, Ford and Chrysler combined. So what's the big deal, you
ask? Wal-Mart accomplished this through a buy American campaign that has
since turned into empty patriotism. Wal-Mart's made in USA marketing
invites criticism today since it imports so many of its products from
I am not prepared to compare the volume of Wal-Mart's imports against
similar competitors like Kmart, but I can tell you that the only reason
Wal-Mart's "Bring it home to the USA" slogan was credible in the
was because it had more goods come overseas to start with compared to
Of course Wal-Mart's slogans come and go like most other retail chains,
at least one was ordered to be discontinued since it simply was not
For this reason, the Better Business Bureau forced Wal-Mart to stop
the slogan "Always the Low Price."
According to a 1998 National Labor Committee study, 85 percent of all
apparel products sold at Wal-Mart was made outside the USA. Wal-Mart,
course, defends itself wondering if Kmart and Target have similar
percentages (which they probably do). The difference is that Kmart and
Target don't make the same buy American claims as Wal-Mart.
At Wal-Mart, Girl Scouts are prohibited from asking "Would you like our
cookies?" And while Kmart donates 3.6 times as much as Wal-Mart to
Wal-Mart believes that by spending less of their profits on charity,
give more discretion to the charitable will of their employees, as if
employees have enough disposable income to spend on charity donations.
Most recently, another self-professed example of Wal-Mart's "flexibility"
their offer of "opportunity" to their associates to dip into their
retirement funds. The reason? Even though Wal-Mart is the nation's
employer in terms of the number of American workers, they found it
to raise health insurance costs not covered by the company a full 30%
2001 levels. And although Wal-Mart does voluntarily contribute 2% of
employees' pay into their 401(k)s, the company failed to mention that
employees who do raid their 401(k)s will have certain tax liabilities as
result, claiming it is already mentioned in other company literature.
grumbling employees feel they deserve an appropriate accompanying
on an issue as serious as raiding retirement funds to pay for basic
care. A single working mother would now have to pay $120 a month for
care to cover herself and one child. Wal-Mart's move is sure to increase
current level of over 44 million Americans who don't have health
The national average of company-sponsored health plans is 60%, but only
of Wal-Mart employees take advantage of company-sponsored health care.
majority of the rest rely on state or federal health care benefits that
and I pay for through our taxes. A nation of low income earners simply
cannot support the most costly health-care system in the world.
In 1996, the Congressional Research Service issued a report that noted
retail jobs "provided significantly lower wages than jobs in many
industries, and are often only part-time positions, seasonal
or subject to extensive turnover.In short, it is easy to over-estimate
true benefit to would-be workers in the local economy." Another downside
accompany this statistic is that retailing in now one-third of our
Similar to increased foreign investment, research shows that more
destroy jobs rather than create them. For every two jobs Wal-Mart
three jobs are lost in the community. And since the average Wal-Mart
employee makes $11,700 annually, which is below the poverty line for a
single mother with 2 children, wages throughout the community are reduced
It does matter to your home town, your state, and your country not only
you buy, but also where you shop. As a BJ's Wholesale slogan once said,
"When we shop, we're doing more than making a purchase, we're making an
investment." The health of the U.S. economy is the outcome of all the
individual actions we take collectively as a people. Consumers don't
necessarily demand cheap goods, but often find it necessary to locate
goods to save money. I do not believe that the majority of Americans,
especially since the events of September 11, think that bargain shopping
more important than patriotism, but it is sad to believe that more and
consumers find it necessary to find the best deal available. And to the
extent that this is true, it is also sad to believe that it is a signal
distress for the nation.
A full-time Wal-Mart employee earns less than $12,000 a year, and they
offered few if any health care benefits. A full-time employee as defined
the company is anyone who clocks-in 28 hours a week. 28 hours a week, by
way, is just below the threshold that would require Wal-Mart to pay
At the beginning of my research on buying American before I printed the
first edition in 1996, I did hear stories about how Wal-Mart kept
small businesses from going belly up that had few retail outlets to
their goods. Since that time, I have read many more stories pointing to
the opposite. Gitano Group, for instance, lost control of its
and price structure because of Wal-Mart, and ultimately went bankrupt.
Wal-Mart allowed Gitano to eventually sell just one-third of its products
Wal-Mart Stores, Wal-Mart required the company to shift more production
overseas as a condition for a continuing supplier-retailer relationship.
Wal-Mart then proclaimed Gitano mismanagement as a reason to seriously
reduce orders from the struggling company. Gitano went bankrupt. All
American jobs Wal-Mart helped create through an initial increase in
evaporated as domestic factories closed.
Wal-Mart once allowed Rubbermaid to sell 15% of its products to them.
when Rubbermaid tried to increase prices to offset a rise in the cost of
materials, Wal-Mart switched to Rubbermaid's competitors. In 1995,
Rubbermaid announced layoffs for 9 percent of its workers as it closed
It is my hope that America does not define itself merely as a nation of
bargain shoppers. We are a nation of values, tradition, and historical
culture. By shopping at Wal-Mart, American consumers may get cheap
underwear, but American workers get layoff notices.
Wal-Mart's success has turned many Main Streets of small-town U.S.A.
ghost towns. A 1995 Iowa survey showed that of the small retail
devastation statewide, half the clothing stores, nearly one-third of the
hardware and shoe stores, one-fourth of the department and building
materials stores, and nearly one-fifth of jewelry stores had closed
doors because of Wal-Mart.
What's more is that Wal-Mart usually buys cheap land on the outskirts of
town and uses their clout to get local officials to grant special tax
at taxpayers' expense. This amounts to nothing more than bidding for
redundant jobs with public funds.
Al Norman, author of a Slam-Dunking Wal-Mart, gives several examples of
small-town America has done and can do to stop Wal-Mart from ruining
Street USA in your hometown too. Remember, you may not get that coveted
"Bargain Shopper of the Week" award by shopping at small businesses, and
will probably pay a little more, but shouldn't we be more concerned
what's good for America's future than today's cheap bargain?
Why would America's future be better with less Wal-Mart's and more
locally-owned businesses? Because the poorer a nation's workers are, the
less rich the nation becomes. A study by the University of Massachusetts
found that $1 spent in a locally owned business has four to five times
economic spin-off of $1 spent in a Wal-Mart store. The reason, of
is that rather than keeping profits within the community to pay for
programs, profits are sent to Arkansas where Wal-Mart has its
You are probably also less likely to join one of the 25,000 people who
filed a lawsuit in court because they have been hit by falling products
instead of falling prices at Wal-Mart's stacked-to-the-ceiling store
And by not having to pay attorneys' fees to recover damages, you can use
that extra money to support your local hometown.
Your town will also be less likely to become a victim of large,
buildings, and your community will look much nicer without these
My state of Florida currently leads the nation with 30 (at last count)
abandoned Wal-Mart buildings. With Wal-Mart's multi-national success,
might gather the reason behind this phenomenon is something other than
lack of retail success in certain areas, and you are right. Their
tactics have led to success rather than the failure. Wal-Mart will
open up a normal-sized store to "test" the local market. And if it
to be more attractive, Wal-Mart will then open a new "supercenter" on
outskirts of the same town, leaving the old and now-empty
But small town USA is not alone in resisting Wal-Mart, nor should they
Unions like the UFCW (United Food and Commercial Workers) could be hit
if Wal-Mart opens supercenters in California, where union jobs in the
supermarket industry are prevalent. The Orange County Business Council
concluded that wages and benefits could be reduced up to $1.4 billion a
if Wal-Mart were to move into Southern California alone. The reason?
Wal-Mart's pay averages $9.63 an hour, or 47% less than at unionized
chains. The fact that these are union wages is not the issue. It is
union wages are higher than the wages at Wal-Mart, who has resisted the
union at every turn.
Despite the resistance, the UFCW won a union election in Jacksonville, FL
February, 2000. Even though the election involved only 11 meatcutters,
was a huge lift psychologically for the union, who had consistently
to organize any of Wal-Mart's 900,000 U.S. workers. Wal-Mart reacted by
eliminating almost every meatcutter job in the country, and
issued a statement claiming the switch to prepackaged meat had nothing to
with the union election. Kmart, on the other hand, honored their UFCW
election when meatcutters voted 11-3 for union representation in an
Not only does Wal-Mart avoid paying wages at levels that would be
sufficient if they really cared about their associates, they also avoid
paying court-ordered fines.
According to the December 17, 2001 Wall Street Journal, Wal-Mart was
to pay $6.8 million in fines for trying to screen hopeful job seekers
disabilities. According to the Associated Press, $3.8 million will be
to 21 former applicants, and another $3 million will be used to set up a
fund that allows other previous applicants with disabilities to come
and provide documentation of being unfairly turned away between 1994 and
This incident is certainly no red herring. Consider that on August 12,
Wal-Mart was found guilty in federal court for not paying its
overtime, violating labor laws. The Denver court ordered the defiant
to pay back wages to their affected employees. But then again, Wal-Mart
disregarded court orders before. In July of the same year, Wal-Mart was
ordered to pay Tommy Hilfiger $6.4 million for ignoring court orders to
selling fake Hilfiger apparel.
Only to the degree that Americans are wage earners can they also be
consumers. Consumers aren't necessarily demanding cheaper imports. With
events of September 11, polls show that a more-patriotic America
increasingly prefers American-made goods. Consumers are simply being
better deals on price during this recession, and many are taking them.
all, what American would pass up a good deal that could potentially save
them money? The problem is that cheap imports cost the consumer and the
taxpayer more in the long run. But admittedly it isn't up to the average
consumer to discern such issues - it's up to their elected
But even though it is a job they are elected to perform, they either
see the big picture or are willing to ignore it - at least for now.
Wal-Mart is an American company, and an emphasis should be placed on the
profits of our home companies, but not at the expense of virtually the
What Can Be Done?
Especially with the recent bankruptcy filing of America's number two
retailer Kmart, it is increasingly important to spread our consumer
between more competitiors rather than fewer. Wal-Mart is getting far too
many dollars from U.S. consumers, and it is likely that once their
competition is gone, Wal-Mart will slowly raise their prices. In the
of formidable competition, it is unlikely Wal-Mart cares any more about
ability to buy at rock-bottom prices than they care about abiding by
orders to pay millions of dollars in fines. If it is reasonably
for you to shop at larger stores, shop at Sears, Target, Kmart or BJ's
Wholesale Club (Sam's Club is owned by Wal-Mart). However, if at all
possible, patronize your smaller, locally-owned stores first, where you
see the benefits of keeping local dollars local and strengthening your
community. After all, local economies are the building blocks of state
economies, and state economies are the building blocks of the national
economy. Let's not replace higher-wage jobs and better benefits with
lower-wage jobs and unaffordable benefits.
It is quite possible that if America were to shop less at Wal-Mart,
immerses the consumer's mentality into a state of bargain shopping, we
actually spend less, save more, and develop better spending habits to
I believe that if we spent less money on cheap imports that we really
need anyway, especially in a time of economic recession, we just might
able to pay slightly higher prices at stores that don't thumb their noses
When consumers are immersed in a bargain shopping mentality, they are
persuaded to buy things they really don't need, but buy them anyway
the deal is just too good or too cheap to pass up. These extra dollars
could be spent at retail chains that find themselves in financial
like Kmart, because of what Wal-Mart is doing, and keep them healthy and
provide more competition to keep Wal-Mart on their toes. The Enron
taught us not to put all of our retirement-investment eggs in one basket.
should also be careful not to put all of our consumer-investment eggs in