December 15, 2011

December 15, 2011. Bentonville, AR. Two days ago, a journalist who typically writes in support of organized labor published an article that ruffled some feathers among America’s richest and most elite.

Author Jeffrey Goldberg reminds us that years before the Occupy movement and 99 percent cause was born, the 6 children of Sam Walton, founder of Walmart, had more wealth than the bottom one-third of all Americans combined. Today, Forbes used Goldberg’s Bloomberg article attacking Walmart to point out another astonishing statistic – if you have ten dollars in your pocket, you too have more wealth than one-quarter of all Americans.

According to Forbes, the simple fact is that 25 percent of American households have $0 or below $0 net worth. So, if you have ten cents, you’re already richer than a full one-fourth of the American people. In fact, with your shiny dime, you have a higher net worth than one-fourth of the whole of the American people combined!

In his defense of Walmart and the founding Walton family today, Forbes author Tim Worstall does a valuable service by reminding us of just how poor the American people truly are. Taking the statistics one step further, it’s discovered that 37 percent of households, not just individuals, have a net worth of less than $12,000. By comparison, in 2009 the 6 children of Walmart founder Sam Walton had a combined net worth of $93 billion dollars.

Beware however, as we at Whiteout Press always try to remind our readers, statistics can be very misleading.

According to the Forbes take on the numbers, a person with a net worth of below zero, could actually be sitting pretty. The article uses the example of a recent college grad. With as much as $100,000 in student loan debt, but now collecting a six-figure paycheck from a job at a downtown firm, this subject would be counted as poverty-stricken. But by the standards of society, he or she is by no means poor. The same goes for anyone with an underwater mortgage. While this family is seen as wealthy because they live in a mansion and they could sell their home for millions of dollars, after the transaction they’d be left with a negative net worth and no home.

The Forbes author takes issue with the pro-labor Goldberg by writing, ‘I certainly don’t mean that all those with negative net household value are in that situation: there are an awful lot of people who are “properly” poor in the way that we all usually understand it. But this comparison of wealth doesn’t show us quite what Mr. Goldberg thinks it does.’ Jeffrey Goldberg’s argument appeared in a Bloomberg article from earlier this week.

So who’s right?

Which author is the American taxpayer and independent voter supposed to believe? Do we take Jeffrey Goldberg’s side of the argument and react with outrage that 6 people have greedily horded $93 billion dollars of American wealth, more than 75 million Americans combined? Or do we take Tim Worstall’s side of the debate and dismiss the statistic altogether. The Forbes writer correctly debunks a portion of the overall pool of subjects. Indeed, many apparent rich people are actually quite poor and even more apparently poor people do in fact have a nice, secret financial cushion.

Like most, we believe in the free market system, capitalism and the laws of supply and demand. But as always, those policies must come with protective safeguards for the American people. Slavery must not be tolerated, much less profited on. Child labor, either directly or indirectly mandated, is unacceptable. Using poisonous, deadly or dangerous ingredients, in violation of US laws, is illegal. And using unethical, and often illegal, tactics to gain a virtual monopoly in one of the largest industries in the world, is not only immoral, but against the law.

Those tactics, and more, are how the 6 children of Sam Walton accumulated more wealth than possibly all 300 million Americans combined. In fact, the striking statistic that Forbes leaves out of their rebuttal is this – According to Forbes, of the top 11 richest people in America, 4 of them are the children of Sam Walton.

How did Walmart do it?

For those like this author who was at a prime shopping, and financially struggling, age when Walmart exploded out of its Bentonville, Arkansas birthplace, you may remember their first marketing campaigns. Commercials of American grandmas, rural farmers and young entrepreneurs happily laboring away to produce products for Walmart filled the airwaves. Walmart prided itself on buying its products locally. Buying tables from the Amish in Indiana or sweaters from a family-owned start-up in Texas were what Walmart was all about. In fact, buying locally meant that Walmart could save on transportation and warehousing costs. The retailer could then pass those savings onto the customer, always guaranteeing those everyday low prices.

According to Walmart’s website, ‘In his autobiography, Sam said, “… if you think about it from the point of view of the customer, you want everything: a wide assortment of quality merchandise; the lowest possible prices; guaranteed satisfaction; friendly, knowledgeable service; convenient hours; and a pleasant shopping experience. You love it when a store exceeds your expectations, and you hate it when a store inconveniences you, gives you a hard time, or pretends you’re invisible.”

But something happened between along the way. Today, Walmart is known for some of the lowest quality merchandise, not the highest as Sam Walton prescribed. They adhered to their goal of the lowest possible prices and convenient hours. But they quite possibly did it at the expense of the other goals. ‘Friendly’ and ‘knowledgeable’ are not two words typically used to describe Walmart associates. And worse yet – being shot, maced or raped in the Walmart parking lot aren’t generally considered ‘pleasant’ experiences.

What happened to Walmart?

As evidenced by the $93 billion dollars the Waltons now control, critics of Walmart argue that the company sold its soul for higher profits. They also argue, and have successfully won in court numerous times, that Walmart uses illegal and devastating tactics to achieve its mega-profits.

Among criticisms of Walmart are:

• The store purchases products made in third world countries for impossibly cheap prices and leaves the responsibility of maintaining ethical and legal practices to foreign subcontractors. Those companies Walmart buys its products from have repeatedly been accused of inhumane treatment of its workers and even using forced child labor and other forms of slavery.

• Walmart repeatedly builds super-stores on sacred and historical sites. With deals made with local politicians, the retailer has built stores on designated Indian burial sites, a Civil War battlefield and even next to the ancient Teotihuacan Pyramid in Mexico. When that store was constructed in 2004, construction crews unearthed ancient artifacts including a stone altar. That spot now lays beneath a Walmart parking lot.

• Cheap and often deadly and toxic materials are repeatedly used by Walmart’s foreign suppliers. Just one recent example was the popular ‘Miley Cyrus’ line of children’s jewelry. After tests showed the Walmart products contained dangerous and illegal levels of the element cadmium, Walmart pulled the products from shelves.

• Predatory prices are one of the most common complaints about Walmart. Here’s how it works – your town has one drug store, shoe store, tire store, clothes store, grocery store, liquor store, gun store, furniture store, electronics store and dentist. To gain a 100 percent monopoly on any of those products in your store, Walmart must first put those mom and pop shops out of business. Starting pharmaceutical prescriptions, Walmart uses its buying power to negotiate lower prices for itself than any other retailer can get. Now, Walmart can sell drugs cheaper than your local drug store can buy them for. Or, as was alleged in Federal court, Walmart simply sells the drugs at a loss just to out-price mom and pop until they close up shop. When there are no more drug stores, Walmart moves onto shoes, tires, etc. Unfortunately for Walmart however, it’s illegal to sell merchandise at a loss just to put your competitors out of business. So far, with hundreds of thousands of local stores buried by the super-store, nobody from Walmart has ever served a single day in jail.

• Demand and Supply sounds backwards, but that’s exactly the reversal of American capitalism that Walmart has miraculously accomplished. As detailed in many books on the subject, Walmart has become master of the manufacturing world. For eons, manufacturers produced a product, took into account how much it cost to produce it, and then sold it at a price that allowed for a small profit while still remaining competitive with other suppliers. Retailers purchased those products at the cost asked, reduced when volume purchases lowered the cost of manufacture, and marked them up appropriately to sell to the general public. But when Walmart was awarded it monopoly, it reversed the entire American system of business. Now and forever more, Walmart arbitrarily makes up a price it is willing to pay for any item, always well under what their few remaining competitors have to buy the same item for. How the manufacturer can produce a can of cat food for .10 cents when the base ingredients alone cost .20 cents, is the manufacturer’s problem, not Walmarts. It’s that Walmart pressure and impossible price demands that have led America’s manufacturing base to move to other countries, third world countries like China where slavery and child labor are tolerated.

• In any given American town or suburb, it’s generally proven that the highest crime areas are the none other than the Walmart parking lot. In many instances, the crime that occurs in Walmart parking lots account for more crime in any given town than the rest of the city combined. One place to find examples of outrage over this fact is with independently-made documentaries and victim lawsuits. Court documents, as well as other sources, have shown that while Walmart has a battery of cameras located throughout the inside of their stores, including dressing room areas, to look out for shoplifters, they rarely have more than one or two cameras outside, where the vast majority of violent Walmart crime occurs. Past disclosures have revealed that while Walmart pays to have their shoplifting cameras monitored by humans, the customer-protection cameras outside aren’t monitored by anyone. In fact, the cameras typically aren’t even aimed at the parking lot where they could capture necessary footage to capture and remove a violent offender from their midst. Instead, Walmart points the cameras at the front doors hoping to capture footage of shoplifters entering and exiting.

• Poverty level wages are another complaint about Walmart. Numerous critics and documentaries have exposed the corporation for recommending and assisting its employees to apply for welfare, including Medicaid. Critics contend that Walmart is using the taxpayer to fund its multi-billion dollar corporate healthcare program. By paying its employees sub-poverty wages, most of the company’s workforce qualifies for welfare benefits.

• In 2000, Walmart agreed to pay $50 million to its Colorado employees for forcing 69,000 of them to work without pay. In 2005, a class action lawsuit by Walmart employees in Missouri claimed the company forced as many as 200,000 workers to do the same.

• Child labor crimes by Walmart aren’t limited to outside the United States. A 2004 internal audit exposed by the New York Times of just one week’s worth of Walmart time cards for 25,000 of its employees revealed more than 1,300 violations of child labor laws, including working during school hours, working without breaks, working late into the evening or working too many hours or days in the week. Even more revealing, from those 25,000 employees, it showed there were more than 76,000 missed breaks during that week.

• Employing illegal immigrants throughout the United States is another way the Waltons accumulated their $93 billion dollars. Laying off American workers and replacing them with sub-minimum wage illegal immigrants, who also have no legal rights as far as Walmart is concerned, has been a staple of the Walmart business model for years. In 1998, 2001, 2003 and 2005, Federal agents actually had to raid Walmart stores nationwide to attempt to end the retailer’s illegal practices. One raid alone included 61 Walmart stores and resulted in the arrest of 250 illegal immigrants working at the super-store.

• Buy American used to be Walmart’s slogan. In fact, Wikipedia details that as late as 1995, only 6 percent of Walmart’s products were foreign-made. By 2005 however, that percentage increased to 60 percent and growing everyday.

In closing, it would take a book to detail all the un-American activities the Walmart corporation and it’s Walton family owners have used to destroy such a large portion of the American economy and the American dream. Not surprisingly, dozens of books detailing just that subject already exists. To sum up the consensus feeling from Main Street, the AFL-CIO said at the time – “Walmart is the single largest importer ../../../articles/q42011/defending-walmart-and-the-waltons647/of foreign-produced goods in the United States.css”, their biggest trading partner is China, and their trade with China alone constitutes approximately 10 percent of the total US trade deficit with China as of 2004.”