LISSA’S: Discounted Employees

Discounted employees

Wal-Mart's appalling labour practices mean it's getting rich at the expense of workers and their families

Wal-Mart, the world's largest private employer, now employs over 1.3 million Americans. Globally, more than two million people are now Wal-Martees, and several million more are dependent on these employees. Millions also make their livelihoods by selling their products, albeit at rock-bottom prices, to Wal-Mart. In America the only employer with more clout than this overgrown supermarket chain is the federal government. The company has annual revenues three times larger than California's state budget, profits bigger than the GDP of many small developing nations and the clout to set its own purchasing prices and drive competitors out of business by undercutting them with consumers.

This is all bad - very bad. I'm not going to try to make the argument that all big corporations are, by definition, problematic. For better or worse, we live in a corporate world. Unless we want to dedicate our lives to living some back-to-land dream, for the foreseeable future most of us are going to spend a significant portions of our incomes shopping at one megastore or another.

No, the reason it's bad that Wal-Mart is so extraordinarily dominant (and, arguably, the reason why Wal-Mart is so dominant in the first place) is that the company has appalling labour practices.

The monitoring group Wal-Mart Watch has reported stories of employees refused bathroom breaks, forced to work off-the-clock overtime and punished for attempting to unionise their fellow employees.

In recent weeks, I've spoken with employees who have been with the company nearly a decade and still make only about $10 per hour. Huge numbers of Wal-Mart workers earn far less, scraping by on as little as $7 an hour.

Many are technically part-time, because if they're listed as not working a full 40-hour work week they don't qualify for health insurance for the first year of employment. Afterwards, when the benefits kick in, Wal-Mart removes a startlingly high percentage of the already-low wages to help cover the costs of the insurance. In other words, while Wal-Mart claims to provide most of its employees with health insurance, in reality the employees themselves are paying much of the bill.

One 58-year-old woman I spoke with brings home, in a good month, just over $1,100 after taxes. Out of this, over $100 is removed for health insurance. If the insurance she got for this was comprehensive, that wouldn't be so bad. But it's not. She has to pay the first $1,000 of her medical bills each year before her insurance kicks in, and after that she still has to pay $20 for every doctor's visit and $20 for most prescriptions. So, she has health insurance, but she can only really afford to use it for emergencies. Other employees pay less that her per month in premiums, but their deductibles are even higher - having to pay upwards of $2,500 before the insurance kicks in.

How far does a $1,000 take-home paycheque go today? Well, figure that even in a depressed rural community, $350 is about as low as you can go for rent or a mortgage, or even for paying to use a trailer lot space. Heating is going to run you about $100 a month. Utilities, including phone charges, another $100. Since a car is pretty much a necessity in most of the small towns and outer-burbs where Wal-Mart sets up shop, add in $100 a month for basic car insurance. If you're paying off the car, your payments will be at least $100 a month. Then there's gas. At current prices, even someone not driving more than a few miles a day to and from work is likely spending close to $100 a month on gas.

That leaves about $150 for food, basic household items like toilet paper, dish soap and shampoo, clothing, medical bills, the paying off of credit card debt and entertainment.

What gives? Well, first off goes entertainment. If you're working a low-wage job in America today, even going to the movies is increasingly an impossibility.

Then you go without new clothes. Then medicines. Sure, you might need your blood pressure pills or you'll likely have a heart attack or stroke down the road, but who can plan that far ahead when you have to make a few dollars and change last the month. Many end up giving up their insurance altogether, banking on the fact that they are paid so little they can qualify for state Medicaid coverage or hoping, against hope, that they don't get sick.

Finally, you start skipping meals. Recently, I've interviewed Wal-Mart employees who never eat breakfast, who take low-grade sandwiches to work for lunch and crack open a discount can of soup for dinner. They buy fruit if it's on sale at one or another discount market. Occasionally they treat themselves to low-grade meat for dinner.

Wal-Mart has annual revenues of over $351bn, and last year made over $11bn in profit. On the assumption an average employee works close to 40 hours a week, it could pay every one of its two million employees an extra two dollars an hour (translating to roughly $4,000 more per year, per employee) and still end up with nearly $4bn in profit each year. That's close to $1.5bn more than the 2007 profit level of Target, its closest rival in the all-in-one department store business and a company known for paying its workers more than Wal-Mart does.

The extra money would raise hundreds of thousands of workers out of lives of poverty, would allow them to afford healthcare and to buy enough food to feed themselves and their families.

Don't hold your breath on this happening anytime soon. But, next time you shop at Wal-Mart, remember that many of those who serve you probably don't make enough money to properly feed and clothe their families.

source: guardian unlimited