Earnings reports show that same store sales for Walmart have dropped for 5 consecutive quarters. One theory is that the slump is the result of wealth inequality and lower salaries for the bulk of Walmart’s customer base.
If so, it couldn’t happen to a better company.
Walmart began as the American flag-draped spawn of Sam Walton. For years, it advertised that its inventory was American-made even though the labels on its products clearly stated otherwise. Meanwhile, Walmart used predatory pricing to eliminate its competition. As a result, the retailer eviscerated small town America, forcing thousands of small retailers to close. When the competition had been eliminated, Walmart’s prices began to rise. At the same time, Walmart was putting such severe cost-cutting pressure on its suppliers that it caused the majority to outsource their production to nations that offered cheap labor with no labor protections and no benefits.
No company has had such a profound effect on the outsourcing of American jobs. A 5-year study found that, over that period, Walmart alone accounted for the loss of 133,000 American jobs!
In 1996, labor rights groups exposed the fact that a line of clothing sold by Walmart and endorsed by Kathie Lee Gifford was being made in sweat shops. Although Gifford had no control or responsibility for where Walmart chose to make her clothing designs, Walmart let Gifford take the criticism as it continued to wave the American flag.
More recently, labor rights groups have exposed the amount of corporate welfare given to Walmart in the form of tax write-offs, taxpayer-funded infrastructure for its stores and the taxpayer-funded benefits for its underpaid employees. A large percentage of Walmart employees are paid so little they need food stamps and Medicaid benefits to survive. Indeed, it has been reported that Walmart’s Human Resources department provides the government-assistance forms to employees the day they are hired.
The company has used its size and political clout to bully local governments to keep them from raising the minimum wage. It has demonstrated a pattern of suppressing employee hours in order to avoid providing benefits. Yet, while it forces a large portion of its labor force to live at or near the poverty level, Sam Walton’s heirs have become the wealthiest family in America.
Now, according to a report by Robert Greenwald published by Salon, Walmart says that it will spend $50 billion a year more on US-made products by 2022 in order to help build families. One suspects the retailing giant may have realized that, as a result of its policies, fewer and fewer Americans can afford to purchase what they once could. Nevertheless, let’s hope Walmart follows through on its pledge. But given the company’s past history, don’t hold your breath.