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Wal-Mart: Abusing Its Power for 40 Years


You don't have to be a bully to be a good capitalist.

Editors Note: Welcome to Love It or Hate It, a regular dual-column feature that will capture the love-hate relationship America has with some of its biggest, most controversial companies. For past columns, click here. For the opposing view on Walmart, see Walmart: The Leaders We Deserve.

I live 8.2 miles from the nearest Wal-Mart (WMT), and sometimes that feels too close.

I'm grateful that the distance makes it easy to avoid, however. That's because I'm one of those believers that Wal-Mart has done more bad than good for this country since it was established more than 40 years ago. See also Wal-Mart to Kill Two Cultures With One Stone.

Now, just for the record, I'm not some union-loving, left-wing, tree-hugger who doesn't believe in capitalism. I'm not being financed by any anti-Wal-Mart website or union group and I haven't read any of the countless books on Wal-Mart, such as The Bully of Bentonville, The Wal-Mart Effect, or The United States of Wal-Mart. I haven't even seen the movie Wal-Mart: The High Cost of Low Price.

I've just observed the rise of the world's biggest retailer and watched what it's done to competitors, suppliers, taxpayers, and employees along the way. It's been an ugly show.


The criticisms against Wal-Mart are well documented. The company employs 2.1 million people, many of whom subsist on near-poverty wages. About half of its US employees have company-sponsored health insurance; the rest have to fend for themselves or depend on the government for health care. Wal-Mart has been accused of predatory pricing by its competitors. Suppliers claim that its persistent demand for lower prices have led to bankruptcies, closed plants, and lost jobs. It imports so much product from China it's been blamed for the growing US trade deficit there. It's been accused of sexual discrimination, gender discrimination, child-labor violations, anti-Semitism, employing undocumented immigrants, denying overtime wages, dodging taxes, excessive pollution, and general thuggishness.

Of course, any company Wal-Mart's size is going to be scrutinized heavily. It's easy to attack the strongest, and not all allegations made against it will be true. And it's hard to deny the fact that Wal-Mart does provide a valuable service to our battered consumer economy: People need cheap stuff like never before.

But a company with the kind of influence Wal-Mart has over consumers, manufacturers, government, and international relations needs to conduct itself at a higher standard than Wal-Mart does. In recent years, it has teamed up with Democratic lobbyists and public-relations specialists to help it improve its image after years of lawsuits and bad press on its treatment of its workers. See The Bad Boys of Business: Wal-Mart.

It's troubling that Wal-Mart has to go to such lengths to shine its image instead of simply avoiding the practices that tarnished it in the first place. In a desperate attempt to keep its costs down, Wal-Mart -- which clocked in as the fourteenth most profitable company in the world last year as measured by Fortune -- has established corporate policy that calls for stepping on virtually everyone it's involved with.
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No positions in stocks mentioned.
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