Modern Day Wage Slavery at Wal-Mart

With an annual turnover of $400 billion, Wal-Mart is usually the biggest company on the Fortune 500 list. Its presence has always been there in the top 5 companies for over the past decade or so. The company is also the nation’s largest employer with more than 1.3 million workers.

Also, with the Walton family’s net-worth of over $150 billion, it has more money than the bottom 40% of Americans combined. The company owned by the richest family in the world has got embroiled in some serious controversies with regards to its labor practices. The average American resents the labor practices of the company and as such sales are declining given this bad reputation.

In this article, we will find out more about the questionable labor practices at Wal-Mart and why they are attracting so much negative attention.

Dress Code Controversy

Wal-Mart recently announced a new “dress-code” for its employees. Now, who would expect a controversy to be stirred out of something as mundane as dress code? However, Wal-Mart came up with a policy wherein its workers are required to buy their clothes from Wal-Mart itself. The employees who already feel marginalized because of the company’s strong-arm tactics went up in arms calling the practice illegal.

The United States federal law requires companies to provide uniforms to their employees free of cost. However, the legal team at Wal-Mart has used some legal word-play and converted “uniforms” into “dress code”. Federal law dictates that companies give free of cost uniforms. However, it does not mention anything about a “dress code”.

Workers in the United States therefore no longer trust Wal-Mart. Only people who cannot find a job anywhere else are the ones that want to be employed with the company.

Lower Minimum Wages

Wal-Mart had been paying its workers, a dismal minimum wage of $8 per hour! Very recently, has the company raised the wage to $10 and that has happened after huge protests from the workers and pressure from the American population. The average Wal-Mart worker cannot survive on the salary provided by Wal-Mart and hence has to rely on food stamps and other government welfare programs to feed their family.

Critics estimate that every worker that works for Wal-Mart has to be subsidized by the American government! People that are not paid on an hourly but rather salaried basis are swamped with work. An average full-time worker in Wal-Mart is said to work a 12 hour day, often 6 days a week! The workers in Wal-Mart are not fighting for bonuses or pay hikes. All they want is a minimum wage, because, given Wal-Mart’s current wages, they have a hard time even surviving.

Outrageous Management Salaries

Compared to the average worker, the salaries being paid to the top management are just outrageous. The CEO of Wal-Mart has an outrageous salary of $35 million. This means that the CEO makes in more in one hour than 50% of Wal-Mart’s workforce makes in an entire year! The company justifies its low pay saying that it needs to keep its prices low in the face of inflationary pressures. However, the money released by even slightly reducing the CEO’s pay can help fund pay raise for thousands of workers. Wal-Mart is, therefore, a textbook case of inequality of wealth distribution in multi-national corporations.

Forced Part Time

Another one of Wal-Mart’s predatory business practices include not hiring workers full time. Federal law mandates that if employees are hired full time, they need to be provided benefits like insurance and health-care. Wal-Mart does not want to undertake those costs. Therefore, most Wal-Mart stores do not hire any full-time workers. Rather, they hire multiple part-time workers to do the same job effectively evading the payment of benefits to the employees!

Anti-Organization Practices

Wal-Mart is known for its strong arm tactics against labor unions. It does not want its workers to unite under any kind of political body. When workers in Toronto succeeded in creating a labor union, Wal-Mart immediately shut down the store. The reason cited for closing the store was falling profitability. However, the real reason was clear to all the workers and this move crushed unionization attempts across many stores in the country.

Wastage of Money

Surprisingly, Wal-Mart wastes an obscene amount of money defending its labor practices. The company faces an average of 17 lawsuits per day and has hired hordes of expensive lawyers to defend itself from these multi-million dollar damage claims. Also, a lot of money has to be spent in the form of public relations campaign so that the company can maintain a favourable image. A lot of critics suggest that a company could do away with a lot of these wasteful expenditures if it simply treated its workers slightly better!

It is surprising to see one of the world’s largest companies openly adopt exploitative practices without fear of any kind of retribution. However, people are slowly waking up to Wal-Mart wage slavery. Newspaper articles are being written about the human cost of Wal-Mart’s low prices. Hopefully, Wal-Mart will resolve the problem by providing a livable wage and the associated benefits to their workers.