Getting What You Pay For

Hartford Courant
April 6, 2004

It's time to look behind the price tags at Wal-Mart Stores, and ask whether those bargains are worth the cost.

The latest revelation of an insane policy is the practice of locking overnight workers in the store, without a manager on site to let them out in case of an emergency. There are fire doors, but employees are ordered to use them only in case of fire. If a worker is badly injured, goes into labor or has a family emergency, he or she has to wait for a manager to get to the store with a key.

Wal-Mart and Sam's Club stores engaged in the lockdowns until recently. Shamed company officials now say the dangerous practice has ended.

As this Dickensian throwback was being disclosed, the company was responding to publication of an internal audit that uncovered thousands of labor violations, including 1,371 violations of child-labor laws.

The list goes on. In October, federal agents raided 60 Wal-Mart stores in 21 states and arrested more than 250 illegal immigrants working as janitors. Later, a federal lawsuit was filed contending that Wal-Mart and its contractors failed to pay these employees legally required overtime or make workers' compensation and Social Security payments.

Wal-Mart has a record of employment law violations; the company has been sued over "off-the-clock" work, discrimination against Hispanic employees and sex discrimination, and has paid tens of millions of dollars in settlements.

On the environmental front, Wal-Mart just agreed in federal court to pay a $400,000 penalty and stop selling refrigerants that contain ozone-depleting substances.

It almost makes one nostalgic for the days when the only complaint about Wal-Mart was sprawl. On that topic, The Washington Post recently reported that 245 former Wal-Marts sit empty or partially empty across the country, adding to local blight. Wal-Mart is leaving those big boxes for bigger boxes, grocery/retail superstores.

Wal-Mart became the world's largest corporation, an economic force unto itself, by relentlessly cutting prices. In the short-term, this is good for the consumer.

But by squeezing suppliers for every cent, Wal-Mart has helped drive U.S. manufacturing jobs overseas. What price the bargains at Wal-Mart?