What's to hate about Wal-Mart

By Megan Barnett, Minyanville

I live 8.2 miles from the nearest Wal-Mart (WMT, news, msgs), 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 who believe that Wal-Mart has done more bad than good for this country since it was established more than 40 years ago.

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 Web site 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."

• Why you should love Wal-Mart

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 case against Wal-Mart

The criticisms against Wal-Mart are well documented. The company employs 2.1 million people, many of whom subsist on near-poverty wages. Only about half of its U.S. 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 pressure to lower prices has led to bankruptcies, closed plants and lost jobs. It imports so much product from China it's been blamed for the growing U.S. 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, of course, general thuggishness.Obviously, any company Wal-Mart's size is going to come under heavy scrutiny, 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 hold itself to a higher standard than it currently 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. (For more, see "The Bad Boys of Business: Wal-Mart.")

Mistreatment as policy

It's troubling that Wal-Mart goes 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 14th-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.

In a 2005 memo (.pdf file) to the Wal-Mart board of directors, a human-resources executive outlined myriad ways to save money on benefits, including ways to hire healthier people and requiring physical activity for all associates. She even raised the problem that comes with employees who are happy enough to stay at Wal-Mart for longer than the company would like:

"(T)he cost of an Associate with seven years of tenure is almost 55% more than the cost of an Associate with one year of tenure, yet there is no difference in his or her productivity," she wrote. "Moreover, because we pay an Associate more in salary and benefits as his or her tenure increases, we are pricing that Associate out of the labor market, increasing the likelihood that he or she will stay with Wal-Mart."

The horror! If we treat our people well, they might actually want to stay. This kind of thinking by a senior human resources executive at one of the world's biggest companies is simply unconscionable. Over the years, there have been too many examples of this kind of pervasive thinking among Wal-Mart's top ranks.

When you have to hire an army of people to help improve your image, you've probably been doing some things wrong. That's a lesson Wal-Mart seems incapable of learning.

Pushing Wal-Mart values

Even more troubling to some is Wal-Mart's practice of bringing its own moral values into the public domain through its retailing. For years, it has refused to stock countless albums due to their "offensive lyrics," forcing some bands to produce sanitized editions just so they can be sold in Wal-Mart stores. It's ripped mainstream magazines from its shelves and turned away best-sellers simply because the company didn't approve of their messages. Its decision to carry emergency contraceptives was made only after public outcry in what was yet another transparent effort to help its image.

Video: Secrets behind Wal-Mart's success

Recently, Wal-Mart made its most astonishing image repair effort ever. It teamed up with a Democratic think tank and a leading union to support President Barack Obama's health care reform, which includes employer-mandated insurance. It's not clear what Wal-Mart's motive is behind this move. It insists it's always advocated for health care reform. (For more, see Minyanville's video "A healthy debate about health care.")

I applaud Wal-Mart's move, but knowing the company's history with health care and its mandate to keep costs down, I remain skeptical. It could be a politically savvy move that will cement its place at the table when the details of reform get ironed out. It's certainly hard to believe the company actively wants to provide health insurance to its employees.

I have no problem with a single company acquiring the influence and reach that Wal-Mart has attained. What I have a problem with is a company of its stature abusing its power time and time again, then relying on hired image saviors to bail it out.

Personally, I don't plan to ever travel the 8.2 miles to save a few cents on my shampoo, and fortunately I don't have to. I've got a Target (TGT, news, msgs) just a few blocks away.