Walmart: The High Cost of Low Price

Walmart: The High Cost of Low Price

Introduction

Walmart has transformed into the most significant American retail corporation through a low-cost strategy that allows the company to cater to millions of Americans with its low prices. Since its inception in 1962, the company has expanded from a single store to thousands of chains of stores dominating the American retail sector. Walmart is also one of the largest international retail corporations that employ factory workers in developing countries such as China, Bangladesh, and Honduras, among others. Unfortunately, Walmart’s guarantee low price creates a huge expense for stakeholders, the community, and the environment. Therefore, the company’s operations go against the required ethical standards and corporate social responsibility expectations.

Walmart: The High Cost of Low Price is a 2005 documentary created by Robert Greenwald that highlights the ethical and corporate social responsibility disparities associated with Walmart’s operations. The film serves as an eye-opener that aims at informing the public on the adverse effects of Walmart’s monopoly tactics. It explores the company’s lies, manipulation, and crafty techniques applied to rid of competition and union formation in their stores in the guise of serving its consumers and maintaining its low prices. The documentary gives a realistic outlook of Walmart’s malpractices through primary research from interviews and commentaries of employees, former employees, small business owners, and former managers at Walmart to provide an extensive outlook of the companies’ poor organizational culture and its effects of the economic growth of societies. These personal accounts indicate that the company carries out corrupt practices such as overworking employees without overtime payments, taking out of business local retailers, and exploiting its workers both locally and internationally. It also examines the problem from a wide-scale by exploring statistical information, news from media stations, and environmental departments, which provide an analysis of the effects of Walmart and its practices on the environment and safety concerns of communities surrounding its stores. Walmart contributes to water and land pollution, and destruction of the local environment.

The documentary also reveals that Walmart places profits before the protection of its customers and their welfare. There are numerous reports of robberies, rapes, and murders that take place within the parking lots that are in proximity to the stores, and Walmart is yet to develop appropriate protection measures for its clients. Walmart: The High Cost of Low Price is a documentary that provides an elaborate depiction of the manipulation, corrupt, and illegal business practices and strategies applied by Walmart, which reveals that low price guarantees are expensive for the consumer and community.

Facts

Walmart puts out of business small businesses and retailers in the location where the company opens its stores. Most customers shift from supporting their local retailers to Walmart stores as they offer lower prices on goods. The documentary highlights the stories of the Hunter and Esry families who were the former owner of the H&H hardware store and Esry grocery store, respectively. The family business was doing well and catering to a vast number of residents before Walmart opened stores in their regions.

Walmart does not provide adequate payments to its employees. The average wage of Walmart employees is $ 17,000 per year. As such, majority of Walmart employees depend on government assistance to improve their living conditions. Walmart is the business with the highest number of employees signed to Medicaid, government food stamps, WIC, and other social welfare programs. It owes the American government $ 1, 557, 000, 000 for social welfare programs.

Walmart’s manufacturing sector is primarily located in the third world and developing economies, including states like China, Bangladesh, and Honduras, among others. The company takes advantage of cheap labor from these countries to create the cheap goods it sells to American consumers and other developed nations. Unfortunately, this cheap labor is at the expense of the welfare of the employees in these developing states who are overworked, paid low wages, subjected to poor living conditions, and unsafe working environments. Walmart pays these workers approximately 18 cents per hour.

Walmart is an unethical company that supports the discrimination and oppression of women and minorities. Walmart’s management does not make appropriate changes to organizational culture or punish employees involved in maltreatment and discrimination of minorities such as African Americans. Walmart has few women holding top positions at managerial levels as they believe that women are incapable of operating as active managers.

Media reports reveal that the company also hires undocumented immigrant workers to clean and work at their stores for wages below the minimum payments.

Walmart does not invest in the welfare of the environment and local communities near its stores. As mentioned, there are several reports of robberies, rapes, and murders that take place within the place in Walmart’s parking lots. The film reveals that over 60% of the local crimes occur in Walmart’s parking lots, and the company is yet to take action. Another concern is the pollution of and adverse environmental effects of Walmart’s operations. The company is a direct pollutant of water, air, and land within its local environments.

Analysis

Walmart: The High Cost of Low Price provides an analysis of the illegal and corrupt business practices used by Walmart in the name of fulfilling its guarantee for low prices. The film begins with a discussion on the adverse effects presented by Walmart on the small business and retailers within different states. The film discusses the plight of Hunters and Esry families alongside other small business operatives put out of business with the establishment of Walmart in their neighborhood. Walmart is a monopoly that uses crude business tactics to close down small businesses and creates a dependence on their stores. Walmart provides a one-stop-shop for customers to get all the products and services they previously received at local retailers at relatively low prices. Walmart’s existence lowers the value of local retail stores. Unfortunately, this prevents businesses from receiving adequate loans on their property. Therefore, it forced them to liquidate and sell the premises.

Walmart mistreats its employees with low wages that are unsustainable; as such, they depend on government welfare to improve their living standards. The documentary reveals that Walmart has a social welfare debt of $ 1.5 billion that the government has provided through a program such as food stamps, WIC, and Medicaid to its employees. Walmart payments method and highly discriminative and illegal as they go below the minimum standards required by the government as the company’s full-time employees work for 28 hours a week instead of the minimum 40 hours. It is disappointing and unethical that a billion-dollar company has a CEO who makes over 2 million a month, and the workers make an average of $ 17,000 annually, preventing them from accessing medical insurance and sustaining their livelihoods.

The film also exposes the ethical and corporate social responsibility malpractices taking place in Walmart’s overseas manufacturing plants in Bangladesh, China, and Honduras, among others. The company disregards its duty to provide reasonable wages and suitable living conditions for their workers. Instead, workers are crammed up in tiny dorms, paid minimum wages with numerous deductions on utility, rent, and water. Oversees workers receive as little as 18 cents an hour for creating several goods that cost thousands of dollars in the American market. Unfortunately, the workers in these third world regions are desperate and afraid to report the unfavorable environmental conditions in their workplace and the low wages for fear of punishment or termination of employment.

Walmart has does not embrace diversity but instead encourages actions that discriminate against women and minorities. There are few women in the company’s management position as they believe that women are not aggressive enough to make tough decisions on issues affecting the company. Walmart also supports the discriminative actions against minorities such as African America. One of the commentaries in the film is an African American forced to quit after working in Walmart for six years due to racial abuse and discrimination by his fellow workers. He mentions that despite making constant reports to the management, the violence continued to intensify. Another interview with an African American woman reveals she was passed for a management position because she was a woman, who was also African American. Another problem is the employment of undocumented immigrant workers. Walmart pays these workers below minimum wages and limits their movement within and outside the premise to prevent the government from finding out, and this shows that the company is highly unethical and inconsiderate of the suffering of immigrant workers.

Walmart also engages in environmental pollution and degradation and does not consider the security and welfare of its customers or the local society. The documentary provides interviews with different customers who have been affected the safety problems at Walmart. The film reveals that there are customers who are victims affected by the robberies, rapes, and murders that take place at the Walmart parking lot. Over 60% of the crime rates in the local regions occur at the Walmart parking lots, yet the company has failed to put in place measures such as mobile security at the parking lots. Walmart also contributes to environmental degradation and pollution. The residues from the company’s fertilizers, sewage, and waste systems contribute to the contamination of land and water in the neighboring regions. Unfortunately, Walmart is often unresponsive to these violations of federal regulation until the company suffers exposure by the media.

Conclusion

Walmart’s success over the years has been at the expense of its stakeholders, communities, and the environment. Walmart is a corrupt company that is out to make profits and satisfy its shareholders at the cost of the consumers and the government. The company has continuously failed to carry out ethical actions as well as participate in corporate social responsibility. Walmart: The High Cost of Low Price is a documentary that serves as an eye-opener to the public on the harmful socio-economic and environmental practices carried out by Walmart. The film reveals that Walmart guaranteed low prices are at the expense of customers, the community, and the government. Walmart is a monopolistic business that aims at taking control of the American retail sector. The film reveals that the establishment of Walmart stores with a region devalues the local retails stores and contributes to putting them out of business by attracting most customers with low prices.

Despite earning billions of profits annually, Walmart does not consider the welfare of its customers. Instead of providing them with adequate wages, the company encourages its workers to sign up for welfare programs such as Medicaid, WIC, and food stamps to supplement their salaries. Walmart also fails to uphold the values of diversity and inclusion as the company encourages behavior that discriminates against minorities and women. The company also hires undocumented workers with low wages and does not consider the welfare of overseas workers in its manufacturing plants. It also contributes to increased crime rates in local neighbors as well as environmental pollution and degradation. Given these findings, it is evident that the company has failed to carry out ethical actions as well as participate in corporate social responsibility.