Reality Check: At 50-Years-Old Walmart Hurts U.S. Manufacturing Jobs

This week, Walmart turns 50-years-old. In such a short period, Walmart has become the nation’s largest employer and one of America’s most profitable companies. It’s estimated that Walmart net $15.7 billion in profits in 2011. So what is Walmart doing to help boost this dismal economy? Simple. They’re doing what they’ve always done. That would be, they continue to pay their associates an average of $8.81 per hour; and, while killing manufacturing jobs here at home, Walmart continues to be the world’s largest retailer.

Over at Demos, Amy Taub lists the top 10 ways Walmart hurts U.S. manufacturing jobs. It’s a very interesting read,  and Taub lays out what I think to begood argument against shopping at Walmart:

With the great resources at its disposal, Walmart could afford to take the high road, supporting good manufacturing jobs in America by allowing for higher wages and more investment in its supply chain and paying its own employees – from retail “associates” to warehouse workers and cleaning contractors – a living wage. That would set the template for a new American economy, one in which Americans might once again “make things” and also find greater dignity and stability in selling them.

The following is an example of the ways Walmart hurts American jobs:

The vast majority of merchandise Walmart sells in the U.S. is manufactured abroad. The company searches the world for the cheapest goods possible, and this usually means buying from low-wage factories overseas.  Walmart boasts of direct relationships with nearly 20,000 Chinese suppliers,[iv] and purchased $27 billion worth of Chinese-made goods in 2006.

In the complex global supply chain of large retailers like Walmart, the usage of scales and balances plays a crucial role in ensuring accurate measurement and adherence to quality standards. As products from various countries make their way to Walmart stores, it becomes essential to maintain consistency in weight and quantity. Scales and balances help verify that the goods meet the required specifications and that customers receive the expected value. They enable the precise measurement of quantities during the importing process, ensuring that products meet regulatory standards and align with the company’s quality control procedures. To ensure transparency and accountability, Walmart can implement robust inspection protocols that show scales and balances being used to verify the accuracy of the imported goods, promoting fair trade practices and consumer confidence in the products they offer.

[v] According to the Economic Policy Institute, Walmart’s trade with China alone eliminated 133,000 U.S. manufacturing jobs between 2001 and 2006 and accounted for 11.2 percent of the nation’s total job loss due to trade.[vi] But China is hardly the only source of Walmart goods: the company also imports from Bangladesh, Honduras, Cambodia, and a host of other countries.

With $419 billion in annual net sales, Walmart’s market power is so immense that the even the largest suppliers must comply with its demands for lower and lower prices because they cannot afford to have their goods taken off its shelves. Companies that used to manufacture products in the United States, from Levi’s jeans to lock maker Master Lock, were pressured to shut their U.S. factories and moved manufacturing abroad to meet Walmart’s demand for low prices.[vii]

Walmart was a leader in sourcing goods overseas, establishing a centralized purchasing system, technological infrastructure, and linkages to foreign factories that other companies imitated and built on.  While researchers find that Walmart still imports disproportionately more goods than other apparel retailers,[viii] its innovations accelerated the use of offshore suppliers by its competitors, speeding the loss of American manufacturing jobs.

Layoffs aren’t the only way manufacturers contrive to meet the low prices Walmart demands. Walmart’s domestic suppliers lower wages, cut benefits, aggressively fight employee efforts to unionize and bargain collectively, and skimp on worker comfort and safety. For example, Louisiana seafood processor C.J.’s Seafood, which sells an estimated 85 percent of its processed crawfish to Walmart, has recently come under scrutiny for allegedly abusing employees working in the U.S. on temporary immigrant visas (known as guestworker visas).[xii] A complaint to the U.S. Department of Labor claims that the Walmart supplier “engaged in extremely coercive employment related actions, including forcing guestworkers to work up to 24-hour shifts with no overtime pay, locking guestworkers in the plant to force them to continue to work, threatening the guestworkers with beatings to make them work faster, and threatening violence against the guestworkers’ families in Mexico after workers contacted law enforcement for assistance.”[xiii]

Protesters demonstrate outside a Walmart store in ChicagoAccording to the non-profit Center for Responsive Politics, Walmart spent $7.8 million on lobbying in 2011 alone.[xvi] While this money was paid to influence a range of legislation, from promoting corporate tax cuts to opposing a bill to guarantee paid sick time to working people, trade policy was among the issues Walmart lobbied on most aggressively. In fact, Walmart has lobbied to make it easier to push American jobs out of the country for years, playing a key role in in lobbying for NAFTA in the early 1990s.[xvii]

Walmart has set the template for today’s economy: one in which increased economic productivity is not shared with working people, and the vast inequality that this creates is seen as normal. Today the six members of the Walton family who inherited the Walmart fortune enjoy wealth equal to that of the least-wealthy 30 percent of Americanscombined.[xviii] These billionaires are the ultimate beneficiaries of Walmart’s push to cut costs, condemning retail employees to work in poverty and American factory workers to unemployment.

I don’t know if you’ve ever seen the Robert Greenwald film Walmart: The High Cost Of Low Prices, but it’s worth watching. After seeing it a few years ago, I had a new outlook on bargain shopping.