Wal-Mart's CEO Lee H. Scott continues his efforts to paint Wal-Mart as a big benefactor for American consumers, and his own workers. But he fails to convince. The top secret memo written by his vice president Susan Chambers and unveiled by The New York Times just does not go away. In this memo, the company's greed and moral corruption very concretely laid in the open.
Yesterday, Scott was in Kansas where he spoke to students at Wichita State University, and other listeners. He tried to convince his listeners that Wal-Mart is good for the consumers and that it cannot raise its low wages without raising prices - or cutting shareholder profits, which they would not accept, he very honestly added.
What Scott did not say was that a consumer poll commissioned by WakeUpWalMart.com earlier this week shows that the world's largest retailer is not successful in its propaganda campaign. The number of US consumers who believe that Wal-Mart is more negative than positive is already larger than those who are favourable, and the critical population is steadily growing.
Secret memo admits and supports greedy and discriminating employer behaviour
Ms Chambers' secret memo is surely one of the factors behind this trend, as is the UFCW WakeUpWalMart.com campaign itself. In her memo to her management colleagues, she admitted that Wal-Mart's health care is in trouble:
"...our critics are correct in some of their observations. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance."
The Wal-Mart vice president also suggests that the company should not hire people who could be unhealthy or obese. So much about a company that has made believe that it provides jobs for hundreds of thousands Americans, who would otherwise be disadvantaged at the labour market.
Wal-Mart's new health care initiative is the old product in a new package
In Wichita, Mr Scott actually touched on the health insurance problem, advertising a new initiative that the company has launched last Monday. This is the old product in a new package, says WakeUpWalMart.com in its first comment. It would increase health insurance coverage among Wal-Mart's workers by a meagre 2 per cent per year, which means that they would have to wait until year 2017 before the company would have reached the national average when it comes to healthcare coverage by large employers.
In the memo, Wal-Mart revealed that 46 percent of the children of Wal-Mart employees are either uninsured or on taxpayer funded public health care programs. No wonder Wal-Mart so vehemently opposes legislators’ efforts to expose the truth about the true cost of the Wal-Mart economy. It is inexcusable and unconscionable for a company, with 10 billion dollars in profits, to know that one out of every two of their employees’ children has no health care, or is forced to rely on our public safety net, and that the employer does nothing about it.
It is obvious that Wal-Mart continues to be something of an Emperor Without Clothes, such as the real emperor who rode naked through his town in the old children's storybook. The massive investments in public relations do not really work, and why should they work if the story itself is not right. Not even Wal-Mart with its enormous resources can turn black into white, so no wonder that consumer confidence is eroding and the patience within important parts of the global investor community is growing thin.
Wal-Mart tilts German playing field in its favour through social dumping at home
But it is not only consumers, investors and Wal-Mart workers who have a reason to be concerned over Wal-Mart's behaviour, and the concept of walmartization that the retail giant is spreading. Also serious retailers are increasingly at risk. Look at Germany, where Wal-Mart finances its aggressive price wars through social dumping at home in the United States.
When Mr Scott says that better conditions for the workers would mean higher prices and cuts in shareholder returns, he forgets to mention that it would make it more difficult for the company to fight against its competitors with unfair weapons. Wal-Mart is now contributing to the downward pressure on collective agreement provisions in Germany, already put in play by the commerce employers, to an extent that basic values of social peace and stability are being endangered. At the end of the day, neither European retailing, nor the societies as a whole, will benefit from Wal-Mart's social dumping approaches.
Brutal repression when workers try to defend their rights
This is a company which not only denies its workers the wages and employment conditions that their colleagues who work for organised employers earn. As we have seen earlier this year in Jonquière, Canada, all attempts by the Wal-Mart workers to ask for their rights are brutally crushed. Here, numerous families were coldly thrown out into unemployment and bereaved of their means to make a living just because they wanted UNI Commerce affiliate UFCW to negotiate a normal Canadian collective agreement for them.
It is indeed time for Wal-Mart to wake up and change. Like the consumer poll shows, public relation campaigns - however ambitious they are - will not do the job. There has to be a real change. The global union movement through UNI keeps a door open for the company, as was illustrated by the offer made at the Chicago World Congress to meet and to see how a way forward could be found. The offer is still valid, and at the end of the day, cooperating with the unions both globally and at home is the only way.
