The Story of Stuff - Annie Leonard [90]
As for their breadth, what can’t you get at Wal-Mart? It’s now the number-one seller of groceries, clothing, home furnishings, toys, and music in the United States.69 Americans are buying many of their DVDs, cameras, home appliances, and common household items like toothpaste, shampoo, and diapers there too. It sells gas. It’s even opened health clinics. And it has been trying to overturn laws that keep it from offering banking services.70 Remember the corporation in the film WALL-E that basically owned the planet, providing every good and service on, and then beyond, earth? It’s really not that far-fetched; Wal-Mart seems to be headed in that very direction.
In contrast to Amazon, however, Wal-Mart offers at most only a couple of varieties of any given product. About 40 percent of products sold are its own private label brands, meaning they’re produced exclusively for Wal-Mart.71 Yet, even without the variety available at Amazon, the “always low prices, always” promised in these huge one-stop-shopping emporia are enough to keep people coming back again and again.
The funny thing about those “always low prices” is that they’re actually not always so low. Sam Walton’s whole shtick, starting with his very first store in Arkansas in 1962, was to stack popular items like shampoo and toothpaste at the front of the store, marked with ostentatious price tags that were well below cost. These are known as “loss leaders”: they lured customers into the store and away from competing vendors. Once inside, people would usually buy additional products that were priced to make a profit.72 A 2005 Consumer Reports analysis showed that big retailers like Wal-Mart rely on tricky pricing structures that make customers think their prices are lower, but that’s not always the case.73 Also, Wal-Mart often opens a new store in a new market with steep discounts to snuff out the competition and then raises its prices when there’s no place else to shop.74 That practice has earned Wal-Mart massive criticism from activists across the country, who blame the retail giant for undermining diverse local economies and communities.
And regardless what the price tag says, the true cost of every single product at Wal-Mart is actually much, much higher. The real costs start with raw materials that are often pillaged from poor countries or subsidized by the government and which leave behind a trail of tragic consequences for the earth’s water, animals, air, forests, and people. The costs continue with hot, poorly ventilated factories in Asia, where thousands of workers slave away for less than five dollars per day, often exposed to toxic chemicals without adequate protection or health care, forced to work unpaid overtime, with little hope of rising out of their dismal situations. And the costs culminate in the stores, where many employees earn so little that they fall underneath the federal poverty line. According to WakeUpWalmart.com, a U.S. campaign working to make the megastore improve its operations, the average full-time associate (as Wal-Mart workers are called) earned $10.84 an hour in 2008. The annual salary of $19,165 (for a thirty-four-hour work week) is $2,000 below the U.S. federal poverty line. By contrast, in 2007 Wal-Mart’s CEO, Lee Scott, earned $29.7 million, or 1,550 times the annual income of an average full-time Wal-Mart associate.75
Watchdog groups report that stores are regularly understaffed to save the corporation even more money, and managers have been caught secretly deleting hours, especially overtime, from time cards.76 Employees are paid so little that most can’t afford the company health care program, resulting in about half of Wal-Mart’s 1.4 million U.S. employees not being covered by the plan.77 Often workers are outright encouraged by Wal-Mart management