Business Economics Wal-Mart Essay

Topics: Wal-Mart, Health care, Health insurance Pages: 7 (2491 words) Published: July 30, 2012
Wal-Mart is the world’s largest retailer. They are the leading private employer with over 2 million employees. Currently, there are 8,500 stores, across 15 countries. Wal-Mart has a massive economic impact in the U.S and other countries of operation. I will argue that Wal-Mart’s disregard for moral business practices through the lack of their social responsibility has had a negative consequence. Their only interest seems to be in making a significant profit at the cost of sacrificing good ethical moral business practices. I will provide evidence for this belief by showing how “everyday low-prices” are effecting employees, customers, taxpayers, and other countries. I will show the reason for the need for change in their business. Wal-Mart has a powerful impact on the countries that they operate in. I believe that Wal-Mart has a social responsibility to model a successful business through good moral ethics. Wal-Mart has become a popular retailer giant for having the lowest prices and a variety of products. While having low prices noticeably has benefits for consumer, growing evidence from across the country indicates that these benefits come at a steep price for employees earning low-wages, unaffordable health car, and poor labor conditions. Public outcry for Wal-Mart’s lack of social responsibility for their employees is a constant battle. They have the potential to improve their business practices in regards to low-wages, unaffordable health car, and poor labor conditions overseas with out changing their business model of “everyday low prices”. There will be others who disagree with my assessment of Wal-Mart. They might possibly show the benefits of Wal-Mart’s moral business practices; such as, how Wal-Mart creates jobs, new source of tax-revenue and their charity donations to communities.

One of the largest concerns facing Wal-Mart is the poor treatment of their workers. Wal-Mart first unmoral practice is shown through their disregard for their employees. They are only required to pay employees the minimum wage in each state. Low-wage jobs do not assist employees, especially those with families. An average worker makes between $12,000 and $17,000 a year, which is not much (Real Change News ). One of the main reasons for Wal-Mart’s low wages is due to the fact they want to continue offering low prices. “Wal-Mart's ultimate defense is that it offers lower prices and somehow that justifies all sins." (www.usatoday.com) Taxpayers are subsidizing the world’s largest retailer. Wal-Mart typically doesn’t pay its workers enough to live on. They rely on the government to assist their employees through welfare programs. Therefore, we, as taxpayers, pay for Wal-Mart’s cost-cutting tactics (Real Change News ). The Democratic staff of the House Committee on Education and the Workforce estimated a breakdown of the cost for one 200-employee store. On average, $36,000 a year is spent toward free or reduced school lunches. In addition, there would be roughly $42,000 spent on rental assistance. In households with two parents, with two children, there would be $125,000 a year for federal tax credits and deductions for low-income families (Turley). Overall, the committee estimates that a one 200-person store could possibly result in excess cost of $420,740 a year for federal taxpayers (Turley). The CEO of Wal-Mart makes an annual salary of $35 million. Studies have shown that the CEO makes in an hour what the average employee makes in a whole year (Turley). Enough is enough. Wal-mart, which posted an enormous annual profit of around $13 billion last year can afford to increases workers salaries with out changing prices. I think it is a wrongful business model allowing Wal-Mart to pay workers such low wages. I believe that taxpayers need to stop subsidizing low wages. Let Wal-Mart pay their workers a living wage. They need to be forced into improving their wages and benefits for their employees. According to the Center for Labor Research...
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