Panelist: Buyers should 'absolutely' avoid Wal-Mart

By Chris O'Connell

"You should absolutely not shop at Wal-Mart," Bob Brownstein said to a group of students at the Monday Ethics talk in Casa Italiana.

Brownstein, a policy director for Working Partnerships USA headed the meeting along with Jeff Seglin, a business ethics columnist for the New York Times and for an hour, the two presented information to an audience of students, faculty and members of the Santa Clara community regarding the ethical ups and downs of Wal-Mart.

Brownstein said he considers Wal-Mart Stores Inc. to be a major contributor to inequality because the corporation feeds off of what he described as today's economy, in which the upper class is becoming wealthier and more elite, while the middle class is dying and the lower class is growing and becoming poorer.

The Seattle Times reported on Feb. 18 that nationwide, from 1978 to 2000, the lowest 20 percent of families gained only $972 annually, or 7.1 percent and the top 5 percent gained $87,779, or 58.4 percent.

In his presentation, Brownstein referenced several recent newspaper and journal articles to explain how the company's unethical business practices contribute to the disparity between rich and poor in the United States.

On Oct. 19 of last year, The New York Times reported that Wal-Mart sales clerks average "about $8.50 an hour, or about $14,000 a year, while the poverty line for a family of three is $15,060." Brownstein added that two-thirds of the employees cannot afford to participate in the company health plan.

Another concern is Wal-Mart's alleged anti-union practices. There are no unionized Wal-Mart stores in the United States

"At Wal-Mart, we respect the individual rights of our associates and encourage them to express their ideas, comments and concerns. Because we believe in maintaining an environment of open communications, we do not believe there is a need for third-party representation," Wal-Mart's Web site states.

Many critics say Wal-Mart management stymies workers' attempts at unionizing. Currently, employees in Jonquière, Quebec are fighting to create the first unionized Wal-Mart in North America.

Brownstein called Wal-Mart a sweatshop on a grand scale.

"You can live a middle class lifestyle and work at Safeway or Albertsons; you live a lower class lifestyle working at Wal-Mart," he said.

But Seglin said vilifying Wal-Mart is too simple of a solution.

"To answer the question, 'Is it ethical to shop at Wal-Mart?' depends on what my values are," Seglin said. He said he would be hypocritical if he did not shop at Wal-Mart for ethical reasons and at the same time supported other stores without putting their business practices under the same scope. He also stressed that if a person was to be consistent in boycotting Wal-Mart,Æ' then he or she must also not hold stocks and mutual funds in the company.

Seglin said he is not an "apologist" for the corporation, but he also presented many of Wal-Mart's ethically notable actions. In 2003, Wal-Mart Stores Inc. was named the most admired company in the United States by Fortune magazine.

The corporation was ranked by Hispanic Business Magazine as one of the Top 25 Diversity Recruitment Programs in 2001 for its aggressive program to hire and promote Latinos. And last year Wal-Mart Stores, Inc. contributed more than $150 million to support communities and local non-profit organizations. Customers raised an additional $75 million with the help of the company's stores and clubs.

The corporation, which is the world's largest retailer, this country's largest employer and brought in $244.5 billion in sales last year, has been in the California news lately.

Last Tuesday,Æ' residents in Inglewood voted on a referendum to keep Wal-Mart Stores Inc. from constructing a "Supercenter" store in the Los Angeles suburb, after the corporation spent a reported $1 million on the campaign. On Thursday, CNN.com reported that a coalition of business, union, religious and community leaders led the opposition and residents voted against the store by a ratio of three to two.

Wal-Mart's Bob McAdam, vice president of corporate affairs, said the company will press ahead with its larger plans to construct 40 Supercenters around California. Last month, Wal-Mart won a similar vote closer to campus in Contra Costa County in the East Bay.

Local reaction

Many members of the campus community have differing opinions of Wal-Mart and its business practices.

David DeCosse, director of campus ethics programs, said he doesn't think it is ethical to shop at Wal-Mart.

"I'm aware that there are many people for whom the low prices at Wal-Mart are a great help to a very tight budget," DeCosse said, "but I think Wal-Mart's anti-union stance, low wages, minimal health insurance and great economic and political power, among other things, combine to provide a strong ethical argument for not shopping there."

Jim Balassone, executive-in-residence at the Markkula Center with nearly 40 years of experience in sales and marketing, said he does not shop at Wal-Mart and that he has also sold his shares in the Arkansas-based company.

Balassone compared Wal-Mart to Home Depot, another large home improvement corporation. He said Home Depot has fewer employees, which allows the company to train their workers, pay them more, and offer them better benefits, whereas Wal-Mart has a larger â€" and lower paid â€" employee base.

Balassone said you could have just as viable a company and reach the same goals with a higher paid, more productive and smaller employee base like Home Depot.

"I want to support the firms who do that," he said.

Junior Marshall Davidson attended the ethics forum Monday.

"I came into the ethics talk with a bias against Wal-Mart," Davidson said. "I felt the speakers posed some worthwhile objections to Wal-Mart and raised serious concerns about how Wal-Mart treats their workers, the damage their presence causes local businesses and the effects their extremely low prices have on American jobs and working conditions in the developing world."

Davidson said it isn't fair to stop at just disagreeing with Wal-Mart's practices.

"I don't think these problems can be solved simply by refusing to shop at Wal-Mart," Davidson said, "but by stopping the spread of Wal-Martization in its current state."

Ed Bayley, a senior from the Los Angeles area, said Wal-Mart is in itself an ethical conundrum.

"The Supercenter that would have been built in Inglewood will probably be built in the neighboring Torrance," Bayley said. "It's a tricky situation because while Wal-Mart may have hurt businesses in Inglewood, it would have created jobs and much needed revenue from sales."

The closest Wal-Mart to Santa Clara is nine miles away in Milpitas, not easily accessible to students without automobiles.

One employee, speaking on the condition of anonymity, has worked as a sales associate at the store for three years this April. He said he enjoys working at Wal-Mart. Although he has read about the accusations of Wal-Mart's unfair business practices and labor transgressions he said he doesn't feel the same way.

"I've never had any difficulty here and I don't feel that we are unfairly treated," he said.

Two female employees shared similar sentiments. They both said they've enjoyed their Wal-Mart experience.

The manager at Wal-Mart declined comment, saying that "Wal-Mart employees are not permitted to speak with any media."

û Contact Chris O'Connell at (408) 554-4546 or coconnell@scu.edu.