The Facts About Wal-Mart

NEA has joined "Wake-Up Wal-Mart," a national campaign to educate the public about the effects of Wal-Mart on its employees, their communities and the economy, as well as the anti-public education activities of founder Sam Walton's family.

Participation in the campaign, which is organized by the United Food and Commercial Workers Union (UFCW), the AFL-CIO union with primary jurisdiction for employees of retail stores, was approved by the NEA Executive Committee in May 2005 and endorsed by the 2005 Representative Assembly in July 2005.

Our society and economy pay for Wal-Mart's low prices. Because of its enormous size (the world's largest and richest corporation and with 1.2 million U.S. employees, the country's largest employer), Wal-Mart's practices have an impact far beyond its own stores and employees.

The company's low wages and benefits drive down wages and benefits throughout the economy, negatively impacting the families of students in NEA members' classrooms. The tax subsidies Wal-Mart receives could be used to help fund schools and other public services.

The following are among the Wal-Mart practices that caused NEA's elected leadership to decide to join "Wake-Up Wal-Mart" to educate its members and the public about this company.

Wal-Mart profits fund the anti-public education movement.

• The Walton family dedicates the bulk of its philanthropy to pushing vouchers, tuition tax credits and charter schools, giving at least $250 million to such efforts over the past six years. (USA Today, 3/11/04)

• Since 1998, the Walton Family Foundation has given more than $100 million to private organizations that finance vouchers to private schools, undermine support for public education, and are intended to increase political pressure for publicly funded vouchers. (Mediatransparency.org)

• The late John Walton was the biggest paycheck in the anti-public education movement, providing tens of millions of dollars of his own money to support anti-public education ballot initiatives and organizations and sitting on the boards of the major pro-voucher organizations.

Wal-Mart is a low-wage, low-benefit employer.

• The 2003 poverty line for a family of three was $15,260. In 2003, sales associates (the most common job at Wal-Mart) earned an average of $8.23 an hour for annual wages of $13,861. (Business Week, 10/6/03)

• Sales clerks at Wal-Mart earned an average of $8.50 an hour, or about $14,000 a year in 2004 -- $1,000 below the poverty level for a family of three. (New York Review of Books, 12/16/04) Many low-wage Wal-Mart employees qualify for public assistance.

• Wal-Mart employees must pay 33% of their health insurance premiums (compared to a national average of 16%) -- and then pay deductibles of $1,000 a year.

• Wal-Mart reports that its health insurance covers only 48% of its 1.2  million U.S. employees. On average, large U.S. firms (100 or more workers) cover 68% of their employees. If Wal-Mart were to reach the average coverage rate, it would cover another quarter-million-plus employees. (Kaiser Family Foundation & Health Research and Educational Trust, 2004)

• An analysis by the Massachusetts Department of Health and Human Services found that in 2003, Wal-Mart covered only 52% of total health care premium costs compared to K-Mart which covered 66%, Target which covered 68%, and Sears which covered 80%.

US taxpayers subsidize Wal-Mart.

• US taxpayers provide medical insurance for many Wal-Mart employees who cannot afford or are not eligible for the company's insurance. California, for example, spends $86 million each year on public assistance for Wal-Mart workers, including $32 million on health care. (Hidden Cost of Wal-Mart Jobs, UC Berkeley Institute of Labor Relations, August 2004) In Georgia, over 10,000 children of Wal-Mart employees rely on state-funded health care. (Atlanta Journal Constitution, 2/27/04) In Tennessee more than 9,000 Wal-Mart workers -- one-quarter of the company's total employees in the state -- are enrolled in the TennCare low-income medical program. (Chattanooga Times Free Press, 1/20/05) In Alabama and at least seven other states, Wal-Mart tops the list of the state's largest employers whose employees receive publicly funded health care.

• Wal-Mart has received over $1 billion in subsidies from state and local governments. This money could be used for education and other public services. ("Shopping For Subsidies: How Wal-Mart Uses Taxpayer Money to Finance Its Never-Ending Growth," Good Jobs First, May 2004)

• A Congressional report estimates that every 200-employee Wal-Mart store costs federal taxpayers $420,750 a year: $36,000 for free and reduced school lunches; $42,000 for housing assistance; $125,000 for federal tax credits and deductions for low-income families; $100,000 for Title 1; $108,000 for the federal share of state children's health program costs; $9,750 for low income energy assistance (Committee on Education and the Workforce Democratic Staff, U.S. House of Representatives, 2/16/04).

• Wal-Mart employees were eligible for $2.5 billion in federal assistance (paid for by American taxpayers) in 2004. (Harper's Magazine, 3/2005)

Wal-Mart will do anything to stop its employees from unionizing.

• The company does everything in its considerable power to prevent its employees from unionizing. It trains managers to recognize signs of union organizing campaigns, provides each one with a "Toolbox to Remain Union-Free," and rushes anti-union squads to any store where there's sign of union activity.

• Wal-Mart's labor law violations range from illegally firing workers who attempt to organize a union to unlawful surveillance, threats, and intimidation of employees who dare to speak out. (Report by the Democratic Staff of the Committee on Education and the Workforce, 2/16/04)

• When Wal-Mart workers do vote to join a union, the company eliminates their jobs. In 2000 a small meat cutting department successfully organized a union at a Texas Wal-Mart store; a week later the company announced it was shutting down in-store meat cutting company-wide. ("Is Wal-Mart Wrapped in Union Phobia?" Food & Packaging 76, August 1, 2003)

• In 2005, after employees in a Wal-Mart store in Quebec, Canada voted to unionize, the company announced it was closing the store. (Supermarket News, April 22, 2005]

Wal-Mart hurts local businesses and communities.

• The average Wal-Mart store gets 84% of its business from existing stores in the area, according the company's own Annual Report. Retail Forward predicts that for every new Wal-Mart SuperCenter that opens, two local supermarkets will close. (Business Week, 10/06/03)

• Town centers and Main Streets are shuttered when Wal-Mart opens its big box stores. In towns without Wal-Marts that are close to towns with Wal-Marts, sales in general merchandise declined immediately after Wal-Mart stores opened. After ten years, sales declined by a cumulative 34%. ("Impact of the Wal-Mart Phenomenon on rural Communities," Professor Kenneth Stone, Iowa State University)

• The San Diego Taxpayers Association calculated that an influx of big-box stores into San Diego would result in an annual decline in wages and benefits between $105 million and $221 million.

Wal-Mart's low prices rely on low-wage Chinese labor.

• If Wal-Mart were a country, it would rank as China's 8th largest trading partner, ahead of Russia, Australia, and Canada. (China Business Weekly, 12/02/2004)

• Wal-Mart reports that it purchased $18 billion of goods from China in 2004. It is responsible for about 1/10th of the U.S. trade deficit with China. (Taking Stock, Bloomberg, 7/1/05)

• Workers in China's Guangdong Province who made toys for Wal-Mart toiled as much as 130 hours per week for wages averaging 16.5 ¢ per hour (below the minimum wage) and no health insurance. (National Labor Committee, "Toys of Misery 2004," February 2004)

Wal-Mart violates child labor laws.

• An internal Wal-Mart audit found "extensive violations of child-labor laws and state regulations requiring time for breaks and meals." (New York Times, 1/13/04)

• One week of time records from 25,000 employees in July 2000 found 1,371 instances of minors working too late, during school hours, or for too many hours in a day. There were 60,767 missed breaks and 15,705 lost meal times. (New York Times, 1/13/04)

• Wal-Mart agreed to pay $135,540 to settle child labor violation charges in January 2005 for allegedly breaking child labor laws in 24 incidents. (Wall Street Journal, 2/12/05)

Wal-Mart discriminates against women.

• In 2001, while more than two-thirds of Wal-Mart's hourly workers were female, women held only one-third of managerial positions and constituted less than 15 percent of store managers. This is despite women having had on average longer seniority and higher merit ratings than their male counterparts. (Financial Times 11, 11/20/03)

• In 2001, six women sued Wal-Mart in California claiming the company discriminated against women by systematically denying them promotions and paying them less than men. The lawsuit, Dukes v. Wal-Mart, has expanded to include more than 1 million current and former female employees, and was certified on June 21 2004 as the largest class action lawsuit ever.

• In 2001, Wal-Mart's women managers on average earned $14,500 less than their male counterparts. Female hourly workers earned on average $1,100 less than male counterparts. ("Statistical Analysis of Gender Patterns in Wal-Mart's Workforce," Dr. Richard Drogin, 2003)

Wal-Mart hires undocumented workers.

• In March 2005, Wal-Mart agreed to pay $11 million to settle federal allegations it used undocumented immigrants to clean its stores. (CNN Money, 2005)

• Since 1997, federal authorities have uncovered the cases of at least 250 undocumented immigrants who were employed by janitor contracting services and hired by Wal-Mart in 21 states. Many of the janitors -- from Mexico, Russia, Mongolia, Poland, and a host of other nations -- worked seven days or nights a week without overtime pay or injury compensation. Those who worked nights were often locked in the store until the morning. (CNN Money, 2005)

Wal-Mart has a negative effect on the environment.

• In October 2004, the United States sued Wal-Mart for violating the Clean Water Act in 9 states, calling for penalties of over $3 million and changes to W-M building codes. (U.S. v. Wal-Mart Stores Inc., 2004 WL 2370700)

• The United States Environmental Protection Agency fined Wal-Mart $1 million, settling allegations that Wal-Mart violated the Clean Water Act with dirt discharges while building stores in Massachusetts, New Mexico, Okalahoma, and Texas. (Wal-MartLitigation.com)

• Wal-Mart was fined $765,000 for violating Florida's petroleum storage tank laws at its automobile service centers. Wal-Mart failed to register its fuel tanks, failed to install devices that prevent overflow, did not perform monthly monitoring, lacked current technologies, and blocked state inspectors. (Associated Press, 11/18/04)