Journal Blows Whistle On Wal-Mart
Journal Blows Whistle On Wal-Mart
Today, the Wall Street Journal highlights what may become a huge story on the reasons behind the recent resignation of Thomas Coughlin, a man who helped start Wal-Mart and who many thought might become CEO. An internal probe launched by a whistleblower suggests that Coughlin had subordinates create fake invoices to have Wal-Mart reimburse him for personal expenses. The story doesn’t end there though:
The tale involves another mystery: the “union project.” Mr. Coughlin told several Wal-Mart employees that the money was actually being used for antiunion activities, including paying union staffers to tell him of pro-union workers in stores…. The fake invoices… were simply a roundabout way of compensating him for out-of-pocket expenses in his antiunion campaign.
If the money was in fact used for antiunion efforts, Coughlin (and potentially executives still at Wal-Mart) would be in violation of the federal Taft-Hartley act. The WSJ reports:
Led by the United Food and Commercial Workers International Union, labor organizers have tried for years to unionize Wal-Mart’s U.S. workers, who currently number 1.3 million, but they have met with fierce and well-organized opposition.
Last week, Wal-Mart CEO Lee Scott “admonished his employees in a companywide broadcast,” saying that they absolutely must come forward if a supervisor or friend or anyone is engaging in illegal activity. Just to set a good example, the following day, company brass fired James Bowen, the employee who alerted them to Coughlin’s dealings.
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Workers are and should be free to unionize. However, unionizing *could* prove to be a mistake for Walmart workers. Union workers cost more to employ, which would result in higher prices, which would send consumers to other stores. Walmart would then have to fire workers and close stores as a result of the lost business.
April 8th, 2005 at 2:49 pmTony, your argument comes straight from Wal-Mart’s talking points. Right now each state is footing the bill for wal-mart employees – who are mostly on medicaid b/c they do not get health care. Furthermore, there are many, many stores that currently provide products that are incredibly cheap (eg: Costco) but are unionized. Everyone loses when employees cannot unionize.
April 8th, 2005 at 3:00 pmIf consumers are used to going to Mall-Wart, they’re not going to stop simply because prices went up a few cents. Besides, in the traditional Mall-Wart way, they’ll just screw their vendors into lowering their costs even more until the vendors go out of business.
Just curious: has ANY company ever considered taking a hit in its profits, or reducing management’s salary packages, instead of resorting to the extreme of firing employees?
April 8th, 2005 at 3:03 pmElizabeth:
April 8th, 2005 at 3:41 pmCostco would be able to do even better if its employees weren’t unionized. They would be able to open more stores and hire more people. Also, you said, “Everyone loses when employees cannot unionize”. Tell that to the millions of customers affected by the Southern Cal grocery strike. Customers always loose when workers are unionized.
Correction: customers always loose when workers are unionized *in a union that exerts wage/benefit pressure on the company*.
There are some positives to unions, such as legal defense funds and discounted “group rate” job training initiatives.
April 8th, 2005 at 3:53 pmTony,
April 8th, 2005 at 4:06 pmWorkers are customers, but when they are poorly paid they are not very good customers. There are many far more important things in life than maximizing profits for mega-corporations like Walmart. In fact there aren’t many things that are less important than maximizing Walmart profits.
Unions exist to protect workers. Tony, please enlighten us as to why exploiting workers, and in this case the tax payers, for the benefit of the bottom line is a good thing. Is the dollar the only thing in the world that matters?
April 8th, 2005 at 7:24 pmTony is just a repug shill on these blogs. Ignore him.
April 8th, 2005 at 8:32 pmTony
April 8th, 2005 at 11:09 pmYou don’t have a clue
I for one do not shop at china mart. I buy only made in USA when I can “while I still can” IE electronics. My older son worked for them and when he was ready to receive benefits they fired him.. Thats how they operate. He is not the first and won’t be the last. He won his case to receive unemployment. As far as unions go they are the best. I belong to Plumbers local 690 I make good money, I have all the free training I want,great benefits and a good retirement fund. I have worked both union and non-union and I had been with the union for 15 years now. It was the best thing I ever did..I’m sure you are glad that the chemical plant or nuclear plant was built by highly train workers and not by a bunch of illegal aliens
Very good article–I’ve linked to my blog.
What Wal-Mart needs is a Norma Rae.
April 9th, 2005 at 7:53 amTony,
April 10th, 2005 at 10:06 amWhat Wal=Mart is doing extends to every industry because their penny pinching, including in the form of lower wages for workers, results in lower buying power in the US. Because we have lower buying power, our goods which cost more to make, don’t get made. Instead we buy goods from China. Our factories go out of business. (I’m being simplistic, but you get the point.) A mother and father and child cannot subsist on wages from Wal-Mart without help from the state. Where does that help come from? Our taxes. So, Wal-Mart’s prices go down and your taxes go up. But it’s worse. In addition, they’re one of the biggest buyers in the US and they’re buying all of their goods from India, Turkey and China. Mostly China. That contributes hugely to the trade deficite. When Sam Walton was alive Wal-Mart was committed to selling USA. It really meant something. They paid higher wages too. It was really a family company. That meant a lot more consuming power among the employees of one of the biggest employers in America. If you pay people more they can buy things. The more things they buy the better businesses do. Am I missing anything?
Commentary by Butler Shaffer
‘Explanations for this well-orchestrated campaign are to be found in the economic self-interest motivations of labor unions and Wal-Mart’s retail competitors. Wal-Mart has managed to succeed without too much interference from labor unions. Like political systems – which, in America, provide government certified unions with coercive, monopoly status over the workforce – labor unions depend upon creating conflict between “employees” and “employers.” To the degree they are successful, unions also generate conflict between “union” and “non-union” workers. By maintaining employment practices that minimize management/employee conflict, Wal-Mart has made it difficult for unions to solicit their employees for membership.”
http://www.lewrockwell.com/shaffer/shaffer75.html
April 10th, 2005 at 10:22 amWilliam Anderson explains:
In the past several years, a virtual industry has been created in bashing Wal-Mart. From leftist church groups to the AFL-CIO to the Chronicles, Wal-Mart has been the favorite whipping boy of people on all sides of the political spectrum. Thus, it was no surprise when I recently received an emailed article from the quasi-Marxist Sojourners magazine not only attacking Wal-Mart for the usual set of “sins” that the critics claim, but also a new transgression: Wal-Mart’s business practices, on net, make our economy worse off and leave us poorer.
http://www.mises.org/fullstory.aspx?Id=1714
Of course, Sojourners since its original inception about 30 years ago has railed against what it calls “consumerism.” Now, the term “ism” would seem to represent an ideology or way of thinking, but it is difficult to claim that choosing to purchase relatively inexpensive goods is an ideology. What the editors of Sojourners, along with their fellow ideological travelers, really dislike is the fact that low-income earners are able to purchase low-price goods without the aid of the state, or at least that Wal-Mart is a private, not state-run outfit.
(As a semi-regular reader of Sojourners since the magazine was begun, I can assure readers of this article that scarcely an issue passes without the editors or writers advocating more power to the state, along with the increase of government regulation and the demise of private property. Moreover, the editors and writers always invoke religious arguments to buttress their anti-capitalist ideology.)
April 10th, 2005 at 10:28 amThe Sojourners are actually a left wing religous organization committed to changing the world through “faith-based social justice.” This includes ministering to the poor, running soup kitchens, and demonstrating against war. IMHO – They’re good people. I’ve met several Sojos at demonstrations over the years and they’re really great people and very intelligent.
April 10th, 2005 at 11:42 amAnd yes, often the Sojouners advocate more programs for the poor, more money for the poor, and generally more help for the homeless which is one of their major ministries. Also one of the big Biblical callings they advocate.
If you’re going to bash them, tell the whole story and link to their website. That was disingenuous. We don’t need our opinions told to us.
googled –> http://www.sojo.net/
Tony ~ COSTCO does fine. I go out of my way to go there and pass two WalMats and a Sam’s Club on the way. COSTCO benefits by paying their workers better wages because then they have less turn over. I refus eto step inside a WalMART with all their China comm (communist) goods. The truth is that most of our debt is to China. If tehy decise to ask for payment we lose and communism wins.
April 10th, 2005 at 5:37 pmTony – perception versus reality dictating your buying habits? Do you know how many billions costco is spending on chinese goods every year?
There is nothing wrong with trading with Asian people – your guilt.
This article is so riddled with economic fallacies, I can’t help but smile. China is NOT the problem.
the blame must be laid on Bush and Greenspan. If you have lower interest rates to negative levels in real terms ( The Fed funds rate is even after the small increases lately at only 2.25% while the CPI has risen 3.5% and asset prices even more) then this will discourage savings and encourage investments. And a country which has lower savings than investments will have a trade deficit (or more strictly a current account deficit). And of course, the large budget deficit and the large dis-savings that constitute has further aggravated the problem.
April 11th, 2005 at 3:08 amCommentary by Butler Shaffer
‘Explanations for this well-orchestrated campaign are to be found in the economic self-interest motivations of labor unions and Wal-Mart’s retail competitors. Wal-Mart has managed to succeed without too much interference from labor unions. Like political systems – which, in America, provide government certified unions with coercive, monopoly status over the workforce – labor unions depend upon creating conflict between “employees� and “employers.� To the degree they are successful, unions also generate conflict between “union� and “non-union� workers. By maintaining employment practices that minimize management/employee conflict, Wal-Mart has made it difficult for unions to solicit their employees for membership.�
Like the Bush administration you are DEAD WRONG!!!!
China mart has a lot of “management/employee conflicts” (Just do a google search). They show a one hour tape when they hire you.Thirty mins. devoted to anti-union babble. I have you know that my employer and many in the surrounding counties loves being union.. We are well qualified to do our jobs, we don’t get payed holidays or vacations. We work or don’t get payed. We come with all our welding certs, all of our OSHA certs, they don’t have to worried the rising health cost. When they need more help they just call..I haven’t but many of my brothers have ,more then once bailed out a non-union company.A lot of time, that contractor remains as a union contractor.Before I joined the union I heard all the babble also, and you know? NONE of it was true.Company’s are finding out its a pay me now or pay me later deal. Just cheaper to pay me now that save all the lawyer fees.
As far as Costco goes ALL retail stores sell Non-MADE IN USA goods. Its up to ALL OF US to NOT buy them when we have a choice. Is that “WE SUPPORT OUR TROOPS ” ribbon on your car made in the USA or some where else. Seems kinda silly doesn’t it. You support our American Troops, and you prove it with a Chinese sign…
Comment by cinder  April 10th, 2005 @ 11:42 am
Tony ~ COSTCO does fine. I go out of my way to go there and pass two WalMats and a Sam’s Club on the way. COSTCO benefits by paying their workers better wages because then they have less turn over. I refuse to step inside a WalMART with all their China comm (communist) goods. The truth is that most of our debt is to China. If they decide to ask for payment we lose and communism wins.
Great way to be cinder
April 13th, 2005 at 7:22 pmTHis is pitiful… are all of the posters to this thread under 16 years of age? Here are some *facts* for you… I have not seen one of you that knows anything about finance or economics that you didn’t learn from an ideologue. All of your ideas are guided more by ideology than by reason or evidence. You employ anecdotes as proof and only give the information that suits your arguments. Not one of you has produced a logically valid or correct argument.
And step back from your ideological or self-interested blinders for a moment to consider one possibility. Unions are neither inherently good nor inherently bad. Neither are corporations watching the “bottom line” that half of you seem so pissed about. If there wasn’t a profit to be made, why would people run the businesses that produce the things we want? I promise you, if you make it unprofitable for people to produce things, they will stop and get other jobs.
But neither unions or companies can pretend like they are in any way morally superior to the other. Do any of you know what a union is? It is a business that sells labor! If the supply of certain types of labor can be consolidated under one organization, you can exert leverage upon those who want to buy it. With a union, you force companies to pay more for labor. If the companies find that this makes their entire enterprise unprofitable, they will go out of business, the owners will go become executives elsewhere, and no one is any better off. However, if the companies can do so, they will pass on the burden of paying the increased labor cost to the consumers.
One way or another…through taxes or through more expensive toothpaste, you will be paying for Wal-MArt’s workers.
Next, who has the right to tell anyone how to run their own business? If you want influence over Wal-MArt, buy their stock! Otherwise, it is like telling your neighbor how to raise their kids.
Furthermore, no one is forcing these people to work at Wal-Mart. If there was no wal-mart, these people would be working for the same amount of money. THink about that! If these people had the intelligence or skill to work anywhere else, they would do so. Taxpayers would still pay for their healthcare, and if the jobs were more dangerous, we’d pay more in health care. But they don’t, so they work at Wal-Mart…
Union plumber guy above, Dave I guess… don’t talk about the immense benefits of unions until you can spell correctly and use decent grammar. Do they have training for that? And don’t get pissed off…your parents could write well, and so can you. And also… Wal-Mart is not a nuclear power plant.
Cinder…there is much you have missed. See my comments above. Specifically, if you pay people more, they can buy more? Right? Wrong, cinder… you are using really sloppy logic. Your argument misses several things. Some people save money when they have it in excess. If you pay people more, the money to do so has to come from somewhere, right? Where does it come from? Either from consumers or from taxpayers or from other employees (in another region or in some other funcitonal capacity within the organization). Why should the workers become entitled to spend that money instead of the consumers or the taxpayers. The point is…buying power stays the same.
Also, a deficit is not the same as debt…google it to find out how.
Don’t even get me started on China…our stock market and our economic growth would be a good bit slower if it weren’t for those cheape chinese manufactured goods. We benefit because wealth chinese men sell us salve labor to make things that are unprofitable to make here (unprofitable means you have to pay someone more to make it than you can charge someone to buy it). Our economy…indeed, the entire world’s economy…is benefitting because of the near-slave conditions in China. If you want more american jobs, new businesses, more growth… buy more chinese goods! If you pay less for them, that is more money you have to spend on other things “made in america” like fast food and cigarettes and cable TV… yea, America!
Moreover, running trade deficits traditionally has no definite relationship to long-term economic growth. That depends on two things…the absense of contraining LAWS and the presence of good EDUCATION. The only way value (hence money) is created in the world is through people using their heads to figure out better ways of doing things. GOod education does better than any other method to create good thinkers. Good thinkers create value…they don’t just figure out a way to take it from someone else.
Finally…we should not be surprised about what is going on between Wal-MArt and the unions. THis is comeptition among powerful organizations with inhrently different interests. These interests are determined by the position the organization occupies in the economic chain. The more they fight, the more efficient they both have to be. Pitting power against power is the only way to ensure that both sides are kept in check. If either side brings the other to its knees, then we are all screwed until some other organization rises up to challenge it. Such is the way of the world, of politics, and of the market. We should be glad they are competing…wal-mart loking out for capital and the unions looking out for labor. The only problem is that there is no one looking out for the consumer (Wal-MArt does, but only after it looks out for itself).
In closing…let me make some suggestions. Quit getting your information from the TV news…any channel. It is all poison. You are worse off doing that than not keeping up at all. Read books, for God’s sake people…read the Economist magazine. Read anything besides mainstream american media. You’ll never know the answers if you keep doing so.
And please, try not to let your individual pshychology, your pride, your personal experience, or your arrogance get in the way of a reasoned debate. If you want to bitch at people becasue they see things differently from you, join a church. If you want to find the answers to questions about business strategy, economics, finance, and politics…pick up some books, study, do the math, abandon your own personal biases, and engage one another is calm, reasoned debate.
I shouldn’t ahve to be telling any of you about all of this.
April 14th, 2005 at 11:58 amWalMart sells stock. Just like any other corporation. It sells stock to insiders like officers of the corporation, vice presidents, directors,et al at greatly reduced prices. Employees who buy stock, like stockmen and cashiers, buy at full price, every pay period. This guarantees the stock will not fluctuate greatly in price, so that the people buying 3 or 4 times cheaper will have plenty of time to dump stock if things start to look badly for the company. The rich folk pay analysts for advice when to sell. The poor folk just take the hit in their employee stock plans and 401-k. This is the type of insider information that is OK by SEC standards. You loose 20K the same year a VP sells 10 MM in stock he bought for 5MM. Anti-trust laws are available, but abandoned by a poplus that is more interested in Love Boat re-runs than voting in elections.
May 15th, 2005 at 7:02 amAs a member of Local 880, I am concerned about the nefarious happens at “Wally World” and what the Walton family is doing to dismantle the U.S. economy. I feel that under the Weingarten Act, employees of “Wally World” should unionize. I work for a local TOPS Supermarket, owned by Giant Foods (a non-union supporter) that is following the teachings of the Walton family and is dismantling the family values that once built the TOPS Supermarket chain. Employee incomes are down this year by 25 to 33%. Giant Foods is fircing us to give up a weeks vacation in exchange to continue receiving medical benefits, else pay between $350 to $700 per month to keep said benefits. Stores are operating at staffing levels that are about 15% below what they should be for the gross sales generated. Our options are extremely bleak. If we strike, Giant Foods will shutdown our store. If we vote our contract down, Giant Foods will close our store. If our sales don’t meet the profit margin expected, Giant Foods will close our store. If the “Wally World” store (less than a half a mile away from us) is converted over to a SuperCenter (as rumored), Giant Foods will close our store because TOPS Supermarkets and Giant Foods cannot compete with “Wally World” prices and survive. Because of “Wally World”, I must raise my family on $13,000 this year, down from $16,000 last year and down from $19,000 two years ago. If it weren’t for my wife slaving away at a job for less than $20,000 per year and working 60 to 70 hours per week (straight pay), we would be living in a cardboard box somewhere. In NEOhio, a family of 4, needs at least $50,000 of gross income per year including family benefits and even then you could not afford a 30 year note on a home. Dealing with “Wally World” has already decimated the local economy in my area already suffering from the steel industry fiasco of the 1970’s and 1980’s, which shutdown virtually all steel mills here. The lower Wally World prices things, the higher the cost of living here goes and the bleaker the economic outlook gets. While the economy of the country is supposedly climbing up our local economy is still on a downward spiral. In 2006, the Wally World SuperCenter is supposed to be started. If this happens, it will drive out over 250 jobs across 2 stores out of work or be forced to commute over 100 miles per day to work for the same exact pay. This is the suffering brought to communities by Wally World. We need laws banning Wally World from economically raped areas, or at least further construction. But this can’t be done since Walton family paid for the re-election of the Republican Party in 2004, by giving them Florida and Ohio on a silver platter. We need Democrats to be elected or even people like Lyndon LaRouche elected. After 2006, I may be living on the street, thanks to the Republican Party and Wally World! After this, how much longer will it be before the Walton family takes control of the government and becomes the driving authority behind our lives? Meglomaniacs like the Walton family don’t stop at buying out banks or ravaging economically raped areas for another dollar, they want to control the whole world as part of the “New World Order” and become Dictator of the World. Smaller companies are being forced to use the same tactics that has made Wally World worth 102 billion this year to survive (including outsourcing to “sweatshops”) or die. Today TOPS Supermarkets no longer make all their bake goods in the store as they did 5 or 10 years ago. All baked goods are now outsourced to places like Orlando Bakery at sub-union wages and come frozen. This outsourcing policy has been adopted at all TOPS Supermarkets, by Gaint Foods (courtesy of Wally World). TOPS employees are forced to work and cover two or three jobs because Giant Foods is more concerned about increasing corporate profit to remain competitive with Wally World than to hire adequate employees to cover all job assignments. Average wage at TOPS Supermarket is about $7 to $8 per hour, locally, not the $9.75 per hour as Local 880 has led us to believe (among union workers). If we refuse to cover two or three positions, we are fired for insubordination. If we apply for work as a secondary income, all benefits all taken away by Giant Foods never to return again “under a conflict of schedule availability” policy recently adopted by Giant Foods, courtesy to Wally World. So I must have more job responsibility shoved into my face and given less hours to get it done and less pay. This is the future that Wally World brings to communities!!!!
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