WalMart Stores Inc. is the largest private employer in the United States of America. Over the years, WalMart Stores Inc. has expanded across the globe acquiring a multinational status. Indeed, WalMart plays a significant economic role both within and outside the United States of America. As such, naturally a lot of focus is placed on the corporation. Business and legal pundits have analyzed the conduct, performance and structure of WalMart with a keen interest to observe its ethical practices. From the outset it is imperative to note that the multinational has not had a clean bill of health. It has suffered a number of legal suits, ethical spats and accusations in the courts of public opinion. Be that as it may, what keeps WalMart standing is its gigantic model of operations which places it well ahead of its competitors. For the purpose of this paper, consideration shall be placed on the ethical issues surrounding the wages at WalMart. Apparently, under WalMart’s market model of operations, what are typically called employees in the business setup is referred to as associates. The brief of the paper is to consider the ethical issues surrounding the wages paid to the so called associates.
Ethical Issues in Wages
A lot of ink has been splintered by analysts in assessing and reporting on the wages problems at WalMart. To begin with it is imperative to note that WalMart enjoys the status of a multinational with economic power that surpasses the GDP of several third world countries. As such, WalMart economically controls billions of dollars in the market. In the United States of America, being the largest private employer, it goes without contest that it is the largest taxpayer as well. For that reason, WalMart has economic power which it can use to acquire political leverage and maximize its potential in the market. Indeed, it has been suggested that the market dominance power WalMart enjoys explains some of its unethical behavior.
There are two broad ways of looking at the unethical occurrences in as far as wages as concerned; foremost, the observation of labor laws and policies within and outside the United States of America and secondly, the adherence to the requirements of Title VII of the Civil Rights Act. The paper shall consider the two issues successively.
In the United States of America, in order to protect employees, the federal government sets he basic minimum wage. The basic minimum wage implies the lowest wages that an employer ought to pay an employee. The objective of government is to ensure that employees earn an amount just sufficient for living. For that reason, the basic minimum wage would be a function of the living wage. The wage bill, as is popularly referred to, is the mandate of the federal government. As such, the basic wage applies in the entire United States of America.
The first ethical concern with the WalMart wages resonates around the minimum wages. It is imperative to note that the minimum wage keeps on fluctuating depending on the state of the economy. However, in many cases WalMart wages have often fallen short of the minimum wages recommended by the Federal Government. The same occurrence does not only pose an ethical concern, but equally poses a legal problem. In other words, paying below the basic wage is illegal and attracts legal sanctions. However, statistics show that WalMart has overtime paid its associates, figures ways below the basic wage. For instance, according to the records for 2012 a retail worker earned $ 8.81 per hour culminating into an annual pay of $15,567. The same was way below the recommended minimum which was an annual pay of $ 22,050 for families of four. The same merely suggests the level of impunity perpetrated by WalMart. It begs several questions. It equally poses concerns on the federal government’s ability to implement its policies.
Another dynamic brought forth by the figures paid by WalMart resonates around the comparative industrial average. While WalMart is the leading private employer in the United States, it apparently is the lowest paying employer. For instance, according to 2013 figures, a cashier at WalMart pocketed $8.48 per hour against a national average for cashiers at $ 11.22. The same does not necessarily raise legal issues. However, the ethical questions it evokes leave many tongues wagging. How does the largest multinational in the USA also turn out as the lowest payer? It typifies WalMart as an absolute capitalist modeled around the economist argument of paying laborers just sufficient amount to keep them hooked to the job. The same does not augur well for WalMart which needs to keep its reputation. In the wake of corporate social responsibility, companies doing business are keen to position themselves as being compliant with the triple bottom line philosophy. As such, companies want to show that they not only care about the profits but value people as well. The employees are the first people to show the care to. In the case of WalMart, the same philosophy falls flat on the foot thanks to its low pay rates.
The second limb of the problem relates to WalMart’s adherence to the provisions of Title VII of the Civil Rights Act. The same contemplates equality and treatment that is not adverse to any segment of the workforce. In the case of WalMart legal suits have brought out some of the adverse practices it perpetrates on its employees. Two cases shall be used illustratively. These are Doe v WalMart Stores Inc. and Dukes v WalMart Stores Inc.. Interestingly; both cases have a wage twist making them critical for purposes of this discussion.
In the former, WalMart was suit by its employees for violation of the United States laws in relation to employment law and business regulations. The plaintiffs accused WalMart of dealing with international companies which do not observe minimum labor standards and human rights. The same applied especially to the Chinese suppliers that WalMart transacts with. Interestingly, one of the salient minimum standards that were being trampled upon was the minimum wages. The Chinese concerns are notorious for their violation of labor standards and the plaintiffs pressed the Court to bar WalMart from transacting with the former. Unfortunately, the Court ruled in a rather retrogressive manner. It held that while the minimum labor standards ought to be observed, legally, WalMart was only bound in relation to concerns within the United States of America. As such, since the companies in question were international the Court lacked jurisdiction as the statutory provisions did not have an extraterritorial effect. In other words, the Court recognized the illegalities perpetrators including low pay rates but declined to take action for lack of jurisdiction. This paper argues that the same exposes WalMart in terms of the ethical practices. It demonstrates WalMart’s commitment to profit. In other words, ethics may be sacrificed at the altar of profit. The same does not augur well for WalMart was brand risks been damaged because of the same.
The second case, Dukes v WalMart is more glaring. It was institutes in 2001 and was heard up to the Supreme Court level. The same is the highest court in the land. The fact that the case reached the Supreme Court demonstrates the significant nature of the case and the bad publicity the corporation was prepared to earn. The merits of the case were that a total of 1.6 million women, being former and current associates of WalMart sued the corporation for discriminative practices committed against their person. The plaintiffs argued that WalMart violated the provisions of Title VII of the Civil Rights Act by paying the women at lower rates than the men for the same work done. In the same breadth, the women contended that WalMart discriminated them against men in cases of promotions and employee rewards. It is interesting how over one million women could gang up to fight a multinational corporation that they had either worked for or still worked for. At the Supreme Court, the decision arrived at favored WalMart. However, it is imperative to appreciate that the decision was based on a technicality due to the Court’s interpretation of class suit to the extent that the women did not have the same issues to earn a right to class action. However, the case has been used in this paper to bring out the ethical concerns WalMart has faced and continues to face.
One may argue that perhaps WalMart has an alternative option in resolving the wage problems. One mode of solution often entails the use of unions whereby bilateral or tripartite agreements are signed that bind the employer, the employee and for the third party, the state. The bad news is that WalMart has traditionally been against worker unions. The same has set WalMart against the associates who feel that their freedom of association as read in the context of labor rights is being violated. This paper strongly advocates the use of worker/trade unions for the resolution of disputes and the negotiation of agreements that would address the concerns and interests of all parties. Ultimately, WalMart need to protect its reputation as a multinational committed to the triple bottom line principle. The grievances raised thus far by employees concerning wages may not have negative effects in the legal space. However, in the court of public opinion, the assumption perpetuated is that WalMart is insensitive to the plight of its workers. If the same is allowed to gain traction in the market, WalMart stands to lose its reputation and customer loyalty. It requires no business analysts to know that such a path would ultimately lead to the collapse of WalMart.
In conclusion, therefore, the ethical concerns raised about the wages at WalMart deserve immediate attention. The same must be resolved not following the letter of the law, but considering the spirit so that ultimately, all the parties concerns are met.
References
Crofoot, A. (2012). Wal-Mart: Rolling Back on Ethics. Journal of Ethics, 1-14.
Worstall, T. (2014). WalMart Pays High Wages, Not Low Wages. Forbes. Retrieved from http://www.forbes.com/sites/timworstall/2014/07/23/walmart-pays-high-wages-not-low-wages/
