As Wal-Mart continues a campaign to burnish its skinflint image, recent events belie this effort. Here are some developments that show that this petty, miserly corporation hasn't changed:
- Chain Store Age reported on July 20 that a U.S. federal judge struck down a Maryland law that required Wal-Mart to provide health insurance for employees in the state. (Wal-Mart shares rose 2 percent after the news.)
- Wal-Mart bitterly fought a proposed ordinance in Chicago that requires "big box" stores to pay a minimum wage of $10 an hour plus at least $3 an hour worth of benefits. The New York Times reported on July 27 that the measure passed, 35-14, and that a gallery crowded with supporters "broke into cheers." The city's first Wal-Mart is set to open soon -- and it may be the last, some sources say. The City Council majority was veto-proof; but of course, court challenges are likely.
- Deutsche Welle reported on July 28 that Wal-Mart is closing up shop in Germany, where it had been struggling since 1998. Analysts said the company's attempt to apply the U.S. model (cheap goods made possible by low wages) was a "fiasco" in Germany. There were conflicts with unions, and also with the culture. For example, employees "were forbidden ... from dating colleagues in positions of influence. Workers were also told not to flirt with one another."
- Remember "dead peasant insurance"? That was a pundit's description of a practice by hundreds of employers, Wal-Mart among them, of having insurers write policies on the lives of low-wage workers. These "corporate-owned life insurance policies" turned mighty sour on the retail giant.
Andrews Publications writer Frank Reynolds reported on July 24:
"Discount retailing giant Wal-Mart cannot sue its insurers just because it gambled and lost $1.3 billion on getting a tax break from thousands of insurance policies it took out on employees, according to a brief filed by the insurers in the Delaware Supreme Court.
"Press reports have dubbed the 'corporate-owned life insurance' policies at issue in this litigation 'dead peasant insurance' because most of the policies were purchased by companies that employ large numbers of workers at the lower end of the wage scale and most of the policy benefits went to the companies rather than to families of deceased employees.
"Wal-Mart is contending in an appeal that it was entitled to rely on its expert insurance brokers to warn the company of the inherent dangers of buying COLI policies. Wal-Mart has asked the high court to revive its bad-faith and breach-of-duty claims against its insurers, which the Delaware Chancery Court had dismissed."
As of July 2005, six states had outlawed that practice in cases in which the employee is not told, Wikipedia reports. The online encyclopedia also states:
"Wal-Mart is one of those companies under fire from the US Internal Revenue Service and labor organizations for the practice. The IRS considers COLI a tax dodge, and has pursued Dow Chemical, Camelot Music, Winn-Dixie and American Electric Power, among others, to recover tax underpayments.
"The practice of using COLI is still widespread ... According to one source, Hartford Life Insurance estimated that one-quarter of all Fortune 500 companies have COLI policies, which cover the lives of about 5 million employees. Wal-Mart alone has policies on 350,000 employees."
MSN Money writer Liz Pulliam Weston has reported:
"-- Companies pay a whopping $8 billion in premiums each year for such coverage, according to the American Council of Life Insurers, a trade group.
"-- The policies make up more than 20% of all the life insurance policies sold each year.
"-- Companies expect to reap more than $9 billion in tax breaks from these policies over the next five years. The policies are treated as whole life policies. So, companies can borrow against the policies (though the IRS won't let them write off the interest). And the death benefits are tax-free."
That this practice by corporate ghouls became so widespread is the stuff outrageous scandals are made of. Yet this story, developing over years, was largely ignored by the mainstream media when it should have been on every front page and a lead story on every newscast.
But, back to Wal-Mart: Just name any enormity, any exploitative practice, any labor abuse -- and the folks at Wally World have done it. The company has resolutely fought any and every effort to genuinely improve the lot of its "associates."
And if recent developments are any indication, the cheesy PR campaign and measly "lower-cost" health care plan are like putting a pretty little Band-Aid on a hatchet wound. Folks at Wally World -- get real. Lots of shoppers aren't going to buy it.
MANIFESTO JOE IS AN UNDERGROUND WRITER LIVING IN TEXAS