Wal-Mart - the world's largest retailer - has been in the headlines recently with the release of a new documentary "Wal-Mart: The High Cost of Low Price" that criticizes the company's labor practices. A film defending the company, "Why Wal-Mart Works: And Why That Makes Some People Crazy," has also been released. We host a debate over Wal-Mart with the communications director of Wal-Mart watch and the filmmaker of "Why Wal-Mart Works." [includes rush transcript]
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TRANSCRIPT:
AMY GOODMAN: Today we're going to have a debate over Wal-Mart, and we'll also air excerpts from two films, the Greenwald film, as well as the documentary Why Wal-Mart Works: And Why That Makes Some People Crazy. It's by Ron and Robert Galloway. We're going to turn now to that first film.
SHARON, Wal-Mart Support Mgr.: We always hear these things about the benefits and things like that. Ha! First time I went to the doctor, to the dentist. I actually got my teeth cleaned. I've never done that before. You know what I mean? And to actually be able to go to a doctor when I'm sick, right then. You know? And I don't have to wait six hours to be seen, because I'm sitting in a county facility.
MICHAEL F. CANNON, Dir. of Health Policy Studies, Cato Institute: Wal-Mart gets a bad rap because it only pays about $3,500 per employee for health benefits. Now, a lot of companies will pay more. A lot of companies pay less. But if you look at the average for all employers, for family coverage, it's about almost $7,000. And if you look at the average for all employers for individual workers, self-only coverage, it's about $2,800. So actually Wal-Mart is somewhere – their average is in between there. But if you look at retail companies, they actually pay a lot less, in general, than the average employer. So Wal-Mart's package looks even more reasonable there, and Wal-Mart makes the point that one of the reasons why they pay less in health benefits is because they get more effective health benefits.
KEVIN BRANCATO, Alwayslowprices.net: There is very little evidence to support Wal-Mart corporate telling its workers, ‘Go out, have – do not take our insurance plan, take the insurance plan offered by a state government, by a federal agency.’ There's just no evidence that Wal-Mart corporate has done that. There are many instances, some, many, of local store managers and other lower-level managers saying to their employees, ‘It's a better deal for you. Go ahead. Go do it.’ There are some notices that various opponents have found.
MICHAEL F. CANNON: That is the most disingenuous and least meritorious charge against Wal-Mart, because it's coming from the very people who are trying to expand Medicaid and get more people onto government health programs. If you look at the people who are criticizing Wal-Mart, they are also trying to get middle-class families onto these government programs.
And a few words about these government programs: Medicaid provides lower quality health coverage to a lot of people than they would get with private coverage. The government has been expanding Medicaid up the income scale so that now in a lot of states, middle class people can get on these government health programs. And one of the effects of Medicaid and other government health programs is that they make private insurance more expensive. Now, you put all of these factors together, and then you look at the fact that the people who are promoting government health programs are criticizing Wal-Mart because Wal-Mart employees are taking advantage of these programs, it's completely disingenuous.
If the government is giving health coverage away for free, how can Wal-Mart compete with that? If the government is selling – if you're selling apples on one side of the street, and the government moves in on the other side of the street and starts giving away apples for free, and then the government starts criticizing you because people aren't buying your apples anymore? I mean, how ridiculous is that?
AMY GOODMAN: That, the pro-Wal-Mart film that has just been produced. We now turn to the anti-Wal-Mart film, which begins with Wal-Mart employee, Josh Noble, describing his insurance plan at Wal-Mart.
JOSH NOBLE, Wal-Mart Employee: I was under my mom's insurance plan with a local grocery store that she works for, and any prescription it was, it didn’t matter what it was, was $5. And now, through Wal-Mart, for that one bottle of pills, I’m paying $70.
DONNA PAYTON, Wal-Mart Employee: But I can't afford to put my children on the Wal-Mart insurance, because it’s too expensive.
ALICIA SYLVIA, Wal-Mart Employee: There's no way I can afford to have $75 taken out of each check just for medical. That’s why – because I'm such low income, why I’m able to get the Medicaid for the kids through Colorado state.
DONNA PAYTON: But they're a billion dollar corporation, so I don't see why they cannot offer a better medical package for their associates, so that we can afford to get our families on insurance.
EDITH ARANA, Wal-Mart Inventory Specialist: You start weighing – okay, he's sick/we eat. Which one do we do? Well, let's give him an aspirin.
WELDON NICHOLSON, Wal-Mart Store Mgr. Trainer, 17 years: No matter what anybody says, we’re at poverty level. I watched so many people go without lunch in the lounges that I stopped eating in the lounges, because – I just had my managers eating there, because I just couldn't stand it. They just wouldn't eat, and we weren't allowed to offer them any money. And there were people I’d see that didn't eat nothing. They'd take an hour lunch and just sit there.
EDITH ARANA: We have full-time employees that worked at Wal-Mart, and they had medical, but the medical was so high, so they had to go out and get Medi-Cal, some type of government medical.
DIANE DeVOY, Wal-Mart Employee: While I was working at Wal-Mart I was on WIC. That's an excellent program. It saved my life, really, because you got all the formula and cereal and stuff you needed for the baby. And I also went to the Medicaid office. It can be a real hassle having to deal with the offices. But, you know, at least they're there. I'm thankful for the programs that are available, you know. It's not a fun situation. It's demeaning. I always heard people say, you know, “Oh, there are so many people who just use the system.” I can't imagine that, because there is no way I would want to spend any length of time having to do what you have to do to get assistance.
CATHY NEMCHIK, Wal-Mart Employee: You talk about using the system. Look at the way Wal-Mart is using the system. They're promoting people to go to Healthy Kids and to get food stamps and Section 8 housing. They’re the ones that are using the system.
DIANE DeVOY: Yeah. It's pretty bad when you need to tell your employees that all of these programs are available to you, because we're not paying you enough money.
NEWS ANCHOR 1: Retail giant Wal-Mart is encouraging its workers to go on welfare.
NEWS ANCHOR 2: Instead of paying for its employees to have health benefits, she says Wal-Mart is making the government take care of it.
REPORTER: In Florida, Wal-Mart has more employees and family members eligible for Medicaid than any other company. Critics accuse the retail giant of using Medicaid and state programs for the poor as its health care plan.
NARRATOR: This report from U.C. Berkeley researchers concludes Wal-Mart costs state taxpayers $86 million a year and county taxpayers as much as another $25 million to pick up the tab for public health care, income tax credits, housing subsidies and food stamps.
REPORTER: Evelyn Deas used to work full-time for Wal-Mart but didn't have company health care benefits. She literally couldn't afford to pay for it so she turned to government assistance.
UNIDENTIFIED WOMAN: What the public doesn't understand is that those everyday low prices are based on taxpayer subsidies. Wal-Mart is getting away with it because they can.
STAN FORTUNE, Wal-Mart District Loss Prevention Mgr.: I talked to the regional personnel manager about who was going to take care of the Wal-Mart associates and their health care needs. He said, “Let the state do it.”
PHENIX MONTGOMERY, Wal-Mart Employee: The personnel manager told me personally that there's assistance out there for people. They should be able to go use it. ‘Use your taxpayers' dollars.’
STAN FORTUNE: I had a list of all of the government agencies and all the different places that people could go if they needed the money for their utility bills, if they needed to apply for food stamps or if they needed to apply for WIC or for Medicaid.
PHENIX MONTGOMERY: So your dignity is not there. Your pride is not there. You go to work knowing that you're not making enough money to really make ends meet, but yet you got to go with a smile on your face and fake it. Yeah, that's pretty bad.
EDITH ARANA: Come up with some type of health care that a full-time person can afford and don't have to put on the scale health care or feed my family.
DIANE DeVOY: Why is it that a corporation that in 2003 had an outstanding $240 billion in sales will not provide a livable wage and affordable health care for their employees?
STAN FORTUNE: There's nowhere around that there's a company that makes this much money and still turns around and makes their associates go to the state for aid.
AMY GOODMAN: An excerpt of Wal-Mart: The High Cost of Low Price. We're joined in the Washington studio by Tracy Sefl, Communications Director, Wal-Mart Watch. Joining us on the telephone from Georgia is Ron Galloway, the documentary filmmaker who produced Why Wal-Mart Works: And Why That Drives Some People Crazy. Well, let's start with Ron Galloway. Why did you make your film? And what is your response to these concerns about Wal-Mart and its treatment of its workers?
RON GALLOWAY: Good morning, Amy.
AMY GOODMAN: It's good to have you with us.
RON GALLOWAY: I'm not an Amy-head yet, but I'm willing to learn. Basically I made the film, initially as a study of logistics. But it turned into more of a study of people. And if I could address pretty much the main thrust of the clips before about Wal-Mart putting people on government assistance or recommending government assistance and that causing – you know, costing the taxpayers money, there's a flip side to that. Wal-Mart pays $22 billion – let's accept the number that is bandied about, which is that Wal-Mart costs taxpayers between $1.5 billion and $2 billion. Well, let's accept that, but Wal-Mart pays $22 billion in federal taxes, collects $11 billion in state and local taxes, and through their vendors – and this is sort of the unrecognized story – their vendor-suppliers, they also are responsible for another $40 billion in income tax. Wal-Mart is a complete cash cow, so if you add those three up, that's $73 billion. So sort of a flip side of looking at it is if Wal-Mart is paying or costing $2 billion, $73 billion is coming back into the treasury. Now, I'm a middle-aged guy, and as with most things you find that the truth lies somewhere in the middle. But I honestly don't believe things are as dire as they are portrayed in the other film.
AMY GOODMAN: Tracy Sefl, Communications Director, Wal-Mart Watch, in Washington, your response?
TRACY SEFL: Thank you, Amy. First of all, I think Mr. Galloway is doing something that must be a little bit lonely. He's certainly on the wrong side of the equation these days. All around the country this week we've been screening the Wal-Mart: High Cost of Low Price to hundreds of thousands of people across the country, screenings big and small, in private homes, in public theaters, in public parks, huge crowds. It's been an incredible week. And we're delighted to know just how far-reaching this film has been.
And what's notable about the film are the key arguments that are made in it, which we think reflect all of the concerns of our organization and those who support us. And the first is certainly this notion of health care and the crisis that Wal-Mart is contributing to in this country. By not paying affordable wages and by not offering adequate benefits, this company is indisputably pushing people into a difficult position of having to rely on public programs.
Imagine just for a moment if this were the Microsoft Corporation and it was Bill Gates's company where you heard these same kind of stories. The responsibility for this shameful business practice lies squarely on the shoulders of the Walton family, the multi-mega-billionaires who control this company and who make the final decisions in the private confines of their boardroom. That's where the responsibility lies. That's where the problems can be diagnosed to. So the health care crisis is certainly the first and most foremost pressing issue that we've been attending to.
The memo that you mentioned earlier was leaked to our organization several weeks ago. We were stunned by what was in there. We were also stunned by the fact that this was the company acknowledging in their own words and to the privacy of their board of directors just how bad that problem is. So, while we're delighted that there's a film that's making that argument, we also continually would like to note that it was the Wal-Mart Corporation, in their own words, acknowledging how just how bad it is, as well.
AMY GOODMAN: Tracy Sefl, was it your group, Wal-Mart Watch, that got a hold of this internal memo about health care?
TRACY SEFL: Yes. It came to our office in an unmarked plain envelope, no return address. We don't know who sent it to us. We've received several other similar documents from inside the company, which, to us, suggests that there's not only an internal security problem at Wal-Mart but that there are people high up inside the company who agree that there are serious problems that need to be attended to, that this is a flawed business model, and that this is a company that is essentially profiting on the backs of its lowest paid workers.
AMY GOODMAN: Now, among other things in the memo, it said that it would have people start off by pushing carts, even if that wouldn't be their job, but just to weed out unhealthy people who might not be able to do that, to keep the health care costs lower?
TRACY SEFL: That was, in fact, one page – one part of the memo. And while there were many pieces of this memo that many would argue were simply reflections of the realities of corporate America and the importance of understanding the bottom line and looking at benefits and looking at value and value-added benefits, there was a tone to this memo that was so disturbing and so profoundly troubling that it explains the impact that this memo has had on the debate about Wal-Mart in this country.
AMY GOODMAN: Ron Galloway, were you troubled by this memo?
RON GALLOWAY: Well, yeah. It was kind of a %¤#&!§-ed memo. And the person that wrote it, they immediately put out on the air to get a good whipping on a lot of media organizations. I'm not sure that that represents the full view of Wal-Mart corporate, but that was clearly a sub-optimal memo. Now, one thing, she talked about Microsoft there for a second. Microsoft has 43% profit margins whereas Wal-Mart has 3.5%. And so, where Wal-Mart does make or generate $250 million in revenues, they make $9 billion. Well, $9 billion still sounds like a lot. But they are running things really skinny over there. And the two big things they have to worry about are wages and health care. For instance, if everybody got a $4 an hour raise at Wal-Mart that $9 billion would be erased. They operate on such a scale and so skinny that they just – they're walking a thin line.
And Tracy also said that Wal-Mart has a flawed business model. Well, I would contend that 138 million people a week accept that flawed business model and walk into their stores, and 1.3 million people work there. And, you know, we're pretty close, we're statistically around a full-employment economy, so it's not like they don't have other choices. And for unskilled labor, I firmly believe that, ironically due to Wal-Mart's growth, for unskilled labor at Wal-Mart it's really one of the better places where you can move up. I can't think of another corporation where just because they grow so fast, they have to hire from within. I can't really think of anyplace else you can do that.
AMY GOODMAN: Ron Galloway, we’ll go back to that point, but we have to break for stations to identify themselves. Ron Galloway is the producer of the film Why Wal-Mart Works, and Tracy Sefl is Communications Director of Wal-Mart Watch. We’ll be back with them in a minute.
[break]
AMY GOODMAN: Our guests are Ron Galloway, documentary filmmaker, made Why Wal-Mart Works: And Why That Drives Some People Crazy. Also, in the Washington studio, Tracy Sefl, communications director of Wal-Mart Watch. Tracy Sefl, your response about the ability of workers to be promoted from within? And then I wanted to go to the issue of Wal-Mart's public image and how they're dealing with it with this war room, The New York Times reporting about how Wal-Mart has taken a page from the modern political playbook, has quietly recruited former presidential advisers, including Michael Deaver, who was Ronald Reagan's image-meister, and Leslie Dach, one of Bill Clinton's media consultants to set up this rapid response P.R. team, a war room in Arkansas. Tracy Sefl.
TRACY SEFL: The question about mobility is an important one, especially in the context of this post-Katrina time. We all know, of course, Wal-Mart came out and outshone the Bush Administration in its response to the natural disaster. I'm not saying that it was much of a stretch to outshine the Bush Administration but nonetheless it was an important moment for Wal-Mart. They commanded tremendous press. They did good work. They helped people at a time of crisis. All of that seems to have been passed and forgotten now, and Wal-Mart hasn't been able to capture anything beyond that instant moment where it came to the rescue of some people in a quick time. And the important point here is that the notion of mobility and opportunity should be something that a corporation embraces.
I'd like to point out something that's been little noticed, back to the memo you were discussing earlier. There are actually two versions of that memo: the original version, which is available on my website at WalMartWatch.com, is different than the memo that the company ultimately provided to The New York Times, and there's one section that the company actually omitted in the version that they made public. And that section talks about how their associates, when overcome with healthcare costs and problems that arise from their healthcare crises, that associates are forced to file for bankruptcy, and they offer the troubling statistics about just how many of their associates have been forced into bankruptcy. That version was omitted from the memo that they made public.
Now, what kind of mobility is being offered? What kind of opportunities is the company offering, when it has to make private discussions about just how many of their associates are forced into bankruptcy? What kind of a circumstance is that? What kind of a corporate model is that to look up to? And why wouldn't they have left that in the document that they made public?
AMY GOODMAN: Ron Galloway, let's put that question right to you.
RON GALLOWAY: Well, I guess the first thing I would say is, statistically, Wal-Mart is so huge that, I think, they have to address the problem. I didn't know about that part being left out. But I'll say this on Wal-Mart's whole P.R., I guess, problem. One problem they would have is she mentioned Katrina. Well, Wal-Mart actually didn't really go out and advertise much after that or brag about it, where they had a golden opportunity.
The other interesting thing is, lately I've sort of been -- I don't know, defending Wal-Mart a whole bunch, and when they have Forrest Gump out there defending them, then they may need some P.R. straightening out to do. And I think that's one of their problems. They're so focused on their mission, which is, of course, always low prices, that I think they feel or have felt as though that if they were doing that, that was good enough and people would recognize it. But we live in a really political world now and I just think that's not good enough anymore. And they are making attempts at ameliorating their P.R. problem.
TRACY SEFL: Amy, I think that --
AMY GOODMAN: Tracy Sefl of Wal-Mart Watch?
TRACY SEFL: Sure. The so-called war room that Wal-Mart has been gaining attention for having convened has essentially served two functions for that company. First, it's gotten them attention merely for having it. It's not clear to me that this has been an operation that has been successful in helping the company out of its unfortunate bind and morass of bad publicity and terrible missteps. Today, the headline you led with: 120 illegal undocumented workers rounded up at a Wal-Mart construction site. These aren't good times for the company. Perhaps these well or overpaid consultants should focus a little more on coming up with solutions and less on simply publicizing their own existence.
The second point would I mention is that this so-called war room has actually done a terrific job to bring more attention to Mr. Greenwald's film and to help drive huge crowds all over the country this week -- in fact, all over the world. Just last weekend we learned that there is a screening of the movie occurring down in Antarctica. This has been a tremendous thing. And we're thankful that the Wal-Mart Corporation, by choosing to issue somewhat baseless attacks on Mr. Greenwald, has actually helped to publicize the movie even more. So those are the two things that this war room has seemed to actually accomplish at this point.
AMY GOODMAN: Ron Galloway --
RON GALLOWAY: Amy, could I say one thing about the other film real quick?
AMY GOODMAN: Yes.
RON GALLOWAY: And this is kind of an aside. One of the producers of the other film, Jim Gilliam is awaiting a -- and I know you have a lot of listeners, Amy. He's awaiting a lung transplant at UCLA. I think it would be kind of a good thing for your listeners to sort of send a thought his way. He's supposed to find out pretty soon. Now that's an aside.
And, you know, business is business. But I think the whole war room issue -- I think -- I'm not sure if I was Wal-Mart I would have publicized that either. But I think it's sort of one of their first attempts to kind of deal with the -- and Tracy's over there in Washington -- it's one of their first sort of attempts to try and deal with operating on a level that Washington operates at. I mean, they're in Arkansas, and I think they're learning. And I truly believe this. Wal-Mart, I genuinely believe, does more for poor and blue-collar workers in this country than any special interest group does. So you have to take the good with the bad. And like everything else -- I've said it before -- the truth lies somewhere in the middle of my film and Mr. Greenwald's film. But Wal-Mart genuinely serves the poor more than almost any other institution, except the government, that I can think of.
AMY GOODMAN: Well, Tracy Sefl, what about that point?
TRACY SEFL: What Wal-Mart does by its inadequate wages, its low benefits, its disdain for communities, its disregard of the democratic political process, essentially it's making another class of Wal-Mart customers. They're ensuring their own success by virtue of their business model. That's the bottom line with this company.
RON GALLOWAY: Amy, could I say one thing?
AMY GOODMAN: Yes. Ron Galloway.
RON GALLOWAY: Wal-Mart doesn't have 138 million employees that go there every week. So I think people vote with their feet. And Wal-Mart is just so big that they set the statistical mean. They are the mean, so they're going to have every issue you can think of to deal with. These undocumented workers this morning, by the way, were hired by a subcontractor who was contractually bound to Wal-Mart not to hire undocumented workers. Personally, I think we should be able to hire as many undocumented workers as we want; if we're going to let them into the country, I think they should be able to work. So I sort of have a -- I don't know -- bleeding heart look on that one.
AMY GOODMAN: Tracy Sefl, let me ask you. What is Wal-Mart Watch's goal?
TRACY SEFL: This week and beyond, our goal is for Wal-Mart to do three things: To become a better employer, a better neighbor, and a better corporate citizen. We've talked extensively about their employment practices, and I think it's very clear that there's certainly room for this company to change. They've made tiny little steps in a direction that we think is good. They have a long way to go. We also expect Wal-Mart to become a better neighbor. This is a corporation that has little disregard for local democratic processes. It steamrolls over local communities. It lies and badgers and baits and switches its way into local towns. Just this week my organization released yet another leaked document that shows exactly where Wal-Mart is planning to expand itself in the coming year. And that's been tremendous fodder for all of these energized supporters around the country to say, ‘Well, now we know where this company is planning to come, and we'll be there to fight it and to make sure that it happens on our terms, if we decide it should happen.’
AMY GOODMAN: I want to ask you both about China, about the relationship between China and Wal-Mart. Tracy Sefl, we'll start with you.
TRACY SEFL: Sam Walton was heralded for his Buy America Program, for bringing to the forefront of American retail and American manufacturing a commitment to selling products that were made in this country. That's long gone. It's nothing more than a shadow of itself at this point. The company has abandoned that philosophy. 70% of the merchandise on Wal-Mart shelves are from China. We featured an advertisement recently -- and I do believe that's available on our website, as well -- that features a photograph from an actual Wal-Mart store here in the Washington area, with arrows pointing to every item that's from China. Needless to say, the photo is filled with arrows. The point here is that that comes at the expense of the American jobs. It comes at the expense of American jobs, and it comes with the abandonment of Sam Walton's philosophy. This isn't the same company that it once was.
AMY GOODMAN: Ron Galloway, your response?
RON GALLOWAY: Well, a hundred years ago, as is stated in my film, Europeans were screaming and moaning about the fact -- the flood of cheap goods from America. Wal-Mart is simply -- there's winners and losers in this. You can't argue that. The winners are the American consumer and the Chinese laborer. The loser is certain sectors of the American manufacturing economy.
Now, Wal-Mart didn't make the rules that allowed this flood of imports to come in. I happen to think those rules are, as I've stated before, sub-optimal. But they didn't set those rules. They're simply following them. China actually represents one of the great growth opportunities for Wal-Mart in terms of putting stores there. But, I mean, there's no way around the fact that the American worker in certain manufacturing sectors has been left behind, and I don't see the government or much of anybody really addressing that problem, although it may be --
AMY GOODMAN: Ron Galloway, we have to leave it there. Tracy Sefl, as well. Ron Galloway has made the film with his brother, Why Wal-Mart Works: And Why That Drives Some People Crazy. Tracy Sefl with Wal-Mart Watch. The excerpt of the film we played was Wal-Mart: The High Cost of Low Price.
http://www.democracynow.org/article.pl?sid=05/11/18/1535212
