The Untold Story of
Sam Walton and How
Wal-Mart is Devouring
(Times Business)God knows why there is this morbid interest in telling the life stories of those who steal money from us through the disgusting come-on called retailing. Like books on Sam Walton, the man who created 3,000 discount stores, with almost a million workers; the man who converted $1,000,000 in debt in 1965 to $200,000,000,000 in assets when he popped off in 1992.
Walton did it by selling. The great American dream. Sell enough and you become rich. Destroy your competition, and you become super-rich. Keep your employees underpaid --- minimum wage-earners are the best. (High turnover of employees means that you don't have to raise wage and ante up benefits.) Get your merchandise made overseas, in places like Bangladesh, where boys and girls, some as young as nine years old, become your workforce.
Sam Walton died several years ago of multiple myeloma, but his works live on, including several patent falsehoods:
Walton's original method of operation was to set up huge discount stores that, in opposition to K-Mart or Target or J C Penney or Sears --- were located solely in small towns. He started out in Bentonville, Arkansas, and spread throughout the United States --- and now, even as we speak, his ghost is spreading the disease to other parts of the world.
- The poor --- if energetic enough, and optimistic enough, like Sam --- can rise to the top. However, Walton started out far from poor. His PR machine doesn't advertise the fact that his first investment came from a rich father-in-law, bringing in a loan of some $500,000 (in 1995 dollars).
- Then there is the myth that Wal-Mart returns dollars to the community. In truth, a store that grosses many millions annually sets up, with great fanfare, local scholarships of $1,000; the rest gets shipped off to Arkansas.
- How about the myth that Wal-Mart workers are all "family" --- and that the company rewards its workers with stock options. If it's family, it's a family with peculiar rules (intrafamilial love not permitted). Moreover, it's been shown that not more than one in fifty will ever be able to take advantage of stock options. The rest drop out sooner or later because they just can't stand working for such miserable wages.
- Then there's "what's good for Wal-Mart is good for all of us." This includes despoliation of land, encouragement of numbing conformity of the employees, and support of aggressive --- often vicious --- business practices, especially associated with the politics involved in setting up a new store.
- The most-repeated canard is Sam Supersalesman was a great and humble folk because he drove old cars and glad-handed his employees. This made him worthy of Presidential medals-of-honor. But you'll notice that he did not drive around in the $20,000,000,000 trusts he set up for his wife and each of his children --- thus avoiding almost all estate taxes. Finally, they tell us that he and his stores bring needed bucks into our communities. However, if you look at the figures, it turns out that our governments --- federal, state, local --- not only don't get much in taxes from the likes of Sam, they subsidize him, his estate, and his family estates through tax gimmicks.
Like countless other entrepreneurs of the last half of the 20th Century, governmental institutions that helped him lavishly --- but their good works for Sam were well hidden. For example, he was --- Wal-Mart still is --- on the dole from federal, state, county and city governments. We ain't talking measly welfare checks, we're talking tax advantages, rebates, and multi-million dollar checks (what they call corporate welfare).
On the federal level, there's the lowering of international tariff barriers so that his clothing can be manufactured by hand by teens and sub-teens earning ten-cents-an-hour in Honduras, Bangladesh, Indonesia, China. Then the U. S. Congress gives him artificially low minimum wage and medical benefit requirements so that the young and the ill-educated can be used as Wal-Mart's primary workforce. They tell us that this work keeps the kids off the street, makes productive citizens of them; we never look at the price extracted from their souls for working in such a sterile environment.
Finally, there are the immense rebates and reduced taxes (sometimes, reduced to nothing) provided by city and county councils, themselves mostly real estate people. It's the usual variation on control over property values: a simple change of zoning from "rural" to "business" can increase the value of property a thousand-fold. With a bevy of lawyers, and an artful PR machine, it's always been easy for Wal-Mart to get variances so that their huge boxes can be erected, surrounded by acres of parking spaces. This doubles the value of the land, while at the same time contravening all good architectural and aesthetic sense. Would you want to live next door to a Wal-Mart?
Then there are the other indirect subsidies. Local and county rebates are set up, written in arcane language, so that a town's citizens will never know that they are subsidizing Sam's stock portfolio. What is said, instead, is that the city is going to benefit from his merchandise, and from 800 new jobs. It's not much different from what happened in 1950 when they said that the thousands of new jobs created by the new nuclear facility in Hanford, Washington would be of great financial benefit to the community, offer great security for the citizens of Southern Washington. Typical. The local governments hot to get Wal-Mart in their area don't look at what sociologists know as the ruination of the natural infrastructure --- the links between merchants, townspeople, and the subtle health of a community. Only after it's done and in place do we see city center suddenly destroyed by this box from outer space, resting in asphalt, five miles north on the Interstate.
At the end of his life, Sam Walton was lionized --- but few took the trouble to point out his was a tyrannical business where employees could be fired for trying to organize unions to represent them, or even falling in love with a clerk in the next department. The myth was that it was pure American work-ethic, with a benign, homey straight-shooting character at the top.
In Sam We Trust is an excellent moral tale of a system that rewards the avaricious while it penalizes --- if not destroys --- the human scale and values of communities. The Christian fundamentalists think that the devil is at work in the form of abortions, television programs about gays, and crucifixes stuck into bottles of urine. Too bad they don't have the time to look out and see what's going on the edge of town.
In 1992, George Bush gave Sam Walton the Presidential Medal of Freedom, one of the country's highest civilian honors. The message: if you build a fortune on the corpses of the poor and under-represented, the government will give you its love and its blessings. Local businessmen with more humane operations and more humane scale get bull-dozed, the owners sent into premature and poverty-stricken retirement --- while those who steamroller our lives with opportunistic merchandising get the blessings of the presidents.
David Glass --- the man who took over after Sam's death --- was asked by NBC about children in Bangladesh who hand-sew clothes for Wal-Mart "locked in their plant until all hours of the night, until they finish that day's production." Glass was then shown photographs of one factory that burned down with the children still locked inside. He responded, "Yeah...there are tragic things that happen all over the world." The interview was terminated at this point, not by NBC, but by Wal-Mart's publicity person.
Bob Ortega wrote In Sam We Trust and writes for the Wall Street Journal. He's good. In simple language, he shows how you and I had the privilege of paying, through the nose, for Sam's preposterous wealth. He also suggests that we deserve better.--- Ruth McCreedy