Greed is pernicious and will always benefit one in the short-term, but can rear its ugly head in the long-term. This rule applies jus to individual people, but to businesses and mega corporations as well. Walmart, long criticized for their business model, is quickly learning that their penny-pinching business ways are not helping their business image one bit.
Walmart’s stock experienced the biggest one-day drop in decades on October 15th, plummeting to $60.03 – which is $6.70 less than where it had been at the start of the day start of the day. And even Walmart spokespeople have admitted that the trend will probably continue, announcing a projected decrease in profits of up to 12% in its next fiscal year when only a 1% drop was anticipated.
The massive corporation is now facing growing competition, primarily from online retailers and smaller better business retailers. It is trying to change its reputation in hopes of maintaining and regaining average consumers, while attracting more higher-income customers. Good luck, guys. But Walmart’s reputation is a poor one, having driven thousands of manufacturers overseas, and largely employed workers overseas paying them pennies an hour. They have been involved in a number of class action lawsuits from former employees, and are known for denying their workers any benefits.
To compound this, American taxpayers are left to ameliorate Walmart’s poor treatment of their employees, and minimum wages. $6.2 billion in taxes is spent annually to provide food stamps, Medicaid, and subsidized housing to Walmart employees. Which translates to between $900,000 and $1.75 million per year, per Walmart store – put another way, that is approximately $3,000 to $5,800 worth of taxpayer assistance per employee annually. Many Republicans openly praise Walmart and its big business model, citing it as being shrewd. Walmart employees make $8.81 an hour on average.
Intuitively, a competitor that pays an average of $21 an hour to its employees, plus benefits, would not be a huge competitor to Walmart. But, that’s the irony. One firm doing exactly that, and is posing a serious business threat to Walmart. Their name? Costco! Unlike Walmart, Costco’s profits are on the up and up, a tremendous 29 percent only in 2015, and they are continuing to expand and grow. Both companies have the same aim: providing household products at very low prices, but they approach the game much differently. The inequity at Walmart is highlighted by the simple fact that Walmart’s CEO, Doug McMillon, raked in $25.6 million in 2014. Costco’s CEO, conversely, made a much more reasonable $5 million, including stock options and other compensation bonuses. The fact that the Walton heirs took in $3.1 billion in 2014 alone just further illustrates the level of greedy corporate corruption Walmart has sunk to.
But that’s not all, folks! That’s right, beyond treating workers poorly and creating a serious tax burden upon the American public, Walmart creates even further chaos by driving out local businesses and causing horrible dilemmas within the community. This phenomenon affects the average small business, but can even make it hard for individuals to find jobs … Except, perhaps, at Walmart. But why would you? There are no benefits, and the pay is extremely meager – Walmart employees are one of the nation’s biggest group of food stamp recipients, with about $13 billion in benefits allotted per year. By paying a fair wage, Costco employees can not only afford to shop at Costco – giving back to their employer – but also support other community mainstays and activities. And, unlike Walmart, neighborhoods with a Costco often experience increased property values as a result.
It isn’t often that greed comes back around to bite corporations in the ass, but it looks like this is exactly the case with Walmart. Good business companies like Costco need to become the norm, and hopefully that is what this trend is indicating. Corporate greed runs rampant in this country and there needs to be some serious changes made. It looks like Walmart will either have to change its business model or suffer the inevitable consequences. I for one, wouldn’t be sad to see them go.