Wal-Mart: rock-bottom wages, obliges employees to resort to government subsistence, including food stamps

Independent Online Edition > Americas: "3 November 2005 23:16 | Wal-Mart: is this the worst company in the world?

There can be few chief executives in corporate America more uncomfortable at the moment than Lee Scott of Wal-Mart. Not that he should necessarily have our sympathy: his company, known unaffectionately as the Beast of Bentonville, after its corporate home, is the biggest single private employer in the United States. Its network of more than 3,500 discount retail stores has been lambasted repeatedly in recent years for its rock-bottom wages, which oblige thousands of its lower-end employees to resort to government subsistence, including food stamps, to make ends meet.
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But all the careful public relations work was demolished by the leak of an internal memo last week which acknowledged some shocking home truths about Wal-Mart - including the fact that 46 per cent of the children of company employees either had no health insurance or relied on emergency government programmes nominally set up for the indigent and unemployed. The memo, written by Wal-Mart's executive vice-president for benefits in conjunction with the management consultants McKinsey, also showed the true purpose of rearranging the company's health plan was to cut costs further.

Sure enough, close examination of the health plan revealed that, while monthly insurance payments were being lowered in some cases, they came with a hefty deductible that many company employees were unlikely to be able to afford. The memo went so far as to suggest adding a physical element to sedentary jobs such as cashiering to deter unhealthy people from applying. ...