Walmart: the High Cost of Low Price

Walmart: The High Cost of Low Price

Wal-Mart is accused of doing several things to maintain their low prices. The first of these is choosing to locate their stores in towns where other large retail businesses are not present in order to decrease competition. Instead, the consumers in these towns are shopping at small shops, referred to in the documentary as “mom and pop stores”. When a Wal-Mart is built in these small towns, the mom and pop stores go out of business because the consumers begin to shop at Wal-Mart instead. By eliminating the competition in this area, Wal-Mart is able to keep low prices because all the business is going to them.

Many Wal-Mart employees in the documentary express their dissatisfaction with the store. They are not paid well and are often unable to afford the insurance that is offered to Wal-Mart associates. Instead, they are forced to turn to government-funded programs like Medicaid. The documentary claims that thousands of Wal-Mart workers in every state use Medicaid or other similar services. Wal-Mart associates are also strongly discouraged from working overtime, and when a worker does work overtime, the time the spent is not recorded and they are therefore not paid for it.

Wal-Mart has been fined millions of dollars and some stores were not finished being built because of environmental violations. Wal-Mart saves money by ignoring regulations because they do not ensure that the proper safety rules are being followed and that the proper equipment is in place.

Finally, Wal-Mart is accused of manufacturing their products overseas in developing countries. The workers there are paid very little and the products they make are sold in Wal-Mart for prices sometimes over 80% higher than what it costs to manufacture. One product show in the movie cost 18 cents to make and was sold in Wal-Mart for nearly $15. The workers also are made to live in a building owned by the company, and if they choose to live elsewhere, they are still...