NEW YORK (MainStreet) In addition to a spate of bad press, Walmart's Walton family is facing another accusation that they are penny-pinchers. And that's why more than half of New York City Council members have been working to stop the "Save Money, Live Better"-slogan-promoter from grabbing a foothold in the Big Apple not mention the cause for the slew of employee mutinies all over the country.
The clan behind the world's largest retailer is among the richest in the U.S. But the family members are laughably ungenerous when it comes to charitable giving. Forbes recently revealed that the Walmart heirs have given merely 0.04% of their own fortune to the family foundation. Compared to titans of their ilk like Warren Buffett or Bill Gates, the family demonstrates skimpy altruism.
This lack of charitable generosity dovetails with the company's maltreatment of employees with meager wagesa lightning rod in the national minimum wage debate. This has caused critics to label Walmart as stingy and hypocritical. But should a corporation be required to be generous?
"Corporations should be generous and fair to their employees, because in the long run that would help reducing companies' financial turnover and strengthening their brands," says Carolyn Plump, a professor of business law at La Salle University in Philadelphia.
That's not the implemented philosophy at Walmart. Instead, there's a striking rift between the company's robust revenue and what it gives back to its workers. As a giant business enterprise, Walmart proudly announced to its shareholders in its 2013 annual report that it operates more than 10,700 retail stores in 27 countries, has approximately 245 million customers, grew with a 59% increase in earnings per share and a 123% jump in free cash flow and had paid more than $60 billion in dividends to its shareholders through fiscal years 2009 to 2013; however, it pays less than $25,000 a year to each of its 835,000 workers.
"Big companies always improve the quality of their employees by paying them well," says S. Chris Edmonds, founder and chief executive officer at The Purposeful Culture Group, an organizational consultancy. "Walmart apparently doesn't have a good track record there."
The retail behemoth that is reputed as a "low price provider" to its customers has become notorious as a low-paying employer. And that's incited the backlash.
The Mother of Revolt
In response to the insufficient pay, recently a group of "Walmart mothers," who annually earn less than $25,000, walked off their jobs and went on strike outside of stores in 20 cities, including Chicago, Los Angeles and D.C., fighting for a higher salary and fewer hours, as the company's annual shareholders' meeting convened during the first week of June.
Charmaine Givens-Thomas, a member of the non-profit Organization United for Respect (aka OUR Walmart) has been particularly vocal in fighting for employees' rights.
"Our company must invest more in associates and give them the respect they deserve so we can be even more productive, which benefits us as associates and shareholders," Givens-Thomas said on the floor of the shareholders' meeting. "We need a leader at the top who thinks only of what is best for our company, its associates and all shareholders."
Givens-Thomas, 61, currently works as an electronic sales associate based in Evergreen Park, Ill. She told MainStreet that her position is considered full-time; however, she only works 24 to 34 hours a week and Walmart keeps cutting her hours. Being paid at $12.05 per hour, she said, "I can't get 40 hours a week, I can't pay my utilities."
There are others facing graver obstacles. Gail Todd is a mother of three who lives in Washington D.C. Unlike Givens-Thomas, she has to be a standby employee due to her "open schedule," which means she has to be available for any shift all over the place regardless of the time of day.
Since Todd and her family depend on D.C.'s public healthcare system, food stamps, as well as low income housing to stay afloat, she makes a two-hour roundtrip journey to work on the bus and the train hoping to save money every way that she can.
Droves of employees are in more dire straits than Todd. With a large number of single mothers who work for the country's largest employer have to live in shelters since they can't afford apartments, how could they be expected to create a sustainable lifestyle? All this, as Alice Walton adds a $10 million piece by Donald Judd or a $19 million Edward Hopper painting to her art?
Question of Ethics
Dr. Denise Bortree, an associate professor of communications at Pennsylvania State University and co-editor of Ethical Practice of Social Media in Public Relations (Routledge, 2014) told MainStreet that big companies like Walmart should be required to make positive contributions through corporate social responsibility.
"Companies that rank high in reputation approach CSR in a specific way," she said. "They identify a social or environmental issue that can be addressed with company resources, including employees, products and services. And, they focus their business processes, philanthropy and resources to solve the problem."
Still, there are loopholes beyond our current legal system's scope that do not require social conscience from corporations. There's no hard and fast legal code for corporate ethics to regulate how corporations or their owners behave. Corporate social responsibility, though, is the closest approximation to an ideal moral practice in business.
"Companies like Walmart think it's enough as long as they comply to the law, but sometimes it's important for them just look beyond the law, which requires more ethical and moral standards," says Plump.
Corporate social responsibility combines ethical codes and societal obligations to give back profits to a populace that supports it through consumerism.
Walmart, however, is taking the opposite approach in its CRS by breaking its employees' trust, challenging society's morality and even worse, violating its CSR with empty action. The irony became apparent when its chief executive officer Doug McMillon promised in its 2014 Global Responsibility Report that "[w]e're clarifying the career pathways for associates, adding more flexibility to our scheduling system and piloting training that will accelerate the development of our associates within Walmart."
Of course, even as Walmart as a corporation and the Waltons try to milk their profits by minimizing employee compensation and charitable giving, Plump suggests Walmart might be doing itself a disservice by eschewing CSR.
Large companies often have many resources to develop their business and create healthy and positive impact to the community through building up their CSR. Dr. Fait Muedini, a faculty member of International Studies at Butler University, suggests that "corporations can contribute to the community are funding local projects, scholarship programs for workers as well as additional training programs for workers to build upon their skills and education."
Written by Amy Xie for MainStreet