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Wal-Mart's low prices carry a high price tag here and abroad
When you think about it, the price you pay at Wal-Mart isn't so low after all.

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Date published: 2/15/2004


WAL-MART HAS become my store of last resort. Price may be everything to some people. But when you consider how Wal-Mart manages to keep those prices so low, you might think twice about shopping there.

There are three basic viewpoints to consider--that of the company, that of its employees and suppliers, and that of the shoppers.

In the end, the company alone comes out ahead.

The last time I shopped the Wal-Mart Supercenter at Central Park, my jaw dropped when I arrived at the checkout area. Half the registers were closed, and those that were open had lines with as many as 25 customers in them--most with heaping-full carts.

I chose a line and stood there, and stood there. After 20 minutes, with at least another 20 minutes to go, I gave up, took my cart to the greeter, and left empty-handed.

That poor service is basic, in-your-face evidence of the high price people pay for Wal-Mart's low prices. The company knows that nearly all shoppers will wait it out.

Once when I actually did make it to checkout, I asked the clerk why so many registers were closed, and she said the store can't find enough people willing to work there.

Yes, the company does pay a few bucks above minimum wage, on average, but then makes it back by denying decent health care and other benefits to its "associates."

By beating back all moves toward unionization, the company is able to keep its personnel costs at rock bottom. The average wage of $8.25 is $2 less than at the average unionized grocery store.

The company also pays less for the goods it sells. Because of its size and clout, Wal-Mart can force vendors to meet its prices, rather than negotiate with them.

The so-called all-American Wal-Mart turns to the cheap labor of Third World countries to keep prices low. A recent Washington Post article reveals that 80 percent of the 6,000 factories in Wal-Mart's database are in China. The company might try to keep tabs on these foreign sweatshop operations, but the factories still routinely employ underage workers and require 80-hour work weeks, and they might pay less than $100 a month. There is no need to improve conditions when there are millions of surplus Chinese workers available.

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