Wal-Mart: Greedy Villain or a Shopper's Best Friend?


Nov. 11, 2005 — -- In every one of Wal-Mart's thousands of stores they begin the day with a company cheer. It's supposed to inspire employees and remind them that the customer comes first.

We spoke with employees who say they like working for the retail chain, but others call the workers victims of "exploitation."

Critics say Wal-Mart is responsible for wrecking communities, discriminating against women, failing to provide good health benefits and underpaying its workers.

Robert Greenwald's new documentary, "Wal-Mart: The High Cost of Low Price," depicts the retail giant as a greedy beast grabbing everything in its path.

Now, a big union-led campaign intends to force Wal-Mart to stop being "greedy." Paul Blank was hired by the Food and Commercial Workers Union to convince people not to shop at Wal-Mart until the company pays workers more.

"For a one-penny increase, they could provide their workers with $2 more in wages and benefits," Blank told "20/20." "The average associate at Wal-Mart makes $8.23 an hour … that's not a job that can support a family."

In response, Wal-Mart says the average wage is about $1 an hour more than that, but it's still not a lot.

"They have taken the values, the morals, the ethics, fairness that are the fabric of our society and put them aside and … put their profits before their people," said Blank.

The children of Wal-Mart's founder, in contrast to its workers, are billionaires. Does that make them greedy?

They wouldn't talk to us about that. But three years ago, another billionaire, Ted Turner, did.

The media mogul called greed "ambition."

"America is about competition and rising above that competition. That's at the basis of what makes our … economy and our society tick," said Turner.

But in America capitalists are often vilified, as if one person's success means another's loss.

"That's really a child's view of -- of how the world works," said philosopher David Kelley, of The Objectivist Institute.

"It's like we're all children sitting around the dinner table and a pie comes," said Kelley. "If I get a bigger piece, you get a smaller piece. But in reality, there's no mom there putting a pie down on the table. We're producers, we create wealth."

Wal-Mart certainly created wealth. The chain started with just one discount store. Its owner, Sam Walton, invented new ways to streamline the supply chain and speed delivery to stores. He pushed suppliers to sell for less so he could sell for less.

That strategy was so popular, Wal-Mart now has more than 6,000 stores and sells more goods than any other chain.

As a result, Walton's heirs got rich. But does their having billions mean the rest of us have less? No.

"This is the fallacy that there is some pool of wealth there that's fixed, and if I take more you get less. That's not true," said Kelly. "Wealth is constantly being created."

Walton's innovations created thousands of new jobs and allowed millions of Americans to save money with the low-priced goods.

Brink Lindsey, an economist with the Libertarian Cato Institute, said consumers may be saving as much as $100 billion a year because of Wal-Mart's success in keeping its prices low.

"This translates really into a wage increase that Wal-Mart is offering to all Americans that shop there," said Lindsey.

"Would it be nice if Wal-Mart workers all made $100,000 a year? Sure. It would also be nice if the rivers were filled with lemonade and every kid had a puppy dog and a lollipop," said Lindsey. "In reality, we have trade-offs … It's easy for people who have plenty to say 'oh, I'd be willing to pay a few cents more,' but for people who are struggling to make ends meet, Wal-Mart is their best friend."

Wal-Mart keeps costs down by hiring retired workers, part-time employees, students or people looking for a second income.

"None of them was forced to work at Wal-Mart. That means that if they're working there, presumably, that was the best job they could get," said Lindsey. "If Wal-Mart ceased to exist tomorrow, those people wouldn't be better off."

Take Sha-ron Reese. Before she was hired at Wal-Mart she was on welfare, had lost custody of her kids and was living out of her car.

She had no references, work experience or employment history.

"I was raw," said Reese.

Today she has two people working for her. She has regained custody of two of her kids, and has her own apartment .

"I've actually furnished it with Wal-Mart," said Reese.

Despite its success stories, protesters say Wal-Mart is evil. Similar accusations have been made whenever there are dramatic changes in the marketplace.

"Every single major advance in mass retailing has produced firestorms of protest," said Lindsey. "When Sears & Roebuck and Montgomery Ward started the mail order business … rural retailers went crazy because of the unfair competition."

Capitalists have always been depicted as evil in caricatures, but the name-calling came from competing businessmen -- rarely from consumers.

Cornelius Vanderbilt was shown as someone who leeched off the poor. John D. Rockefeller was a snake. And the newspapers lapped it up, giving them the name "robber barons."

"But you could not find a more inaccurate term for these men than robber barons. They weren't barons. All of them started penniless," said Kelley. "And they weren't robbers, because they didn't take it from anyone else."

Vanderbilt got rich by pleasing lots of people, making travel and shipping cheaper.

Rockefeller got rich selling oil. Competitors and the government called him a monopolist. But no one was forced to buy his oil. Rockefeller had to persuade people by offering it to them for less. So much less, that poorer people, who used to go to bed when it got dark, could now afford fuel for their lanterns.

"The consumers were better off. The workers were better off," said Kelley. "And if that's called greed, then I say greed is good."

But the critics say Wal-Mart's greed is not good.

Activist Paul Blank's campaign against Wal-Mart has the retailer worried.

Some customers have stopped shopping at the chain because of the negative press, and Wal-Mart has set up its own war room, recruiting big name political talent like Michael Deaver, former adviser to President Reagan, to respond to critics like Blank.

Some on the political Left have begun to defend Wal-Mart, like President Clinton's labor secretary, Robert Reich, who says the hatred represents the "dark side" of business to a lot of people.

"They're fighting unions. They're doing everything they can to get their costs down. And that looks unfair. It looks awful. We don't like it," said Reich. "The citizen in us says 'That's not moral.' But the other side of the coin is that those same companies are providing rock bottom prices to consumers. And we as consumers say 'hurray!'"