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Opinion

Consumers must take a stand

Mike Rahimi 
Opinion Columnist

Most people pursue a university education for the obvious reasons. Higher learning leads to a degree that helps in one’s search for a good job, a nice paycheck and a chance at a better life. But once in a while, if students have their eyes and ears open, they may have a chance to learn about something that may help them think outside the box.

In America, Wal-Mart employs thousands and is well known for offering one-stop shopping and low prices.

Wal-Mart uses a strategy called the "pull system" to offer its services and keep prices low. The retailer decides which products should be produced by the supplier. Wal-Mart sets prices for these items and tells the manufacturer when and how many units should be produced. If the producer is unwilling or unable to fill Wal-Mart’s request, the giant retailer will quickly drop the supplier and take its business elsewhere. In many cases, suppliers that have become dependent on Wal-Mart’s contracts fall to ruins in this situation. 

Of Wal-Mart’s 6,000 global suppliers, experts estimate that as many as 80 percent are based in China. Workers in these factories earn a whopping 50 cents an hour, or roughly $100 per month. 

In America, the average Wal-Mart employee earns $8 to $9 an hour and is considered a full-time employee when he or she works 28 hours a week or more. These full-time employees receive little in the form of benefits, healthcare or pensions; many receive none. 

Meanwhile, Wal-Mart is proud to offer customers prices that are a few cents lower than the competition. At the same time, many local businesses and retailers who can not compete with Wal-Mart find themselves out of business. These once-proud American business owners must now wait in line for a part-time work application at their local Super Wal-Mart.

We all know that businesses are set up with the common goal of profit making. Smaller companies often compete by offering lower prices. Many cut their profits but hope to gain extra customers who will lead to earnings in the long run. 

Wal-Mart would like consumers to believe it offers them low prices because it loves to slash prices. We have all seen the television advertisements where the yellow smiley face flies around the store cutting price tags. In reality, the yellow smiley face depends on the pull system, low-wage earners at home and abroad and shrewd business tactics to cut prices. 

In fact, Wal-Mart often earns an 80 to 100 percent mark-up on its goods while the industry standard of its competition is roughly 20 to 30 percent. That little smiley face flies smiling all the way to the bank. 

Wal-Mart may not be good for America. Countless manufacturing jobs have been lost in America because of cheap labor abroad. Many small businesses have closed their doors because of Wal-Mart’s quest to slash prices for the American consumer. 

Some will say that Wal-Mart should be praised for finding labor willing to work for 50 cents an hour, finding a way to hire as few people as possible and finding a way to mark up its products by 80 percent. But is this just?

Few would find the American consumer most at fault. Many consumers know all the facts and are fully aware of certain business practices, but they continue to support such behavior by taking their business to Wal-Mart. 

We’re in a society driven by a business pattern of supply and demand. If consumers continue to demand certain things, these businesses will continue to provide those things. By continuing to support Wal-Mart by shopping there, consumers give Wal-Mart the green light to do as it wishes. If society continues to ignore the injustices Wal-Mart commits, the cycle will continue.

Rahimi, an international business junior, 
can be reached via dccampus@mail.uh.edu