A Giant in Every Sense
The Denver Post
June 27, 2004

Wal-Mart is a giant. Everything about it is big. Biggest retailer in the world. Largest employer in the United States. Biggest exporter from China, responsible for an astonishing 10% of China's exports. And, right now, it has some giant headaches.

Citizen protests in Thornton and Arvada have put its rezoning requests on hold. Communities in several states have "just said no" to the retailer. Now, a judge has turned sex discrimination lawsuits against Wal-Mart into the largest workplace discrimination class action lawsuit in history. Sometimes being bigger isn't better.

There's a mixed bag to the Wal-Mart story. Consumers love its low prices. Local elected officials fight to acquire its tax base. Poor villagers from rural China flood the cities to work in factories that supply Wal-Mart, earning what seem like slave wages to us, but that enable them to support their families back home and save some money as well. China loves Wal-Mart, which, all by itself, is China's 5th largest export market, even ahead of Germany and Britain.

But, for small businesspeople, Wal-Mart can spell doom. The giant company squeezes its suppliers, limiting their profit margins in order to improve its own. Downtown sections of small cities can look like wastelands after Wal-Mart sucks the shoppers out of local businesses. All this, of course, is part of the great American competitive spirit. Yet, there is a legitimate question about whether this level of ferocious competition makes life better for us.

Now, Wal-Mart is facing a huge discrimination lawsuit, including approximately 1.6 million of its current and former female employees. Women make up 65% of the company's hourly workforce, but only 33% of its management. The women claim that Wal-Mart paid women less than men doing the same jobs and passed them over repeatedly for promotions, giving the better jobs to men.

While Wal-Mart disputes these charges, the judge ruled that the "plaintiffs present largely uncontested descriptive statistics which show that women working at Wal-Mart stores are paid less than men in every region, that pay disparities exist in most job categories, [and] that women take longer to enter management positions." The company is appealing the class action designation and denying any discrimination.

At the same time, Wal-Mart is revamping its personnel policies to, as its spokesperson put it, "ensure internal equity and external competitiveness." That is a good sign. But, I wonder if Wal-Mart is really getting it. Discrimination is more a factor of attitude and corporate culture than a set of rules. An equal opportunity culture comes from the top and is nurtured by setting good examples, diversity at all management levels, rewards and penalties, as well as personnel rules.

An evenhanded atmosphere is also just common sense. When 65% of your workers are female, and probably a majority of your customers as well, it just makes sense to ensure your work environment is open and fair. As the economy improves, after all, workers will have other choices about where to work and consumers, about where to shop.

The growing anti-Wal-Mart sentiment in communities should ring another loud alarm bell for the company. Angry citizens won't make good customers. Workers who have lost jobs as small businesses implode won't make up their loss of income working part-time at Wal-Mart. That, too, will cut into customer goodwill and spending.

Wal-Mart could take a more community, worker, and consumer friendly stance. Instead of wringing every last penny out of its suppliers, it could consider doing some business with local businesses, helping them become more efficient while maintaining their place in the local economy. Certainly, it can offer equal opportunity to its employees, making women partners in its success instead of litigants purveying ill will.

Finally, while Wal-Mart shows that in business, as in politics, the very powerful can be bullies, it could decide, instead, that fair play and collaboration are a better business model. It could lead the way in demonstrating the competitive value of providing equal opportunity and supporting your local community. It could become the giant who proves that setting a good example is also better for business.

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