WAL-MART AND WORKERS’ RIGHTS: A CASE STUDY 5
Wal-Martand Workers’ Rights: A Case Study
Wal-Martand Workers’ Rights: A Case Study
of the case
Theissue of employees’ rights is among the major problems that haveinspired the signing of various bills intended to address the same.From the case, the signing of the FairLabor Standardsinto Law by President Franklin Roosevelt in 1938 created the initialstate minimum wage. Its aim was to modify the link between employees’rights and legislation, something that safeguarded both theirphysical and financial rights. This included being paid a livingwage. President Obama has also tried to increase the minimum wage butthis has not been successful.
Theintention to pass the LargeRetailer Accountability Act(LRAA) of 2013 shows the commitment of the District of Columbia todeal with the issue of workers’ rights. The passage of the billfailed and it was banned by Vincent Mayor, the District Mayor, in thesame year. This showed the struggle that existed between localpolitics and large businesses.
TheLRAA bill, if passed, would have obliged large non-union retailers topay their workers an hourly minimum wage of 12.50 dollars. Inaddition, the bill could have incorporated provisions necessitatingemployers to consider inflation while setting wages. This wouldensure that employees’ income changes with the living cost.
Theneed to pass the bill in Columbia originated from the interest shownby various large retailers including Wal-Mart, to expand in theDistrict, with plans to establish six novel stores. The company isrecognized for paying its workers low wages while offering meagerbenefits unlike other big retailers (Volk, 2014). In 2012 forinstance, workers responded to these poor conditions by going onstrike. In 2008, Wal-Mart paid 352 million dollars to settledifferent court cases related to unpaid overtime job.
Supportersof the bill argued that it could hold responsible big retailers whichpaid low wages to the workers. As per the bill, inadequate benefitsand low wages amplified costs incurred by the District of Columbia interms of the employment of public healthcare. In addition, the billboosted minimum wage with the aim of offsetting the historicreduction in the federal minimum wage (Volk, 2014).
Thefall in the value of minimum wage from an hourly rate of $10.69 to$7.25 in 1968 and 2014 respectively has resulted in an amplified wagedisparity as well as a wide gap between the lower and rich class.According to the case, the entrance of big retailers such as Wal-Martinto an urban setting, they gradually drive away small businesseswhich characterize a particular neighborhood. Such retailers pursueurban development as a result of over-saturation of other markets inthe country.
Inaddition to LRAA, other bills have been pioneered by the governmenttargeting the low wages paid by Wal-Mart. For instance, a bill waspassed in Maryland necessitating retailers with 10,000 workers andover to direct no less than 8% to cater for their employees’healthcare expenses. Out of all the retailers in the state, Wal-Martwas the single business that did not meet the 8% threshold.
Onthe other hand, challengers of the bill argued that passage of thebill would negatively affect citizens. They argued that any kind ofdevelopment could have positive benefits on the community, in spiteof the low wages paid to the workers.
Whateffect on the economy will this ethical issue have?
Payinglow wages to workers and providing meager benefits is a major ethicalissue that must be addressed in order to mitigate the associatednegative impacts on the economy. One of the key impacts is lowerliving standards among individuals. High living standardsparticularly in the United States necessitate a minimum wage thatwould cater for the same. However, this is not the case for Wal-Martemployees who are paid low wages, below the minimum wage value (Volk,2014). This means inability to afford basic commodities such asproper schooling for their children, producing a generation of lowlyeducated individuals. Low wages also results in an amplified group ofthe working poor. These are employed individuals however they livebelow the poverty line as defined by the federal government.
Anotherimpact is that the government has to cater for high costs ofhealthcare. Most of these workers cannot afford private insurancecovers therefore opting for public covers such as Medicaid.Healthcare expenses, particularly in the current time when lifestyleand chronic diseases have become rampant among Americans, haveincreased. This only adds pressure to the general economy.
Additionally,low wages lead to a wider gap between the affluent and the poor. Thisincreases the levels of economic insecurity among the latter group,implying that they have to live a life of poverty. In most cases,where women are discriminated against in terms of pay, they have tolive under public benefits such as housing assistance andSupplementalNutrition Assistance Programonly adding pressure to the economy. The already difficult economy isrequired to stretch for family budgets in order to cater for basicrequirements.
AnthonyVolk (2014). . HarvardPolitical Review.Retrieved fromhttp://harvardpolitics.com/united-states/wal-mart-workers-rights-case-study/