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Walmart Organizational Specifications: Increasing Taxes and Lack of Proper Treatment for Employees
How Wal-Mart has increased taxes on their products
According to Richard (2006), the recently increased taxes by Wal-Mart on their products have purposely been introduced to hide the truth regarding the company. Recently, the company launched an advertising campaign worth multi-million dollars to silence the critic of the company and therefore, hiding real facts about the organization. However, even when these taxes appear to be high, the associates of the company earn wages that are far below the poverty line; as low as $8 an hour. Analysts have argued that the company can increase the wages of its employees, and the cost to meet such an increment would be relatively below. These would be achieved by raising the price of the companys products a half a penny for every dollar, consequently covering an increment of a dollar per hour wage to its employees. Studies on Wal-Marts expenditure on advertising and healthcare have revealed that there has been more increment on advertising than in healthcare. For example, in 2004 alone, the company spent $1.5 billion to cover healthcare benefits in comparison to $1.4 billion that was spent on advertising.
It is also observed that Wal-Mart also pays rent to the same properties it owns and therefore, ends up cutting a large amount of bill on retailers tax. This is referred to as distortion and abuse of income according to the states revenue department. The department states that, even though the company is the worlds largest retailer, it does not pay its share of taxes meant to support public schools, fire departments, and police as well as the highways used by the same company to transport its sales. Since these state expenses have to be met, the burden is therefore shifted to individuals and small business organizations. This is because individuals and small-scale businesses cannot set up such mechanisms. The company says that it does this to reduce costs by having one subsidiary running the stores while another runs the real estate of the company and therefore, the money finally gets back to the company. (Richard, 2006)
How Wal-Mart employees are fired without pay or any pension
According to Richard (2006), an employee at Wal-Mart may not be in a position to support his/her family because the earnings are very little. In addition, job security is low and even when an employee is fired, he/she is not guaranteed to receive full benefits. Sometimes an employee does not receive the payment for the work done immediately before being fired. They are fired without pay or any pension; for employees that are close to retirement. Worse still, the company forces its employees to continue with their duties off-the-clock and this is evident from the number of lawsuits regarding wages and hours worked for, which amounted to 57 in 2006. Among the undisclosed secrets of the companys profitability is the implementation of a system, which encourages working off-clock for the employees.
Another shortcoming regarding benefits for employees at Wal-Mart is about plans for healthcare where research has revealed that health insurance by the company covers only 43% of entire employees. Compared with other major companies, this is a low figure because other similar companies cater for up to 66% of health insurance plans for their entire employees. Failure to pay employees after they are fired and denying them their due benefits means the employees are likely to have less potential to spend on basic goods and services in society. The surrounding area, therefore, suffers a multiplier impact because when employees do not receive adequate benefits after retirement, they cannot afford the cost of health services, food, and housing. Taxpayers and the community at large therefore have to bear the cost. The issue of the company increasing its taxes on its products and lack of proper treatment for its employees; even when fired through unfair circumstances is serious and should urgently be reviewed through the existing laws. (Richard, 2006)
Reference
Richard, V: The Wal-Mart revolution, Washington: AEI press, (2006) pp 79-85.
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