Critics of Walmart have long charged the company with not paying employees enough and selling too many items made in lower-cost countries like China.  Walmart is responding to these charges by agreeing to buy an additional $50 billion in U.S. made merchandise over the next decade, specifically in sporting goods and high-end appliances.  Walmart has also stated that it plans to hire 100,000 newly discharged veterans over the next five years.  Walmart’s efforts are designed to boost the economy and assist in lowering the 7.8% unemployment rate.

Walmart claims that two-thirds of the goods it buys and sells in its stores are made, sourced from, or grown in the United States.  According to Walmart, only 7% of its U.S. sales of apparel, jewelry and accessories were sourced from lower-cost companies.  Walmart is also trying to reduce logistics expenses and inefficiencies.  For example, 70% of the cotton grown in the U.S. is shipped overseas and spun into products that are shipped right back to the United States.  By encouraging in-country manufacturing, Walmart is also eliminating two global shipments.  Walmart’s shift to buy more American made merchandise that otherwise would have been imported is a reflective of the changing dynamic between the United States’ commercial relationships and the rest of the world.

While the unemployment rate for non-veterans is 7.9%, the unemployment rate for veterans was just below 10% at the end of 2012.  At the most recent conference of the National Retail Federation, Bill Simon (Walmart U.S. Chief Executive) announced that, beginning Memorial Day weekend, Walmart plans to hire 100,000 veterans over the next five years.  Simon stated that “when we work together, our retail industry can lead in a way no other industry can.” Simon, who served in the U.S. Navy and Navy Reserve for 25 years said that Walmart will offer a job to any honorably discharged veteran.  Walmart believes that hiring veterans is a good, strategic business decision because these employees are “leaders with discipline, training, and a passion for service.”

Walmart averages anywhere from 15,000 to 50,000 job postings, depending on the time of the year.  The company claims to promote 170,000 employees a year, providing an additional opportunity to recruit new talent.  Walmart responds to critics of its low pay wages with statistics that the average store manager can average $50,000 to $170,000 per year.  The highest earning store manager at Walmart made $250,000 last year.

Discussion Questions:

1. Why is Walmart going to purchase more merchandise made in the U.S.?

2. Why is Walmart going to hire more veterans?

 

SOURCES: Jessica Wohl, “Walmart Announces $50 Billion Buy American Campaign,” Huffington Post, January 15, 2013; James Dao, “Walmart Plans to Hire Any Veteran Who Wants a Job,” New York Times, January 14, 2013; George Anderson, “Walmart Goes Big on Red, White, and Blue,”Retail Wire, January 16, 2013