Last Thursday, an Ethics Forum sponsored by Davidson’s Vann Center for Ethics hosted Marjie Harmon ’10, who presented a condensed version of her senior thesis entitled “Sam Walton’s Gospel Meets the Christian Gospel: Theological Analysis of Wal-Mart’s Remuneration Practices.”
The paper is this year’s winner of the Religion Department’s prestigious Maloney Prize. Harmon also presented her research at the North Carolina Religious Studies Association, and they will publish it this year.
“Wal-Mart has become a lightening rod of societal conflict and debate, with poll results indicating that the American people have deeply divided attitudes toward this multi-national retailer,” Harmon said. “Yet responsible citizens, and in particular, responsible Christians cannot simply resign themselves to an ambivalent attitude given the unfathomable magnitude and influence this corporate giant has.”
Not only is Wal-Mart the world’s largest corporation, but it is also the largest private employer. Harmon cited one statistic which noted that one third of Americans shop at Wal-Mart each week, and in 2003, 82 percent of households purchased merchandise from this retailer.
“To some degree, the economic health of the entire economy hinges upon the success of its largest retailer,” Harmon said. “Its sales volumes for a single day last fall came in ahead of the GDPs of 36 countries.
“A Christian-based analysis of this company requires a theological examination of the way in which Wal-Mart’s conduct affects the well-being of God’s creation and God’s creatures,” she continued. “The level at which Wal-Mart compensates its workforce influences its other business practices.”
Citing several theologians including John A. Ryan, Walter Rauschenbusch, Judith Brady and Christine Hinze, Harmon pointed out that in general these thinkers “insisted that every laborer has the right to at least a decent livelihood.For Rauschenbusch, fair wages constituted a manifestation of justice on the personal level. Unjust pay practices ‘break down workers’ nerves, their mental buoyancy and their character. A truly just remuneration practice requires a wage that allows workers to live a healthy existence. Modern-day theologians have more explicitly defined a living wage as the salary that ensures adequate healthcare coverage for the laborer.”
Brady and Hinze argued that “any wage that fails to secure adequate healthcare coverage for the laborer falls short of the Christian justice standard.”
Despite these philosophies that focus on the necessity for a fair wage earned by individuals, Harmon illustrated that a fair analysis of Wal-Mart’s payment policies must also include a consideration of the overall social benefit the company provides to society.
“Wal-Mart delivers substantial overall social benefits in the form of lower prices,” she said. “The Bureau of Economic Research now credits Wal-Mart with driving down the inflation rate by upwards of 15 percent, meaning that all Americans substantially profit from its low pricing commitment.”
In particular, the main beneficiaries of Wal-Mart’s low prices are the poor, without whom Wal-Mart would not be able to afford many of the products it stocks. Wal-Mart’s growth has caused an increase in the standard of living for many people.
This is the basis of Harmon’s central question. “Wal-Mart marks up its products by mere pennies and passes those savings along to the consumer in the form of lower prices,” Harmon explained. “Given the social good Wal-Mart achieves on behalf of the poor, and it’s redistribution of gains in the form of lower prices, the question remains, ‘How do Christian based ethics sort through this myriad of competing interests given contemporary living wage standards?’ Should the collective societal good Wal-Mart achieves trump any analysis of whether the company pays adequate wages and proper benefits?”
According to Christian ethicists, the answer is no. “The highest consideration should be given to the value and respect of the individual,” Harmon said. “Distinguishing between individual and social welfare safeguards the dignity of the individual and helps to protect against the denigration of ethical analysis to a form crass utilitarianism. A Christian examination of Wal-Mart’s wage practices should therefore look at upholding the individual dignity of each employee, rather than simply the broad maximization of social benefits.”
The average full-time hourly wage rate at Wal-Mart is about $11 per hour. Its average starting salary is about seven dollars per hour. However, only about 60 percent of Wal-Mart workers qualify as full-time employees. And even these full-time employees earn only about $17,600 per year on average.
Another approach Harmon used to assess the fairness of Wal-Mart’s wages had to do with measuring what percent of associates’ incomes was applied toward healthcare costs. “In an embarrassing memo that was leaked to the press in 2005, the executive of Wal-Mart’s people division admitted that ‘On average, associates spend about 8 percent of their income on healthcare for themselves and their family’ – nearly twice the national average,” Harmon said.
“Judging these figures against the Christian conception of a living wage, the salary Wal-Mart pays its workers falls short of the mark,” she continued. “Clearly, the current wage rate does not honor Wal-Mart’s workers’ personal development, and it stifles their participation as individuals in society.”
Using an online “Living Wage Calculator” Harmon was able to examine living wage estimates for thousands of communities across the country. She found that the current wage Wal-Mart pays its employees in Charlotte, for example, falls well below the benchmark the living wage calculator listed for this community. Additionally, a newly hired Wal-Mart employee can expect to earn only about $3,000 more than the current abject poverty standard for an individual.
From this analytical approach, Harmon reiterated that the dignity of an individual and his or her needs must outweigh any benefit society reaps as a whole. “Noting the disparity between living wage standards and Wal-Mart employee salaries, any societal good that the company delivers in the form of lower prices does not justify its underpayment of its workers,” she said. “At the heart of religious resistance lies the fundamental Christian conviction that social forces that exploit individual dignity in the name of business violate God’s will.”
A study conducted at the University of California-Berkley found that “not only is the Christian conception of a just wage spiritually desirable, it is economically feasible as well. If Wal-Mart unilaterally increased all employee’s pay to $10 per hour, even if Wal-Mart passed on these increases in wages entirely to the consumer in the form of price mark-ups (an unlikely occurrence), this would translate to a mere price increase of $1.47 per shopping trip.”
From this perspective, the amount Wal-Mart would have to increase its prices in order to pay workers a living wage would be virtually negligible and would thus not hurt the welfare of society. Furthermore, if Wal-Mart instituted these wage increases, “this would make healthcare coverage for all employees a feasible option,” Harmon said.
Wal-Mart’s current healthcare policies emphasize their coverage of crisis care over preventative care. But from a Christian ethics perspective, Harmon argued, “Christians should not view critical and preventative care as competing choices. In light of this appreciation for both preventative and crisis care treatment, an evaluation of Wal-Mart’s current health insurance philosophy exposes the ethical problems associated with its current plan. Wal-Mart fails to meet a Christian standard in that the corporation essentially drops preventative care out of the healthcare equation.”
A separate issue complicating the analysis of ethical wages has to do with how many people one person’s wage is supporting. Harmon noted that many laborers work to support not only themselves but family dependents as well. This brings the idea of a family living wage into the discussion. However, the adoption of such a wage would nearly double the figure Wal-Mart would have to pay its employees.
Harmon presented several options that would make the family living wage “a sort of moral target – a wage that allows for a decent livelihood and respects the sanctity of personhood incorporates the realization that people have social needs to be part of family structure,” she said. “While Christians rightly recognize the economic infeasibility of a living wage that supports ‘a family, regardless of the number of dependents,’ this does not mean that the target of a wage that compensates beyond an individual should be abandoned. As Christians fight for wage justice, they will necessarily encounter the tension between norms and ideals.”
Harmon concluded that “believers can reasonably ascertain that the current wage rate does not adequately meet a Christian standard. The intractable problem of limited financial and medical resources and unlimited claims on such resources makes explaining away all tension virtually impossible.”
Following her presentation, Harmon opened a forum for questions in which she explained, “Wal-Mart is very effective any time there is any sort of collaboration” by workers to protest their wages. “They shut it down right away, so there really hasn’t been any sort of collective bargaining. Most of the headway that people have made has come from outside organizations like Christian-based groups.”
Harmon ʼ10 deliberates ethics of Wal-Mart
Kelly Wilson
Published: Wednesday, February 10, 2010
Updated: Wednesday, February 10, 2010
Be the first to comment on this article!