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Wal-Mart: a story of the few and the many Sam Walton, the founder of Wal-Mart, who died in 1992, was famous for his business approach focused Protests by employees and labour groups have on keeping down costs. He was also highly successful become common in recent years, targeting Walmart n managing the Walton family fortune. In 1953, he not just for its low wages, but for practices such as created his first trust fund in the name of his eldest sex discrimination and blocking the right of workers daughter, who was 9 at the time. At that stage, he had to join trade unions. Workers have called for a only a modest retail business - the first Walmart store minimum hourly rate of $15 as a living wage. In 2015. Walmart announced it would raise the minimum to opened in 1962 (see Note). His early planning to avoid estate taxes and gift taxes has paid off handsomely. The $9, in a move which would lift the pay of 500,000 Walton family is worth over $140 billion in total, more workers, although it would hardly move most out of poverty. Walmart executives' deeply engrained than the wealth of the bottom 42% of the US cost-cutting and profit maximization have tended population. This money is protected in trusts that to prevail over considerations of employee effectively pass on family wealth, tax-free, to later welfare. However, worker protests, combined with generations. The methods of charitable and estate lacklustre financial performance and low rankings in planning are entirely legal. A former US Treasury consumer satisfaction surveys, perhaps persuaded Secretary. Lawrence Sumners, has expressed executives to take this initiative. It would help to disappointment that the system of collection of estate reduce staff turnover and improve morale, which in and gift tax in the US raised just $14 billion in 2012. This turn would benefit the business numbers. Walmart is 1% of the amount passed on by the very rich to their has been criticized in other respects, such as descendants in a year - a sum that was then $1.2 animal welfare and supply chain safety issues. In trillion (Mider, 2013). both these areas, it has taken limited voluntary The Walton business empire is based in Bentonville. steps that stop short of binding commitment. Arkansas, one of the mainly rural southern states where Walmart is the largest gun retailer in the US, A poorer families have been Walmart's main market over proposal by a church group to have the the years. Walmart aims to keep costs down so that shareholders vote on restricting gun sales was customers pay less. This philosophy has proved highly rejected by Walmart. The church group then profitable. Walmart's annual revenues amount to $476 applied to the court and won. But Walmart appealed. billion. But low-cost policies have often stirred and the court of appeals ruled in favour of the controversy. Walmart employs 2.2 million people company in 2015. worldwide. 1.4 million of them in the US, making Walmart has sought to expand in emerging Walmart the country's largest private-sector employer. markets such as China, where it has operated stores These are overwhelmingly low-paid workers. Along since 1996. These stores have proved challenging. with fast-food outlets like Mcdonald's, Walmart stands and local retailers, more attuned to Chinese out as an exemplar of what many now see as the cause customers' demands for quality rather than simply of poverty among America's low-paid workers. The US low price. have had a competitive edge over Walmart. federal minimum wage, last raised in 2009, is $7.25 per It has had successful operations in the UK, with its hour. Many states have minimum wage thresholds takeover of ASDA, but UK supermarkets generally slightly higher, but not as much as $10. Even at $10, have seen weak financial performance in recent workers are below the poverty line, and need to rely on years. Walmart has no stores in Luxembourg government safety-net programmes in the form of However, it has 22 offshore subsidiaries registered in "food stamps' and Medicaid. Walmart employees. Luxembourg, which are used to shelter profits known as 'associates', form one of the largest groups amounting to $64 billion, on which it pays tax at a or workers receiving federal aid. rate of 1%. The Walton family has famously kept theWalmart empire in family hands, despite the fact that Note: Wal-Mart Stores Inc. is the name of the listed company and it is a listed company. Through charitable trusts, the Walmart without the hyphen, is now used as the trading name for the family owns just over half the company. When a stores son-in-law took over from Rob Walton, a son of Sam Sources: Crow, D. and Fleming 5. (20151 Walmart raises the bar for Walton, as chairman in 2015, he said that Walmart was low-pay employers'. Financial Times, 21 February. at www.ft.com. Mider Z committed to 'long-term succession planning" (2013) How Wal-Mart's Waltons maintain their billionaire fortune taxes Bloomberg News, 12 September. at www.bloomberg com, Whipp. L. (2015) (Whipp, 2015). This would be true of both the Walton exit marks Walmart milestone'. Financial Times. 6 June. Dewson business and the family fortune. A (2015) Wal-Mart does so much wrong, but the shame is that none of it is illegal. The independent, 19 June, at www independent co uk Questions for discussion . What are the grounds for complaints by Walmart's low-paid workers? . What impact will the rise in minimum hourly wage achieve, in your view? To what extent is Walmart a socially responsible company? . What steps could be taken by the US government to rein in the inequality exemplified by the Walton family
