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Fox: Low Prices Cover a Multitude of Wal-Mart Sins

Reported by Judy - November 26, 2005

Fox News' "Cavuto on Business" finally got into the fray over Wal-Mart's business ethics Saturday (November 26, 2005), but host Neil Cavuto cleverly framed the issue to keep it centered on low prices being good for consumers, rather than addressing business practices that include discrimination against women, violation of overtime regulations, and use of child labor.

The segment was obviously in response to the Robert Greenwald film on Wal-Mart, Wal-Mart: The High Cost of Low Price, but Cavuto never mentioned the film, resorting to the Fox News trademark "some" say. Cavuto began the discussion by asking, "Would America be a better place without Wal-Mart? ... Shopping there saves a lot of hard-working families a lot of money. So why do some believe we'd all be better off if Wal-Mart simply went away?"

Cavuto's guest was journalist Liza Featherstone, author of Selling Women Short: The Landmark Battle for Workers' Rights at Wal-Mart, who unfortunately proved as lightweight in the ensuing discussion as her surname implies. Featherstone made the case in her opening remarks that, "There's a lot of hidden costs to Wal-Mart's low-cost motto" in the form of Medicaid for the 46 percent of Wal-Mart employees' children on welfare. But the slow-talking, soft-spoken Featherstone could not keep up after that.

Chris Lahui, author of dailytrends.com, more than picked up the slack, bringing some passion to the discussion of Wal-Mart. He suggested the country's largest retailer and largest employer should "change their slogan from 'Always low prices' to 'Always low wages.' Wal-Mart is horrible when it comes to employees. First off, they offer poverty-level wages for employees. They offer inadequate health care for them. They also devastate local small business, local towns, and local communities. I don't think Wal-Mart is doing any benefit for society right now."

The rest of Cavuto's panel jumped on the topic like dogs on raw meat. Jim Rogers, author of Hot Commodities, went first. "This is ludicrous ifyou ask me. Nobody forces anybody to shop at Wal-Mart. Nobody forces anybody to work at Wal-Mart. Nobody forces anybody to supply Wal-Mart. What's wrong with all of us? If you don't like Wal-Mart, don't go there. But a lot of people seem to. A lot of people seem to want to work there." Rogers claimed that similar concerns were voiced about Sears, Roebuck a century ago, and about J.C. Penney, Montgomery Ward, and McDonald's, without being specific about what those concerns were. "Come on, the world moves forward, and the efficient people, people like them," he said.

Guest Daria Dolan argued that Wal-Mart was good for the country because its productivity growth helped the overall economy. Jon Najarian, from inside options.com, said he favors Wal-Mart because it provides "value for consumers. ... If you're in favor of a free markets, then you shop where you get the most value for your dollar and if it's not Wal-Mart, shop somewhere else, but to sit here and blast Wal-Mart for doing what they're supposed to do, providing a great service at a great price ... ."

Tracy Byrnes, a business writer for The New York Post, praised Wal-Mart for helping people keep inflation in check by offering low prices. She at least admitted that there is tension between "the people who shop there and the people who work there." Nobody else seemed to have much concern for employes. As Cavto said, "The workers who work there, they're not indentured servants so what's their beef?"

Featherstone got back into the conversation, noting that many Wal-Mart stores are in rural areas where many people have few choices in jobs. Whereupon Rogers suggested that "they get on the bus and go to the city." When Lahui noted that the $18,000 a year Wal-Mart pays its employees is below the poverty line for a family of three, Rogers suggested he open a store and pay them more. Lahui responded that Costco manages to pay its workers more, an average of $16 an hour, and still had an operating profit per employee that is higher than Wal-Mart's. Cavuto said the numbers were "skewed" because more Wal-Mart workers are part-time workers. Byrnes finally admitted where her sympathies lie, noting that if Wal-Mart paid its workers more, "then you're taking away from the shareholder."

Cavuto managed to get Lahui to admit to shopping at Wal-Mart occasionally. Featherstone finally got back into the conversation again at the end, when she noted that a major concern was the "lawlessness of Wal-Mart's business model," which she said includes discrimination against women, violation of overtime regulations and a dependence on child labor. Rogers challenged her on that, and Featherstone said Wal-Mart has used child labor in Maine, Connecticut, and Arkansas.

Featherstone's closing comments were too late. She blew her chance at the very beginning to focus the panel discussion on Wal-Mart's worst sins. Instead of opening with "no health care," Featherstone should have concentrated on Wal-Mart's legal violations from the very beginning. She should have spelled out the specifics of child labor vioilations, overtime violations, and so on. The type of people who show up on Fox News' financial shows will find it easy to defend an employer who pays poverty-level wages and fails to provide adequate health care. But even Rogers would have had a hard time cozying up to a corporation that breaks the laws that every other business in America is expected to abide by.

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