Break Up Wal-Mart Stores, Inc. (WMT)?


I saw an older documentary about Wal-Mart (WMT) the other day, and while the tide has turned a little lately, it is still a great topic to discuss.

We all know the mega retailer, its $262B market capitalization and dominate grip on the American consumer.  You may know them for low prices, but you may also know them as a destroyer of jobs.

You might know WMT for its huge selection and somewhat recent move into grocery items, and you may also know it for its polluting and abandoned superstores that scar the landscape.

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Wal-Mart gets plenty of tax breaks from towns that add the stores, but they also bring along plenty of unwanted consequences.  The low wages that they pay associates are among the primary problem… and it was recently highlighted on the Daily Show about how WMT employees are donating to other WMT employees.

In keeping a high number of part time employees and far fewer full timers, the company is able to reduce expenses and thus improve the bottom line.  The part timers may then turn to the government for assistance and things like food stamps and assistance with housing bills and other programs.  The tax payers, whether they utilize the low prices of WMT or not, are stuck with the bill.

I am all in favor of WMT employees using Twitter to organize and create a union to force higher wages, better conditions and more respect.  I would welcome the higher prices that are passed along to all shoppers in order to preserve some dignity of the working people.

But I am also in favor of breaking up the company like we did for Standard Oil and AT&T.  Both companies more than survived the process and shareholders didn’t really suffer either.  The result would be less government influence and more jobs.

I guess when you come down to it, I am for the tax payer more than I am for the shareholder of WMT.  I think something needs to be done, whether it’s a union or a breakup of the company.  Let’s have a discussion about which would be best for all parties, the workers, the tax payers and let us not forget the Walton’s themselves.

Chime in with your thoughts in the comments!

WAL-MART STORES (WMT): Free Stock Analysis Report

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