It Really Is Better to Give Than Receive

January 19, 2013
In a recent press statement, Wal-Mart announced two initiatives to great fanfare. First, they made a “Buy American” commitment in which they pledged to increase purchases of products made in the U. S. A. by $50 billion over the next ten years. Second, they commited to hire 100,000 newly discharged veterans over the next five years. Taken at face value, both programs seem worthwhile and created great press.  However, the math geek in me had a nagging suspicion that the figures deserved further analysis.

Let’s start with the “Made in America” pledge. Certainly, $50 billion is a lot even spread over ten years when it becomes $5 billion per year. I wouldn’t turn it down! But, according to Wal-Mart’s 2012 Annual Report  their net sales for 2012 were almost $444 billion. Assuming their cost of goods sold is between 50% and 75% of net sales, they must purchase at least $221 and $332 billion of merchandise every year. As a percentage of these purchases, a promise to spend another $5 billion on American made goods is an addition of only $1.5% to 2.2%. This seems less impressive than the raw numbers, don’t you think?

Their promise to employ veterans also seems to pale when compared to their overall employment figures. Wal-Mart employs about two million people world wide and about 1.3 million in the United States. They promise to hire 100,000 veterans over the next five years but that is only 20,000 per year. This amounts to a measly 1.5% of their total U. S. workforce.

The impact is a little better when placed in the context of Wal-Mart’s total new hires in a year. Wal-Mart estimates it loses about 37% of their work force every year. That means they have to hire about 480,000 new employees in the United States every year. If 20,000 of these positions are new veterans, that would come to about 4.1% of their annual hirees. Better, but read on.

The Military Times Edge web site ranks employers as "The Best for Vets." Part of the methodology was to measure the percentage of new hires who were vets. Of the top ten, the average percentage was about 22%; over five times what Wal-Mart promised to do.

So the question becomes, do we gig Wal-Mart for not doing enough or do we give them kudos for at least doing something? There is a third option: take what they are doing with a grain of salt? After all, Wal-Mart has faced a lot of bad press in the last year for claims of bribery in their Mexican division and the employee backlash they created when they increased their Black Friday store hours. Is it possible Wal-Mart thought that pledges to buy American or hire vets would in some way mitigate these problems? Pass the salt, please.

Cynical thoughts aside, Wal-Mart is so big, even small percent changes in the way they spend or hire have big impacts. But, I am drawn to what Judaism teaches about charity. Supposedly there are eight levels of charity and they are ranked from the least to the most desirable ways of giving. The least honorable reasons include donating so that the recipient is aware of your identity. The most ethical way is to give in a manner which enables the recipient to become self-reliant. Wal-Mart did nothing to hide their light under a bushel when they made this announcement but at least veterans hired under this program will become self-reliant. What would a rabbi say about that?

I prefer to give Wal-Mart kudos for doing something. To them it may be a drop in the bucket. To the American who isn’t downsized because Wal-Mart increases its “Made in America” commitment, or, to the veteran who is able to get a job from Wal-Mart’s “Hire a Veteran” program, it may mean a better life.

Yours in confused retailing, Bruce