Thursday, August 8, 2013

Walmart Chastened by Huge Fine

Trey Smith

On Sunday, I wrote about a particular "settlement" between the State of California and JPMorgan Chase. Today, we turn our attention to another financial behemoth: Walmart. The Occupational Safety and Health Administration (OSHA) recently fined Walmart because of a litany of safety hazards in their stores in 10 states. As reported in The Guardian, Walmart "has been cited in more than 100 OSHA reports of health and safety violations over the last five years."

With such widespread problems, this must have been a huge fine. I mean, if the government wants Walmart to take these violations seriously, the fine needs to be large enough to get the big retailer's attention. So, are you ready to hear about this astronomical fine? The amount is...wait for it, wait for it, wait for it...1-9-0.

Since Walmart has total assets of $205 billion, is this fine $190 million? Uh, no. Is it $1.90 million? It's not that either. No, the world's largest private employer is on the hook for a $190,000 fine! Ooh, I bet that hurts!

As I did with the JPMorgan Chase "settlement," let's put this figure into perspective. The fine is equal to 0.00000093 of Walmart's current total assets. Using this percentage, the fine for an individual or family with $100,000 in total assets would be...wait for it, wait for it, wait for it...9 cents. Not even one thin dime!

Imagine if you have been found guilty of manslaughter and the judge sentences you to 12 years in prison. If she then applied the Walmart Standard to figure out how many days you actually would need to serve, what do you think the true sentence would be? Well, 12 years is 4,380 days. If we multiply 4,380 x 0.00000093, we get...wait for it, wait for it, wait for it...5 minutes and 45 seconds! You'd be out before they were even done processing you!!!

So, do you think that Walmart will take this fine seriously?

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