Wednesday, April 6, 2011
Wal-Mart is the largest private employer in the United States, with more than one million current employees. Its employment practices directly affect over one percent of the American workforce. Moreover, other retailers often strive to replicate Wal-Mart’s practices. If employment discrimination is pervasive at Wal-Mart, it may thrive throughout the retail market. Assuming the empirical evidence supports the claim that Wal-Mart engaged in widespread pay and promotion discrimination against female employees, what could explain the persistence of such a practice in a company known for its devotion to efficiency principles? In answering this question, this Article builds on an earlier coauthored paper that created a model to demonstrate how employment discrimination could persist even in a highly competitive market. In this Article, I add to the criticism of unregulated markets by analyzing a real-world example in which a seemingly competitive market allegedly allows discrimination to flourish. This Article suggests that the reasons why the market may have failed to eliminate sex discrimination at Wal-Mart are of both theoretical and practical importance. Regardless of whether the Wal-Mart plaintiffs ultimately prevail in a lawsuit, this analysis of the retail labor market speaks to the justification for, if not the efficacy of, government regulation in this area. In other words, Wal-Mart matters.