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Rolling back prices and workers rights

By Lance Selfa | June 20, 2003 | Page 9

A CENTURY ago, firms like Ford Motor Company and U.S. Steel set the pace for U.S. capitalism. These giants' business practices and labor relations shaped American industry in the last century. Today, there's a good case to be made that mega-retailer Wal-Mart is the company that best represents today's free-market, low-benefit U.S. capitalism.

This goes against the grain of Wal-Mart's image-makers, who project the fiction that the Bentonville, Ark., firm is a family-owned business embodying founder Sam Walton's simple values. Wal-Mart is a Walton family business in the same way that Microsoft is Bill Gates' pet project.

Wal-Mart is the largest corporation and largest employer in the U.S., employing 1 million workers in the U.S. and 300,000 abroad. Its $200 billion annual sales account for 2 percent of the U.S. gross domestic product. It uses the most advanced technology to manage a worldwide supply chain, and it uses its market power to demand the lowest prices from wholesalers whose products it sells.

Its policy of "everyday low prices" is the main reason for its success. In many parts of rural and exurban America, Wal-Mart is the only place to buy all sorts of products. Because of its size and reach, its policies set the pace for business practices and labor relations for the service sector that accounts for two-thirds of the U.S. workforce.

Wal-Mart proudly displays its conservative "family values" agenda. But like the White House whose values it mimics, the company's hypocrisy knows few limits.

Wal-Mart recently decided to stop selling sexist magazines like FHM and Maxim. Before anyone decides to congratulate the company for standing up to sexism, it's worth considering its record on the other side of the cash registers.

There, Wal-Mart is exposed as one of the most backward companies for women to work. Three-quarters of Wal-Mart workers are women, but women make up only one-third of managers. Women who make it into the ranks of store managers must regularly entertain suppliers at strip clubs and accompany their male colleagues on "business lunches" at places like Hooters, according to a class-action lawsuit filed on behalf of more than 700,000 female employees.

And below the management ranks, where most of women at Wal-Mart work, company policies discriminate against women. At all pay levels, men receive on average 5 to 6 percent more in pay than women do, according to a 2002 study conducted as part of the suit.

And the men aren't exactly raking it in either. An average Wal-Mart worker, working 30-hour weeks, makes $11,700 a year--$2,000 below the poverty line for a single parent with two children. Because of its high costs, only 38 percent of Wal-Mart workers accept the health insurance coverage the company offers, compared to a national average of 60 percent coverage. In fact, one Wal-Mart executive bragged about the company's success in getting taxpayers--through the Medicaid program--to pick up its health care tab.

In Texas, the company violated state law and took out more than 350,000 life insurance policies on employees without informing them and naming itself as beneficiary. So Wal-Mart would benefit from paying its workers low wages when they were alive, and collecting insurance on them when they died. This gives Wal-Mart's promotion of elderly new hires as "greeters" a more sinister aspect. Wal-Mart shared this business practice with that other exemplar of 21st century, freewheeling capitalism--Enron.

Juries have also found Wal-Mart guilty of forcing hourly workers to work "off-the-clock," unpaid. If there was ever a company whose workers needed a union, it's Wal-Mart.

The AFL-CIO has launched a multi-year campaign to organize the retail giant, which remains one of the most viciously antiunion companies in the U.S. Organizing Wal-Mart can't happen too soon. As union victories in places like Ford and U.S. Steel marked a huge step forward for workers in the 20th century, the battle to organize Wal-Mart will help determine labor's fate in the 21st century.

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