Taking on Wal-Mart
June 25, 2004 | Page 5
Nearly 3,500 stores in the U.S., 1 million employees, revenues of $256 billion and profits topping $9 billion. And it's getting bigger all the time.
Wal-Mart, the nation's largest private employer, is so big that it's influencing the entire economy by driving down wages and costs--and, along the way, buying political influence from City Hall to the U.S. Senate. But as Wal-Mart makes its move into U.S. cities, it's meeting with growing opposition over its poor pay as well as its union-busting practices. LEE SUSTAR looks at Wal-Mart and the rising opposition to the retail giant.
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WAL-MART bosses are finally starting to feel some heat for the company's notoriously anti-worker policies. A federal judge ruled June 22 that women employees of the retail giant could go forward with a class action lawsuit over wage and promotion policies.
The lawsuit covers every woman hired by the store since 1998--which, at an estimated 1.6 million, is the largest such suit in U.S. history. U.S. District Judge Martin Jenkins compared the case to the 1954 Brown v. Board of Education lawsuit that outlawed segregated schools. "This anniversary serves as a reminder of the importance of the courts in addressing the denial of equal treatment under the law, whenever and by whomever it occurs," he wrote.
Experts who supported the lawsuit found that women workers at Wal-Mart earned 6.2 percent less than men in similar jobs. Female store managers--who are just 15 percent of the total--got $16,400 a year less than their male counterparts.
One of the women involved in the lawsuit, an 18-year employee, told National Public Radio that she was repeatedly passed over for promotion--and that she had to "doll up" if she wanted a better position. "The more I complained, the more they considered me the big bad B word," she said.
The lawsuit follows the arrest of 300 undocumented workers earlier this year who worked for janitorial contractors used by the company. Those workers reported routine abuse--such as "lock-ins" that prevented injured workers from receiving medical conditions.
Then there's Wal-Mart's unwillingness to pay a living wage. According to a study by Forbes magazine, Wal-Mart employees earn an average hourly wage of $7.50. That works out to roughly $15,000 a year--right at the federal poverty line of $15,060 for a family of three. In February, a federal jury in Oregon ruled that the company made 83 employees work unpaid overtime between 1994 and 1999. At least three dozen similar lawsuits have been filed.
If pay and overtime are lousy, health care coverage is even worse. Many workers simply can't afford to pay their share of health insurance--30 percent of the total cost. The company's health coverage reflects the conservative views of the Walton management, for example, barring payment for contraception.
But Wal-Mart bosses also won't pay for child vaccinations and many routine procedures. To counter criticisms of this poor health plan, Wal-Mart executives trumpet a program in which the company steps in to pay for expensive procedures such as organ transplants.
But as Los Angeles Times journalist Michael Hilttzik pointed out, such transplants were needed by just 0.01 percent of the company's 500,000 insured employees. "By steering coverage toward major procedures over routine benefits, which would be used by a huge percentage of employees, Wal-Mart has turned a couple of decades of health-care orthodoxy on its head," Hiltzik wrote.
Employees aren't the only people squeezed by the Wal-Mart machine. According to a study by the research group Good Jobs First, Wal-Mart extracted at least $624 million in government subsidies for its big distribution centers--in the form of infrastructure improvements, tax credits, financing, job training and more.
The subsidies are justified in the name of job creation. Yet Wal-Mart typically destroys jobs as well, driving out smaller competitors. "When they go in, they simply redistribute retail revenue," Phillip Mattera, one of the authors of the study, told Socialist Worker.
Now that the heat is on, Wal-Mart is launching a public relations blitz to soften its image. In Chicago, where unions and community groups defeated City Council approval for one of two proposed Wal-Mart stores, the company is sponsoring the local National Public Radio station with the slogan, "Creating job opportunities for people in all walks of life."
And at the shareholder's annual meeting, the company announced that it was willing to pay higher wages--a step that the company will have to take anyway as it moves into cities where retail wages are higher. Don't be fooled, says Good Jobs First's Mattera.
"Wal-Mart has realized it needs to spend more money on PR and buying political resources," he said. "They have a much bigger Washington presence now, and they're spending more on lobbying at the state level. You are seeing a different Wal-Mart. But the last thing they are going to do to improve their wages and conditions."
Can Wal-Mart be unionized?
WAL-MART IS the leading force in low-wage America--and wants to stay that way. When the National Labor Relations Board recently ordered the company to negotiate with meatcutters in Jacksonville, Texas, who had tried to join the United Food and Commercial Workers (UFCW) union, it was a rare defeat for the company.
But the decision came nearly three years after the company shut down the meat department rather than see the union get a toehold anywhere. Now, the company plans to appeal the decision to the federal courts, which means several more years could pass before workers get a final ruling on their fate.
Faced with such hostility, the UFCW has mounted a "corporate campaign" against Wal-Mart--an attempt to expose anti-worker practices at the company. Yet in most cases, this hasn't been backed by any serious attempt to organize the company. Rather, it most often focuses on boycotts of the store.
This strategy is completely mistaken. It inevitably focuses on the 34 million workers in the U.S. who earn less than $8.70 an hour--workers who have little choice but to shop at Wal-Mart to take advantage of low prices.
In Chicago, many residents of the mostly African American and impoverished West Side were puzzled about why organized labor opposed the construction of stores in an area sorely lacking stores--and jobs. Moreover, UFCW officials have no strategy to stop Wal-Mart's pressure from driving down wages in the grocery industry, where Wal-Mart is now the largest retailer.
When tens of thousands of Southern California grocery workers in the UFCW went on strike last year, union leaders pushed for an agreement that included the huge increases in health care that management had demanded in the first place. The only way to improve wages and conditions at Wal-Mart is to organize unions--not with the UFCW alone, but with the concentrated efforts and resources of the labor movement.
This isn't a matter of one-off demonstrations and advertising, but has to take place city by city, store by store, worker by worker. Failure to unionize the largest private employer in the U.S. would only ensure a further decline of the labor movement.
There are no shortcuts to stopping the Wal-Mart behemoth. Now that the company is on the defensive, it's time for labor and its allies to step up the fight.
Wal-Mart employee speaks out
"MY NAME is Rosetta Brown, and I've been an employee for the Wal-Mart company for six years. As an employee, I have seen first hand that Wal-Mart associates are often placed under harmful working conditions--everything from racial discrimination, to intimidation by management, to misinformation, to violations of workers' rights and the law.
I was injured on the job October 6, 1999, while locked in the store overnight doing inventory. Currently, I live with the pain and suffering of a herniated disk in my neck that happened that night. The actions of Wal-Mart and Sam's Club have delayed my workers' compensation. As a result, I have accumulated tens of thousands of dollars in debt from medical bills, lost my apartment and depended on public aid.
My credit is ruined, and I live in pain every day. My doctor has recommended surgery in the future to alleviate my suffering, but because Wal-Mart continues to deny my claim, I can't afford to pay for it. My greatest pain is that all of this could have been prevented from the beginning if they had only done what was right."