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terpfan1980

Join Date 08/2004

+13

Wal-mart and wages and salaries in America

Is Wal-mart a good corporate citizen or no?

I've seen a few articles lately on this topic, many of which build upon information such as that found in the following article, from UFCW's web-site. Headline is linked for the original article/site.

The Wal-Mart Threat

Wal-Mart threatens the wages, health-care, benefits, and livelihoods of workers across the country and around the world. Whether you work or shop at Wal-Mart, the giant retailer’s employment practices affect your wages. Wal-Mart leads the race to the bottom in wages and health-care. The company’s disregard for the law and systematic suppression of the basic democratic rights of workers is undermining fundamental American values.
There is no questioning the company’s incredible efficiency and shrewd market sense. The innovative business strategy of Sam Walton has transformed the retail industry. But along the way his successors have lost track of the community and worker focused values on which Walton built his success.
As the largest corporation in the world, Wal-Mart has a responsibility to the people who built it. Wal-Mart jobs offer low pay, inadequate and unaffordable healthcare, and off the clock work. Having a job at Wal-Mart means relying on family, the community, or the government to pay the bills and provide health care. Wal-Mart’s growth actually depresses natural wage increases. In areas where Wal-Mart increased its share of the retail food market by 20% or more 1998-2002, cashiers’ wages fell 40%-31% below the national average increase.
Wal-Mart’s disregard for its workers encourages other employers to do the same. The company pressures its extensive network of vendors to cut labor costs and lower prices every year. The demands force clothing, toy, plumbing, and grocery suppliers to layoff workers, lower wages and benefits, and take their factories overseas or move from one low cost country to another. As one Honduran manufacturer, worried that his business will soon lose out to Chinese factories, told the LA Times, “We’re earning less and producing more.”
But even in Wal-Mart’s shadow, every business must take responsibility for its own choices. In the contract dispute that ended in 2004 in Southern California-- which resulted in 70,000 grocery workers on strike and locked out for four and a half months--three of the most profitable companies in the industry hid behind Wal-Mart while effectively eliminating health care for their employees. Safeway, Kroger and Albertsons control 61 percent of the grocery market in Southern California and their combined profit rose 91 percent over the five years leading up to the strike; yet, the companies demanded their workers to sacrifice their health to increase those profits even more.
At the heart of this fight is a question of values -- the values of the hard-working, middle class American worker or the underlying greed of the largest company in the world. Every person working hard for a living earns the right to a decent wage, affordable health care and a voice on the job. But Wal-Mart’s greed provides other companies a license to chip away at the rights of working America, influencing everything from wages to working conditions. Wal-Mart is transforming America from a secure middle class country to one of extremes: those struggling to survive at the bottom and the rich getting richer at the top.

A similar article can be found at the New York Times (take it with a grain of salt, it's still hard to tell when they are working with reliable information

). Again, headline is linked.

May 4, 2005

At Wal-Mart, Choosing Sides Over $9.68 an Hour

By STEVEN GREENHOUSE

BENTONVILLE, Ark. - With most of Wal-Mart's workers earning less than $19,000 a year, a number of community groups and lawmakers have recently teamed up with labor unions in mounting an intensive campaign aimed at prodding Wal-Mart into paying its 1.3 million employees higher wages.
A new group of Wal-Mart critics ran a full-page advertisement on April 20 contending that the company's low pay had forced tens of thousands of its workers to resort to food stamps and Medicaid, costing taxpayers billions of dollars. On April 26, as part of a campaign called "Love Mom, Not Wal-Mart," five members of Congress joined women's advocates and labor leaders to assail the company for not paying its female employees more.
And in a book to be published this fall, a group of scholars will argue that Wal-Mart Stores, having replaced General Motors as the nation's largest company, has an obligation to treat its employees better.
Among workers at Wal-Mart's 3,700 stores across the United States, the debate is also heating up.
Frances Browning, for example, once earned $15 a hour, but now at Wal-Mart, where she is a cashier in Roswell, Ga., she is paid $9.43. She says she is happy to have the job.
"I was unemployed for two and a half years before I found my job at Wal-Mart," Ms. Browning, 57, said. "Like everybody else I'd love to make a lot more, but I have to be realistic."
But Jason Mrkwa, 27, a high school graduate who stocks frozen food at a Wal-Mart in Independence, Kan., maintains that he is underpaid. "I make $8.53, even though every one of my evaluations has been above standard," Mr. Mrkwa (pronounced MARK-wah) said. "You can't really live on this."
Labor groups and their allies are focusing on Wal-Mart because they say that the campaign will not just benefit its workers but also reduce the existing pressure on unionized competitors to reduce their own wages and benefits.
"Wal-Mart should pay people at a minimum enough to go above the U.S. poverty line," said Andrew Grossman, executive director of Wal-Mart Watch, the coalition of community, environmental and labor groups running the series of ads criticizing Wal-Mart. "A company this big and this wealthy has the ability to pay higher wages."
H. Lee Scott Jr., Wal-Mart's chief executive, vigorously defends his company, arguing that wages are primarily determined by market forces and that Wal-Mart pays more than most retailers and provides better opportunities for advancement.
"If people tell you that Wal-Mart is leading the so-called 'race to the bottom' in terms of job quality or pay, they're not only wrong, they're dead wrong," he said to journalists at a company-sponsored conference here in April, the first time Wal-Mart has gone out of its way to invite a number of reporters to its headquarters to hear its views. "We are instead creating a better workplace with more opportunity and more benefits than have been available in retail."
Mr. Scott contends that the critics, including competitors, are defenders of an outdated status quo, intent on upholding a retailing system full of inefficiency and inflated prices.
He said that if Wal-Mart were as greedy as its detractors say, it would never have attracted 8,000 job applicants for 525 places at a new store in Glendale, Ariz., or 3,000 applicants for 300 jobs in outlying Los Angeles.
Michael T. Duke, chief of the company's stores division, said, "Wal-Mart is a very good place to work for our associates, and every day we make it even better."

... much more at linked article

First, I hope that the named individuals in the NY Times article all had their resumes up to date. Those that weren't giving glowing support of the company line may well find that their employment with Wal-Mart isn't as reliable as it used to be.

With that said, please understand that I am not necessarily going to take a lot of swipes at Wal-mart. I actually also give a little credit to the NY Times for trying to be somewhat balanced in their article, which seems inspired by the UFCW (and others) campaign and efforts.

Wal-mart is, as noted in the article at the NY Times (if not directly quoted above, at least noted well in the original materials) a business. They have to make a profit, or they quickly find themselves bankrupt and driven out of business. They face stiff competition from K-Mart (and their new partner Sears), as well as Target, Walgreens, CVS and a number of other stores all competing to get the spending money of the customer base.

The question becomes though, what would really happen if Wal-mart raised the base wages that they pay to their employees? Could they raise the wages so that a typical employee would not be eligible for public assistance if they are a head of household? If they do, how much higher do they need to go? Once they start raising wages, price increases are sure to follow, would it mean that Wal-marts newly wealthier employees would find themselves unable to buy goods at Wal-mart because the prices had to be increased to pay the wages? If so, then where do the employees turn, given Wal-marts reputation for "always the low price"?

There don't seem to be easy answers. Much like the U.S. economy in general. Raising revenues comes at the expense of taking more tax money from the citizenry. That means less money to spend on goods and services, and less money spent on goods and services eventually means less revenue coming in to the government as employers cut back on employees when there is less demand for the goods and services, or lower profit margins at least.

If Wal-mart could raise the wages of their employees at the cost of 5% of the jobs in an average location, would that be acceptable? What would you tell the 5% of the employees that find themselves laid off or working few hours so they fall into part-time employee categories, rather than full time?

Sorry for the econ 101 lesson in the form of a blog article. I hope it helps some people understand the "circle of life" that exists in this country's economy. Once you understand the concept, start thinking even bigger, and you really get the picture of the problem we face in a multi-trillion dollar economy (which we now have in this country).

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kingbee

Join Date 04/2004

+42

whether you wanna agree or not, the relationship between an enterprise, the community in which it operates and its workers must be at least somewhat mutually beneficial if it's gonna endure. (except perhaps in springfield where ned burns continues to give nothing in return for everything).

ultimately, the most dangerous thing about walmart may not be the way it sucks the life outta a community, nor the way it uses its leverage to bully suppliers nor the way it takes advantage of taxpayers but the way it undermines the work ethic.

despite their other faults, guys like ford and carnegie understood (altho they may not have always acted as if they did) the necessity of paying a living wage.

one of the funnier things ive encountered (and i mentioned it in an earlier blog) was the vp/board member who embezzled $500,000. most respectable corporations of that magnitude would be embarassed to admit they'd hired someone who'd admit to stealing chickenfeed. but i guess he didnt wanna appear too assertive.

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Zoomba

Join Date 11/2002

+114

Wal Mart has grown to a point where it doesn't have to listen to anyone. Think about it... How many real competitors are there to WalMart in your area? I mean both on price points and in selection. Target comes close, so does K-Mart, but their stores aren't nearly as big, and if WalMart vanished tomorrow, they wouldn't be able to handle the flood of customers. They control every inch of the supply and distribution chain, they dictate to everyone how they do business, where they do it and how much they charge. They're the largest employer in the world, and even if they're not treating their employees well, they're still giving them jobs that the local economy probably couldn't make up for if they weren't there.

WalMart holds all the cards, and they know it. Govt intervention/sanctions could cripple our economy as a ripple effect as suddenly you'd have a HUGE spike in unemployment, massive spike in the price of common goods, all sorts of problems with production and distribution channels (even for other companies). In short, the house of cards would collapse. WalMart has done an extraordinary job of making itself a corner stone of our economy. We can't touch them without seriously hurting ourselves.

The balance Kingbee mentions about company->community->worker doesn't apply when dealing with companies of this scale, we need to devise new laws of economics and business just to accomodate WalMart, they're a completely different animal.

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The level of economic education in this country is appalling bad. Most people just do not understand the relationship between wages and prices, even tho we have had many minimum wage increases (that never work anyway) in the past 35 years.

A company is a conglomeration of stockholders. And their duty, by law and by nature, is to those stockholders, not the community, not the public, and not the employees.

But before the company shows the finger to all the others just mentioned, they have to realize that their money also comes from those sources. Either through labor or sales of goods. SO they need to balance the needs of the stockholders with the happiness of their clients. Good companies do. Bad companies go out of business.

Wal-Mart is the biggest because they have done just that. The unions cant stand them for the reason that they keep most of their employees happy most of the time, and hence do not need the blood sucking unions to 'help them'. And then the willing accomplices of the blood sucking unions will always parrot the union line, because they have forgottten how to be objective journalist.

Actions speak louder than words, and the actions of Wal Mart speak to a very successful company that has found a good Balance between stock holders and clients. And all the words of the nay sayers are so much garbage. For that is what they are worth. Wal Mart works, and they hate them for it.

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kingbee

Join Date 04/2004

+42

Actions speak louder than words, and the actions of Wal Mart speak to a very successful company that has found a good Balance between stock holders and clients.

walmart has done more to implement nationalized healthcare than any progressive or left-wing politician or activist of the last century. i'd be willing to bet there are more working families receiving government funded medical treatment and other benefits at this point in time than any time in the past.

what you claim to be a very successful company is making you help pay its employees wages.

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what you claim to be a very successful company is making you help pay its employees wages.

I dont claim anything. The proof is in the pudding. I find it supremely ironic that so many trash the company, and yet still shop there. You dont like it? Dont shop them. If you convince enough people of your convictions, they will not be number one for very long.

And they are not pulling any money out of my pockets. Politicians do that, and they dont need flimsy excuses either.

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Yet many like me would point to Social Security and tell you that virtually every other company has been encouraged, thanks to that government hand-out program, to drop their own retirement plans and (shift) place the burden for the care of their retirees on the federal government.

Government intervention is not necessarily the answer either, is it?

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kingbee

Join Date 04/2004

+42

you could do that, but in order to do so, you'd have to dismiss the 40 years during which no properly operated company would have dared to consider doing such a thing.

unless in youre in terminal denial, you'd also have to agree that the 'government' that permitted companies to weasel outta their obligations (if not actually encouraging it--altho i guess it amounts to the same thing) was actually the reagan administration

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kingbee

Join Date 04/2004

+42

I find it supremely ironic that so many trash the company, and yet still shop there. You dont like it? Dont shop them. If you convince enough people of your convictions, they will not be number one for very long.
And they are not pulling any money out of my pockets. Politicians do that, and they dont need flimsy excuses either.

despite the dangers of earthquakes, freeway shooters, floods, landslides and the annoyances of traffic gridlock and high gas prices, there is still one reason to be happy about living in los angeles: NO walmarts.

how many walmart employees and their families are receiving benefits in the old dominion while ostensibly earning making sure you get the latest cheap crap from china? according to the berkeley study from last year, california's walmart employees received $86 million in benefits last year. if other companies start operating like wal-mart, the estimate annual cost would be over 400 million in this state alone.

like i said in the preceding comment, i guess its accurate to say politicians are responsible cuz they sure the hell arent stopping it from happening. btw you voted for em...not me.

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like i said in the preceding comment, i guess its accurate to say politicians are responsible cuz they sure the hell arent stopping it from happening. btw you voted for em...not me.

First, unlike others, I dont shop Wally World. But that has nothing to do with their employment practices.

Second, if their benefits were so bad (and I agree they are not lavish), no one would work there. As our area has the lowest unemployment in the nation.

Finally, the state is not taking any money out of my pocket for Wal Mart employees. If they are being subsidized (how?), it is from the feds. And as the Union propaganda sheet already said, other retailers used Wal Mart to reduce benefits already, and they are in LA, not Virginia.

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I have to agree with an earlier comment about the appalling lack of economic education in this country. When I graduated from High School I could balance my checkbook, not because I learned it in class, but because my Mother took the effort to teach me when I started my first job.

Shortly after I graduated HS I got my first credit card… This was trouble!
Like so many kids I see today, I charged, and charged, and charged, because I thought “Hey, my monthly payment will only go up $3, no problem!”

When I reached that HUGE limit of $1000 and I REALY NEEDED that new surround sound receiver, Visa was more than glad to raise my limit to $2500. I had never missed making my minimum payment after all.

It took me 6 years to crawl out from under that debt. I finally learned what a dual edged sword compound interest can be, and I now have it working for me.

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kingbee

Join Date 04/2004

+42

Finally, the state is not taking any money out of my pocket for Wal Mart employees. If they are being subsidized (how?), it is from the feds.

the only difference between the unemployed who receive medicaid and foodstamps and wal-mart employees who receive medicaid and foodstamps is the unemployed recipients aren't helping wal-mart and the proc to get rich at the expense of just about everyone else.

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Medicaid is Fed Dunned and state Run, so you get the same shaft as anyone, even if you have no Wal Marts. And by your logic, every business that does not pay a 'living wage' (stupid concept) is in the same boat as Wal Mart. So why pick on Wal Mart? Because they are so big and easier to see? That is still Mickey D in terms of employees however.

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Having worked for WalMart, I can tell you the problems go further than their wages. Frankly, their wages aren't as bad as many think for the retail sector (we had a guy come to work for us that was making 80 cents an hour more than he had made working for Abercrombie & Fitch, a corporation that definitely has greater overhead). Retail always has been, and probably always will be, a low paying career field.

If people want to have a reason to dislike WalMart, they could start with WalMart's outright refusal to donate any out of date/damaged food items to food organizations such as Second Harvest. In the last three communities in which I lived, WalMart was the ONLY food merchant that refused to give food donations. Or they could go after the outright FRAUD perpetrated when WalMart's claims department reshelves returned merchandise as "new", knowing that most people won't bother returning an item.

Then again, you could attack WalMart's productivity standards, which often require people staying at work off the clock (although it's against company policy, that's just so they can fire you and absolve themselves of any blame if your state labor board finds out about it), or the fact that, for employees eligible for health care, premium costs amount to about 1/4 of the employee's take home wages, which makes most employees continue to subsist on state health care programs.

WalMart is traditionally a VERY poor community partner, and although I am strongly against forced unionization, consumers would be wise to evaluate what is being said about this company from people who've had the experience of working there. Choosing to shop at WalMart is choosing to force local businesses to close their doors, sadly enough, as they cannot compete with WalMart's massive distribution system (incidentally, once WalMart controls the market in the community, they set prices substantially higher than in larger, more competitive markets, despite having the same costs).

WalMart is not the problem here, they are simply trying to meet the demands of stockholders to maintain the value of their stock. To do this, they must produce more and more profits, despite having fewer places to seek profits.

In virtually every community, individuals DO have the opportunity to not shop at WalMart. Personally, I don't go to WalMart unless/until I have exhausted ALL other options.

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If Wal-mart continues this type of growth, maybe the government should break it up as a monopoly?

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consumers would be wise to evaluate what is being said about this company from people who've had the experience of working there.

That is the perfect answer and the one I have been pounding. If you use the government to get them, all you are going to do is destroy more of our rights. But if you dont like them, and all companies have skeletons in their closets that anyone can use to hate a company, then boycott them! A company will not be number 1, low prices or not, if people refuse to shop them for whatever reason.

Here in town, the highest priced grocery store is also the largest. It also does not sell alcohol. SO why is it so large? Cause it has one command for all employees. The Customer comes first. And unlike other companies that use that as a slogan, this one practices it religiously. Everyone likes to shop at that store, even if it costs more, because the Employees are so great and helpful!

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I wonder what Walmart would be like if it was unionized. Would it do alot of good now and eventually bloat like other unions have in recents years and rear its greedy head?

The Union that is trying is already bloated. Unions would not fix Walmart. Boycotting them is the only way to show your displeasure. So I do. Not for Gid's reason, but for my own.

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All I have to say is.......#3. Link

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kingbee

Join Date 04/2004

+42

the actions of Wal Mart speak to a very successful company that has found a good Balance between stock holders and clients

So why pick on Wal Mart? Because they are so big and easier to see?

it's a lot easier to be financially successful when you have no scruples. what it boils down to is: what's good for wal-mart isnt necessarily good for the country or its citizens in the long run. they're a step up from tobacco companies in that they arent profiting from poisoning their customers, but wal-mart is helping to ruin the economy just as surely as cigarettes ruin the general health and wellbeing of the nation. it's not about wages so much as it is exploitation. wal-mart is really just a more subtle incarnation of companies like monsanto or the now-defunct asbestos mine operators.

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The problem a lot of employees face today, particularly when it comes to health care and other benefits, (like paid holidays and vacations, retirement plans, stock options, etc.) is that the law has left a giant loophole in which corporations can avoid offering any benefits at all by scheduling multiple part time workers instead of fewer full timers, or hiring 'temporaries' for permanent positions.

There is no loop hole. The reason they are called 'benefits' is because they are not required by law to offer them! Competition dictates benefits, not the government. SO it does not matter whether you are PT or FT.

And Retail has to have more PT because shopping is not a homogenous activity. There are peaks and valleys, and I doubt many people would want to work for 2 hours, go home and then come back for another 6. Yet that is how the trends go. So instead retailers have to hire a lot of PT people to cover the peaks and make sure they dont have a bunch of dead wait standing around during the valleys.

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If it can be done by a contractor, regardless of the length of time the project is expected to take, then by god, why hire someone permanently and provide them with some benefits?

Actually, that is not the reason for contractors. Usually, and by Microsoft Law, after a year, a contractor has to be hired as a regular. But during that year, if they dont like you, you are gone in a heart beat. No paperwork, no CYAing. Contractors are hired and fired for no reason than wearing a pink tie on a wednesday.

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Sorry doc but it does matter. Not in a legal sense. But for the most part, companies do NOT offer benefits to temp OR part timers. I've been in BOTH of those positions more than a few times in my life. All I could do was hope for an offer for a permanent position.

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I am not saying it does not matter, only that it is not a government mandate. Companies do not have to offer benefits to any employees if they do not want to. They chose to because of competition from other companies that offer them, not because they are required to by law.

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Zoomba

Join Date 11/2002

+114

I believe some states have rules on what's considered PT vs FT and the minimum benefits they have to provide for FT employees. I know when I was working for Penn State, I could only work up to 39hrs a week, since past that they would have to consider me a FT employee and offer me basic health insurance.

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My mom has worked at TJ Maxx for over 20 years, their full time status is 35 hours per week. Out of the entire store, they only have 6 full timers, the rest are scheduled for 33-34 hours per week. Management is FORBIDDEN to give them more hours, and they will go shorthanded for days on end rather than call in an employee who has already worked their magic number of hours that week.

During some periods, notably Christmas and Mother's day, they could easily schedule the employees over 40 hours aweekm but then the law does dictate they be made FT at that point, so they do not. However, most of the time, they just do not have enough work or the work is spread out over 7 days, not 5 (and who would want to work 7 days a week), so they HAVE to hire 2 part timers instead of a full timer.

How do I know? I worked for a major retailer for 12 years. My Job? Scheduling the staffs of 300 stores to match traffic. It is a very scientific occupation with that higher end math that no one ever uses after school comes into play. Trust me when my boss promoted me to manage that area, he told me "someone has to be the company bastard, and nmow I pass the job on to you".

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The law only states that all FT must be treated the same. Since these places have High paid executives that want Benes, they offer them to all FT people. But that does not mean they have to. Only that if they do offer to some, they must offer to all. And so yes, in order to prevent paying more benes, they make sure you are PT and not FT.

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