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Wal-mart and wages and salaries in America

terpfan1980

Join Date 08/2004

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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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except perhaps in springfield where ned burns continues to give nothing in return for everything).

--Dude, its Montgomery Burns and Ned Flanders. [not sure if spelling is correct] ya gotta get yer simpsons right....

J/K...

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Would it do alot of good now and eventually bloat like other unions have in recents years and rear its greedy head?

Unions have become as much a big business as the big businesses they claim to fight. I know this firsthand from my experience in underground mining, the most dangerous industry as a whole (the only reason crab fishing usually comes out on top is its fatalities generally fall in one category, where mining fatalities come in several). We made $9 an hour in a state where minimum wage is $6.75, worked long hours, in chronically unsafe conditions and had NO Contact with our union reps.

So unions are NOT the solution here, or anywhere else, in my opinion.

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Reply #32 By: Citizen Gideon MacLeish - 5/6/2005 11:40:58 AM

--I agree with you. Though i have never had to deal directly with unions or anything like that, from hearing people talking to me about them, they seem to be more trouble than help, seem to go for their own interests...instead of representing their workers...

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Actually, just the interests of the democrat party. The sold their soul.

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If you really want to know how bad a union can be to it's own members and out for themselves, read up on that UPS strike about eight years ago.

The union retirement plan that they got, gave 50% their net income from a twenty year retirement to the union administration, compared to the company run plan offered early on that was rejected be the union (was not even allowed to be voted on).

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--I know about that strike, my mom worked for UPS then,still does...

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--I know about that strike, my mom worked for UPS then, still does...

Have her check out how the union takes a cut of not only the money she puts into the plan, but also how they take a cut when she takes withdraws too.

Some thing the Company plan did not do. In the Company plan, the union was not allowed to get their cut or decided what the money was invested in. All that extra cash taken at the start of the plan effected the dividends at withdraw time. I was dating an assistant personnel manage of UPS soon after the strike. As technically management it didn't effect her, but the she has friends that it did effect who she felt bad for. Those friends was never told by the unions the details, only that it was a bad plan.

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