In Wichita or Walla Walla, their stores are as familiar as Mom’s Sunday dinner. Big, no-frills blue box on the main road surrounded by acres of asphalt to accommodate any crowd. Walk through the automatic doors and the first thing you notice is the smell of popcorn, lending the visit a carnival atmosphere. Then a beaming, blue-smocked "people greeter" welcomes you inside. Big yellow smiley faces adorn store advertisements. A vast marketing machine portrays it as a great place to work and a model community citizen. Millions of dollars have been spent to instantly trigger thoughts of smiling faces and lower prices at first mention of Wal-Mart.
They would prefer if you weren’t familiar with Wal-Mart’s dark side.
With nearly a million workers, Wal-Mart sets a standard as the largest private employer in the United States. But in its zeal to increase profit margins and boost its stock price, that standard is unparalleled in its race to the bottom. The corporate giant pays workers borderline poverty wages, offers prohibitively expensive health insurance and consistently denies its workers a voice on the job.
"When did the almighty dollar become more important than the people on the front line doing the job?" asked former Wal-Mart manager Gretchen Adams, in a United Food and Commercial Workers (UFCW)-produced video.
How did it get this way? Wal-Mart in recent years has embarked on a conscious strategy to drive costs down in every aspect of its business. In the process, it has become the undisputed low-price leader in discount and grocery store sales. It is a global force of unmatched proportion, exerting downward pressure on wages, and not only of its own workers. Its sheer size and buying power gives it the ability to influence wage rates of its competitors and suppliers, including manufacturing and construction companies. This has resulted in facilities—and jobs—being relocated overseas.
Wal-Mart’s corporate policy—unrelenting in its quest to stamp out competition—is leaving in its wake mute workers and decimated communities, all in its single-minded pursuit of cut-rate business costs.
"Wal-Mart’s continuing dominance—strengthened by every dollar spent at its stores—is hurting far more workers than those in its employ," said IBEW International President Edwin D. Hill. "Wal-Mart has a stealthy but devastating impact on every worker on the job in North America."
The nation’s largest retailer, Wal-Mart is also vehemently antiunion. The corporation, which includes Wal-Mart and Sam’s Club, does not hide its philosophy, although it does take pains to conceal the tactics it uses to remain union-free, some of which former workers contend are illegal.
"We’re not antiunion," said Wal-Mart spokeswoman Cynthia Illick. "We just don’t believe that unions have a place in our business." That mantra—and a seriousness in pursuit of a "union-free" operation—has existed from the first moment the late Sam Walton launched the company.
After years of attempts to organize Wal-Mart, the labor movement, spearheaded by the efforts of the UFCW, has put the retailer on public notice: all that has happened so far is but a prelude to how long labor will fight for the voiceless workers.
LOW PRICES AT WHAT COST?
Wal-Mart is one of the nation’s most profitable corporations, a business model envied and emulated across the world.
But to be an hourly employee at one of Wal-Mart’s 3,300 United States stores is to make a low wage and have very few job protections. An average Wal-Mart employee takes home $250 a week. Part-time workers do not even become eligible to purchase full health benefits for two years. Once they do, it costs between $97 and $173 per month for a family. Only two of five Wal-Mart workers opt for the insurance.
"Wal-Mart has a crummy health plan, it’s very expensive and every year, premiums go up," said Linda Gruen, a former Sam’s Club cashier, of Federal Way, Washington.
Employees, or as Wal-Mart prefers to call them, "associates," earn barely enough to eke out a living, an average hourly wage between $2 and $3 below that of UFCW-represented workers.
"Behind that smiley face is a single mother who makes $7.50 an hour and can’t afford health insurance for her family," said Rian Wathen, a UFCW organizer for Local 700 in Indianapolis. "Now that’s not a very happy face."
The rest of us end up paying the staggering tab for those 700,000 workers who can’t afford the health insurance coverage. "The cost to other employers and taxpayers is upwards of $2 billion a year," said UFCW’s Jill Cashen. "It’s a simple cost shift."
NO PAY FOR MORE WORK
Not only does Wal-Mart pay pathetically low hourly wages, a jury found the company routinely requires its employees to work for nothing.
Last December, a federal jury in Portland, Oregon, found Wal-Mart guilty of forcing its employees to work unpaid overtime. Four hundred current and former employees brought the suit that concluded with the jury agreeing that Wal-Mart has a pattern of widespread violations of the basic U.S. wage and hour law.
"This case is about forcing people to work for free for America’s largest employer," said James Piotrowski, attorney for the plaintiffs, during the trial in December.
That decision is only one of a growing number of lawsuits and complaints against Wal-Mart. Since November 2001, the company has been the subject of 28 complaints brought by the National Labor Relations Board. And a lawsuit filed in San Francisco claims that Wal-Mart discriminates against women in promotions, job assignments, training and pay. If that goes forward as a class action suit, it could involve hundreds of thousands of plaintiffs.
None of Wal-Mart’s million-plus workers belongs to a union. But workers have had a long history of organizing attempts, and one short-lived success. Three years ago, the UFCW won an election of meat-cutters in a Jacksonville, Texas store—shortly thereafter, the company eliminated the department and decided to sell only prepackaged meat.
Wal-Mart’s systematic campaign to stamp out any trace of union sympathy, including firing workers, has been well documented. Store supervisors are equipped with a confidential handbook titled "A Manager’s Toolbox to Remaining Union-Free." If managers hear talk of organizing, they are directed to call a dedicated hotline at Wal-Mart corporate headquarters, which dispatches a team of union busting labor relations personnel to the store.
Current and former workers interviewed for the UFCW video "Wal-Mart’s War on Workers" said the company has a personality profile it uses called the "union probability index" to root out workers who might be receptive to a union message. Those associates were tapped for captive meetings with management and subjected to pressure from fellow employees. Former workers contend managers followed, filmed and otherwise intimidated workers it considered union activists.
Contributing to the difficulty of organizing is the fact that the retail sector has a high rate of turnover and Wal-Mart’s rate is even higher than the average, said the UFCW’s Cashen. "There’s no doubt in my mind that many more people than Wal-Mart realizes would vote for a union if given a really fair opportunity," she said, adding that labor law reform and better enforcement of existing laws would also help organizers give workers a voice.
LOW WAGES PUNISHING OTHERS
Despite the country’s mild recession, Wal-Mart reported $250 billion in annual revenue in fiscal year 2002—a 15 percent increase over 2001—in large part by undercutting the prices of its rivals and saving on labor costs.
Forty years ago, when Wal-Mart started opening stores in small towns across the Midwest and the South, it immediately became the largest employer, setting wage rates for all area retailers. Now it’s having the same impact on retail wages nationwide.
Wal-Mart is the largest customer for some of the best-known consumer brands in the country. Those suppliers—such as Kraft, Gillette and Proctor & Gamble—are more likely to respond to Wal-Mart’s requests to lower prices and product changes. And in its quest for ever-lower prices, Wal-Mart has contributed to driving thousands of manufacturing jobs overseas.
With its overarching goal to do things on the cheap, it’s no suprise Wal-Mart seeks nonunion labor to build its stores, in direct opposition to spirit of its company policy. Wal-Mart’s web site seeks to assuage some communities’ fears of a corporate invasion. "We live here, too. So we strongly believe in our responsibility to contribute to the well-being of our community," the site says. (See Retail Construction Worth Fighting For on what IBEW locals are doing to combat the practice.)
Wal-Mart’s use of nonunion labor is expected to increase, with the company planning to open more stores and introduce its new concept for the urban areas it has traditionally avoided.
The race to the bottom has also placed at risk the wages and jobs of union-represented service jobs performed by members of unions like UNITE! and the service employees. Wal-Mart suppliers operate factories in developing countries such as Bangladesh, Honduras and China and Wal-Mart’s policy of no unions and a constant push for lower wages is vigorously pursued around the world. Wal-Mart’s overseas suppliers are forced to keep wages at a scale dictated by Wal-Mart—or Wal-Mart will change suppliers.
Wal-Mart alone is the largest importer of Chinese-manufactured goods in the world, contracting with thousands of factories there. To display "Made in America" labels on its clothing, Wal-Mart and other discount retailers purchase goods from companies operating sweatshops in American Samoa.
A CALL TO ACTION
On November 21, 2002, approximately 100,000 protesters in 45 cities attended 100 events at Wal-Marts across the country. The "People’s Campaign for Justice at Wal-Mart" drew women’s groups, students and religious leaders in the effort to organize Wal-Mart workers. "Hey, hey, ho, ho, these wages have to go," they chanted in Denver, delivering a message of solidarity to workers struggling inside the stores.
The events, covered by newspapers and television stations, succeeded in prompting a shift in public perception of the retail giant.
"We have noticed a change in the national consciousness about Wal-Mart," Cashen said. "We have received many more e-mails, phone calls and contacts from workers and that was our Number 1 goal."
WHAT YOU CAN DO
"Workers deserve to have a voice and the opportunity have union representation," Cashen said. "Go to Wal-Mart, wear your union jackets and T-shirts, and talk with them. Tell them you’re a union member and that you support them. The best way for these workers to learn what unions can do for them is to hear about it from those of us in the labor movement."
President Hill urges IBEW members to display their union affiliation in Wal-Mart stores. "But, if you’re not going to help spread the union message, please spend your money elsewhere. Every dollar you put in Wal-Mart’s coffers is a nail in the coffin of fairer, decent wages and worker rights."
April 2003 IBEW Journal