This is the third of five parts of my one size fits all information dump about Walmart. There is no particular order in which I’m presenting my information, so just have at it.
The Walmart model is good for America, right? Well, it’s good for corporate CEOs, and for their share holders. It’s not good for the community, workers, or the taxpayer, but what the heck, we don’t matter.
“...While Walmart has added 455 stores in the past five years, it has cut its workforce by about 20,000. Workers complain that they’re too short-staffed to move products from the stockrooms to the aisles, while customers complain that they can’t find basic goods, leading some to shop at competitors…”
Something rather fascinating is that, when times are hard, Walmart does better, right? The worst of it is that something like 18% of all SNAP benefits are cashed in at Walmart. They do better when people are hurting.
“...Wal-Mart’s emphasis on strict labor cost controls finds its way up and down the company’s supply chain. Employees of companies that serve as Wal-Mart suppliers have raised concerns about deteriorating working conditions. One such worker told a reporter: “Wal-Mart squeezes the company, and the company squeezes me.” His company produces chicken for sale at Wal-Mart, quadrupling its production over the last 14 years but not its staff. The worker cited increased workplace injuries resulting from tired employees working overtime to meet production requirements.
On the other side of the world, garment factories in Bangladesh that produce clothing for sale at Wal-Mart have made headlines for their failure to expend time or money on safety measures and their focus on fast, low-cost production to meet the demands of retailers like Wal-Mart. Bangladeshi garment workers’ minimum wages are $37 per month. The most recent industrial tragedy there was the Rana Plaza building collapse, which killed more than 1,100 garment workers. That building produced blue jeans for Wal-Mart as recently as 2012. When this arrangement came to light following the collapse, Wal-Mart denied knowledge of the contract and blamed a rogue supplier. Wal-Mart has thus far refused to sign an international fire and safety agreement that would require the company to contribute to the cost of improving the safety of the factories it employs….”
“...“We have robust plans in place to help our customers save money this holiday season,” Bill Simon, the head of Walmart U.S., said in a recorded call (PDF). “While we’re somewhat encouraged by the momentum coming out of the third quarter, we know the customer continues to be challenged by ongoing uncertainty around healthcare costs, the payroll tax increase and recent SNAP reductions.”
Let’s take a minute to consider the last bit of Simon’s statement. SNAP is the Supplemental Nutrition Assistance Program—otherwise known as food stamps—covering some 47 million people as of July. On Nov. 1, food stamp benefits were reduced after the expiration of a temporary increase put in place by Congress in 2009. More cuts could come as Washington looks for ways to shrink the federal budget.
Walmart, it turns out, is a big beneficiary of the food-stamp program. Almost half of all redemptions are in big-box super-centers such as Walmart and Target (TGT), according to Bloomberg Industries; in total, Americans spent about $73 billion worth of food stamps last year. If Walmart received one-quarter of that, the amount would come to about $18 billion. Walmart didn’t respond to a request for comment….”
This says it all.
“...A sign above the bins reads: “Please donate food items here, so Associates in Need can enjoy Thanksgiving Dinner.” Now, the article notes that this decision was taken at the store-level, and that Walmart has a series of policies and vehicles through which Walmart employees kick in funds for an employee assistance fund.
But this is insane. And it’s a great metaphor for what is happening in the U.S. economy. “That captures Walmart right there,” Kate Bronfenbrenner, director of labor education research at Cornell University’s School of Industrial and Labor Relations, told The Plain Dealer. “Walmart is setting up bins because its employees don’t make enough to feed themselves and their families.”
This—not the food stamps cut, or the ACA, or the government shutdown—is the real reason for Walmart’s continuing sales struggles. Low-wage workers, four plus years into the recovery, aren’t getting paid enough to consume more. Employers large and small, while sitting on record amounts of cash and ringing up record amounts of profits, don’t feel compelled to share the bounty with employees. Labor share of national income is at a post-World War II low. This has real world implications. Walmart, of course, is the nation’s largest private-sector employer, with 1.4 million employees. Aside from accounting for a big chunk of overall retail employment, Walmart sets the benchmarks and norms for a large part of the service industry. The company’s sales are stagnating in part because it doesn’t pay its employees sufficient wages, and because many other companies follow suit. Yes, Washington may be playing a role in Walmart’s travails. But the real source of the problem is in Bentonville.
The irony, off course, is that, despite all the bad press and the stagnant sales, Walmart’s stock is doing quite well. …”
“...Demonstrators in California, Florida and Illinois are demanding the store pay associates at least $25,000 per year, offer more full-time work and end “illegal retaliation” against employees who speak out against work conditions. The National Labor Relations Board announced Monday afternoon it would prosecute Wal-Mart for firing and disciplining more than 117 workers, who could receive back pay or reinstatement to their former positions.
The demonstrations are tied to efforts to raise the federal minimum wage from $7.25 to $10.10 and similar protests by fast-food workers, and organized labor groups announced their support of Black Friday protests by Wal-Mart workers. Lundberg suggested that activists may be misinterpreting and hyping the Canton food drive as part of its campaign, and at least one worker at the store said she agreed.
Canton associate Erica Reed said the store had been holding food drivers for several years and had helped her when she lost $500 a month in child support when the father of her four children was incarcerated. “It took a burden off me. I didn’t have to worry about how I was getting my turkey to feed them Thanksgiving dinner,” Reed said, adding that it was “ignorant” to blame Wal-Mart for a difficult job market. “You can’t find a decent job anywhere,” she said.
But the bins serve as a powerful symbol to those who disagree with the retailer’s labor and business practices. “That captures Wal-Mart right there,” said Kate Bronfenbrenner, director of labor education research at Cornell University’s labor school. “Wal-Mart is setting up bins because its employees don’t make enough to feed themselves and their families.”…”
“…In a huge victory for labor, the National Labor Relations Board found that Walmart violated the rights of 117 of its workers. On Monday, the NLRB released a statement affirming that Walmart stores “unlawfully threatened, disciplined, and/or terminated employees” for both “having engaged in legally protected strikes and protests” and “in anticipation of or in response to employees’ other protected concerted activities.”
The NLRB charges finally address Walmart’s longstanding history of intimidating workers who desire better working conditions. In the past, Walmart boasted that it would tell employees who asked about unions that their benefits and vacations “might go away.” These 117 workers may receive back pay, reinstatement and a reversal of disciplinary actions. A Walmart spokesperson has said that the company will defend itself and that its actions were “legal and justified.” If Walmart does not reach settlements with the parties, the NLRB will issue complaints, which would lead to a hearing….”
Part IV continues tomorrow.