al-Mart is the biggest retailer in the US, one of the largest employers in the US, and probably the most hated company in the US.  They turn up in the news from time to time, whenever they've destroyed the economy of another small town or been sued by another class action full of ex-employees they screwed over in one way or another.

This page collects daily blog items about Wal-Mart.  The most recent items are on top of the page.

January 24, 2004

And speaking of newspaper ads and media coverage, Wal-Mart famously boycotts all newspaper advertising (they use TV commercials to flood a new market).  The effect of this in small towns is often to drive the local paper out of business, since Wal-Mart kills off all the local hardware stores, garden stores, video rental stores, grocery stores, drug stores, etc.  All businesses who used to advertise in the paper, and it's compounded by Wal-Mart never advertising there themselves.

Anyway, my point is that that's probably a major reason that so many newspapers are willing to run so many nasty (but true) articles about Wal-Mart.  They ain't got no ad money to lose by doing it, and they're taking on a sworn enemy.

And speaking of Wal-Mart, I thought this recent post by Calpundit was interesting.  He's talking about the bullshit PR effort Wal-Mart is mounting with their new employee friendly commercials.

Wal-Mart charges its workers a lot for healthcare coverage — as much as 10-15% of their wages — and has increased premiums by 200% since 1993, far higher than the rate of medical inflation. Result: many workers can't afford to sign up for coverage and some of them end up getting healthcare via Medicaid. In other words, via tax dollars.

For better or worse, part of the social contract in America since World War II has been that large corporations provide decent healthcare for their workers. Refusing to do so is a core part of Wal-Mart's strategy for squeezing every last nickel out of its workforce, and they deserve all the scorn they get for their efforts to force an entire industry down to their subterranean level.

October 25, 2003

This news item about Wal-Mart (allegedly) knowingly subcontracting illegal aliens to clean their stores caught my attention, primarily since it ties in nicely with a topic that I've been meaning to blog about for a while.

WASHINGTON - Federal officials arrested more than 300 illegal workers at 60 Wal-Mart stores across the country early Thursday morning and searched the office of one of the retail chain's corporate executives, a federal official said.

Several law enforcement sources who spoke on condition of anonymity said the investigation grew out of earlier probes of Wal-Mart cleaning crew contractors in 1998 and 2001. Based on recordings of meetings and conversations among Wal-Mart executives, managers and contractors, the law enforcement officials said "various immigration violations had continued to occur with direct knowledge by the Wal-Mart corporation."

The workers, members of cleaning crews that the company hired through contractors, were arrested as they finished their night shifts at stores in 21 states. All were in the country illegally, according to Garrison Courtney, a spokesman with Immigration and Customs Enforcement.

At this point Wal-Mart is denying that they knew anything about the illegal workers who were cleaning their stores, even though there are laws that require them to know about the workers cleaning their stores.  So they're clearly guilty of something...

The bigger issue is the way Wal-Mart is destroying not just small town economies, and not just the pay structure at other supermarkets, but the entire middle class in America!  Yes, that sounds overly-dramatic, but see the point made by Kevin Drum in this post on his blog.

The American dream was built on the back of a decently paid middle class, and that middle class largely worked in unionized manufacturing jobs. Those jobs are declining, and today's working class high school graduates are far more likely to work for Safeway than they are to work for General Motors. So if we decide that these kinds of jobs don't deserve more than $20-30,000 a year, we can just wave goodbye to the American middle class.

Safeway got itself into this mess through bad management and ill-advised acquisitions, but instead of firing their CEO they've decided to take it out on their workers instead.

He's talking about the supermarket strike in SoCal in particular, but as other posts explain, the stores are doing their lock out (far more workers are locked out than on strike, as the other grocery stores band together to try and break the union) supposedly because they can't afford to pay a living wage with the big bad bogeyman Wal-Mart superstores coming.

The benefit (to consumers) of the Wal-Mart superstores is that they drive down overall grocery prices, since Wal-Mart is cheaper and therefore other stores are forced to cut their own prices to keep up.  The problem for the local economy is that they wipe out all the competition with prices they can't match, pay their employees far less than comparable jobs would pay, and have horrible benefits.  Since the work there is so unskilled, they can hire and train pretty much anyone to do the work, and therefore have no need to keep workers on for a long time, or pay them decently.  If you don't like it you can quit, and they'll replace you immediately.  Good luck finding a better job.

It's not as if other companies wouldn't do this if they could; witness the California grocery store strike/lockout, predicated by just the hint that Wal-Mart grocery outlets might come to the state.  The point is that workers need to band together to keep the companies from doing this sort of thing to them, since workers certainly can't expect any help from government any time soon. Wal-Mart is of course intensely hostile to any union talk, since if they paid their workers a decent wage, they'd just be extremely-profitable, rather than obscenely profitable.

Wal-Mart is now the world’s biggest corporation, having passed ExxonMobil for the top slot. It hauls off a stunning $220 billion a year from We the People (more in revenues than the entire GDP of Israel and Ireland combined).

Despite its claim that it slashes profits to the bone in order to deliver "Always Low Prices," Wal-Mart banks about $7 billion a year in profits, ranking it among the most profitable entities on the planet.

Of the 10 richest people in the world, five are Waltons—the ruling family of the Wal-Mart empire. S. Robson Walton is ranked by London’s "Rich List 2001" as the wealthiest human on the planet, having sacked up more than $65 billion (£45.3 billion) in personal wealth and topping Bill Gates as No. 1.

Wal-Mart could double every employee's pay tomorrow, add decent health care and other benefits, and still be the low price leader and make tremendous profits.  They'd just make slightly lower corporate profits.  Of course they're about as likely to do this as purple snow is to fall in Paris tomorrow, but that's beside the point.  Or perhaps that's exactly the point.

...the average employee makes only $15,000 a year for full-time work. Most are denied even this poverty income, for they’re held to part-time work. While the company brags that 70% of its workers are full-time, at Wal-Mart "full time" is 28 hours a week, meaning they gross less than $11,000 a year.

Health-care benefits? Only if you’ve been there two years; then the plan hits you with such huge premiums that few can afford it—only 38% of Wal-Marters are covered.

In case you're wondering, no you can't live on $11k a year.  Certainly not if you plan on doing things like having children, buying property, or retiring some day. Small wonder the supermarkets in SoCal want to lock out their workers and break the unions, when they consider trying to remain profitable while paying their full time workers the barely-livable wages of $20-30k a year.

I'm not sure what the solution is.  My perspective is obviously that corporate profits are less important than workers earning enough money to support their families and keep the economy going. The Republican perspective, at least as represented by the Republicans who are currently in national power is that corporate profits and tax cuts for the rich are the most important things, and that their further gains in wealth will "trickle down" to everyone, over time.  I think that philosophy is utter bullshit, and as Exhibit A I'd call Wal-Mart and their 50% of the world's richest 10 people ownership, but that's beside the point.

So if I were in power, and even assuming I could get the corporate-owned legislature to go along with me, what would I do to improve pay for common workers, without screwing over companies so badly that they became unprofitable?  I'm not an economist, so I'm not going to offer any detailed solutions (since they'd be full of errors).  You can't force companies to raise their pay to workers, at least not under current US laws, and I wouldn't want to do that anyway; it's way too socialistic.  You could raise corporate taxes on profits substantially while lowering taxes on workers, but would that really fix anything?  Companies would just cut wages even further and move into even more elaborate tax scams to avoid paying their fair share, and the employees would end up worse off than they were to begin with.

How about raising the national minimum wage substantially?  It's now at $6 an hour (or something like that), and went up under Clinton, but it's still far below what it was a couple of decades ago, when you adjust for inflation.  Even if you doubled it to say $12 an hour, would that help?  It would help workers, but still wouldn't be enough for someone to work full time and live on, not if they had to support a family or pay rent anywhere expensive.  And many small companies would legitimately be unable to pay that and not have to lay people off or go bankrupt.  The problem is trying to find ways to make highly-profitable, worker-raping conglomerates like Wal-Mart pay their employees fairly, while not killing the various mom and pop businesses around the country.  I'm sure there's some smarty-man economist way to do this, but it's beyond my knowledge.

Of course this is all just pissing into the wind since I don't have the power and as long as corporations are buying 95% of the politicians in the US, nothing even approaching any of my ideas are going to come to pass.  The only way things will change is if the common people get so pissed off or fed up that they do something about it, and ignore the crying and bitching that businesses always do when government forces them to clean up environmentally or pay a better wage.  Most profit-greedy companies are like pouting five year olds.  When told to do something they don't want to do, they put out dozens of lies and excuses why they can't, but no one really pays attention when a little kid says he'll die or run away when he's forced to clean his room or do some chores.

I think the main reason this sort of thing goes on to such an extent in the US is the myth (and occasional reality) of upward mobility is so ingrained in the national psyche.  The whole "anyone can be anything they want to in America!" story is fun to listen to, and it's true, sort of.  But the reality is that the .0001% of people who really do make it huge worked incredibly hard to get where they were going, or got very lucky, or both.  The majority of people who made it big were big to begin with, or were born to big parents.

Millions of kids dream of being rap stars or basketball stars while dozing their way to straight D's in high school, and most of them end up unemployed or in prison or working in Wal-Marts, or stuck in an endless series of medium-paying short term jobs.  You can do a lot better in the white collar/business world, if you can afford the education you need to get a foot into it, but while dreaming of becoming the next Bill Gates, most people end up staring in their own private Dilbert world, while religiously buying 10 lottery tickets a week.

Said the man with plans for best sellerdom while writing fan fiction for a gaming site and working far too many hours a week on his blog.  *cough*

March 24, 2003

Amusing and very long list of the 101 Dumbest Moments in Business in the past year. I probably laughed the hardest at this one, though #87 is great also.

#32, #33, #34

Panic in the heartland, part 1: The crisis begins.
Outside a Wal-Mart in the small town of Geneseo, Ill., a 73-year-old woman buys a newspaper and suddenly finds herself trapped when the door of the news rack slips closed and catches her coat. Unable to wriggle out, she solicits a bystander to enter the Wal-Mart and ask for help. A Wal-Mart employee comes out to explain that she can't assist, citing a policy against tampering with the news rack.

Panic in the heartland, part 2: The tense negotiation.
After going back inside for a moment, the Wal-Mart employee comes out and tells the trapped woman that she'll call the newspaper and have a representative come to release her. The woman suggests an alternative solution: Somebody could simply put two quarters in the machine and open the damn door. The Wal-Mart employee rejects this out of hand, explaining that the store can't pay refunds for the news rack.

Panic in the heartland, part 3: The sweet taste of liberation.
Eventually the employee relents and puts two quarters in the machine. Later the liberated woman's daughter visits the store and gives her a $5 bill to be used strictly to finance future releases. A Wal-Mart corporate spokesperson apologizes for the incident, saying, "This is not how we do business."

I have to give them props for the writing on that summary.  Succinct and clear, and some great phrases of dry wit.  "Solicits a bystander" and "liberated woman's daughter" and "finance future releases" are just brilliant.

December 17, 2002

You can find articles every day about what a horrible company WalMart is, but this is about the most thorough presentation of their duplicity and evil I've ever seen. Basically you want to be sure you never work there, since almost everyone who does gets screwed into working unpaid overtime, and fired if they complain too much.  And then if you try to sue they drag the case out indefinitely, happy to spend more money defending themselves than you're suing for in the first place, since if they ever admit to their wrong-doing it will set precedent for the thousands of other such lawsuits.

Of course since they come into every community and drive all the other businesses bankrupt, the question of where else you'll work is a tricky one.

Since that case was filed, Wal-Mart has been through a half-dozen different legal firms, constantly bringing new lawyers into court. "Every time their attorneys tell them they're in trouble and should settle, they fire them," Azar says. "If they don't like the message, they kill the messenger."

According to a recent story in the Cleveland Scene, Wal-Mart has been slapped with 75 sanctions by angry judges over the past six years after it was found to have destroyed, altered or hidden evidence. That number of sanctions is remarkable for a major corporation, since each sanction can carry fines running into the millions.

WalMart isn't the only company that does this sort of thing, but they are the worst.

"If you're getting people to work for ten hours a day and paying them for eight, you can undercut your competitors," he says. "That's why they're able to put everybody else out of business. I've never gotten a call complaining about Target or Kmart. They pay people."

Even more disturbing to Azar is what Wal-Mart's behavior portends for working people in the United States.

"This is now the biggest company in America. They employ more people than General Motors," he says. "We've caught them red-handed erasing time off people's time cards. When you're doing that for 900,000 people, that comes out to a lot of money. You can sell stuff for a lot cheaper than anybody else. People say, 'I go there because they have cheap prices.' Now you know why. Eventually, you'll be buying everything at Wal-Mart, and everybody in the country will be making $7.25 an hour."

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