Abominable Wal-Mart

We were not impressed by Wal-Mart's public forums, held months ago, to sell its distribution center to the Merced public. We took one look at the corporation's discount hucksters (we dubbed them "empty T-shirts"), dutifully took notes, listened to the local chamber of commerce types, and were not surprised by anything said. Project proponents said the center would bring jobs, jobs, jobs. Opponents said it would bring low-paying jobs and a great increase of air pollution, traffic congestion and noise, lowering property values around the site. No one has changed their tune.

The entire political class of the city and county seem to be behind the Wal-Mart project because its entire economic development policy consists of begging for outside investment as if economic development was a form of New Guinea cargo cult. (Primitive hill tribesmen in that region build false runways to try to attract airplanes to crash so that they can gather the salvage.)

However, Paul Krugman pointed out some new employment trends at Wal-Mart:

If you want to see how the war against wages is being fought in the United States, and what it's doing to working Americans and their families, consider the latest news from Wal-Mart.

Wal-Mart already has a well-deserved reputation for paying low wages and offering few benefits to its employees; last year, an internal Wal-Mart memo conceded that 46 percent of its workers' children were either on Medicaid or lacked health insurance. Nonetheless, the memo expressed concern that wages and benefits were rising, in part "because we pay an associate more in salary and benefits as his or her tenure increases."

The problem from the company's point of view, then, is that its workers are too loyal; it wants cheap labor that doesn't hang around too long, but not enough workers quit before acquiring the right to higher wages and benefits. Among the policy changes the memo suggested to deal with this problem was a shift to hiring more part-time workers, which "will lower Wal-Mart's health care enrollment."

And the strategy is being put into effect. "Investment analysts and store managers," reports The New York Times, "say Wal-Mart executives have told them the company wants to transform its work force to 40 percent part time from 20 percent." Another leaked Wal-Mart memo describes a plan to impose wage caps, so that long-term employees won't get raises. And the company is taking other steps to keep workers from staying too long: In some stores, according to workers, "managers have suddenly barred older employees with back or leg problems from sitting on stools."

It's a brutal strategy. Once upon a time a company that treated its workers this badly would have made itself a prime target for union organizers. But Wal- Mart doesn't have to worry about that, because it knows that these days the people who are supposed to enforce labor laws are on the side of the employers, not the workers.

Wal-Mart, of course, is not just a local problem. Wal-Mart is just a part of a global corporate disgrace:

Economic growth since early 2000, when the Dow reached its previous peak, hasn't been exceptional. But after-tax corporate profits have more than doubled, because workers' productivity is up, but their wages aren't - and because companies have dealt with rising health insurance premiums by denying insurance to ever more workers.

From an environmental point of view, the distribution center is an abomination. How interesting it is when you discover that if you look at an environmental abomination, you often find a socioeconomic abomination. At is almost as if John Muir were correct when he said that everything hangs together, somehow.

Unfortunately, Wal-Mart's new employee policies are nothing new. Corporate brutality to older, better paid workers in America has been legendary for decades, growing steadily worse as unions dwindled in power and influence. These policies have meant the loss of loyalty to the company and a badly trained, often unmannerly, minimum-wage -- but definitely young --workforce, many of them married with children and homeowners with adjustable rate mortgages -- but that's next year's story.

Bill Hatch


A Brutal Way with Wages, Paul Krugman, October 7, 2006, International Herald Tribune