In less than four days Wal-Mart opens its doors at 6:00 am on Thanksgiving day and stays open for 41 hours, trying to entice all the Black Friday shoppers into its stores. Almost 200,000 people have signed petitions protesting the new hours. If the company were not unfair to its 2.1 million workers, two-thirds of them in the United States, people might not be as upset. But the corporation has a reputation for paying its employees under the poverty level, an average of $8.81 per hour, and opposes any union structure.
Workers in 28 stores across 12 states went on strike, and a probe by the National Labor Relations Board (NLRB) is siding with the company’s labor force. Wal-Mart may have to rehire its fired workers because the company “unlawfully threatened employees with reprisal if they engaged in strikes and protests on November 22, 2012” and at other times. NLRB can also force Wal-Mart to tell workers of their rights to unionize.
Things are so bad at Wal-Mart that CEO Mike Duke quit this morning before tomorrow’s shareholders meeting.
Some Wal-Mart facts:
- Wal-Mart employs more people than any other company in the United States outside of the federal government.
- The majority of its employees with children live below the poverty line, and the children qualify for school free lunches.
- One-third of the employees are part-time, limited to less than 28 hours per week and thus ineligible for benefits such as health care.
- Employees make 25 percent less after two years at the job than their unionized counterparts working for other companies.
- Employees take home on average under $250 per week.
- Last year, only 18 percent of hourly workers received any pay raise at all.
- When the United Food and Commercial Workers tried to organize workers across the country, labor experts were brought in for “coaching sessions” (aka intimidation sessions) with personnel who support unionization. Employees complained that these were intimidation sessions.
- Full-time employees are eligible for benefits, but the employees are required to pay 35 percent of the health insurance package.
- Not one in 50 workers has amassed as much as $50,000 through the stock-ownership pension plan although Wal-Mart matches 15 percent of the first $1,800 in stocks purchased. (Voting power for these stocks remains with Wal-Mart management.)
- Over 85 percent of its goods are made outside the U.S. and often in sweatshops.
- Musicians are frequently forced to create “sanitized” versions of their albums specifically for Wal-Mart.
- Wal-Mart has forced many U.S. manufacturers out of business.
- The company has been the primary distributor of many goods attracting controversy, including Kathie Lee Gifford’s clothing line, Disney’s Haitian-made pajamas, child-produced clothing from Bangladesh, and sweatshop-produced toys and sports gear from Asia.
In the U.S., Wal-Mart makes over $13,000 in pre-tax profits per employee (after paying them), which comes to more than 50 percent of the earnings of a 40-hour-per-week wage earner. At the same time, Wal-Mart costs taxpayers $5,815 per employee for food stamps, welfare, Medicaid, etc. That’s over $1.7 million per year for just one store. Wal-Mart has over 4,000 stores in the U.S.
The six Walton heirs together own as much wealth as 40 percent of the U.S. population. Last year, four members of the Wal-Mart family made a combined $20 billion from their investments. Less than half that would have increased the salary for each Wal-Mart worker by $3 an hour, enough to end the taxpayer contributions for these employees.
When Wal-Mart stores arrive, small businesses close, and employees in other stores have their wages lowered. An example is the experience of supermarket employees in Los Angeles: just the possibility of a Wal-Mart opening there dropped the pay scale markedly for new hires. After public opposition kept Wal-Mart stores from coming into most of L.A., the pay scale went back up.
Thirty years ago, Wal-Mart displayed “Buy America” and “Made in America” signs, but the marketing program was fraudulent. Even then, the corporation was shifting its purchasing to Asia. At the beginning of this year, the company declared that it would put $50 billion into buying domestic goods over the next decade. That’s really 1.5 percent of its expenditure on inventory.
Most of this $50 billion will go into its expansion in groceries. With Wal-Mart taking over the grocery business—25 percent of it at the beginning of the year—other grocers lose business and buy less. The result is no new jobs but lower wages for workers. In the past decade, Wal-Mart’s gross from groceries has increased from 24 percent in 2003 to its current 55 percent, and the company plans to take over more of the grocery share with its Neighborhood Market stores and new supercenters.
Georgia towel maker, 1888 Mills, will provide Wal-Mart with “American-made towels” but will maintain its overseas workforce of 14,000. The U.S. factory will add only 35 jobs at $12-$14 per hour.
Wal-Mart has often been compared to its competitor Costco which offers its employees an average wage of $21.96 an hour, about 40 percent more than Wal-Mart employees make. Wal-Mart’s profits sank the second quarter of the year while Costco saw a 19-percent increase. There’s another company, however, that should be a model for Wal-Mart as it goes into the grocery business.
WinCo, a small privately-held chain of 100 supermarkets in western United States, manages to undercut Wal-Mart prices. And how?
- It cuts out distributors and other middle “men” by buying many goods directly from farms and factories.
- It doesn’t accept credit cards.
- Customers bag their own groceries.
- Stores are organized and minimalist without frills and a tremendous variety of merchandise.
- Employees have decent health care benefits for those who work at least 24 hours a week.
- Some of WinCo’s 400 nonexecutive workers, including cashiers and produce clerks, have pensions worth over $1 million because WinCo puts an amount equal to 20% of employees’ annual salary into a pension plan.
And WinCo is going to Texas, competing with Wal-Mart and offering lower prices.
During the recession, Wal-Mart cut employees hours so deeply that stores could not keep their shelves stocked causing customers to go elsewhere. In the past five years, the U.S. workforce dropped by 120,000 while the company opened 500 new stores. With longer check-outlines, backlogged inventory, and poor customer service, Wal-Mart will move 35,000 part-time workers to full-time and another 35,000 temps, who have to re-apply for their jobs every 180 days, to part-time.
The Affordable Care Act will require new full-time employees to get health insurance after 90 days instead of the usual six months. Workers still have to be employed an average of 30 hours a week for a year to get the benefits; most “associates” at Wal-Mart don’t have the opportunity to work this many hours.
Food for thought as you schedule your shopping this week.