Destroying Communities, Abusing Workers: What's (Still) The Matter With Wal-Mart
This past week marked the 50th anniversary of the opening of the first Wal-Mart store. From Rogers, Arkansas, Wal-Mart has sprawled across the globe, opening some 10,000 stores and becoming the world's second-largest corporation—amassing a fortune for the Walton family, and gutting the American middle class.
With all their money and power, it might seem that Wal-Mart's hold on the country is unshakeable. Yet the retail giant is facing a bit of a perfect storm in terms of its reputation right now. Revelations of horrific abuses at one of its U.S. suppliers and of bribes the company paid in Mexico, as well as communities fighting fiercely against Wal-Marts in their neighborhoods, are pushing the big-box giant into damage control mode.
Workers at C.J.'s Seafood, a Wal-Mart vendor in Louisiana, have made headlines with a strike against the company—and they're taking their complaints straight to the top, asking Wal-Mart officials and board members to meet with them to discuss their conditions. They're guestworkers from Mexico, brought in on H-2B visas to work temporarily in the U.S. preparing crawfish for distribution in Wal-Mart stores.
“Some of us work from 2:00 in the morning til 5:00 or 6:00 in the evening and get no paid overtime,” Marta Uvalle, one of the C.J.'s workers, told AlterNet. “Pressures to work got so bad that the supervisors locked the doors so that we couldn't take breaks. When the doors weren't locked we could only take five minute breaks. We were also threatened by the supervisor that if we took too long of a bathroom break or lunch break he would beat us.”
One of the workers finally called 911 for help—which only led to more threats against the workers and their families back in Mexico. Finally, the workers found the National Guestworker Alliance, and organized a strike. Victor Ramos, another of the C.J.'s workers, told AlterNet that they reached out to other guestworkers in other plants and found similar conditions.
“Wal-Mart claims that it has standards for suppliers, so theoretically all they need to do is be enforcing those standards," Saket Soni, an organizer with the National Guestworker Alliance, told AlterNet. But Wal-Mart has refused to meet with the workers, and claimed to have opened an investigation but found nothing.
“If Wal-Mart can't guarantee safety and meet the complaints of eight workers in a small town in Louisiana, how is it going to guarantee the standards of literally hundreds of thousands of workers across the country?” Soni asked. “What the CJ's workers have revealed is the tip of the iceberg.”
Cracks in the Big Box Facade
In Los Angeles, last Saturday marked a different kind of history for the world's largest retailer: around 10,000 people marched in Chinatown in what may have been the largest protest against Wal-Mart in the country.
“We had a huge contingent of residents from Chinatown, supporters of small businesses, as well as workers from all along the supply chain; workers at Wal-Mart, workers at warehouses, truck drivers and some of the suppliers as well,” Aiha Nguyen, a senior researcher and policy analyst at LAANE, an organization that fights for economic justice in Los Angeles, told AlterNet. “It was a very festive environment, we had performances, and it culminated in speeches and more concerts at the Chinatown gates. As we marched down, small businesses came out with signs showing their support for the action.”
The fight against Wal-Mart drew musicians Tom Morello and Steve Earle to join the action, and united local workers and small business owners. Wal-Mart's low wages and low prices are a deadly combination for local businesses and workers; family businesses can't compete with the retailing behemoth's prices, and workers are squeezed as businesses try to cut wages in order to push their own costs down.
“Chinatown is a historic neighborhood, it's culturally significant, and the majority of the businesses there are family-owned businesses,” Nguyen explained. “This was exactly the type of neighborhood that so many people had talked about being destroyed by Wal-Mart. People started coming out of the woodwork from Chinatown, saying 'We want to protect the character of this neighborhood.'”
LAANE and other groups that organized against Wal-Mart managed to get an interim control ordinance through the City Council that would have created a temporary stay against new development—but the day before that vote, permits that Wal-Mart needed to move forward were pushed through by the mayor, including one for early construction.
L.A.'s Chinatown might be a unique neighborhood, but the story is the same around the country: communities, particularly in urban areas, fighting to keep their towns free of the destruction that Wal-Mart leaves in its wake. Wal-Mart's business model depends on buying in bulk and selling for less, with its sheer size allowing it to set the prices it pays suppliers, and often with tax breaks from local communities that it gets by promising to create jobs. Those jobs, though, are low-wage, no-benefit, no-security jobs that often leave workers dependent on government benefits to survive.
If all that weren't enough, a bribery scandal hit Wal-Mart in April. A front-page New York Times story found that the company had been paying bribes—more than $24 million in bribes--to Mexican officials to make it easier to open new stores. Through the bribes, Wal-Mart became Mexico's largest private employer, with more than a thousand stores.
Wal-Mart's reputation took a hit as well in recent years with a massive class-action lawsuit, Dukes v. Wal-Mart, that alleged pervasive discrimination against the women that work at retail stores and in the company's executive offices. Although Wal-Mart won the case in the Supreme Court, where the justices ruled that it had not been properly certified as a class action suit, Liza Featherstone (author of a book on the case, Selling Women Short: The Landmark Battle for Workers’ Rights at Wal-Mart) noted that it could be a launching point for more consumer and worker activism against the company.
“Something I think is really powerful about the sex discrimination lawsuit is the extent to which people are disillusioned when they realize that what they meant by Christianity is not what Wal-Mart meant,” Featherstone told Mother Jones magazine. “Many of the plaintiffs in this lawsuit are Christian women. They thought that being Christian meant treating people decently. So when Wal-Mart discriminated against them, didn’t give them promotions that they were promised, didn’t pay them enough to hire a babysitter for their kids, they were really disappointed.”
In the fifty years since Wal-Mart was born, America has shifted from a country of middle-class industrial workers to a nation of service workers; inequality is growing, the religious right has an outsized influence on politics, and a few big corporations have even more influence. To understand how we got here, we have to understand Wal-Mart.
“The economic vision we call neoliberalism, Thatcherism, Reaganomics, or free-market fundamentalism could also claim the title of Wal-Martism,” Bethany Moreton, historian and author of the book To Serve God and Wal-Mart, pointed out on the website Rorotoko. In other words: the decline of what is commonly called Fordism, a manufacturing economy where employers understand that their workers have to be able to afford their products, gave rise to another corporate ethos—that of Wal-Mart.
Wal-Mart arose in the South, Moreton pointed out, opening its signature big-box stores in places where there were few options for shopping – or none at all – providing cheap consumer goods to people who didn't have access to them. Wal-Mart prides itself on the fact that it improved the quality of life of those customers. And as it grew, it tapped into a workforce that also had not previously been exploited: middle-aged white women, often evangelical Christians, workers more likely to turn to God with a problem than to a labor union organizer.
“They're cheap and highly skilled, if the skill you want is service and patience and ability to deal with people,” Moreton told AlterNet. And they take pride in their skills—Wal-Mart spread not just a style of retail, but a style of work and a particular work ethic behind it, one that was deeply tied to Christianity. “In a service economy you really transform the wage relationship because people understand themselves to be working for the client, the customer who is a real person – one who never wanders into the Detroit auto factory,” Moreton continued.
As Wal-Mart spread and its workforce grew, and as American manufacturing declined, men found their way into those low-wage service jobs as well. “The real story in labor is not 'Oh wow, women get to be lawyers,' but that men get to be casualized clerks,” Moreton noted. And while recent revelations of massive, pervasive discrimination against women at the company showed that the men tended to make more money and get more promotions, their jobs were still paid far less than the unionized middle class jobs that we've lost.
Meanwhile, wherever Wal-Mart went, local businesses died. Stacy Mitchell at Other Words noted that in the years from 1992 to 2007, across the country, over 60,000 independent retailers were shuttered. “As communities lost their local retailers,” she further points out, “there was less demand for services like accounting and graphic design, less advertising revenue for local media outlets, and fewer accounts for local banks.”
But perhaps the biggest shift that Wal-Mart helped bring about was the shift from manufacturer to retailer as the central focus of the economy. Wal-Mart doesn't make anything. When Wal-Mart surpassed Exxon-Mobil to become the world's largest company, Moreton noted, it was the first service provider to do so.
Wal-Mart sits atop a supply chain that extends around the world, yet it owns nothing but the stores where it sells its products. Historian Nelson Lichtenstein, in an essay in the book Labor Rising, compares the supply chain to “the iron shackles subordinating slave to master.”
“Wal-Mart is … not simply a huge retailer, but increasingly a manufacturing giant in all but name. . . To make it all work, the supply firms and the discount retailers have to be functionally linked, even if they retain a separate legal and administrative existence,” Lichtenstein wrote. This allows Wal-Mart to deny that it has any responsibility for the conditions in the factories that produce its goods, even while demanding the ultra-low prices that force manufacturers to push wages ever lower. Vendors that sell to Wal-Mart, Lichtenstein noted, maintain offices in Bentonville, Arkansas, to be closer to the hub of Wal-Mart's operations.
And this happens in the U.S. as well as in China: in a recent report, the think tank Demos pointed out that a Wal-Mart spokesperson had blatantly admitted “one of our big objectives was to put the heat on American manufacturers to lower prices.”
As it pushes wages downward, of course, Wal-Mart has made the Walton family, the children and widow of founder Sam Walton, into some of the world's richest people. The six remaining family members, Demos pointed out, have a fortune equal to the combined wealth of the bottom 30 percent of the American population – 100 million people. And they spend that fortune, in part, influencing our politics, dropping $7.8 million on lobbying in 2011 alone. Trade policy has been a focus of that lobbying; Wal-Mart was a force behind the push for NAFTA in the '90s, behind pushes for corporate tax cuts and against paid sick days, and many more pro-corporate, anti-worker decisions that have shaped the conditions under which American workers labor today.
The family and various foundations directly or indirectly linked to Wal-Mart give away millions in charitable donations every year as well, but often those donations are used to build goodwill in communities like L.A.'s Chinatown, where they want to build stores or repair their reputation. In a 2006 paper, then-doctoral student Susan Clark Muntean pointed out that the Sam Walton School of Business at the University of Arkansas, funded by the family, provides a pool of potential managers already loyal to the company.
Their political donations lean Republican, but like any big company these days, they spread out their cash. Before she was the Senator from New York, Hillary Clinton, as the First Lady of Arkansas, spent six years on the board of Wal-Mart. (Sam Walton reportedly called her “My little lady.”) This year, though, they're all in for Romney—Peter Dreier and Donald Cohen, in Dissent, noted that three members of the family have given over $400,000 to the pro-Romney SuperPAC Restore Our Future. In the past decade, they wrote, Wal-Mart and the Waltons have given more than $11 million to national political candidates, PACs and parties.
And of course, they're funding think tanks too—the Cato Institute and the Heritage Foundation, and of course ALEC, the American Legislative Exchange Council. “Wal-Mart may have left ALEC over the 'Stand Your Ground' controversy,” Dreier and Cohen write, “but company executive Janet Scott was the co-chair of an ALEC committee that encouraged state legislators to enact the very same controversial pro-gun laws. This shouldn’t be surprising. Wal-Mart is the country’s biggest seller of shotguns and ammunition.”
Brave New Economy?
Growing anger at the company often focuses on the fact that while championing free enterprise and conservative small-government values, Wal-Mart leaves its employees dependent on the government for its health care and even on food stamps and other welfare programs.
Aiha Nguyen of LAANE pointed out that putting a bunch of employees on public benefits in California, a state that's already struggling with a budget crisis, will hurt everyone. “We have a worker who currently works at the Crenshaw Wal-Mart, she says she has three forms of ID: her license, her Wal-Mart ID and her benefit card, that's what she carries around.”
Nationally, the company costs taxpayers an estimated $1 billion a year in public aid, according to a report by Wal-Mart Free NYC. In their home state of Arkansas, nearly 4,000 employees were on public benefits in 2005.
All of this anger is leading to some victories against Wal-Mart. Nguyen told AlterNet that in Boston, Wal-Mart cancelled plans for two stores rather than meet with community activists. And at the company's June 1 shareholder meeting, Dreier and Cohen reported, several large public pension funds challenged the re-election of board members, including the CEO, Lee Scott, and Rob Walton, the Chairman of the Board. Because the Waltons control over half the company's stock, executives weren't actually removed, but, Dreier and Cohen noted, “[T]hey added momentum to the growing political and public opinion backlash against the giant corporation.
“While the Ford Motor Co. once profited by creating a workforce that could afford to buy its cars, today Walmart profits by ensuring that Americans cannot afford to shop anywhere else,” Stacy Mitchell wrote. But, Nguyen pointed out, Wal-Mart's declining profits at its supercenters prove the problem with this model: eventually, wages are so low that people can't even afford to shop at Wal-Mart. (Barbara Ehrenreich made this point in her classic book, Nickel & Dimed.) The challenge for Americans now is to find a new economy beyond Wal-Martism.
The service economy has raised fundamental questions about what being a worker means, about the nature of work itself. “The inability to revalue this service labor reverberates all throughout the economy,” Bethany Moreton said. It's important to remember that manufacturing jobs weren't good in themselves; they were good because a labor movement fought for decades to make them well-paid, stable jobs that came with benefits.
Wal-Mart claims to value service work, but these claims and its use of “family values” language fall apart when one looks at the company's policies. Nguyen noted that the small businesses in L.A.'s Chinatown are family run and actually allow families to support themselves, and the arrival of Wal-Mart would threaten, not help, those families. “We have to fight this idea that we just need jobs. If it's a job that nobody can support themselves on, someone's going to have to make up for that.”
“We're going to continue to run actions and pressure the Wal-Mart board of directors until they sit down with us,” Ana Diaz, one of the C.J.'s Seafood workers, said. From Louisiana to Los Angeles, the fight against Wal-Mart and what it stands for goes on. Forcing change at the world's biggest retailer, the activists all point out, would also reverberate across the global economy.