The Dark Heart of Wal-Mart

From the Houston Chronicle last year, an article about keeping employee tenure short at Wal-Mart. Lots of part-time employees and a high employee turnover rate of 50% a year helps keep wages and benefits down at Wal-Mart. This is the primary basis of their Always low prices. Always business model. Other retailers must do the same to compete with the giant. Wal-Mart suppliers keep costs down by shipping jobs overseas.

Wal-Mart is not alone in struggling with these costs. But its proposed solutions reveal the company's dark heart. It's extracting the cost from those who can least afford it.

Business doesn't look back. Wal-Mart led the charge from the town square to the edge of town. It trained us to believe that the cost of our purchases was all that mattered. Somewhere along the road, the company started believing that, too.

It taught us to expect low prices — always. Chambers' memo shows a company that believes in the low price at any cost.

Wal-Mart makes people poor.

During the last decade, dependence on the food stamp program nationwide increased by 8 percent, while in counties with Wal-Mart stores the increase was almost twice as large at 15.3 percent, according to the study. Although Wal-Mart employs many people living in its communities, for most, the hours worked and the wages paid do not help these families transition out of poverty, the study said.

This article from The Globalist, a syndication of the San Jose Mercury News and the Boston Globe compares and contrasts Wal-Mart with General Motors.

No company of Wal-Mart's size and influence can long remain a truly private enterprise. By its very existence and competitive success, it rezones our cities, determines the real minimum wage, channels capital throughout the world — and conducts a kind of international diplomacy with a score of nations.

In short, the company's management "legislates" for the rest of us key components of U.S. social and industrial policy.

Bus Tour Stories

WakeUpWalmart started a bus tour of the USA last Tuesday. It's purpose is to educate citizens about corporate responsibility, living wages and a fair workplace. Yeah, yeah, I know that Wakeupwalmart is funded by the evil unions and it's not fair for workers to band together to fight multi-billion dollar corporations. Afterall, Wal-Mart has an 'open door policy'. And, that the bus tour is more about politics than people (Wal-Mart talking point). It never ceases to amaze me that Wal-Mart, the largest, richest company on earth, whines about being picked on. But be that as it may, here are a couple of stories concerning the bus tour.

Long, Hot Summer for Wal-Mart by Liza Featherstone (BTW, she points to a link to a story at Fortune Magazine concerning Wal-Mart and goal to clean up its environmental record.

The Bus tour's Baltimore stop.

Wal-Mart's paid PR lackies at Edelman's 'Paidcritics' are very upset about all this political nonsense. Afterall, it's Democrat politicians showing up at the bus tour stops and not Republicans.

Wal-Mart has a lot more money invested in Republican senators and congressmen including our own John Sweeney and John McHugh than they do in Democrat congressmen and women. They depend on Republicans to prevent a minimum wage hike and to promote the abolishment of the Estate Tax.

Percentage of Wal-Mart PAC money to Republicans in 2000 was 85%, 2002 was 78%, 2004 was 78% and thus far in 2006 is 70% (they need to start buying some Democrats now that the winds appear to be shifting).

walmartdailyshow

The Daily Show's Lewis Black on the Wal-Mart Movie

Wal-Mart, Salmon and Environmental Defense

This post (on The Writing On the Wal blog), concerning Environmental Defense opening an office in Bentonville, AR, immediately caught my attention today.

Wal-Mart has started a campaign to be more environmentally friendly because it saves the company money in the long run and gives them badly needed PR. You can read all about the new 'green' Wal-Mart here.

In Wal-Mart’s case, Environmental Defense was one of several groups Wal-Mart contacted in early 2005 to help formulate a green policy unveiled by Scott last October. Under that plan, Wal-Mart set goals of using 100 percent renewable energy, creating zero waste and selling more products that sustain the environment.

Environmental Defense is the group that got MacDonald's to stop using styrofoam containers in packaging their food. So they can be an effective organization. They often use economic arguments to convince companies that it is cost-effective to do what is right concerning the environment. However, it's easy for Wal-Mart to require that suppliers not let their truck engines idle while making deliveries or to change store lighting to save on energy costs. But other recommended changes may require Wal-Mart to do things that are against the Wal-Mart 'Always low prices, always' culture.

Wal-Mart is one of the biggest sellers of farmed seafood in the world, but they have been criticized (a chapter from Charles Fishmans book, The Wal-Mart Effect) for the effects on the environment of these fish farms, especially salmon farms in Chile. [Note: careful about reading this article, you may never eat farmed salmon again.] Environmental Defense on the other hand, has an ongoing campaign to change the fish farming industry. Environmenal Defense goes so far as to claim that eating farmed salmon could be harmful to your health. Several months ago, Wal-Mart vowed to only sell fish obtained from environmentally sound sources.

The world's largest retailer has pledged that all of its U.S. fresh and frozen fish, excluding farmed fish, will eventually come from fisheries certified as being "sustainable" by the Marine Stewardship Council, meaning that the sea areas they come from are not being over-fished.

So here is a question for Environmental Defense and for Wal-Mart. (1) Is Wal-Mart going to require it's suppliers of farmed salmon to follow the salmon fish farming recommendations of Environmental Defense? (2) Will Wal-Mart allow the fish farmers to raise their prices to cover these changes?

Lee Scott wants the fish farming industry to raise it's standards, but the fish farming industry farms the way it does because Wal-Mart forces them to cut costs.

Part of the reason Wal-Mart can sell a salmon fillet for $4.84 is that, as Leape puts it, "they don't internalize all the costs." Pollution ultimately costs money--to clean up, to prevent, to recover from. But right now those costs aren't in the price of a pound of Chilean salmon. (From the Fishman article)

An MSNBC web poll shows that 61% of respondents don't believe that Wal-Mart will live up to its environmental pledge.

A Couple Wal-Mart Parodies

Thrall-Mart Always low standards, always. Brought to you by 'Cracked'.

WalmartDotGov

Ballston, NY Rejects Wal-Mart

From the Albany Times Union:

The Town Council said "game over" Tuesday to Wal-Mart and its plans to build a super center on Route 50.
By a unanimous vote, the council rejected Wal-Mart's application, resulting in an eruption of cheers and standing ovations from residents.

Before the vote, Albany attorney Mary Beth Slevin, who represented Wal-Mart's proposal, said the retail giant looked forward to working with the Town Council. She was unavailable for comment after the vote.

Councilwoman Mary Beth Hynes, meanwhile, had challenged fellow board members to take a position on the proposed Wal-Mart.

"I urge my fellow board members to join me tonight in sending an unambiguous message that, as far as the town of Ballston is concerned, the door will be closed to Wal-Mart and big-box development once and for all," she said in a prepared statement.

Wal-Mart Discussion on Local TV

Mountain Lake PBS will air a panel discussion on the local Wal-Mart issue this Friday evening at 8:30 PM. It will be an episode of Mountain Lake Journal and the panel will consist of Brian Mann (NCPR), Jack LaDuke (WCAX-TV) and Peter Crowley (Adirondack Daily Enterprise). I believe the episode will also be shown on Saturday at 7 PM.

Wal-Mart Job or Manufacturing Job?

1954: Huffy opens the Celina, Ohio, plant. At its peak, the plant produced 1 million bikes a year.

1998: Pressure from Wal-Mart forces Huffy to close the bicycle plant in Celina, putting 1,100 employees out of work. The jobs were moved to a nonunion factory in Missouri.

1999: Huffy, pressured to continue lowering costs, closes its last two U.S. bicycle plants—in Farmington, Mo., and Southaven, Miss. The move eliminates 600 jobs. The company contracts with fac-tories in Mexico and China.

2001: Huffy ends its manufacturing contracts with Mexico and begins relying almost entirely onfactories in China, where Chinese workers earn only 33 cents an hour and frequently work sevendays a week.

Wal-Mart creates good jobs? I bet Ruth Schumacher and her husband would disagree. Now Mr. and Mrs. Schumacher are dependent on Wal-Mart's everyday low prices.

Laid-off factory worker Ruth Schumacher rises before the sun most days and earns $7 per hour tending the breakfast bar at a Holiday Inn in Celina, Ohio. She would like to set out a tip jar for the occasional dollar, but management forbids it.

After work, she occasionally goes next door to shop at Wal-Mart or at Kmart one town away.

“They’ve got real good bargains,” she said of Wal-Mart, echoing a generation of thrifty shoppers.

Never mind that Wal-Mart is a major reason Schumacher no longer has a $12-per-hour job at Huffy Corp.’s bicycle plant. Five years ago, Wal-Mart pressured Huffy to lower the cost of its bikes, so Huffy closed its Celina plant. Schumacher’s job and the job her husband held at Huffy eventually ended up in China.

Wal-Mart's response?

“We are in business to take care of the customer,” spokeswoman Melissa Berryhill said. “We are going to do what we need to do to deliver everyday low prices to our customers, and we are going to go where we have to go in order to do that.”

So to get low prices Wal-Mart ships good jobs overseas thereby creating more poor people that need their everyday low prices. Excellent strategy.

Maybe if we all get minimum wage jobs, Wal-Mart will give their stuff away.

Questions Wal-Mart's Effect on the Economy

Speaking from the heartland, Etson Hougland, suggests that Wal-Mart should be under greater scrutiny:

Wal-Mart not only dictates the price, it also dictates the terms, conditions, source and in some cases the material used in the products it purchases. It has been the leading exponent of forcing American firms to move production of products to a Communist “slave labor” state – China. It is using its economic power to orchestrate the destruction of American industry. Its economic power is used to destroy local independent merchants in virtually every community in which it operates.

In conjunction with this power, Wal-Mart provides substandard pay, medical and retirement benefits to its hundreds of thousands of employees while denying them the option of obtaining union representation. The Bush administration has taken countless legal steps designed to weaken the power of labor and destroy any vestige of legal representation for the working people of this nation. This policy combined with a suicidal unfair trade policy has allowed multinational corporations to exploit slave labor in order to undermine our nation’s entire economic and benefits system.

He goes on to point out that China deliberately pegs it's currency at a very low value resulting in products being imported into the USA 30-40% below their actual value.

I'm no fan of GW Bush, but I think others deserve more credit for the current state of labor (Reagan). But Bush hasn't done a whole lot to get the Chinese to more fairly adjust the value of their currency against the US dollar either.

He does make the point that we need more insight into the effects of Wal-Mart on our economy. Charles Fishman (The Wal-Mart Effect) did not get much help from Wal-Mart when writing his book. Wal-Mart Corporation is famously secretive. Fishman couldn't even get Wal-Mart suppliers to comment on their relationships with Wal-Mart.

Wal-Mart in China Creates a Union

Canadian Wal-Mart workers unionized in Jonquiere,Quebec. Wal-Mart promptly closed the store. Now Chinese Wal-Mart workers have formed a union.

The Wal-Mart workers were reported to have set up the union in Jinjiang, Quanzhou, in Fujian province.

Will Wal-Mart close that store? I doubt it. Wal-Mart can't afford to alienate China.

Opposing Opinions: Facts vs Fiction

There are two 'guest editorials' printed in todays Adirondack Daily Enterprise (UPDATE: Links have now been added). Both are well written, but couldn't be more different. They are not different because they disagree on Wal-Mart locating to Saranac Lake.

One editorial is by Mr. Lee Keet, replying to a guest editorial written by Susan Seaward earlier in the week. Unlike Ms. Seaward, Mr. Keet uses facts and figures from specific sources to explain why he thinks Wal-Mart may not be in the best interest of Saranac Lake and the surrounding communities. Mr. Keet ends his editorial asking area residents to work together to bring a retail business that will be consistent with the character of our community.

The other editorial is by Mr. Donald G. Perryman. He points out that generations (natives) of 'adirondackers' have taken care of our environment and resources, not the 'tree huggers', 'preservationists' and 'do-gooders' (transplants). So we should trust their judgement in "managing and planning regarding the park". "The larger villages provide a kind of oasis in the wilderness where residents can acquire the goods and services that fulfil their needs". So it makes sense that any retailer that wants to locate here should be welcomed with open arms. If the experts say they need a 121,000 sq ft facility, that should be good enough for us. They are the experts you see. Welcoming Wal-Mart is an opportunity to 'revitalize' the Village of Saranac Lake. The local merchants will benefit from this. Mr. Perryman tells us what he 'thinks' will happen.

Do you see the difference between the two editorials? Fact vs wishes (maybe even fiction), certainly facts vs 'what I think' or, in the case of Ms. Seaward, what Wal-Mart tells me.

This is the basis of the debate about Wal-Mart locating to Saranac Lake. At least 60% of village residents are concerned about the possible effects of a large Wal-Mart on our community. They have read articles, reports etc that justifies their concerns.

On the other side, Wal-Mart supporters want a cheap, one-stop place to shop period. They don't really care about the possible effects of a super retailer on our community. But they can't just come out and say that. So they come up with 'soundbites' based on 'what they think', truthiness or wishful thinking.

Let's see some facts, independent of Wal-Mart, that show how Wal-Mart will be good for Saranac Lake. That's what 3/5's of the Village Board want also.

SAGA Opens Informational Storefront

Announcement from SAGA.

Store Front Opens
On Tuesday July 25, 2006, SAGA unveiled its new downtown Saranac Lake storefront located at 29 Broadway. SAGA's intent is to use the location, window space and a small portion of the interior as an "information center" promoting appropriate retail development, continuing efforts to establish a size cap for retail spaces, and furthering its education campaign as to the impacts of inappropriately sized big-box retailers in the Saranac Lake area.

Information will be posted on the storefront window and there will be an effort to staff the space on a limited basis, depending on available volunteer help. It should be noted that SAGA is paying rent for this space and that it is supported by local dollars - not some multi-billion dollar mega-corporation from someplace like Arkansas.

There is an effort on the part of Wal-Mart and its supporters to influence the community with inaccurate, misleading, and deceiving "information." Wal-Mart has ramped up its PR campaign, perpetuating myths that are not grounded in any reality. They have found some local folks to believe them and even repeat them. The storefront will be focused on giving accurate information about the impacts (positive and negative) of different sized retailers on the community of Saranac Lake.

Although SAGA is not specifically opposed to Wal-Mart, we are very critical of its oversized proposal and the damaging effect it will have on Saranac Lake. We make it no secret that if they size a store appropriately, we will not oppose Wal-Mart. However, Wal-Mart and representatives of the local Wal-Mart support group, CARD, have shown no interest in discussing a reasonably sized store - they make it clear that they only support a 121,000-sq-ft Wal-Mart Super Center. We have seen no desire on their part to compromise.

Residents concerned about out-of-scale retail development in Saranac Lake are willing to put their time/money where their mouth is. Homemade signs, informational storefronts, organizations, community store development etc., they don't need the support of the largest corporation on earth to get their message out there.

Fair Labor Practices - USA vs Canada

I have mixed feelings about the need for Unions, however, I also understand why and how they evolved in the USA. It was because of companies like Wal-Mart. Employees shouldn't have to 'organize', they should be treated with respect by employers.

Unions and Wal-Mart in the USA

There’s little secret to Wal-Mart’s success. The company will simply do whatever it takes to keep workers from organizing. “Staying union free is a full-time commitment,” reads one of the company’s training manuals. “[F]rom the Chairperson of the ‘Board’ down to the front-line manager … [t]he entire management staff should fully comprehend and appreciate exactly what is expected of their individual efforts to meet the union free objective.”

Read more here.

Unions and Wal-Mart in Canada

The Canadian legal system does not play Wal-Mart's game, if the company now thought they would. In two recent court decisions, the retail giant has been mercilessly exposed for its repressive and anti-social behaviour. Workers that were fired in Jonquière, Quebec, for their union activities, have to be compensated. In a Saskatchewan court, Wal-Mart's efforts to disqualify the Labour Relations Board from dealing with unionisation issues in Wal-Mart ran on ground.

More here.

Wal-Mart and Small Town Voter Influence

Wal-Mart has been fined for "failure to register with the Monroe city clerk before a 2005 referendum on so-called big box stores, in violation of state campaign finance law." Also, here.

The civil forfeiture action alleged that Wal-Mart spent money on ads, a mass mailing and a public relations company to encourage "yes" votes on the referendum.

The question on the non-binding referendum was "Are you in favor of the City of Monroe allowing the construction of a very large retail supercenter store?" Wal-Mart was not mentioned.

Unfortunately, the fine was a miniscule $753. Monroe, WI voters were smart enough to ignore the illegal Wal-Mart campaign.

Chicago Approves Living Wage Ordinance

The City of Chicago passed an ordinance, 35-14, which requires mega-retailers with sales over one billion dollars and stores with greater than 90,000 sq ft to pay workers at least $10/hr plus $3 in benefits.

"It's trying to get the largest companies in America to pay decent wages," said Alderman Toni Preckwinkle.

HERE.

Saranac Lake should do the same.

Nowata, Oklahoma and Wal-Mart

A small town of 4,000 people who were delighted when Wal-Mart opened a store in 1982. Within three years of Wal-Mart's opening, 18 existing businesses closed their doors.

But that isn't the bad news. In 1994 Wal-Mart closed the Nowata store to move into a supercenter 25 miles away.

(Shipley) said when Wal-Mart left, the downtown was literally boarded up and the citizens were left without local options for shopping other than driving 25 miles away to the Supercenter.
“The question you need to ask Wal-Mart is ‘How long do you intend to stay?’” said Shipley.

“I think I am up here to show how Wal-Mart devastated Nowata when it left,” she said. “Actually it devastated when it came in. Within 1 1/2 years, half the businesses [of the 18] were closed; within three years they were all closed.”

“I can tell you this, they had no sympathy for our town for the citizens who lived there,” she said.

More Here.

Summary of Local Wal-Mart Issue

Chris Knight, news director of WNBZ radio, gives a summary of where we stand with the local Wal-Mart controversy HERE at North Country Public Radio (Speakers required).

The Wal-Mart Debate: A False Choice Between Prices and Wages

On the left side of this blog is a link to a technical article called "Wrestling With Wal-Mart: Tradeoffs Between Profits, Prices and Wages".

There is now a more readable summary of this paper called The Wal-Mart Debate: A False Choice Between Prices and Wages. You can read it HERE.

The Case for Breaking Up Wal-Mart

The article, by Barry Lynn, published in Harpers Magazine a few weeks ago is not available at AlterNet. Click HERE to read it.

The stakes could not be higher. In systems where oligopolies rule unchecked by the state, competition itself is transformed from a free-for-all into a kind of private-property right, a license to the powerful to fence off entire marketplaces, there to pit supplier against supplier, community against community, and worker against worker, for their own private gain. When oligopolies rule unchecked by the state, what is perverted is the free market itself, and our freedom as individuals within the economy and ultimately within our political system as well.

It's too bad people couldn't understand this concept. But many are too busy consuming to be good citizens.

But the issue before us is not how Wal-Mart grew to scale but how Wal-Mart uses its power today and will use it tomorrow. The problem is that Wal-Mart, like other monopsonists, does not participate in the market so much as use its power to micromanage the market, carefully coordinating the actions of thousands of firms from a position above the market.

How is this a free market when Wal-Mart has such power over it's suppliers and politicians? Oh, but it is a free market you say? Read the article!

Wal-Mart and a growing number of today's dominant firms, by contrast, are programmed to cut cost faster than price, to slow the introduction of new technologies and techniques, to dictate downward the wages and profits of the millions of people and smaller firms who make and grow what they sell, to break down entire lines of production in the name of efficiency. The effects of this change are clear: We see them in the collapsing profit margins of the firms caught in Wal-Mart's system. We see them in the fact that of Wal-Mart's top ten suppliers in 1994, four have sought bankruptcy protection.