As the hottest shopping day of the retail calendar looms, the world’s largest retailer, Wal-Mart, is embroiled in a battle to defend its image, even its formula for success. A growing number of employees, protesting low wages and benefit cuts, is vowing to walk out on Black Friday.
Wal-Mart charges that outside union agitators with the United Food and Commercial workers union (UFCWU) are making trouble. Both sides have filed grievances with the National labor Relations board (NLRB).
Coming alongside the failure of talks between labor and management at yet another iconic American company, Hostess Brands Inc., Wal-Mart’s travails have put a sharp focus on working conditions following the worst post-Depression recession in the nation’s history, say both labor and business experts.
“Wal-Mart has become the poster child for all the issues surrounding labor right now,” says Scott Testa, a Philadelphia-based business consultant and blogger who has studied Wal-Mart’s business practices extensively. The company has implemented aggressive anti-union measures, he notes, closing a store in Canada rather than negotiate.
The issues at stake are not peripheral, says Mr. Testa, adding that they go to the very soul of Wal-Mart’s business model. The Arkansas-based company, founded a half-century ago by Sam Walton, lives and dies by its ability to cut costs, he says.
Testa notes that Wal-Mart has evolved over the years by dwelling on the fringes of urban areas.
“Many of the municipalities where Wal-Mart has thrived were happy to give the company big open spaces of under-used land, where there was no development,” he says, adding that employees in hard-hit regions have been grateful for the jobs.
But now that the company is expanding into major urban areas such as Los Angeles, Chicago, and Boston, “they are experiencing a kind of worker pushback that they have largely been able to avoid,” adds Testa.
Wal-Mart is not unionized. But for the first time in the company’s 50-year history, dozens of workers in southern California stores went out on strike on Oct. 4. They were not calling for unions, but for better working conditions and the elimination of retaliatory practices by management. In the past six weeks, the work stoppages have spread around the country.
Wal-Mart is the most robust example of a trend that has been growing for years, says Chris Rhomberg, assistant sociology professor at Fordham University in New York.
Increasingly, employers are refusing to negotiate with unionized workers, he says. “Low wage labor has spread throughout the economy, and income inequality has grown dramatically in the US,” he says via e-mail.
The real issue, he suggests, is what model of economic growth we should have in America.
“Should we support the low-wage, low-road model practiced by Wal-Mart, or can we promote higher wages and purchasing power to help drive our economy?” asks Professor Rhomberg, adding that the Wal-Mart strikers “have helped put that question on the public agenda.”
Wal-Mart disputes what it calls an unfair depiction of its workers' satisfaction.
“Many of our associates have urged us to do something about the UFCW's latest round of publicity stunts,” says Wal-Mart spokesman Kory Lundberg, maintaining that the vast majority of workers are satisfied. “They don't think it's right that a few associates that are being coerced by the UFCW are being portrayed by the media as representative of what it's like to work at Walmart,” he adds via e-mail.
Mr. Lundberg maintains the company has data that reflect worker satisfaction and retention.
He points to 250,000 associates that have worked for the company for more than 10 years as well as 165,000 hourly associates who were promoted last year. This is out of an overall Wal-Mart work force of some 1.3 million.
Wal-Mart’s aggressive anti-union stance is not the only force working to suppress higher wages and benefits for workers, points out Don Schroeder, a labor attorney with Mintz Levin in Boston. Civic realities are also bearing down on cities all over the nation. As the recent rollback of government workers’ collective bargaining rights in Wisconsin demonstrates, many small cities and towns are facing fiscal crises.
“Many of these are headed towards insolvency as they face unfunded pension liabilities,” he says, adding that the pressures to renegotiate contracts with workers both inside and outside public services will affect the abilities of unions to make demands.
While the Wal-Mart workers are carefully avoiding demands to unionize, they are taking the fight to the court of public opinion, he notes.
“This is a very strong stand,” he says of the Wal-Mart workers, adding, “this is just the beginning of a long struggle.”