Interesting Times

Everyone knows that Chinese curse, “May you live in interesting times.” Reading all the news about WalMart lately has to make one believe that executives at the World’s Largest Reetailer are wishing that these times were a lot less interesting for them.

The biggest current worry for them must the push for Fair Share Health Care going on in thirty states, including my own Pennsylvania. Not only is that project amazingly coordinated, it also benefits from perfect framing. Whoever thought of “fair share” should be given a Lakoff Lifetime Acheivement Award. Emphasizing how unfair WalMart’s business model is key to getting Americans to stop buying into what Thomas Nephew calls the retail giant’s Freeloading as Business Model philosophy.

One WalMart’s weapons in its war against workers is the company’s mythology. We all know the story. It’s the classic “make more money than you spend and do it on the back of your workers” theory of getting rich but somehow, thanks in large part to our tendency to worship wealth, we’ve come to believe that Walton was some kind of visionary. That isn’t to say that he didn’t latch on to some new ideas:

Walton’s management style was popular with employees and he founded some of the basic concepts of management that are still in use today. After taking the company public in 1970, Walton introduced his “profit sharing plan”. The profit sharing plan was a plan for Wal-Mart employees to improve their income dependent on the profitability of the store. Sam Walton believed that “individuals don’t win, teams do”. Employees at Wal-Mart stores were offered stock options and store discounts. These benefits are commonplace today, but Walton was among the first to implement them. Walton believed that a happy employee meant happy customers and more sales. Walton believed that by giving employees a part of the company and making their success dependent on the company’s success, they would care about the company.

From Walton’s own mouth during his Medal of Freedom acceptance speech in 1992:

“We’re all working together; that’s the secret. And we’ll lower the cost of living for everyone, not just in America, but we’ll give the world an opportunity to see what it’s like to save and have a better lifestyle, a better life for all. We’re proud of what we’ve accomplished ; we’ve just begun.” (The Wal-Mart Story)

What he meant, of course, was not the cost of living, but the standard of living. And when he said he wanted “happy employees,” he meant employees terrified to lose their job. From the Black Commentator:

Young Sam built his first stores in what he considered the “magic circle” centered in Arkansas, Oklahoma and Missouri, according to University of California at Santa Barbara professor Nelson Lichtenstein. Walton exploited the pools of “surplus labor” that resulted from corporate agricultural consolidation and the ravages of the Thirties dustbowl. Desperate to keep their land, surviving small farmers – and their wives – turned to wage labor.

“An early employee remembers Walton could praise employees,” Lichtenstein recounted, “but always reminded them that they could be replaced.” From the establishment of Walton’s first store in 1945, employment insecurity was central to his business philosophy.

That’s why this, reportedly from Lee Scott’s blog, was no surprise:

In his response to the store manager who asked about retiree health benefits, Mr. Scott wrote: “Quite honestly, this environment isn’t for everyone. There are people who would say, ‘I’m sorry, but you should take the risk and take billions of dollars out of earnings and put this in retiree health benefits and let’s see what happens to the company.’ If you feel that way, then you as a manager should look for a company where you can do those kinds of things.”

Mona Williams, a Wal-Mart spokeswoman, said Mr. Scott responded so sharply because of the manager’s sarcastic tone. The question, she said, indicated the manager failed to understand how competitive retailing is and would not be able to convey that to his subordinates.

Well now it isn’t only the frightened subordinates at WalMart who will need to understand how competitive the business of buying slave-made goods from China for resale to minimum wage employees in the United States is. It’s every American, because every American is paying to subsidize WalMart’s efforts. And to add to WalMart’s problems, we really do understand it. That’s why so many of us would rather shop elsewhere, like Target, which attracts the wealthier shopper because in Target it’s possible to imagine that we aren’t shopping in a discount store – we’re just incredibly good at finding bargains. Or we go to CostCo, where we can imagine that workers are at least paid a living wage for providing all that stuff from China. That leaves WalMart struggling to upscale their product line and remodel their stores, hoping to attract some of the people who are surviving America’s painful and polarizing transition to a service economy. But they still won’t treat their workers fairly. There’s that word again.

If we want to beat WalMart, we can’t let up on the idea that they are, at the end of the day, unfair. They can’t afford the money for health care for their employees, but they can afford millions for lobbyists and millions in salary for the top executives. They get tax breaks to set up business and then send their employees to suck at the public teat. These are inconsistencies that are easy for even casual observers to notice and which resonate with the American ideal of justice and class.

So call the WalMart philosophy what you want to. I think of it as the Company Store model. Thomas calls it freeloading. Either way, it’s about to implode because although Americans will put up with a lot from our Captains of Industry, or in this case of Retail, but when we know it’s happening, we won’t put up with footing the bill so that billionaires can get richer.

One Response to “Interesting Times”

  1. Globalization of the economy will have a bigger impact on workers than the Wal-Martization of the economy. Wages in the U.S. will be under pressure no matter what . Wal-Mart just makes for a convenient target.

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