Thursday, February 24, 2005

you keep all your money in a big brown bag inside a zoo

Slate Magazine has a very interesting column about my favorite small-town killing retailer, Wal*Mart. Some quotes from "The Wal-Mart Manifesto" for your reading pleasure:
H. Lee Scott Jr., the chief executive officer of Wal-Mart, argued in a speech yesterday in Los Angeles that Wal-Mart is a force for good in the economy.

What's fairly new in Scott's speech (a related ad campaign was launched last month) is Wal-Mart's rising on its hind legs to tell the world that it is good to its employees. I'd thought it was a settled matter that Wal-Mart had achieved its miraculously low prices by squeezing its employees. Not so, said Scott:

Wal-Mart's average wage is around $10 an hour, nearly double the federal minimum wage. The truth is that our wages are competitive with comparable retailers in each of the more than 3,500 communities we serve, with one exception—a handful of urban markets with unionized grocery workers. … Few people realize that about 74 percent of Wal-Mart hourly store associates work full-time, compared to 20 to 40 percent at comparable retailers. This means Wal-Mart spends more broadly on health benefits than do most big retailers, whose part-timers are not offered health insurance. You may not be aware that we are one of the few retail firms that offer health benefits to part-timers. Premiums begin at less than $40 a month for an individual and less than $155 per month for a family.
In the Dec. 16 New York Review of Books, Simon Head, director of the Project on Technology and the Workplace at the Century Foundation, stated, "the average pay of a sales clerk [italics mine] at Wal-Mart was $8.50 an hour, or about $14,000 a year, $1,000 below the government's definition of the poverty level for a family of three." That the current minimum wage of $5.15 per hour leaves families even farther below the poverty line is a depressing topic for another day.
Wal-Marts have traditionally targeted rural areas where unions are weak, so of course the pay would be lousy at comparable retailers nearby. What Scott doesn't mention is that Wal-Mart is now so large—its workforce, Head points out, is "larger than that of GM, Ford, GE, and IBM combined"—that it drives down wages at other retailers, too. As Geoghegan observed to me,
Wal-Mart is the behemoth that forces everyone else's wages down and then says, "Hey, we're no worse than anyone else." They turn everyone else into Wal-Mart and then say, "Are we any worse than the other Wal-Mart wannabees?" Now that everyone has to play their game, they like to come across as the industry's statesman. It's disgusting.
The disparaging reference to "urban markets with unionized grocery workers" is a reminder that Wal-Mart has successfully resisted virtually all efforts to unionize its stores, even in labor-friendly blue states.
Yes, but what exactly is a "full-time worker"? Typically, full-time is defined as 40 hours a week or more. At Wal-Mart, it's defined as 34 hours a week. So of course Wal-Mart has more "full-time" workers. Fewer hours worked, I need hardly point out, means that Wal-Mart's "full-time" employees are less likely than employees elsewhere to be able to afford premiums for any health insurance they're offered. According to Head, fewer than half of Wal-Mart's employees can afford even the company's least-expensive health plan.