Tannishblog

I spent the better part of twenty years working in retail. During that time, I bounced from many product lines in many different types of stores. At the time, I was assured of being able to work almost anywhere, as the retail industry was just beginning to recognize the value of service in the trendy new super-stores. Most long-standing department stores have learned the hard-knocks lessons against employee lethargy. In those days, I knew that I could pull stakes and relocate anywhere in the country and get another retail job relatively easily. For the many people like me, who did not come from a moneyed family and are not blinded by money lust, whom have realistic expectations in life based on humble beginnings; a retail career is an honorable way to make a living.

The corporations were mostly fair about the issue of compensation. In consideration of the facts that a big box retail venture suffers from a high overhead, and the greatest strain on a company’s liquidity is employee benefits, I’ve always felt my employers to give me a fair deal. But I’ve always been a person who would trade a few bucks for relative job security.

But that was before Sam Walton. Sam changed the rules for retailers. Companies soon found out that they had to change along or die. According to a report by UC Berkeley:

“We estimate that Wal-Mart workers in California earn on an average 31 percent less than workers employed in large retail as a whole, receiving an average wage of $9.70 per hour compared to the $14.01 average hourly earnings for employees in large retail (firms with 1,000 or more employees). In addition, 23 percent fewer Wal-Mart workers are covered by employer-sponsored health insurance than large retail workers as a whole.

At these low-wages, many Wal-Mart workers rely on public safety net programs - such as food stamps, Medi-Cal, and subsidized housing – to make ends meet. The presence of Wal-Mart stores thus creates a hidden cost to the state’s taxpayers.”

Now you know how Wal-Mart can keep it’s prices so low: not only does it buy goods from countries like China and Indonesia that have few of our modern protections for the working class, but they are unfairly treating their employees here.

The Berkeley report goes on to detail how Wal-Mart, as the nations largest retailer has influenced the whole retail industry, by strategic placement of its “supercenters” in areas of traditional higher standards for wages. These mega-stores carry so many goods they are able to compete with a diverse group of competitors, from grocers and pharmacists to bookstore sand electronic and appliance stores to photography specialists. It’s been known for Wal-Mart to move into a smaller town and destroy the businesses of a whole mall full of shops. Even in larger cities, a neighboring Wal-Mart will skew the business climate to the detriment of the workers salaries and benefits. The conclusion of the Berkeley report explains the dynamic of what it terms “Wal-martization.”

“Wal-Mart workers’ reliance on public assistance due to substandard wages and benefits has become a form of indirect public subsidy to the company. In effect, Wal-Mart is shifting part of its labor costs onto the public. We estimate the cost of the subsidy to Wal-Mart in California for state taxpayers to be $86 million a year. Other retail firms that carry their own weight by providing self-sufficiency wages and employer-sponsored health insurance are placed at a competitive disadvantage, which can result in a downward cycle for wages and benefits across the industry. As we have shown, Wal-Mart’s long-term impact on compensation in the retail industry has the potential to place a significant strain on the states’ already heavily burdened social safety net. We estimate the cost if large retailers throughout the state adopted Wal-Mart’s wage and benefits standards to be an additional $410 million a year in public assistance expenses. The public cost of low-wage jobs should be taken into account by policy makers at all levels as they make decisions about the kinds of economic development we should encourage in California and in our communities.”

For further enlightenment, read: Wal-Mart and county-wide Poverty, sponsored by the Department of Agricultural Economics and Rural Sociology, as Penn State.

Clearly, this is not a problem confined to one sate or even to one country, as Canada is feeling the crunch of Wal-Mart’s aggressive parsimony. Sam Walton was a self-made billionaire, and to many that fact alone will deify him. His business legacy stands at odds with his proposed values. Perhaps this is an effect of the Law of Unintended Consequences; perhaps Sam just hardened as he aged, we’ll never know. By I feel it is in the country’s best interest and in the interest of our communities to “vote with our wallets” and boycott Wal-Mart and its destructive policies. In America there are no lack of stores to shop. One way or another, we pay for the goods we buy, the Berkeley report enumerated this nicely. Why not pay a slightly higher price to support all the retail workers who provide you with shopping therapy. After all, it’s pay now or pay later.

This entry was posted on Thursday, April 14th, 2005 at 6:26 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.