Killing America, one store at a time
Wal-Mart is, of course, the classic American success story. Simple fellow opens a five-and-dime somewhere in the Arkansas Ozarks. Fellow builds five-and-dime into retail empire by selling his stuff cheaper and in greater volumes than the other five-and-dimes. Fellow becomes billionaire, still chooses to drive old F-150 around the streets of Bentonville, Ark. Fellow dies, leaves his family his retail empire and his billions. Now, the little five-and-dime is the world's largest corporation.

That little yellow smiley face who bounces around Wal-Mart's television advertising packs a pretty heavy punch. Yeah, he's making life easier for you, the consumer. But when he bounces off one of Wal-Mart's suppliers, or one of its employees, we all feel the impact.

Full disclosures: My house spends close to $5,000 a year at Wal-Mart. I do not now nor have I ever worked in the service industry. I'm not a member of a union, and I spent years in vocal opposition to the union concept.

But after I stumbled across this in the Los Angeles Times, I could barely control my anger -- or my fear.

By the company's own admission, a full-time worker might not be able to support a family on a Wal-Mart paycheck. ...
[but t]hose who accuse Wal-Mart of shortchanging its employees, company spokeswoman [Mona] Williams suggested, don't understand the modern service economy.

"Retail and service wages are what they are," she said, "whether you look at a department store, a discount store, the local dry cleaners, the bakery or whatever.

"Wal-Mart is a great match for a lot of people," Williams added. "But if you are the sole provider for your family and do not have the time or the skills to move up the ladder, then maybe it's not the right place for you."

This is how Wal-Mart treats its associates. Don't like working for $8 an hour? Tough. Get in our management program or go away. And good luck finding a better job. Remember, we're in complete control of the U.S. economy. Have a nice day.

Wal-Mart has made itself the nation's largest retailer by aggressively cutting costs. The company builds its stores on cheap land -- often squeezing sweetheart deals out of city governments, who are willing to misuse the power of eminent domain to gain the tax revenue a Wal-Mart would generate. They build and operate their stores in an energy-efficient manner. If you're a supplier, and you want your goods on Wal-Mart's shelves, you won't get top dollar for those goods. The company doesn't tolerate waste in any form.

This mindset led Wal-Mart managers in several states to fudge employees' timecards to keep labor costs down. An Oregon jury smacked Wal-Mart for forcing hundreds employees to work unpaid overtime in violation of the Federal Labor Standards Act. Damages for the 290 plaintiffs will be determined next year. The Times noted that Wal-Mart settled similar suits in Colorado and New Mexico for undisclosed amounts, and more than 40 other cases are awaiting trial. It's going to be up to these juries to make it less cost-effective for Wal-Mart to settle suits than to screw employees.

No American expects to get rich working a service-industry job, any more than Americans expected to get rich working in factories in the 20th century. But there's no reason to expect the employees who make the economic wheels turn to have to go begging for the necessities. The factory workers found a way to make sure this happened for them, back in the day. They formed unions and stopped the work at the factory. The companies learned they kind of needed the workers -- at least up to the point where they could send the workers' jobs to other countries, where the labor force was damn happy to be making 13 cents an hour.

America needs a healthy middle class. I thought we learned that in the 1930s, when too few of the people had too much of the money and those who had busted their ass to make sure those who didn't have didn't get any of theirs. The concept of the disposable work force is very, very bad for the country. You can't build an entire economy on white-collar jobs; somebody has to do the actual work. Some of us just want to go in and turn the wheels or stock the shelves or cut the meat or keep the assembly line moving. In a better world, those people could work an honest 40 every week, and have enough money to have a decent house, good healthcare and a little bit of fun on the weekends.

Wal-Mart, like most American corporations, is aggressively anti-union. (Full disclosure: I'm a manager at another American corporation that is aggressively anti-union.) I'm sure it would close a store before it allowed that store's workers to organize. Let's play out that scenario for a second. Let's say the workers in, say, Aurora, Mo., a semi-rural outpost with one Wal-Mart, voted to unionize. Wal-Mart, detecting the start of what could be a bad trend, says, "Fuck you, we'd sooner close the store." The good people of the city of Aurora would rise in opposition to the union effort, not wanting to lose the ability to buy a pair of socks, a box fan, a set of jumper cables and a pound of hamburger all in one stop, at the lowest possible prices. The government of the city of Aurora would also rise in opposition to the union effort, to protect that massive tax base -- and, not incidentally, because they're Wal-Mart shoppers, too. Enough of the workers decide their $8-an-hour Wal-Mart job is indeed better than those other $8-an-hour jobs, because Mona Williams tells them that is so. End of organizing effort. Wal-Mart wins.

I can't argue that the Wal-Mart way isn't capitalism at its very finest. It is. Offer a better deal to the customer, and by doing so, you make money for yourself. Sam Walton died in 1992 as America's richest man. That's the goal, right? The Times writes that current Chief Executive Lee Scott Jr. made almost $18 million in salary last year, plus stock options with an estimated value of $11.3 million. That's a lot of Sam's Choice soda. Still, Scott tells the Times in his defense, "I drive a Volkswagen Bug."

So Wal-Mart is controlling costs. Meanwhile, its CEO is raking in $18 mil a year. If there was any way he could possibly live on $9 million, for starters, I'd bet that Wal-Mart's pass-the-savings-on formula that worked so well in building the empire might work well for its work force.

Profit is good, and profitable companies are good for America. But I'd still like to think that profitable companies that mistreat their employees and think it's OK that to pay them wages on which they have no hope of supporting a family would someday pay the price for that stinginess.

But maybe we're becoming trained to believe that it's beneath us as a society to work at Wal-Mart. If that's the case, we're doomed.