The Atlantic, November 22, 2012
The Wal-Mart workers threatening to walk off the job on Black Friday aren't just fighting their employer. They're fighting a whole system.
Forget the stampeding shoppers, the half-priced waffle irons, or the pepper spray wielding wackos: barring a federal intervention, the main event this Black Friday could turn out to be a showdown between organized labor and its arch corporate nemesis, Wal-Mart.
After organizing the first retail workers' strikes in the company's 50-year history last month, a union-backed group has promised to lead work stoppages and demonstrations at Wal-Mart stores around the country this holiday weekend in protest of its famously aggressive labor practices. Nobody truly knows how big the turnout will be, or if even more than a handful of Wal-Mart's 1.4 million U.S. employees will actually walk off the job. We might witness something historic, or we might witness a sideshow that shoppers ignore while brawling for bargains. Either way, the threat has made Wal-Mart nervous enough to ask the National Labor Relations Board for an injunction stopping the protests. Should they go on, they will be a test of whether, after years of failing to organize the country's largest employer, labor groups still have the wherewithal to take it on.
It would be a mistake, however, to think of this simply as a clash over one company. Rather, it's symptomatic of forces Wal-Mart helped set in motion and now shape our economy in fundamental way. It's about big box retail's refusal to pay a decent wage. It's about the way we've stacked the deck against unions. And it's about the choices we make as consumers.
Wal-Mart's Bad, But the Competition Isn't Much Better
As Harold Meyerson noted recently in The American Prospect, whereas Ford and General Motors paid their factory workers enough to buy the cars they built, Wal-Mart rose up by paying "its workers so little they had to shop at discount stores like Wal-Mart."
But by now, that low-price, low-wage model has become the industry standard among discount retailers, or at least close to it. The median retail worker for a large chain earns $14.42 an hour, but at big box stores, the pay is significantly lower (the notable exception being Costco, which commendably pays its employees a living wage).* Walmart, for instance, says it pays full time sales associates $11.75 an hour on average. But independent analysis peg the figure much lower, closer to $9. According to IBISWorld, that puts it a bit behind companies like Home Depot and Lowes, but ahead of its nearest competitor, Target, which has managed to put a more fashionable face on the same abysmal pay for its workers.
To put these figures in perspective, the federal poverty line for a family of three is $19,090. You would have to work 40 hours a week, every week of the year at Best Buy to clear that figure. Since about 42 percent of low-wage retail employees at large companies only work part time, according to a recent study by Demos, it's not a surprise that about a quarter of them live in or near full poverty.
The problem at Wal-Mart isn't simply that it's stingy with workers. The company has paid hundreds of millions of dollars to settle claims that it denied workers pay and benefits, for instance by forcing them to work through breaks. But we shouldn't pretend that it is a singularly malign influence anymore when it comes to wages.
We've Stacked the Deck Against Unions
There are many reasons why pay in retail is often paltry. Among them, it's a low-skill industry with high turnover and a lot young workers. But the sector's utter lack of of union presence certainly plays role. And for that, we can thank both Wal-Mart and Washington. From its earliest days, Wal-Mart has taken fiercely antagonistic stance towards organized labor, keeping its stores union free by using every ounce of leverage Congress has given employers -- so much so that, in 2007, Human Rights Watch called the company "'a case study in what is wrong with U.S. labor laws."
How so? Wal Mart is an expert at using the weeks before union votes to stoke fear among employees about what might happen to their jobs if they choose to support the union. And in cases where those efforts proved insufficient, the company has been willing to take extreme steps. When a group of Texas butchers voted to unionize in 2000, the company responded to the only successful U.S. union drive in its history by switched to selling pre-packaged meat company wide. No more butchers. Nothing anybody could do.
But the problem isn't simply what's legal -- the NLRB has found many instances where Wal-Mart's union busting behavior violated labor law. But the penalties are negligible. From 2000 to 2009, U.S. companies paid total of $36 million in fines for punishing workers over union activity. Wal-Mart alone could fork that over and write it off as the low, low price of doing business.
Wal-Mart's labor savings helped it put unionized retail competition, such as Caldor, out of business. So perhaps it's no surprise that, like its pay practices, Wal-Mart's anti-union tactics don't seem completely out of the norm anymore. In May, the NLRB set aside a failed union vote after it found that Target had tried to intimidate workers during an organizing drive by threatening to close their store.
These sorts of challenges are what have led to OUR Wal-Mart, the group behind the Black Friday strikes. You might call the organization a pseudo-Union. It launched with financial backing from the United Food and Commercial Workers (UFCW), but it's theoretically a grass roots group. It has no bargaining power or official relationship to Wal-Mart itself. In its request for an injunction, Wal-Mart claimed the group was essentially a front for the UFCW, and that demonstrations amounted to illegal picketing by a union seeking to be recognized.
The company is right, in a way. At best, this is a neutered form of organizing. And that's just another sign of how successful Wal-Mart has been at choking off union activity.
It Would Be Cheap to Pay Retail Workers a Livable Wage
Ultimately, this all comes back to consumers. We are the ones who choose where to take our business. And for the most part, Americans have chosen cheap.
It's hard to blame middle class families for making that decision -- not a lot of people have the extra cash to make a political statement out of where they buy paper towels and diapers. But it's led to cycle of impoverishment, where big box stores have brought down wages at smaller competitors desperate to compete, taking money out of the hands of workers, and sending back up the corporate food chain to shareholders. That's put a burden back on tax payers: research has suggested that Wal-Mart workers are disproportionately reliant on safety net programs like food stamps and Medicaid. I wouldn't be surprised if the same goes for Target and Best Buy employees.
The sad part of this is it wouldn't cost us much to pay big box retail workers something closer to a livable wage. A study from UC-Berkeley's Center for Labor Research and Education suggested it would cost the average shopper an extra $12.49 a year if Wal-Mart paid its workers a full $12 an hour and passed most of the cost to consumers.
That works out to about $0.46 per trip to the store.
Demos calculated that if large retailers paid their workers $25,000 a year and passed half the cost to consumers, the typical big-box shopper would pay an extra $17.73 a year.
I think most people, shown these numbers, would gladly pay a bit more to know the person helping them find the detergent aisle doesn't need help from the government to feed their child. The problem, though, is that consumers only pay so much attention, and only have so many choices when it comes to where they shop. Those choices are largely dominated by the big box stores.
That's why I hope Friday's OUR Wal-Mart strike is the start of something significant, instead of sideshow. Retail workers need leverage of their own. They need to show their more fearful colleagues that they can organize without losing their living. Walking off the job might be one of the last ways to do it.
*An earlier version of this article incorrectly stated that among all retail workers, the median wage was $14.42. That number was drawn from the Demos study cited later in the article, and which only analyzed retail workers at companies with more than 1,000 employees. According to the Bureau of Labor Statistics, the actual median wage among all retail workers is $10.09 per hour. So pay at big box stores appears to be low for large retail chains -- which obviously include a number of higher-end stores.