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Sudden chill sent Wal-Mart’s way
Labor Department moves go against its lucrative, ingrained business model
Sunday, July 26, 2009 | 2 a.m.
Labor Secretary Hilda Solis
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Labor Secretary Hilda Solis quietly announced two actions last week that could have far-reaching effects on workers and Wal-Mart, the country’s largest private employer.
First, Solis boasted of a hike in the federal minimum wage.
She followed up with news that her department will hire 250 investigators this year to enforce wage-and-hour laws — a dire necessity according to a new report by the Government Accountability Office, which found the Labor Department had failed thousands of wage theft victims.
Solis made it clear the hires were intended to send a message: Government will no longer tolerate labor law abuse.
The actions presage a day of reckoning for Wal-Mart, according to a new book by labor historian Nelson Lichtenstein. “The Retail Revolution: How Wal-Mart Created a Brave New World of Business” traces the retailer’s rise out of the rural South, changing the way business is done and creating a new economic order. As Lichtenstein notes, Wal-Mart’s success is due in part to a corporate culture that squeezes managers and workers alike, putting a premium on “off-the-clock” work.
In December, the retailer settled 63 wage-and-hour lawsuits, many originating in Las Vegas and filed in Nevada, accusing it of systematically cheating employees out of hours they had worked. Specifically, the class-action complaint alleged store managers engaged in a practice known as “time shaving,” clocking employees out one minute after their meal breaks ended — even though they worked for several hours afterward — and erasing overtime from their time cards.
Former CEO Lee Scott has blamed the abuses on a bunch of “knuckleheads,” managers acting illegally without the knowledge of corporate headquarters, and the company’s general counsel has said the allegations in the lawsuits are “not representative of the company we are today.”
But Lichtenstein argues that raising the minimum wage and cracking down on wage-and-hour abuses, in addition to other Obama administration initiatives, attack the core of the Wal-Mart business model. The changes, he writes, will result in increased labor costs, reducing a significant advantage it enjoys over other retailers and grocers.
That advantage changed the business landscape in Las Vegas in the 1990s, when the retailer opened 16 stores here. According to Lichtenstein, Wal-Mart’s rise in Southern Nevada led to the collapse of Raley’s, a unionized California-based grocery chain. All of its 18 supermarkets in Southern Nevada were shuttered by 2002.
The United Food and Commercial Workers Union tried to fight back, mounting an organizing campaign in a few spots across the country, with union-friendly Las Vegas as its focus. Lichtenstein says a Wal-Mart manager-turned-union organizer found the conditions at stores here ideal for unionization: violent shoplifters, alienated associates and sky-high turnover.
Wal-Mart responded aggressively though, and the campaign failed.
Even the union’s attempt to get the National Labor Relations Board to impose a serious companywide penalty came up short when Wal-Mart used its juice to appeal to the Bush administration.
But the political winds have changed, and now the company faces legislation that would make it easier for workers to organize. The retailer, not surprisingly, is a fierce opponent.
And yet Wal-Mart is on board with President Barack Obama’s push for health insurance reform. CEO Michael Duke joined with Andy Stern of the Service Employees International Union and John Podesta, who managed Obama’s transition, in a letter to the president last month expressing support for an employer mandate.
The move, denounced by the Chamber of Commerce and the National Retail Federation, is surprising for a company often criticized for insuring slightly more than half of its 1.4 million employees, many of whom are enrolled in Medicaid or other public health programs.
In an interview, Lichtenstein said the retailer is coming to terms with new political and economic realities.
Faced with rising labor costs, both domestic and foreign, and a stagnant stock price, the retailer has little choice, he said.
“What had made Wal-Mart successful, its claim to fame, is diminishing,” he said. “It’s a different kind of animal now. They are changing the way they do business, to some extent.”
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People in America need to realize jus what got America in this shape""cheap" yes so-call cheap items from a foreign land.
quote*Wal-Mart firmly believes in local procurement. We recognize that by purchasing quality products, we can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in our stores in China is sourced locally. We have established partnerships with nearly 20,000 suppliers in China. *end quote!
Now! if there be 182 country's making items for the world to buy and they have only 5% of the pie in China"duh! This company makes the nice people of China support their currency(yuan) by keeping it in their country working for the people there". but with the "yuan" going up in value and the US dollar going down"all the foreign items that the American consumer buys thinking it is cheap has went up in price.
People"its all about the currency and to keep a currency strong you got to keep it floating around the country you live in so it can work for you. For the past 12 years all them US dollars are being shipped overseas to a foreign bank and with the American worker not making anything for the foreigner to buy the "we the people" have to turn to the "second" largest employer in America(Uncle Sam) to sell "we the people" debt in order to get all them dollars back!
50 years ago a foreigner would had given their left nut for a US dollar or a Hershey's chocolate bar and today the same foreigner has got Uncle Sam and the American consumer by both all the while Hershey is moving the chocolate factory to Mexico. Wake up! America and think "MADE IN AMERICA."
quote*"Considering that there are over 30,000 ships at sea this morning," writes James Carlton, director of the Williams College-Mystic Seaport Maritime Studies Program, in an e-mail, "the total number of organisms and species in this global 'bioflow' on the morning your readers read your piece could be staggering - billions of individuals, and thousands of species."
Indeed, scientists have long considered ballast water the primary way invasive aquatic organisms are introduced. From the zebra mussel's arrival in the Great Lakes, to an American jellyfish severely disrupting Black Sea fisheries, the potential costs of accidental introduction of a species to new homes can be tremendous. Aquatic invasives cost the US $9 billion yearly, according to estimates by David Pimentel, professor emeritus of ecology and evolutionary biology at Cornell University in Ithaca, N.Y. Zebra and quagga mussels (a cousin to the zebra) alone cost the $1 billion annually.*end quote!
tat is $9 billion a year in hidden taxes to all Americans"
cheap ain't chic and it cost America""""jobs!
"Now let us look at Wal-Mart again; you buy a product there, 6% goes to the employees, 10-18% is profit to the company, 25% goes to other costs and 50% goes to re-stock or the cost of goods sold. Of the 50% about 20-25% goes to China, a guess, but you get the point. Now then, how long will it take at 433 Billion dollars at year for China to have all of our money, leaving no money flow for us to circulate? At a 17 Trillion dollar economy less than 40-years minus the 1/6 they buy from us. Some say that if we keep putting money into our economy, it would take forever, but if we do not then eventually all the money flow will go. If China buys our debt then eventually they own us, no need to worry about a war, they are buying America, due in part to our own mismanaged trade, so whose fault is that? Not necessarily China, as they are doing what's in the best interests, and we should make sure that trade is not only free, but fair too."
http://www.worldthinktank.net/pdfs/TheFl...
and when it comes to all them ther turnips in D. C. ".they all need to red"oops! read George Washington's farewell address after only eight years of serving his country"
Retail makes nothing! ".and until the American people get off their lazy @ss and start to demand""made in America"".all the retail jobs will be sitting in a foreign land.
The dang government makes only debt"like all it knows is spend"spend"spend. The turnips ain't never past a dang "saving" bill. They go up on tat big hill and play banker with my dang tax dollars and every dang one of them is one sandwich short of a picnic when it comes to balancing their dang check book.
National Debt from 1776 to 1910 wus only $2.6 billion and tat wus without a income tax. After the stiff-shirt "my sh!! don't stink" bankers met in 1910 at Jekyll Island tat debt wus put in high gear in 1913 and even with a income tax and now a tax for every dang thig a person touches"even the air he/she breaths tat debt has mushroom to over $10 trillion in 2008.
Now".we the people in the past 7 months has taken on another $1 trillion and tat person in tat big white house is saying the car is going to slow"well"maybe he needs to get out of the dang thig and walk.
http://dailybail.com/home/the-national-d...
And with America being over $57 trillion in debt".a little walking wouldn't hurt them either. People".it ain't no place in the Constitution tat states the government is suppose to take care of you".not one dang sentence. The word "cheap" ain't no place to be found either. If you don't buy American made"you don't have jobs cause RETAIL makes nothing.
Quit thinking in terms of a jack@ss and elephant".they the ones tat put US in tis mess".think in terms of character, faith in God, love of Country, your State, your town, your family and your dang job. Spend a month"maybe two red"oops! reading Michael Hodges "Grandfather Economic Report" series and learn how the people in government has pull the wool over the eyes of "we the people" for the past 96 years.
"Our constitution was made only for a moral and religious people. It is wholly inadequate for the government of any other." - John Quincy Adams, 6th President of USA.
"I hope our wisdom will grow with our power, and teach us, that the less we use our power the greater it will be." - Thomas Jefferson
"No generation has a right to contract debts greater than can be paid off during the course of its own existence." - George Washington to James Madison 1789.
"support your town"shop around." - madmilker
Strange mix of ideology. Railing against Walmart and government, when it was the so-called "free market" which allowed Walmart to dominate in the first place.
How's the tea party? Lonely?
I surely hope those US Labor agents go after businesses that are breaking the laws when they hire illegals and on top of that break other labor laws by paying them cash under the table.
I now feel dumber after trying to read madmilker's comments. It physically hurts to try to read words and phrases that were so poorly written.
Walmart could change the course of the United States as well as improving their image, by implementing a better version of "buy American". Maybe their buyers could initiate the program by offering to buy alot of the crap they buy from China, from new start-up companies started here in the US. This would put thousand back to work in the manufacturing sector.
"vinnieinvegas"...it is sad to red...oops! read of the "dumber than dumber" feeling your having in regards to my comments.
Your government debt is over $11 trillion dollars and the total debt in America is pushing $58 trillion. Tis would make about 305 million people in tis great union poorer than dirt and dumber than grass.
Maybe you need to red....oops! read what Soviet Leader Khrushchev said to Secretary of Agriculture Ezra Taft Benson.
"You Americans are so gullible. No, you won't accept communism out right, but we'll keep feeding you small doses of socialism until you'll finally wake up and find you already have communism. We won't have to fight you. We'll so weaken your economy until you fall like over-ripe fruit into our hands."
Now! do you feel even dumber!
Wake up! America.
Walmart = a distribution center for communist Chinese goods.
Walmart gave the American public what they asked for. Decent products at a price that the American public wanted to pay.
Americans don't want to pay for American made products. They cost twice as much and in many cases are of lower quality.
You got what you asked for now you want to blame the company that gave it to you.
You can't have it both ways folks. Companies can not pay top dollar and sell you products at deep discounts.
Be careful what you ask for, you just might get it. Walmart did not make their company the largest in the country, Americans did.
zebra and quagga mussels? The United States has a 60% consumer economy which means we buy more than we make. Why? Government has higher employer taxes, utilities charge higher rates, Unions demand higher pay and companies that make the stuff we buy leave. The auto workers union has effectively killed General Motors. After their bailout and then bankruptcy to save them, they are still leaving to Mexico and points abroad.
You want to kill Wal-Mart, the largest employer in the US, fine. Force the unions on them. Don't shop there. Wal-Mart is already expanding worldwide. You'll find every other place charges too much. Remember we don't make stuff here in the USA.
There is this thinking that we need to go after those huge, greedy, evil big business and make them pay, make them pay big time. Those evil profits, we have to tax-em. So they leave, and everyone sits around and wonders WHY?
Unions claim to be for employee rights, when in fact they are business killers.
union killers are on the prowl, they'll just destroy america. dirty unions who brought you 40 hour week, overtime, vacation, sick pay, labor work standards, child labor laws, etc. yeah these darn union folks have ruined america. can see the rich people have alot of time on their hands today.
I work for Wal-mart. Have a fabulous 401(k)/profit-sharing plan, receive quarterly bonuses, get more vacation every year than my casino employee wife. My job is more secure now than it has ever been. All that and I make $50,000 a year.
Do I agree with what Wal-mart symbolizes and practices? Not 100%, but they simply provide what the American public wants.
And not once have I ever been asked to work off the clock.
The only reason minimum wages go up in America is simple. Congress whores itself out for Union endorsements and Union wages are actually tied to the minimum wage. It is easy cover for Congress to say "this helps those that need it the most" when in reality it is payback to the Union jackals who vote Democratic in gigantic, I can't think for myself blocks.
Don't believe me, watch the Clark County Commissioners scramble to get the C.C.F.D's endorsement.
If people don't like what they're getting paid at Wallmart there are 6 million + unemployed Americans who will take their job. That's the reality of the new world we live in.
Does anyone here think a mom and pop shop could afford to pay employees the new minimum wage and benefits whilst staying in business in this new world economy?
Sux, just telling it like it is though"
I would rather hang out in and around the downtown courthouse, versus shop at ANY Walmart.
again...
the liberal union types don't understand the basic law of supply and demand.
know why people go to wal-mart?
because they can afford to. could you imagine if everything at wal-mart was built and made and produced only at union shops?
a pack of disposable razors would be $14.95 and a jar of peanut butter would be $7.98.
yes, unions are FABULOUS! we've all seen how well the steel and auto industry has done in the last few years.
"know why people go to wal-mart?"
because they can't afford not to.
"could you imagine if everything at wal-mart was built and made and produced only at union shops?"
Yes I can, we would have good jobs here in the USA instead of exporting jobs to China and Mexico and the people here could afford to pay the higher prices because they wouldn't be making $8 an hour working two jobs trying to support a family. Sam Walton is spinning in his grave, in the mid 80's he started the "Buy American Program " and wanted products sold at Wal-Mart to be made in the US and had a marketing plan based on it. There are no patriots left in corporate America, just bean counters and CEO's that want 10 mil a year to say no to anything that might put a crimp on their over the top compensation.
You think you know how Sam Walton operated? The man was the biggest bean-counter you could imagine. Wal-mart didn't even have a corporate jet until he was dead.
re by solar
you said you make 50,000 a year. Interesting. Lets do some math...
52 weeks x 40 hours (which *most* walmart workers do not work) = 2080 hours.
50,000 / 2080 = 24.038
Wow I wonder how many walmart workers $24 an hour.
Typical dems. Take away choices and force unions upon folks. Costs of business goes up, prices go up, they raise the minimum wage and the cycle starts again meanwhile the standard of living goes down forcing more folks out of work and making more people rely on the system. That keeps them needing more wasteful government programs.
He's an idea folks. Competition. Businesses fight to survive and lower prices. Let the market decide. Don't see anyone with a gun to his head to work at Walmart.
These are the same folks who want to force government health care on us...what a debacle that'll be.
Here is the deal. I red...ooops read this article this morning. Let me 'splain something to you cats from Vegas baby. People in the tax brackets of working for Wal mart spend 100% of the money they earn. Not that they want to but because they have to. So now that they are making a little more money guess what happens. Maybe they will buy those new socks for the kids. Maybe they will buy an extra bible...for the kids. Maybe they will buy some more vodka. What ever they do. It will be good for the economy. And that concludes the lesson of the day.
Last I heard, Card Check was going to fail. There will be no increase in the minimum wage for the time being with infation in check and 11% unemployment. I am not sure Walmart is really facing any significant regulatory issues right now. I think Mr. Lichtenstein is just seeing what he wants to see rather than what is really happening.
I love to shop at Wal-Mart. First you park the car and get out and step on a diaper. Then you walk to the store past many trash cans with no diapers in them. I think these mothers feel we should all enjoy the fruits of her baby's bowels.
Not to mention the free Spanish lessons we all get in Wal-Mart. Kinda like living behind enemy lines.
Free Market at work. If it will increase profit it will be done; if it decreases profit it will be fought.
Maybe a merger of Target, Walmart, Blockbuster and Taco Bell will control all food and clothing and entertainment in the nation.
Recently I heard about a video that was shown to the employees of one retail store. It emphasized these points: 1) The union is an entity that collects dues and cannot exist without them. 2) No union can guarantee any wage. 3) Once union rules are established, they may make your job easier or they may make your job more difficult. 4) The problem with the new legislation is that some employees may not want to be in a union and it will be easier to force a union on them. I certainly agree with point #1. I've read about how some of the younger people who work at grocery stores have quit when they discovered how much they had to pay in union dues.
Alice. There are at least ten members of staff at my store that I can think of off-hand that make at least that much. Hell, even the starting wage for a cashier at Wal-mart is more than that of someone who starts at any other big box retailer.
If those cashiers want to make more money, they can inform management that they wish to take up a particular department or task and an increase in wages is available to them. Wal-mart doesn't run like a union where you can loaf around for 40 hours and make higher wages every year. It must be worked for. Training programs are available to EVERY associate who seeks a career in management. How many other companies can say that?