Sunday, November 20, 2005
Recently I saw the movie "Wal-Mart – The High Cost of Low Price". Through interviews with independent business operators, the movie describes how the arrival of a Wal-Mart in a Midwestern town guts the local economy by undercutting local businesses. Wal-Mart workers (or Wal-Martyrs as some people call them) go into detail about their minimal-pay, about being forced to work off-the-clock (read: for free), about the company's all-but-useless high-deductible health "benefits" and – this is the kicker – how they often have to turn to public assistance (with the encouragement of their managers) just to make ends not quite meet. All of this against a backdrop of Wal-Mart’s CEO rhapsodizing to stockholders about how virtuous and socially-responsible the company which they have invested in is. You don’t have to look too far to find out if the film’s assertions are correct. As excerpts from local television news programs included in the movie prove, the media is full of corroborating evidence.
I certainly don't disagree with the film's basic premises, that the 21st-Century robber-barons who run this giant corporate octopus are ruining lives and communities. But as far as I can see, Wal-Mart’s business practices are only slightly more egregious than those of any other national chainstores. Furthermore, the detrimental effects of chainstores upon local economies has been a fact of life long before Sam Walton’s Arkansas discount store chain went national.
Back in the early 1960's, a developer was planning to build a suburban-style shopping plaza (what we would now call a strip-mall) only a few minutes from downtown. My father, a very active participant in the local business community, tried to warn every retailer he knew about the adverse effect this would have on their businesses. He suggested that they buy up the land before the developers could get hold of it and donate it to the city as a park. They pooh-poohed my father's advice, The subsequent construction of the shopping plaza, capped by the arrival of the giant discount chain Grand-Way, sent downtown's retail economy into a steep downward slide from which it has never recovered.
Retail sales used to be a respectable profession with potential for advancement, not the dead-end McJob it has largely become. For instance, when you walked into a camera shop in the 1960's, the people behind the counters were either photographers themselves or at the very least knew what you were talking about when you asked for anything more specialized than a roll of film. When you went to the local electronics store to buy a stereo or a TV, the salespeople there had some background in electronics. No business operator of that day in his right mind would have hired a salesperson who had no knowledge of what he or she was selling. So, what happened?
In the mid-1950's, a little hamburger stand near Chicago called McDonald’s started raking in the bucks by selling cheap hamburgers, and milkshakes by the carload. When Ray Croc bought the business, he made some fundamental changes. Out went the skilled - and highly-paid - personnel, like short-order cooks. In went an assembly-line-like system whose individual tasks were so dumbed-down that unskilled minimum-wage earners could perform them. As the fast-food chain and others like it grew by leaps and bounds over the next 20 years, the management of other corporations watched in awe, and said to themselves “Hey! I want some of that!”. The chain stores which displaced traditional retailers over the last 30 years employ much the same business model as McDonald’s; reduce skilled tasks to a series of simple routines, hire cheap, unskilled workers and watch the money roll in. It apparently has worked, because that is how nearly all national mass-market retail chains do business now.
The makers of Wal-Mart - The High Cost of Low Price also took Wal-Mart to task for breaking with founder Sam Walton’s ideal of buying American, and sourcing much of its merchandise from China, which is known for extremely low wages and deplorable working conditions. Actually the “made in China” issue has been around since at least the mid-1980's. About that time, CBS aired an installment of “60 Minutes” which outlined how Chinese manufacturers were undercutting American manufacturers, putting many of them out of business. The program featured a business encounter with a representative of one Chinese manufacturer, who informed her American client, on-camera, that quality control in her employer’s factories was enforced through beatings of workers who failed to meet quality-control standards.
My own experiences working in the modern retail industry spoke volumes about it. At one mall job, after explaining to my boss that I had skills and experience with cameras, recorded music and home entertainment gear (which I did have and still do), he assigned me to cover the automotive department, even though at the time I had never worked on a car. At another I was the only one in my department who knew anything about the camera or computer equipment we were selling, apart from whatever was printed in the weekly sale flyer. The pay at these mall jobs was whatever the minimum wage was at the time give or take a few pennies. Benefits were non-existent. Only a handful of commission salespeople in departments which sold big-ticket items worked full-time. Management often treated my co-workers and I as if we were petty criminals or mental defectives. Each company reminded us, and reminded us often, that we were expendable and that they could (and often did) force any of us out on a whim. One particular employer used a sure-fire cost-cutting tactic. When they decided that they had no further use for you, instead of laying you off or firing you, they simply cut you down to four hours of work per week in order to force you to quit so that you couldn’t collect unemployment insurance. Unions? Never heard of 'em. At least partly as a result of the way they were treated by management, my mostly high-school and college-age co-workers never took their jobs seriously and it showed in the mediocre level of service they delivered. Customers' simple questions about products often got answered with an indifferent "I don't know", in no small part because we never received any information from the company about the things that it sold. Management just hired us and put us in whichever department they chose and left us to fend for ourselves. One of my co-workers was an older woman whose demeanor was the very epitome of resignation. “A job is a job is a job” was what she would often sigh whenever our break-room conversations turned to work-related issues.
America cannot afford to put up with Wal-Mart’s current business practices, no two ways about that. Wal-Mart cannot be permitted to merrily trash local economies and soak taxpayers by letting welfare agencies feed and house their underpaid work force. But as bad as it certainly is, Wal-Mart is not unique. Wal-Mart’s issues are merely the big-screen version of what is wrong with America’s “service” economy. Realistic minimum-wage laws (also known as living wages), genuine fair-labor practices enforced by law, and unionization of retail workers are the only true long-range solutions to the sorry situation of not only Wal-Mart workers but American service-sector workers in general.
Posted by C.S. Lewiston at 4:22 PM