Wal-Mart's Labor Record
CONGRESSMAN GEORGE MILLER
Democratic Staff of the Committee on Education and the Workforce
U.S. House of Representatives
16feb04
[More on Wal-Mart]
TABLE OF CONTENTS
INTRODUCTION
WAL-MART'S LABOR PRACTICES
• WORKERS' ORGANIZING RIGHTS
• LOW WAGES
• UNEQUAL PAY AND TREATMENT
• OFF-THE-CLOCK WORK
• CHILD LABOR AND WORK BREAKS VIOLATIONS
• UNAFFORDABLE OR UNAVAILABLE HEALTH CARE
• LOW WAGES MEAN HIGH COSTS TO TAXPAYERS
• ILLEGAL USE OF UNDOCUMENTED WORKERS
• TRADING AWAY JOBS
• DISABILITY DISCRIMINATION
• WORKER SAFETY
WAL-MART'S RESPONSE
CONGRESSIONAL RESPONSES
• LABOR LAW REFORM AND THE RIGHT TO ORGANIZE
• PROPOSALS TO INCREASE WAGES AND PROTECT OVERTIME
• CHILD LABOR
• SWEATSHOPS
• AFFORDABLE AND MEANINGFUL HEALTH INSURANCE
• FAIR TRADE AND THE FIGHT TO SAVE GOOD-PAYING JOBS
CONCLUSION
ENDNOTES
INTRODUCTION
The retail giant Wal-Mart has become the nation's largest private sector employer
with an estimated 1.2 million employees.[1] The company's annual revenues now
amount to 2 percent of the U.S. Gross Domestic Product.[2] Wal-Mart's success is
attributed to its ability to charge low prices in mega-stores offering everything from
toys and furniture to groceries. While charging low prices obviously has some
consumer benefits, mounting evidence from across the country indicates that these
benefits come at a steep price for American workers, U.S. labor laws, and
community living standards.
Wal-Mart is undercutting labor standards at home and abroad, while those federal
officials charged with protecting labor standards have been largely indifferent. Public
outcry against Wal-Mart's labor practices has been answered by the company with
a cosmetic response. Wal-Mart has attempted to offset its labor record with
advertising campaigns utilizing employees (who are euphemistically called
"associates") to attest to Wal-Mart's employment benefits and support of local
communities. Nevertheless – whether the issue is basic organizing rights of
workers, or wages, or health benefits, or working conditions, or trade policy – Wal-
Mart has come to represent the lowest common denominator in the treatment of
working people.
This report reviews Wal-Mart's labor practices across the country and around the
world and provides an overview of how working Americans and their allies in
Congress are seeking to address the gamut of issues raised by this new standard-
bearer of American retail.
WAL-MART'S LABOR PRACTICES
WORKERS' ORGANIZING RIGHTS
The United States recognizes workers' right to organize unions. Government
employers generally may not interfere with public sector employees' freedom of
association. In the private sector, workers' right to organize is protected by the
National Labor Relations Act.[3] Internationally, this right is recognized as a core
labor standard and a basic human right.[4]
Wal-Mart's record on the right to organize recently achieved international notoriety.
On January 14, 2004, the International Confederation of Free Trade Unions
(ICFTU), an organization representing 151 million workers in 233 affiliated unions
around the world, issued a report on U.S. labor standards.[5] Wal-Mart's rampant
violations of workers' rights figured prominently. In the last few years, well over
100 unfair labor practice charges have been lodged against Wal-Mart throughout
the country, with 43 charges filed in 2002 alone. Since 1995, the U.S. government
has been forced to issue at least 60 complaints against Wal-Mart at the National
Labor Relations Board.[6] Wal-Mart's labor law violations range from illegally firing
workers who attempt to organize a union to unlawful surveillance, threats, and
intimidation of employees who dare to speak out.
With not a single Wal-Mart store in the United States represented by a union, the
company takes a pro-active role in maintaining its union-free status. Wal-Mart has
issued "A Manager's Toolbox to Remaining Union Free," which provides managers
with lists of warning signs that workers might be organizing, including "frequent
meetings at associates' homes" and "associates who are never seen together start
talking or associating with each other."[7] The "Toolbox" gives managers a hotline
to call so that company specialists can respond rapidly and head off any attempt by
employees to organize.
When employees have managed to obtain a union election and vote for a union,
Wal-Mart has taken sweeping action in response. In 2000, when a small
meatcutting department successfully organized a union at a Wal-Mart store in
Texas, Wal-Mart responded a week later by announcing the phase-out of its
meatcutting departments entirely. Because of deficient labor laws, it took the
meatcutters in Texas three years to win their jobs back with an order that Wal-
Mart bargain with their union.[8] Rather than comply, Wal-Mart is appealing this
decision.[9]
Wal-Mart's aggressive anti-union activity, along with the nation's weak labor laws,
have kept the largest private sector employer in the U.S. union-free. Breaking the
law that guarantees workers' right to organize has material consequences for both
the workers and the company. According to data released by the Bureau of Labor
Statistics in January 2004, union workers earn median weekly salaries of $760,
compared to non-union workers' median weekly salaries of $599 – a difference of
over 26 percent.[10] In the supermarket industry, the union difference is even
more pronounced, with union members making 30 percent more than non-union
workers. Union representation also correlates with higher benefits.[11] For
instance, 72 percent of union workers have guaranteed pensions with defined
benefits, while only 15 percent of non-union workers enjoy such retirement
security.[12] On the health care front, which will be explored in more detail later, 60
percent of union workers have medical care benefits on the job, compared to only
44 percent of non-union workers.[13] For companies like Wal-Mart seeking to
maintain low labor costs, these statistics obviously provide an incentive to remain
union-free. Unfortunately, U.S. labor laws fail to provide a sufficient disincentive
against violating workers' rights.
LOW WAGES
By keeping unions at bay, Wal-Mart keeps its wages low – even by general industry
standards. The average supermarket employee makes $10.35 per hour.[14] Sales
clerks at Wal-Mart, on the other hand, made only $8.23 per hour on average, or
$13,861 per year, in 2001.[15] Some estimate that average "associate" salaries
range from $7.50 to $8.50 per hour.[16] With an average on-the-clock workweek
of 32 hours, many workers take home less than $1,000 per month.[17] Even the
higher estimate of a $13,861 annual salary fell below the 2001 federal poverty line
of $14,630 for a family of three.[18] About one-third of Wal-Mart's employees are
part-time, restricting their access to benefits.[19] These low wages, to say the
least, complicate employees' ability to obtain essential benefits, such as health care
coverage, which will be explored in a later section.
The low pay stands in stark contrast to Wal-Mart's slogan, "Our people make the
difference." Now-retired Senior Vice President Don Soderquist has explained: "`Our
people make the difference' is not a meaningless slogan – it's a reality at Wal-Mart.
We are a group of dedicated, hardworking, ordinary people who have teamed
together to accomplish extraordinary things."[20] With 2002 company profits
hitting $6.6 billion, Wal-Mart employees do indeed "accomplish extraordinary
things."[21] But at poverty level wages, these workers are not sharing in the
company's success.
UNEQUAL PAY AND TREATMENT
Title VII of the Civil Rights Act prohibits discrimination in employment based on
employees' race, color, religion, sex, or national origin.[22] Additionally, the Equal
Pay Act, an amendment to the Fair Labor Standards Act, prohibits unequal pay for
equal work on the basis of sex.[23] These basic labor and civil rights laws have
become an issue at Wal-Mart.
In 2001, six women sued Wal-Mart in California claiming the company discriminated
against women by systematically denying them promotions and paying them less
than men. The lawsuit has expanded to potentially the largest class action in U.S.
history – on behalf of more than 1 million current and former female employees.
While two-thirds of the company's hourly workers are female, women hold only
one-third of managerial positions and constitute less than 15 percent of store
managers.[24] The suit also claims that women are pushed into "female"
departments and are demoted if they complain about unequal treatment. One
plaintiff, a single mother of four, started at Wal-Mart in 1990 at a mere $3.85 an
hour. Even with her persistent requests for training and promotions, it took her
eight years to reach $7.32 an hour and seven years to reach management, while
her male counterparts were given raises and promotions much more quickly. For
this plaintiff, annual pay increases were as little as 10 cents and never more than
35 cents per hour.[25]
OFF-THE-CLOCK WORK
While wages are low at Wal-Mart, too often employees are not paid at all. The Fair
Labor Standards Act (FLSA), along with state wage and hour laws, requires hourly
employees to be paid for all time actually worked at no less than a minimum wage
and at time-and-a-half for all hours worked over 40 in a week.[26] These labor laws
have posed a particular obstacle for Wal-Mart. As of December 2002, there were
thirty-nine class-action lawsuits against the company in thirty states, claiming tens
of millions of dollars in back pay for hundreds of thousands of Wal-Mart employees.
[27]
In 2001, Wal-Mart forked over $50 million in unpaid wages to 69,000 workers in
Colorado. These wages were paid only after the workers filed a class action lawsuit.
Wal-Mart had been working the employees off-the-clock. The company also paid
$500,000 to 120 workers in Gallup, New Mexico, who filed a lawsuit over unpaid
work.[28]
In a Texas class-action certified in 2002 on behalf of 200,000 former and current
Wal-Mart employees, statisticians estimated that the company shortchanged its
workers $150 million over four years – just based on the frequency of employees
working through their daily 15 minute breaks.[29]
In Oregon, 400 employees in 27 stores sued the company for unpaid, off-the-clock
overtime. In their suit, the workers explained that managers would delete hours
from their time records and tell employees to clean the store after they clocked out.
In December 2002, a jury found in favor of the workers.[30] One personnel
manager claimed that, for six years, she was forced to delete hours from employee
time sheets.[31]
In the latest class-action, filed in November 2003, noting evidence of systematic
violations of the wage-and-hour law, a judge certified a lawsuit for 65,000 Wal-Mart
employees in Minnesota. Reacting to the certification, a Wal-Mart spokesperson
told the Minneapolis Star Tribune: "We have no reason to believe these isolated
situations . . . represent a widespread problem with off-the-clock work."[32]
Many observers blame the wage-and-hour problems at Wal-Mart on pressure
placed on managers to keep labor costs down. In 2002, operating costs for Wal-
Mart were just 16.6 percent of total sales, compared to a 20.7 percent average for
the retail industry as a whole.[33] Wal-Mart reportedly awards bonuses to its
employees based on earnings. With other operating and inventory costs set by
higher level management, store managers must turn to wages to increase profits.
While Wal-Mart expects those managers to increase sales each year, it expects the
labor costs to be cut by two-tenths of a percentage point each year as well.[34]
Reports from former Wal-Mart managers seem to corroborate this dynamic. Joyce
Moody, a former manager in Alabama and Mississippi, told the New York Times that
Wal-Mart "threatened to write up managers if they didn't bring the payroll in low
enough." Depositions in wage and hour lawsuits reveal that company headquarters
leaned on management to keep their labor costs at 8 percent of sales or less, and
managers in turn leaned on assistant managers to work their employees off-the-
clock or simply delete time from employee time sheets.[35]
CHILD LABOR AND WORK BREAKS VIOLATIONS
The Fair Labor Standards Act and state wage and hour laws also govern child labor
and work breaks. These work time regulations have likewise posed a problem at
Wal-Mart stores.
In January 2004, the New York Times reported on an internal Wal-Mart audit which
found "extensive violations of child-labor laws and state regulations requiring time
for breaks and meals."[36] One week of time records from 25,000 employees in
July 2000 found 1,371 instances of minors working too late, during school hours,
or for too many hours in a day. There were 60,767 missed breaks and 15,705 lost
meal times.[37]
According to the New York Times report: "Verette Richardson, a former Wal-Mart
cashier in Kansas City, Mo., said it was sometimes so hard to get a break that
some cashiers urinated on themselves. Bella Blaubergs, a diabetic who worked at a
Wal-Mart in Washington State, said she sometimes nearly fainted from low blood
sugar because managers often would not give breaks."[38]
A store manager in Kentucky told the New York Times that, after the audit was
issued, he received no word from company executives to try harder to cut down on
violations: "There was no follow-up to that audit, there was nothing sent out I was
aware of saying, `We're bad. We screwed up. This is the remedy we're going to
follow to correct the situation.'"[39]
UNAFFORDABLE OR UNAVAILABLE HEALTH CARE
In 2002, 43 million non-elderly Americans lacked health insurance coverage – an
increase of almost 2.5 million from the previous year. Most Americans receive their
health insurance coverage through their employers. At the same time, most of the
uninsured are working Americans and their families, with low to moderate incomes.
Their employers, however, either do not offer health insurance at all or the health
insurance offered is simply unaffordable.[40]
Among these uninsured working families are a significant number of Wal-Mart
employees, many of whom instead secure their health care from publicly subsidized
programs. Fewer than half – between 41 and 46 percent – of Wal-Mart's employees
are insured by the company's health care plan, compared nationally to 66 percent
of employees at large firms like Wal-Mart who receive health benefits from their
employer.[41] In recent years, the company increased obstacles for its workers to
access its health care plan.
In 2002, Wal-Mart increased the waiting period for enrollment eligibility from 90
days to 6 months for full-time employees. Part-time employees must wait 2 years
before they may enroll in the plan, and they may not purchase coverage for their
spouses or children. The definition of part-time was changed from 28 hours or less
per week to less than 34 hours per week. At the time, approximately one-third of
Wal-Mart's workforce was part-time. By comparison, nationally, the average waiting
period for health coverage for employees at large firms like Wal-Mart was 1.3
months.[42]
The Wal-Mart plan itself shifts much of the health care costs onto employees. In
1999, employees paid 36 percent of the costs. In 2001, the employee burden rose
to 42 percent. Nationally, large-firm employees pay on average 16 percent of the
premium for health insurance. Unionized grocery workers typically pay nothing.[43]
Studies show that much of the decline in employer-based health coverage is due to
shifts of premium costs from employers to employees.[44]
Moreover, Wal-Mart employees who utilize their health care confront high
deductibles and co-payments. A single worker could end up spending around
$6,400 out-of-pocket – about 45 percent of her annual full-time salary – before
seeing a single benefit from the health plan.[45]
According to an AFL-CIO report issued in October 2003, the employees' low wages
and Wal-Mart's cost-shifting render health insurance unaffordable, particularly for
those employees with families. Even under the Wal-Mart plan with the highest
deductible ($1,000) – and therefore with the lowest employee premium contribution
– it would take an $8 per hour employee, working 34 hours per week, almost one-
and-a-half months of pre-tax earnings to pay for one year of family coverage.[46]
Wal-Mart's spending on health care for its employees falls well below industry and
national employer-spending averages. A Harvard Business School case study on
Wal-Mart found that, in 2002, Wal-Mart spent an average of $3,500 per employee.
By comparison, the average spending per employee in the wholesale/retailing sector
was $4,800. For U.S. employers in general, the average was $5,600 per employee.
[47]
In the end, because they cannot afford the company health plan, many Wal-Mart
workers must turn to public assistance for health care or forego their health care
needs altogether. Effectively, Wal-Mart forces taxpayers to subsidize what should
be a company-funded health plan. According to a study by the Institute for Labor
and Employment at the University of California-Berkeley, California taxpayers
subsidized $20.5 million worth of medical care for Wal-Mart in that state alone.[48]
In fact, Wal-Mart personnel offices, knowing employees cannot afford the company
health plan, actually encourage employees to apply for charitable and public
assistance, according to a recent report by the PBS news program Now With Bill
Moyers.[49]
When a giant like Wal-Mart shifts health insurance costs to employees, its
competitors invariably come under pressure to do the same. Currently engaged in
the largest ongoing labor dispute in the nation, unionized grocery workers in
southern California have refused to accept higher health care costs resulting from
cost-shifting on health insurance premiums by their grocery chain employers – cost-
shifting, the grocers say, inspired by the threat of Wal-Mart competition. Beginning
on October 11, 2003, 70,000 grocery employees of Vons, Pavilions, Ralphs, and
Albertsons have either been on strike or locked out. The companies want to
dramatically increase workers' share of health costs, claiming that the change is
necessary in order to compete with Wal-Mart's incursion in the southern California
market. E. Richard Brown, the director of the Center for Health Policy at the
University of California, Los Angeles, told the Sacramento Bee that, if the grocery
chains drastically reduce health benefits, the trends toward cost shifting and
elimination of health coverage will accelerate. Following the grocers' lead, more
employers would offer fewer benefits, would require their workers to pay more, and
may even drop health benefits altogether.[50] Whether the current pressure from
Wal-Mart is real or imagined or merely a convenient excuse for the grocers' cost-
cutting bargaining position, Wal-Mart has sparked a new race to the bottom among
American retail employers. Undeniably, such a race threatens to undermine the
employer-based health insurance system.
LOW WAGES MEAN HIGH COSTS TO TAXPAYERS
Because Wal-Mart wages are generally not living wages, the company uses
taxpayers to subsidize its labor costs. While the California study showed how much
taxpayers were subsidizing Wal-Mart on health care alone, the total costs to
taxpayers for Wal-Mart's labor policies are much greater.
The Democratic Staff of the Committee on Education and the Workforce estimates
that one 200-person Wal-Mart store may result in a cost to federal taxpayers of
$420,750 per year – about $2,103 per employee. Specifically, the low wages result
in the following additional public costs being passed along to taxpayers:
$36,000 a year for free and reduced lunches for just 50 qualifying Wal-Mart families.
$42,000 a year for Section 8 housing assistance, assuming 3 percent of the store
employees qualify for such assistance, at $6,700 per family.
$125,000 a year for federal tax credits and deductions for low-income families,
assuming 50 employees are heads of household with a child and 50 are married
with two children.
$100,000 a year for the additional Title I expenses, assuming 50 Wal-Mart families
qualify with an average of 2 children.
$108,000 a year for the additional federal health care costs of moving into state
children's health insurance programs (S-CHIP), assuming 30 employees with an
average of two children qualify.
$9,750 a year for the additional costs for low income energy assistance.
Among Wal-Mart employees, some single workers may be able to make ends meet.
Others may be forced to take on two or three jobs. Others may have a spouse
with a better job. And others simply cannot make ends meet. Because Wal-Mart
fails to pay sufficient wages, U.S. taxpayers are forced to pick up the tab. In this
sense, Wal-Mart's profits are not made only on the backs of its employees – but
on the backs of every U.S. taxpayer.
The ultimate costs are not limited to subsidies for underpaid Wal-Mart workers.
When a Wal-Mart comes to town, the new competition has a ripple effect
throughout the community. Other stores are forced out of business or forced to
cut employees' wages and benefits in order to compete with Wal-Mart. The Los
Angeles City Council commissioned a report in 2003 on the effects of allowing Wal-
Mart Supercenters into their communities. The report, prepared by consulting firm
Rodino and Associates, found that Supercenters drive down wages in the local
retail industry, place a strain on public services, and damage small businesses. It
recommended that the City Council refuse to allow any Supercenters to be built in
Los Angeles without a promise from Wal-Mart to increase wages and benefits for
its employees.[51]
The findings of the Rodino report are alarming. The labor impacts of a Wal-Mart
Supercenter on low-income communities include:
"Big box retailers and superstores may negatively impact the labor market in an
area by the conversion of higher paying retail jobs to a fewer number of lower
paying retail jobs. The difference in overall compensation (wages and benefits) may
be as much as $8.00."
"Lack of health care benefits of many big box and superstore employees can result
in a greater public financial burden as workers utilize emergency rooms as a major
component of their health care."
"A study conducted by the San Diego Taxpayers Association (SDCTA), a nonprofit,
nonpartisan organization, found that an influx of big-box stores into San Diego
would result in an annual decline in wages and benefits between $105 million and
$221 million, and an increase of $9 million in public health costs. SDCTA also
estimated that the region would lose pensions and retirement benefits valued
between $89 million and $170 million per year and that even increased sales and
property tax revenues would not cover the extra costs of necessary public
services."
"[The threat of Wal-Mart's incursion into the southern California grocery market] is
already triggering a dynamic in which the grocery stores are negotiating with
workers for lowered compensation, in an attempt to re-level the `playing field.'
"One study of superstores and their potential impact on grocery industry
employees found that the entry of such stores into the Southern California regional
grocery business was expected to depress industry wages and benefits at an
estimated range from a low of $500 million to a high of almost $1.4 billion annually,
potentially affecting 250,000 grocery industry employees ... [T]he full impact of lost
wages and benefits throughout Southern California could approach $2.8 billion per
year."[52]
Reports such as these have provided supporting evidence to localities which seek
to pass ordinances restricting "big box" or supercenter stores. Such ordinances
were recently passed in Alameda and Contra Costa counties in California. Wal-Mart,
however, has moved to overturn those ordinances. In Contra Costa, Wal-Mart
launched a petition drive to challenge that county's ordinance in a referendum in
March 2004. In Alameda, the company has filed a lawsuit to void an ordinance
passed by the Board of Supervisors in January 2004.[53]
One of the most cited studies on Wal-Mart's impact on local communities was
performed by economist Kenneth Stone at Iowa State University in 1993. Stone
looked at the impact of Wal-Mart on small towns in Iowa. He found a 3 percent
spike in total retail sales in communities immediately after a Wal-Mart opened. But
the longer term effects of Wal-Mart were disastrous for nearby independent
businesses. Over the course of the next several years, retailers' sales of mens' and
boys' apparel dropped 44 percent on average, hardware sales fell by 31 percent,
and lawn and garden sales fell by 26 percent. Likewise, a Congressional Research
Service report in 1994 explained that Wal-Mart uses a saturation strategy with
store development. In other words, it builds stores in nearby connected markets in
order to stifle any competition in the targeted area by the size of its presence.[54]
By all accounts, Wal-Mart's development strategy has been working. Currently, Wal-
Mart operates around 3,000 total stores and close to 1,400 Supercenters. It is the
largest grocer in the U.S., with a 19 percent market share, and the third-largest
pharmacy, with a 16 percent market share. According to Retail Forward, a global
management consulting and research firm, for every one Supercenter that will
open, two supermarkets will close.[55] Since 1992, the supermarket industry has
experienced a net loss of 13,500 stores.[56] Over the next five years, Wal-Mart
plans to open 1,000 more Supercenters in the U.S.[57] By 2007, Wal-Mart is
expected to control 35 percent of food and drug sales in the U.S.[58]
ILLEGAL USE OF UNDOCUMENTED WORKERS
Among the lowest paid workers in the U.S. economy are undocumented
immigrants. As was reported in the fall of 2003, these workers are not foreign to
the floors of Wal-Mart stores. On October 23, 2003, federal agents raided 61 Wal-
Mart stores in 21 states. When they left, the agents had arrested 250 nightshift
janitors who were undocumented workers.[59]
Following the arrests, a grand jury convened to consider charging Wal-Mart
executives with labor racketeering crimes for knowingly allowing undocumented
workers to work at their stores. The workers themselves were employed by
agencies Wal-Mart contracted with for cheap cleaning services. While Wal-Mart
executives have tried to lay the blame squarely with the contractors, federal
investigators point to wiretapped conversations showing that executives knew the
workers were undocumented.[60]
Additionally, some of the janitors have filed a class-action lawsuit against Wal-Mart
alleging both racketeering and wage-and-hour violations. According to the janitors,
Wal-Mart and its contractors failed to pay them overtime totaling, along with other
damages, $200,000. One of the plaintiffs told the New York Times that he worked
seven days per week for eight months, earning $325 for 60-hour weeks, and he
never received overtime.[61] A legal question now being raised is whether these
undocumented workers even have the right to sue their employers.[62]
Not surprisingly, this recent raid was not the first time Wal-Mart was caught using
undocumented workers. In 1998 and 2001, federal agents arrested 102
undocumented workers at Wal-Marts around the country.[63]
President Bush's newly proposed temporary foreign worker plan would legalize such
undocumented workers without granting them an opportunity for citizenship,
creating a new class of indentured servants and a safer source of cheap labor for
companies like Wal-Mart.
TRADING AWAY JOBS
Since the recession began in March 2001, the United States has lost 2.4 million
jobs. In every recession, since the Great Depression, jobs were recovered within
the first 31 months after the recession began – until now. The latest recession
began 34 months ago and officially ended in November 2001, but the jobs have
not been recovered. For American working families, by all accounts, the "jobless
recovery" has been of little benefit to them. While GDP growth was strong or solid
in the third and fourth quarters of 2003, real wages for workers remained stagnant
and even declined.[64]
Indeed, of the jobs that remain, the pay is low. The country has seen a dramatic
shift from high-paying jobs to low-paying jobs. For instance, in New Hampshire,
which still has not recovered the number of jobs it lost in the recession, new jobs
pay 35 percent lower wages than lost jobs. In Delaware, those wages are 43
percent lower; in Colorado, 35 percent lower; in West Virginia, 33 percent lower. In
fact, the low-pay shift has hit all but two of the fifty states.[65]
Moreover, these changes in the labor market reveal themselves in a marked decline
in living standards for low- and middle-income workers. The real weekly earnings
for full-time workers age 25 and older fell for the bottom half of the workforce
between the fourth quarters of 2002 and 2003. In particular, workers in the 10th
percentile saw their weekly earnings fall 1.2 percent; in the 20th percentile, by 0.5
percent, in the 50th percentile, by 0.1 percent.[66] Conversely, earners in the top
percentiles of income experienced growth. The 90t percentile, for instance, saw a
1.1 percent increase in weekly earnings. As the Economic Policy Institute points
out: "This pattern of earnings growth suggests that while the economy is
expanding, the benefits of growth are flowing to those at the top of the wage
scale."[67]
These lower-paying jobs are largely service sector jobs, like retail, replacing
traditionally higher-paying and unionized manufacturing jobs. Between January
1998 and August 2003, the nation experienced a net loss of 3 million
manufacturing jobs.[68] During the "recovery," 1.3 million manufacturing jobs
disappeared.[69] American manufacturers find it increasingly difficult to keep jobs
in the U.S., given the availability of cheap labor abroad. In 2003, the U.S. trade
deficit hit a record high of $551 billion, increasing 15 percent from 2002 and
exceeding 5 percent of GDP.[70]
Wal-Mart plays a curiously illustrative role in this jobs phenomenon – not just in
the creation of low-paying jobs and the downward pressure on wages and benefits,
but also in the export of existing manufacturing jobs to foreign countries offering
cheap labor. Wal-Mart markets itself with a patriotic, small-town, red-white-and-
blue advertising motif. But Wal-Mart's trade practices are anything but small-town.
Indeed, Wal-Mart conducts international trade in manufactured goods on a scale
that can bring down entire nations' economies.
While the red-white-and-blue banners remain, long-gone are the days when Wal-
Mart abided by the mottos of "Buy American" and "Bring It Home to the USA." In
1995, Wal-Mart claimed only 6 percent of its merchandise was imported. Today an
estimated 50-60 percent of its products come from overseas.[71] In the past five
years, Wal-Mart has doubled its imports from China. In 2002, the company bought
14 percent of the $1.9 billion of clothes exported by Bangladesh to the United
States. Also in 2002, the company purchased $12 billion in merchandise from
China, or 10 percent of China's total U.S.-bound exports, a 20 percent increase
from the previous year. In 2003, these Chinese purchases jumped to $15 billion, or
almost one-eighth of all Chinese exports to the United States.[72] Today, more
than 3,000 supplier factories in China produce for Wal-Mart.[73]
Wal-Mart maintains an extensive global network of 10,000 suppliers.[74] Whether
American, Bangladeshi, Chinese, or Honduran, Wal-Mart plays these producers
against one another in search of lower and lower prices. American suppliers have
been forced to relocate their businesses overseas to maintain Wal-Mart contracts.
[75] Overseas manufacturers are forced to engage in cutthroat competition that
further erodes wages and working conditions of what often already are
sweatshops. To keep up with the pressure to produce ever cheaper goods,
factories force employees to work overtime or work for weeks without a day off. A
Bangladeshi factory worker told the Los Angeles Times that employees at her
factory worked from 8 a.m. to 3 a.m. for 10 and 15 day stretches just to meet Wal-
Mart price demands. And still, Wal-Mart's general manager for Bangladesh
complained of his country's factories, telling the Los Angeles Times, "I think they
need to improve. When I entered a factory in China, it seemed they are very fast."
[76]
While low-wage jobs displace higher-paid manufacturing jobs in the United States,
undercutting living standards at home, living standards abroad are not reaping the
benefits one might expect. Reports indicate that Wal-Mart's bargaining power is
able to maintain low wages and poor working conditions among its foreign
suppliers. The Washington Post has explained: "As capital scours the globe for
cheaper and more malleable workers, and as poor countries seek multinational
companies to provide jobs, lift production, and open export markets, Wal-Mart and
China have forged themselves into the ultimate joint venture, their symbiosis
influencing the terms of labor and consumption the world over."[77] Thanks to a
ban on independent trade unions and a lack of other basic human rights, China
offers Wal-Mart a highly-disciplined and cheap workforce. A Chinese labor official
who asked to remain anonymous for fear of punishment told the Washington Post
that "Wal-Mart pressures the factory to cut its price, and the factory responds with
longer hours or lower pay. And the workers have no options."[78]
One employee of a Chinese supplier described the difficulties of surviving on $75
per month. She could rarely afford to buy meat, and her family largely subsisted on
vegetables. Over four years, she had not received a single salary increase.[79]
Wal-Mart has countered that it insists that its suppliers enforce labor standards
and comply with Chinese law. One-hundred Wal-Mart auditors inspect Chinese
plants, and the company has suspended contracts with about 400 suppliers, mainly
for violating overtime limits. An additional 72 factories were permanently blacklisted
in 2003 for violating child labor standards. Still, critics point out that the Wal-Mart
does not regularly inspect smaller factories that use middlemen to sell to the
company. Nor does it inspect the factories of subcontractors. A Chinese labor
organizer explained that the inspections are "ineffective," since Wal-Mart usually
notifies the factories in advance. The factories "often prepare by cleaning up,
creating fake time sheets and briefing workers on what to say."[80]
The factories themselves complain that, because Wal-Mart demands such low
prices, they have slim profit margins – if any. A manager of one Chinese supplier
told the Washington Post, "In the beginning, we made money ... But when Wal-
Mart started to launch nationwide distribution, they pressured us for a special price
below our cost. Now, we're losing money on every box, while Wal-Mart is making
more money."[81] Obviously, one way to regain a profit for such suppliers would
be to begin cutting back on labor costs.
Finally, as testament to Wal-Mart's stalwart anti-union policy, none of its 31 stores
in China are unionized, despite the fact that the Communist Party-controlled official
union has told the company that it would not help workers fight for higher pay.[82]
Oddly enough, Article 10 of China's Trade Union Law requires that any
establishment with 25 or more workers must have a union. Wal-Mart, however,
claims that it has received assurances from the central government that it need not
allow unions in any of its stores.[83] As one reporter has explained, "The
explanation for the apparent contradiction may be that the government's desire for
foreign investment and jobs trumps any concern for workers' rights. That wouldn't
be surprising in the Chinese environment, where strikes are forbidden and the
official labor grouping actively supports the government's efforts to block the rise
of independent unions."[84] With China, any company in search of pliant and cheap
labor has found a perfect mix of cooperative government officials and workers
made submissive through fear.
DISABILITY DISCRIMINATION
The Americans with Disabilities Act (ADA) prohibits discrimination against persons
with disabilities in employment matters. In particular, an employer may not
discriminate against an employee or prospective employee who is otherwise
qualified to perform the job if given reasonable accommodations.[85]
In addition to lawsuits over lost wages or unequal pay, Wal-Mart has faced a
barrage of lawsuits alleging that the company discriminates against workers with
disabilities. In 2001, Wal-Mart paid over $6 million to settle 13 such lawsuits. These
cases were brought by the U.S. Equal Employment Opportunity Commission
(EEOC) on behalf of disabled persons whom Wal-Mart failed to hire. The settlement
also required Wal-Mart to change its procedures in dealing with disabled job
applicants and provide more training for its employees on anti-discrimination laws.
[86]
Yet, on January 20, 2004, the EEOC filed another lawsuit against the retail giant on
behalf of a job applicant who claims he was not hired because he needed a
wheelchair. The lawsuit was filed in Kansas City after the EEOC failed to obtain a
settlement with Wal-Mart.[87]
WORKER SAFETY
The Occupational Safety and Health Act (OSHA) is designed to protect workers
from workplace injuries and illnesses.[88] OSHA is enforced by the Department of
Labor's Occupational Safety and Health Administration. Regulations issued by that
agency lay out clear rules for such safety matters as the provision of exits for
employees.[89]
The latest Wal-Mart scandal to hit the news is its reported lockdown of its
nighttime shift various stores around the country. According to a January 18,
2004, New York Times report, the company institutes a "lock-in" policy at some of
its Wal-Mart and Sam's Club stores.[90] The stores lock their doors at night so
that no one can enter or leave the building, leaving workers inside trapped. Some
workers are then threatened that, if they ever use the fire exit to leave the
building, they will be fired. Instead, a manager is supposed to have a key that will
unlock doors to allow employees to escape. Many workers have found themselves
locked in without a manager who has a key, as the New York Times story detailed.
[91]
The company has claimed that the policy is designed to protect stores and
employees from crime. Former store managers, however, have claimed the real
reason behind the lockdown is to prevent "shrinkage" – i.e., theft by either
employees or outsiders. It is also designed to eliminate unauthorized cigarette
breaks or quick trips home.[92]
Locked-in workers have had to wait for hours off-the-clock for a manager to show
up to let them go home after they completed their shift. One worker claims to have
broken his foot on the job and had to wait four hours for someone to open the
door. Another worker alleges she cut her hand with box cutters one night and was
forced to wait until morning to go to the hospital, where she received thirteen
stitches.[93]
In the history of American worker safety, some of the worst tragedies have
involved employees locked in their workplaces in an emergency, including the
Triangle Waist Company fire of 1911 in which 146 women died in a fire because the
garment factory's doors were locked. As recently as 1991, 25 workers perished in a
fire at a chicken processing plant in North Carolina. The plant's owner had locked
the doors for fear of employee theft and unauthorized breaks. According to recent
reports, ten percent of Wal-Mart's stores are subjected to the nighttime lockdown.
[94]
In 2002, in a telling junction of alleged labor law violations, the National Labor
Relations Board (NLRB) issued a complaint against a Wal-Mart in Texas regarding
health and safety threats made by management against employees. According to
the complaint, a company official told workers that, after a worker filed complaints
regarding unsafe conditions with the Occupational Safety and Health Administration
(OSHA), any fines imposed upon the company would come out of employee
bonuses.[95]
WAL-MART'S RESPONSE
Wal-Mart's response to this extensive list of labor problems has been to treat the
charges as a public-relations matter and not a substantive issue of workplace
fairness. Seemingly, Wal-Mart believes only its image – not its behavior – needs to
be adjusted. In that regard, Wal-Mart has undertaken aggressive advertising
campaigns, has financed its own economic-impact studies to counter those that
show the costs of Wal-Mart to local communities, and has become a major political
campaign contributor.
On the advertising front, Wal-Mart launched a television ad series called "Good
Jobs" in early 2004. The ads feature Wal-Mart employees talking about how great it
is to work at Wal-Mart. Spots also show Wal-Mart's community involvement. One
ad features a Wal-Mart employee who attests that Wal-Mart health insurance made
it possible to treat his 7-year-old son for liver disease.[96] It is not known what
the total cost of the ad series will be in the end.
Wal-Mart has also financed its own studies, to counter publicly commissioned
reports which detail the burden that Wal-Mart imposes on communities. After the
Rodino report was commissioned by Los Angeles City Council members, the Los
Angeles Economic Development Corporation (LAEDC), a private non-profit
corporation, released its own study. The LAEDC study was commissioned and
financed by Wal-Mart Stores, Inc. Unsurprisingly, it claimed that Wal-Mart
Supercenters would provide extraordinary benefits for the Los Angeles economy.
Because Wal-Mart would be charging lower prices, according to the report,
households would experience greater savings. If Wal-Mart penetrates 20 percent of
the market in the seven Southland counties, the savings, an estimated $3.6 billion,
would then translate into the creation of an incredible 36,400 jobs annually. That
is, while the study estimates that 3,000 to 5,000 jobs would be lost in the grocery
business, consumer savings on food prices would turn into more consumer
spending on non-grocery goods, creating more jobs in those sectors.[97] Of
course, it is not at all clear why job loss would be limited to the grocery business,
since Supercenters, by their very nature, sell virtually any consumer good, except
for durables like automobiles. According to the study, California consumers "may
opt to spend their savings on sports equipment, continuing education classes, or
restaurant meals."[98] The study failed to mention that Wal-Mart already offers an
extensive line of "sports equipment."[99] The "continuing education classes" were
presumably listed because they may constitute job training for better jobs. And
where would those better jobs be? It can only be assumed, as more people spend
their grocery savings for "restaurant meals," much of the claimed job creation
would be in restaurants and similar low-paying service sector businesses, for which
continuing education classes offer little advantage.
The ultimate household savings projections by the LAEDC study should also be
questioned. First, downward pressure on wages and benefits, spurred by the giant
employer, would cause people to have less money to spend. Thus, while they may
spend less on groceries, they also make less or may be spending more on former
benefits like health care. Indeed, the study appears to not take into account the
loss of such benefits as health care and pensions that workers are likely to
experience. Second, when Wal-Mart has successfully reduced the number of
surrounding competitors, there is less pressure on the company to keep its prices
low. Third, the claim that Wal-Mart does in fact charge consumers less is open to
question. Economist Kenneth Stone has found that Wal-Mart lowers the prices of
"price sensitive" items such as milk and bread. Consumers pay attention to the
prices of these items – the kind of everyday items consumers buy most often –
and less attention to the prices of other items such as light bulbs – which are not
reduced and may be more expensive at Wal-Mart than at other retailers. The lower-
priced items are displayed prominently, grabbing customers' attention and leading
them to mistakenly believe that they are getting similarly low prices on other items
throughout the store.[100]
The LAEDC study also disputed the extent of wage and benefit differences between
Wal-Mart employees and other retail or grocery workers. According to the LAEDC,
wage comparisons are often skewed for two reasons. First, most Wal-Mart
Supercenters have not been open long enough to allow employees to accumulate
seniority and, therefore, higher rates of pay. Second, because Wal-Mart promotes
to management from within its own ranks, those employees with the greatest
longevity are usually no longer counted as hourly employees.[101]
The first reason does not appear to square with prolific reports about the intense
pressure on stores to keep labor costs down. This story first appeared in the Wall
Street Journal:
At Wal-Mart Stores Inc., managers are judged in part on their ability to keep
payroll costs at a strict percentage of sales, according to former managers. Some
say that puts extra pressure on higher-paid workers to be more productive.
"You keep people making $ 10 an hour to a high standard," putting more pressure
on them for small mistakes, said Lyndol Jackson, a Wal-Mart manager until he left
for another job in 1998.
Often, those workers quit and can be replaced less expensively, added Jackson,
who lives in Memphis, Tenn.
Former Wal-Mart cashier Dana Mailloux, 33, worked for eight years at a store in
Fort Myers, Fla., moving up to $ 9.15 an hour. Last fall, her manager called her and
more than a dozen other longtime employees into his office and told them he had
to lay them off because of lack of work.
That same day, Mailloux said, she passed a room with six new hires, red vests in
hand, filling out paperwork.
Returning to the store that weekend, she said, she saw newly advertised positions
listed on a bulletin board.
"Basically, I was thrown out like a piece of trash," said Mailloux.
Wal-Mart spokeswoman Sarah Clark said the company continually lays off and hires
workers as sales rise and fall. She said that if "labor adjustments are necessary,"
the company before making cuts asks for volunteers to take time off and carefully
controls hours.
"It is ludicrous and contrary to our business model to think the company would
benefit from replacing experienced associates with new, lower-paid ones," Clark
said in a statement. "It's clear that experienced associates are golden with us."
Clark declined to discuss Mailloux's dismissal, citing employee privacy.[102]
In other words, there may be other reasons for the wage difference than just the
frequency of store openings. Nor does the lack-of-longevity reason for the wage
differences square with previously-mentioned accounts of actual pay raises of just
a few cents per year.
The second reason claimed for wage differences – that Wal-Mart promotes its best
employees to management – would appear to be exaggerated. To the extent that
such promotions do happen, their effect on the average Wal-Mart wage must be
minimal. Wal-Mart is not promoting half of its workforce. The average Wal-Mart
store has one manager, one-to-three assistant managers, and 15 department
heads (who may or may not be counted as hourly), compared to 300 to 350
"associates."[103]
Moreover, according to the study, Wal-Mart's health care benefits are better than
often portrayed. The authors acknowledge that the Wal-Mart health insurance plan
is not as comprehensive as the unionized grocery store plans in Southern California
and that Wal-Mart employees must pay part of the premium while union workers
pay nothing. However, the authors note, the Wal-Mart plan does not include a cap
on medical expenses, thereby protecting participating employees from the
bankrupting costs of catastrophic illnesses. The unionized store plans do have a
cap, according to the LAEDC study.[104]
The relative worth of a catastrophic plan versus a more comprehensive health plan
comes into focus when considering the frequency with which workers utilize various
services. While childrens' vaccinations are covered by the union plans, such routine
medical needs are excluded from Wal-Mart's coverge. Such out-of-pocket costs for
these low-wage employees might be $75 per shot at a private clinic. On the other
hand, Wal-Mart touts the 60 transplants it covers per year at a cost of $1 million
each. As one commentator has noted, 60 transplants amounts to slightly over one-
hundredth of one percent of Wal-Mart's 500,000 insured workers.[105]
On the issue of health care coverage, the LAEDC study explained:
Since they must pay some of the upfront costs of medical care, many Wal-Mart
employees who are eligible for the coverage choose not to participate. This leads to
much lower participation rates among Wal-Mart employees than among union
workers, virtually all of whom participate since their up front costs are paid by their
employer. It is worth noting that more than 90 percent of all Wal-Mart employees
have health coverage from some source, including the company itself, a covered
spouse, parents, through retirement benefits (from another job), etc.[106]
According to the LAEDC, low participation rates in Wal-Mart's health plan are a
matter of mere "choice," not affordability. Nevertheless, most Wal-Mart employees,
according to the study, have health care from "some source," including "a covered
spouse" – that is, a spouse at another company with better health care benefits,
now subsidizing what should be Wal-Mart's labor cost. The study did not go into
any further detail on what these unnamed other sources of coverage might be, but
did not rule out public assistance programs. In July 2003, California
Assemblywoman Sandy Lieber (D-San Jose) released copies of employee handouts
from Wal-Mart which explained how to use an employment verification service when
applying for Medicaid, food stamps, and other public services.[107]
The LAEDC study continued on the topic of health care coverage: "The issue of
participation rates may become moot in California, however. In October, Governor
Davis signed SB2 – Health Care for Working Families that mandates large
employers to provide health coverage to all of their employees."[108] While Wal-
Mart currently covers about two-thirds of the costs of employee health care, SB2
would require Wal-Mart to cover 80 percent. The long waiting periods for Wal-Mart
coverage would also have to be cut by 3 months for full-time workers and one-year
and nine months for part-time workers. While the study claimed SB2 might render
the debate over participation rates moot, it failed to mention that Wal-Mart has
helped finance an employer-backed campaign for a referendum to repeal SB2.[109]
On the political front, Wal-Mart has stepped up its campaign donations. The
company contributed about $475,000 in soft money to the Republicans in the 2000
and 2002 election cycles, compared to $50,000 for Democrats in the same time
period.[110] In 2003, Wal-Mart contributed over $1 million to federal campaigns –
85 percent to Republicans and 15 percent to Democrats – jumping from the 71st
biggest campaign contributor in 2002 to the second biggest single contributor in
2003.[111] These contributions come at a time when the public outcry against Wal-
Mart's behavior is louder than ever.
CONGRESSIONAL RESPONSES
Wal-Mart is certainly emblematic of structural changes within the U.S. economy.
Unfortunately, as a rising standard-bearer of those changes, its employment
practices pose a real and growing threat to U.S. labor standards. Indeed, Wal-
Mart's sheer size and market power render it more than just an emblem but a
leading agent of these changes.
While Congress has failed to address the issues posed by Wal-Mart's ascension,
Congressional Democrats advocate a legislative program that tackles issues such
as growing income disparities, the plight of the working poor, the lack of health
care, unemployment and the shift from high-paying to low-paying jobs, the exodus
of manufacturing jobs from the country, and the lack of effective enforcement of
workers' rights.
LABOR LAW REFORM AND THE RIGHT TO ORGANIZE
Representative George Miller (D-CA) and Senator Ted Kennedy (D-MA), along with
over 130 cosponsors, have introduced HR 3619 "The Employee Free Choice Act."
This bill consists of comprehensive reform of the nation's labor laws in order to give
meaningful effect to workers' right to organize – an internationally-recognized
human right. The Employee Free Choice Act proposes triple damages for unlawful
firings of pro-union workers during organizing drives, instead of the meager
straight backpay remedy which allows employers to violate rights and destroy
organizing drives at very little cost to them; imposes civil fines on employers who
commit serious or repeated violations of the right to organize, instead of often
meaningless and ineffective notice postings; provides for a card check system for
choosing a union, rather than the easily-manipulated NLRB election process; and
provides for first-contract mediation and binding arbitration, so that employers
cannot stall bargaining until workers give up and abandon their union.
PROPOSALS TO INCREASE WAGES AND PROTECT OVERTIME
Democratic Members of Congress and Senators continue to fight for a higher
minimum wage so that one day no one working full-time will be forced to live in
poverty. While Wal-Mart typically pays more than the minimum wage, its average
hourly rate still puts many working families below the poverty line.
Additionally, Democratic Members of Congress and Senators are fighting the Bush
Administration's attempt to gut the nation's overtime laws. Under the Bush
Administration's proposed rule, 8 million working Americans will lose their overtime
pay. In exchange, the Bush Administration claims 1.3 million Americans will gain the
right to overtime pay; the real number is actually much less, according to analysts
at the Economic Policy Institute. President Bush's Department of Labor has issued
public advice to employers on how to skirt the law and avoid paying even those
additional workers any overtime pay.
Other proposals aimed at improving workers' living standards include tax cuts
targeted to working families and making higher education more affordable by
boosting funding to Pell grants and increasing the HOPE Scholarship tax credit.
Congressmembers and Senators have fought the Bush Administration's efforts to
privatize Social Security and have worked to shore up the private pension system
of employer-based retirement plans with proposals to protect the pensions of older
employees and give workers greater control over their pension savings.
CHILD LABOR
Representative Tom Lantos (D-CA), along with over 40 cosponsors, has introduced
HR 3139, "The Youth Worker Protection Act," which imposes limits on the amount
of hours teenagers – who should be focused on their education – may work. Wal-
Mart's internal audit in 2000 pointed to extensive child labor violations.
Longstanding research has established the detrimental impacts of excessive work
on school performance.
SWEATSHOPS
Democrats, led by Representative George Miller (D-CA), have introduced HR 3550,
"The Recruiter Accountability Act." This bill holds labor recruiters and employers
accountable for the promises they make to foreign workers when they lure them to
the U.S. Recruited workers often find that, despite promises of good pay and
healthy working conditions, their new jobs provide poverty wages – if any wages,
at all – and no benefits such as basic health insurance. Additionally, workers are
kept in debt to their recruiter for bringing them to the U.S. Democrats will put an
end to this practice – which not only amounts to exploitation of foreign workers
but undercuts the wages and benefits of working Americans.
Democrats are also introducing a bill to prevent federal agencies from contracting
with anyone who operates or does business with a sweatshop. Taxpayer dollars
should no longer be used to enrich those who violate basic human rights at home
or overseas.
AFFORDABLE AND MEANINGFUL HEALTH INSURANCE
Congress continues to look for solutions to the health care crisis in this country.
Democrats have offered mixes of public and employer-sponsored plans to achieve
universal care – a key policy goal of the party. They have also focused on the cost
of health care. As Wal-Mart demonstrates, offering a health care plan to employees
is not enough if employees cannot afford to participate. Proposals include providing
tax credits to small businesses to assist them in providing a health plan, reducing
the prescription drug prices by making it easier for generic drugs to be sold, and
ensuring a Medicare prescription drug benefit that obtains the best prices for
seniors.
FAIR TRADE AND THE FIGHT TO SAVE GOOD-PAYING JOBS
Democrats have led the call for fair trade agreements – with environmental and
labor standard protections. American manufacturers simply cannot compete with
foreign workforces that are paid pennies per hour, utilize child and slave labor, and
do not enjoy basic human rights. Democrats are exploring ways to end sweatshop
practices around the world; to ensure basic human rights at home and abroad for
all workers; and to ultimately stop the exodus of jobs out of the country.
Proposals include tax deductions for manufacturers who expand their U.S.
operations and fully funding job training and manufacturing development programs.
CONCLUSION
Wal-Mart's success has meant downward pressures on wages and benefits,
rampant violations of basic workers' rights, and threats to the standard of living in
communities across the country. The success of a business need not come at the
expense of workers and their families. Such short-sighted profit-making strategies
ultimately undermine our economy.
In the past few years, Wal-Mart has been subjected to dozens of class-action suits
seeking backpay for hundreds of thousands of shortchanged workers, dozens of
unfair labor practice complaints by the U.S. government for violations of workers'
right to organize, and other legal actions stemming from the company's
employment practices. At the same time, it has managed to keep its wages low and
put suppliers on a downward spiral to cut their own wages. To keep up with Wal-
Mart's low-cost demands, U.S. manufacturers have found it increasingly difficult to
remain in the U.S. Cuts in health care benefits to Wal-Mart employees are pushing
other U.S. grocers to do the same.
Wal-Mart's current behavior must not be allowed to set the standard for American
labor practices. Standing together, America's working families, including Wal-Mart
employees, and their allies in Congress can reverse this race to the bottom in the
fast-expanding service industry. The promise that every American can work an
honest day's work, receive an honest day's wages, raise a family, own a home,
have decent health care, and send their children to college is a promise that is not
easily abandoned. It is, in short, the American Dream.
ENDNOTES
1 Anthony Bianco and Wendy Zellner, "Is Wal-Mart Too Powerful?" Business Week
100 (October 6, 2003).
2 Charles Stein, "Wal-Mart Finds Success, Image Breed Contempt," Boston Globe
H1 (November 30, 2003).
3 29 U.S.C. § 141 et seq.
4 International Labor Organization, Convention No. 87, Freedom of Association and
Protection of the Right to Organize (1948), and No. 98, Right to Organize and
Collective Bargaining (1949).
5 International Confederation of Free Trade Unions (ICFTU), Internationally
Recognised Core Labour Standards in the United States: Report for the WTO
General Council Review of the Trade Policies of the United States (Geneva, January
14-16, 2004).
6 Id. at 3-4.
7 Wal-Mart, A Manager’s Toolbox to Remaining Union Free at 20-21 (no date).
Available online at http://www.ufcw.
org/issues_and_actions/walmart_workers_campaign_info/relevant_links/anti_union_
manuals.cfm.
8 Pan Demetrakakes, "Is Wal-Mart Wrapped in Union Phobia?" Food & Packaging 76
(August 1, 2003).
9 Dan Kasler, "Labor Dispute Has Historical Precedent," Scripps Howard News
Service (November 3, 2003).
10 Bureau of Labor Statistics, Department of Labor, "Union Members in 2003,"
Table 1 (January 21, 2004).
11 Stephen Franklin and Delroy Alexander, "Grocery Walkouts Have Broad Reach,"
Chicago Tribune C1 (November 12, 2003).
12 Bureau of Labor Statistics, Department of Labor, "Employee Benefits in Private
Industry, 2003," Table 1 (September 17, 2003).
13 Id.
14 Charles Williams, "Supermarket Sweepstakes: Traditional Grocery Chains Mull
Responses to Wal-Mart’s Growing Dominance," The Post and Courier (Charleston,
SC) 16E (November 10, 2003).
15 Id.
16 "Unaffordable Health Care, Low Wages, Sexual Discrimination – the Wal-Mart
Way of Life," http://www.ufcw.
org/workplace_connections/retail/industry_news/index.cfm (January 26, 2004).
17 Doug Dority, "The People’s Campaign: Justice@Wal-Mart," Air Line Pilot 55
(February 2003).
18 Bianco and Zellner, supra note 1.
19 PBS, "Store Wars: When Wal-Mart Comes to Town," http://www.pbs.
org/itvs/storewars/stores3.html (February 2, 2004). This percentage of part-time
employees was based on the earlier Wal-Mart definition of part-time as working 28
hours or less per week. In 2002, Wal-Mart changed the definition to less than 34
hours per week, which likely increased the company’s number of part-time workers.
20 Wal-Mart.com, "3 Basic Beliefs," http://www.walmartstores.
com/wmstore/wmstores/Mainabout.jsp?pagetype=about&categoryOID=-
8242&catID=-8242&template=ContentLanding.jsp (January 26, 2004).
21 Karen Olsson, "Up Against Wal-Mart," Mother Jones 54 (March/April 2003).
22 42 U.S.C. § 2000e et seq.
23 29 U.S.C. § 206.
24 Neil Buckley and Caroline Daniel, "Wal-Mart vs. the Workers: Labour Grievances
Are Stacking Up Against the World’s Biggest Company," Financial Times 11
(November 20, 2003).
25 Sheryl McCarthy, "Wal-Mart – Always Low Wages for Women!" Newsday (May 1,
2003).
26 29 U.S.C. § 201 et seq.
27 Associated Press, "Federal Jury Finds Wal-Mart Guilty in Overtime Pay Case,"
Chicago Tribune, Business 3 (December 20, 2003).
28 Id.
29 Steven Greenhouse, "Suits Say Wal-Mart Forces Workers to Toil Off the Clock,"
New York Times A1 (June 25, 2002).
30 Associated press, supra note 27.
31 Kristian Foden-Vencil, "Multiple Lawsuits Accuse Wal-Mart of Violating Workplace
Regulations," NPR Morning Edition (January 14, 2004).
32 Gwendolyn Freed and John Reenan, "Wal-Mart Suit Gets Class Status," Star
Tribune 1D (November 6, 2003).
33 Greenhouse, supra note 29.
34 United Food & Commercial Workers (UFCW), "Wal-Mart’s War on Workers’
Wages and Overtime Pay," http://www.ufcw.
org/press_room/fact_sheets_and_backgrounder/walmart/wages.cfm (January 26,
2004).
35 Greenhouse, supra note 29.
36 Steven Greenhouse, "In-House Audit Says Wal-Mart Violated Labor Laws," New
York Times 16A (January 13, 2004).
37 Id.
38 Id.
39 Id.
40 Kaiser Family Foundation, The Uninsured: A Primer – Key Facts About Americans
Without Health Insurance, at 1 (December 2003).
41 AFL-CIO, Wal-Mart: An Example of Why Workers Remain Uninsured and
Underinsured, at 1 (October 2003).
42 Id. at 11.
43 Id.
44 John Holahan, "Changes in Employer-Sponsored Health Insurance Coverage,"
Snapshots of America’s Families III, Urban Institute (September 17, 2003).
45 AFL-CIO, supra note 41, at 16.
46 Id. at 12.
47 Panjak Ghemawat, Ken Mark, and Stephen Bradley, "Wal-Mart Stores in 2003,"
case study, Harvard Business School (revised January 30, 2004).
48 Sylvia Chase, "The True Cost of Shopping at Wal-Mart," Now with Bill Moyers,
Transcript (December 19, 2003).
49 Id.
50 Laura Mecoy, "Health Benefits Fight Heats Up: South State Grocery Strike
Spotlights a Contentious Trend in Contract Talks," Sacramento Bee A1 (January
19, 2004).
51 Nancy Cleeland, "City Report is Critical of Wal-Mart Supercenters," Los Angeles
Times C1 (December 6, 2003).
52 Rodino Associates, Final Report on Research for Big Box Retail/Superstore
Ordinance, prepared for Industrial and Commercial Development Division,
Community Development Department, at 18-20 (October 28, 2003).
53 Michelle Maitre, "Wal-Mart is Suing Alameda County: Retail Giant Challenges Law
that Bars Supercenters in Unincorporated Areas," Alameda Times-Star (Alameda,
CA) at More Local News (January 27, 2004).
54 Jessica Hall and Jim Troy, "Wal-Mart Go Home! Wal-Mart’s Expansion
Juggernaut Stumbles as Towns Turn Thumbs Down and Noses Up," Warfield’s
Business Record 1 (July 22, 1994).
55 Bianco and Zellner, supra note 1.
56 Matthew Swibel, "How to Outsmart Wal-Mart," Forbes.com (November 24,
2003).
57 Bianco and Zellner, supra note 1.
58 Williams, supra note 14.
59 Steven Greenhouse, "Suit by Wal-Mart Cleaners Asserts Rackets Violation," New
York Times, 12A (November 11, 2003).
60 Greg Schneider and Dina ElBoghdady, "Wal-Mart Confirms Probe of Hiring,"
Washington Post E1 (November 5, 2003).
61 Greenhouse, supra note 59.
62 Sarah Paoletti, "Q: Should illegal aliens be able to sue U.S. employers for labor
racketeering?; Yes: Employees who have suffered discrimination or exploitation in
the workplace are entitled to sue, regardless of their immigration status," Insight
Magazine 46 (January 19, 2004).
63 Steven Greenhouse, "Illegally in the U.S., and Never a Day Off at Wal-Mart,"
International Herald Tribune 2 (November 6, 2003).
64 Jobwatch.org, Economic Policy Institute, http://www.jobwatch.org (January 26,
2004).
65 Economic Policy Institute, "Jobs Shift from Higher-Paying to Lower-Paying
Industries," Economic Snapshots (January 21, 2004).
66 Economic Policy Institute, "Economic Growth Not Reaching Middle- and Lower
Wage Earners," Economic Snapshots (January 28, 2004).
67 Id.
68 Josh Bivens, Robert Scott, and Christian Weller, "Mending Manufacturing:
Reversing poor policy decisions is the only way to end current crisis," EPI Briefing
Paper #44 (September 2003).
69 Economic Policy Institute, "Job Growth Up, Job Quality Down," Economic
Snapshots (December 17, 2003).
70 Economic Policy Institute, "Souring Trade Deficit Threatens to Destabilize U.S.
Financial Markets," Economic Snapshots (January 7, 2004).
71 Nancy Cleeland, Evelyn Iritani, and Tyler Marshall, "The Wal-Mart Effect:
Scouring the Globe to Give Shoppers an $8.63 Polo Shirt," Los Angeles Times A1
(November 24, 2003).
72 Peter S. Goodman and Philip P. Pan, "Chinese Workers Pay for Wal-Mart’s Low
Prices," Washington Post A1 (February 8, 2004).
73 Cleeland, Iritani, and Marshall, supra note 71.
74 Id.
75 Abigail Goodman and Nancy Cleeland, "The Wal-Mart Effect: An Empire Built on
Bargains Remakes the Working World," L.A. Times 1 (November 23, 2003); Charles
Fishman, "The Wal-Mart You Don’t Know," Fast Company 68 (December 2003).
76 Cleeland, Iritani, and Marshall, supra note 71.
77 Goodman and Pan, supra note 72.
78 Id.
79 Id.
80 Id.
81 Id.
82 Id.
83 Carl Goldstein, "Wal-Mart in China," The Nation (November 20, 2003).
84 Id.
85 29 U.S.C. § 706 et seq.
86 "Disabled Man Sues Wal-Mart," Business Journal (Kansas City) (January 20,
2004).
87 Id.
88 29 U.S.C. § 651 et seq.
89 29 C.F.R. 1910.35 et seq.
90 Steven Greenhouse, "Workers Assail Lock-Ins by Wal-Mart," New York Times 1
(January 18, 2004).
91 Id.
92 Id.
93 Id.
94 Id.
95 Walmartwatch.org, "Wal-Mart’s War on Workers: Frontline Report from Texas
and California," http://www.walmartwatch.com/info/internal.cfm?
subsection_id=130&internal_id=351 (May 2, 2002).
96 Greg Schneider, "Wal-Mart’s Damage Control," Washington Post E1 (January
24, 2004).
97 Gregory Freeman, Los Angeles Economic Development Corporation, Wal-Mart
Supercenters: What’s in Store for Southern California? 1-2 (January 2004).
98 Id. at 21.
99 See, e.g., http://www.walmart.com/catalog/catalog.gsp?
cat=4134&lr=B&path=0%3A4125%3A4134 (January 27, 2004).
100 ---, "Stone’s Advice on Wal-Mart: You’ve Got to Change," Aurora News
Register (Aurora, Nebraska), http://www.auroranewsregister.com/128News1.html
(January 27, 2004).
101 Freeman, supra note 97 at 22.
102 Source: Wall Street Journal, "Too Valuable to Be Kept Employees Find that
Success Leads to Higher Pay – and Vulnerability when Companies Look to Cut
Costs," Omaha World-Herald (Nebraska) 1D (June 23, 2003).
103 Simone Toth, "Retailers Stock Up for Another Strong Year of Sales," San
Diego Business Journal 14 (January 4, 1999); Bill Saporito, "A Week Aboard the
Wal-Mart Express," Fortune 77 (August 24, 1992).
104 Freeman, supra note 97 at 23-24.
105 Michael Hiltzik, "Wal-Mart’s Costs Can’t Always Be Measured," Los Angeles
Times (February 2, 2004).
106 Freeman, supra note 97 at 23-24.
107 Janet Adamy, "Wal-Mart’s Benefits Come Under Fire," Contra Costa Times
(Contra Costa, CA) (October 19, 2003).
108 Freeman, supra note 97 at 24.
109 Carl Ingram, "Court OKs Health-Care Referendum," Los Angeles Times B6
(January 23, 2004).
110 Opensecrets.org, http://www.opensecrets.org/softmoney/softcomp1.asp?
txtName=Wal-mart (January 26, 2004).
111 Schneider, supra note 95; http://www.opensecrets.org/overview/topcontribs.
asp?cycle=2004 (February 2, 2004).
