Wal-Mart’s Labor Policies Hit New Low;
How Will Unions Respond to Threat?

Wal-Mart’s new, three-pronged policies are designed to create still cheaper labor costs, more “flexible” store management and tighter control over the lives of its 1.3 million employees, whom it titles as “associates.”

First, Wal-Mart is pressing to double the number of part-time employees from 20% to 40%. This will not only cut its wage bill, but will also reduce the cost of such benefits as health care. It will accelerate the practice of replacing full-time, higher-paid employees with part-timers. It will make it even more difficult for unions to organize the workers in the giant company.

Second, Wal-Mart is putting a “cap” on its wage structure, so that employees will never receive an annual raise if their pay is at or above the cap, unless they move to a higher-paying job category. For countless thousands of employees, their chance of economic betterment at Wal-Mart is nil.

Third, more than 1,900 of Wal-Mart’s 4,000 stores are open 24 hours a day, and their employees are scheduled to work whatever hours of the day or night when the store manager says he needs them. Family life is disrupted; it is almost impossible to plan for weekend activity, since there may be a call to report for work that can’t be ignored.

Wal-Mart justifies these practices on three grounds: (1) better service for customers. (2) a continuance of its low-price standards, and (3) meeting the competition. It is following the accepted business practice of operating as cheaply and as efficiently as possible in order to maximize profits. Nothing illegal about that.

As the world’s largest retailer, Wal-Mart had sales last year of $312 billion, exceeding those of the next five biggest retailers combined.

There is a lot of unhappiness among the “associates,” especially the full-time, higher-paid ones. And lots of grumbling about the 24-hour scheduling. But the store managers are instructed to say that if the employees don’t like it, they can quit. In many cases, those who complain have their working hours curtailed, with a loss in pay.

Inevitably, Wal-Mart’s labor policies will be followed by its competitors, union as well as non-union, and there will be pressure on suppliers to replace full-time employees with part-timers to cut labor costs.

How Should Labor Meet the Wal-Mart Challenge?

The Change to Win coalition has poured massive amounts of money and resources into its Wal-Mart campaign as its prime target. The unionized supermarket chains that are under contract with the United Food and Commercial Workers will be under pressure to emulate the latest cost-cutting and employee scheduling policies of their most powerful competitor.

Until now, the CTW has focused on tearing down Wal-Mart’s reputation, principally on its health-care policy. And it has done a fairly good job with the help of a network of various interested organizations. But it has publicly stated that it is not conducting i a union organizing campaign at Wal-Mart.

But is this limited strategy tenable any longer? What if the 13 millions of AFL-CIO and CTW union members were fired up to commit themselves to sustained organizing at a Wal-Mart store in their community? Couldn’t we organize a hundred or 50 or even ten stores of the more than 2,000 around the country to show Wal-Mart employees that organized labor can stand up to their all powerful bosses?

That seems a sensible strategy. Do CTW leaders have anything better in mind?

Our two weekly columns (LaborTalk and The World of Labor) can be seen and downloaded at our Web site: www.laboreducator.org.

Harry Kelber's e-mail address is: hkelber@igc.org.