Thursday, November 29, 2012

Alternatives to the Evil Empire

There's been a lot in the news recently about Walmart and the way the House of Satan (aka The Evil Empire) screws over its hourly employees: low wages, miserable scheduling, abusive working conditions, you name it. A number of people have tried to make various arguments why we should forgive the Evil Empire its sins, including variations on "but we po' folks need a place to shop for cheap shit," "it's what all employers on the low end of the wage scale do," and "it's not possible to turn a profit and sell for low prices simultaneously." Bullshit on all three.

Taking them in reverse order, there is the stellar example of Costco. Costco sells goods at remarkably low prices. Granted, you have to buy a membership, but that membership aspect isn't what makes Costco a decent place to work. It's the company's overall ethic and business philosophy. Sam's Club is also a membership discount retailer, and their human resources policies are classic House of Satan. What drives a business to treat employees like human Kleenex is an underlying corporate philosophy that values squeezing the last possible dime of profits out of every transaction -- a modest profit isn't good enough; the profit margin has to be ginormous. Granted, the corporate model in general lends itself to profit maximization above everything else; shareholders have been known to sue boards of directors and CEOs if they decide dividends have not been sufficiently maximized. That's a subject, however, for a different post. For now, suffice to say that Costco demonstrates it is possible to sell products cheaply and still pay livable wages, provide decent fringe benefits, and co-exist with labor unions. Businesses do not have to operate like Walmart; the ones that do have made a conscious decision to do so.

Second, the "all low wage employers do it" is pure nonsense. As a person who has labored in the trenches of low wage employment (at various times in my life I've been a nursing assistant, hotel maid, and dash waxer in a car wash) I know that the fact a job is a minimum wage position does not mean the workers also have to tolerate some of the garbage Walmart is notorious for doing. Example: I worked as a nursing assistant or restorative therapy aide at four different nursing homes. All four provided the same level of skilled nursing care, had similar numbers of patients and staff, and in each case the entry level wage was whatever the legal minimum wage was at the time. Two were decent places to work; two sucked. Why did two of them suck? Management. At one, management deliberately cultivated a climate of uncertainty: you wouldn't know from week to week just how many hours you were going to work in a week or what days you would be scheduled. Each weeks' work schedule would be posted at the last minute, making it impossible to effectively plan either your budget or your life. Working in a nursing home is stressful to begin with; adding stress was a good way to guarantee a higher turnover rate among employees.

From what I hear, Walmart does post schedules fairly far in advance. However, one of the games Walmart does play with schedules is to keep as many employees as possible as part-time workers. Most of their stores are open 24/7; nonetheless, most workers are there less than 30 hours in a week. Why? Because if they go over 30 hours in a week, they qualify for the Walmart health benefits plan. Instead of doing the decent thing -- scheduling to maximize full-time employment and thus allowing their human resources to benefit from the company health plan (not to mention avoiding the need to juggle multiple part-time low wage jobs) -- they go in the opposite direction. Walmart trains its managers to respond to requests for more hours of work from employees by steering employees to the local social services office to apply for Medicaid. Again, I will grant that the nature of the business requires that some workers will always be part-time -- certain times of the day or days of the week will always be busier than others so full staffing isn't always going to be necessary -- but Walmart's policy of trying to minimize as much as possible its number of fulltime employees has been well-documented, as has its policy of steering workers toward welfare to supplement work.

Finally, there's the "where will we go for cheap crap?" rationale. Well, depending on just what type of cheap crap you need, there are places like Family Dollar, Dollar General, and so on. Family Dollar is almost everywhere, thanks to the low start-up cost for the franchise, and they're cheaper than Walmart on a lot of items -- you just have to learn to shop carefully and recognize that the inventory at Family Dollar or Dollar General is not going to be as huge as that of a Super Walmart. Aldi is a good cheap source for groceries -- the chain has its own in-house brands and a limited product line, but, depending on what you need, they're cheaper than Walmart. Target has been beating Walmart's prices lately, so have various regional or local chains. Before assuming Walmart is your one and only option, look around.

I never have understood the fascination with Walmart and the belief so many people have that everything there is a bargain. Back when I was in grad school at VaTech, a new Walmart opened in Christiansburg. People were so excited about it that there was actually a shooting in the Walmart parking lot over a parking space. We waited until the initial insanity died down a bit and then checked it out. I did get a good deal on a television set, but when I took the time to comparison shop for stuff I was buying on a more routine basis, there were better deals at Rose's, Hill's, and Kmart. Nonetheless, Walmart did a nice job of snuffing all three of those chains. Advertising does indeed work wonders when it comes to consumer perceptions.


  1. Thanks for the education. Next time I get to a big city and feel a need for cheap stuff, I'll know where to look.

  2. Only have a Walmart here unless I want to drive 15 miles one way to a Costco and I generally don't spend enough money to do that. Otherwise it's local businesses, I'm a die hard Safeway shopper so Walmart doesn't get any of my grocery money.

    They may get 40 percent of my other spending money, the other 60 percent goes to other businesses.

    Scott's wife works for Walfart but she is full time, as I recall Sam's Club is a part of Walfart.

  3. My son-in-law works at Costco and likes it well enough to stay. Not sure how WalMart treat staff in Canada as we do have a few labour laws but I expect as poorly as they can treat them. There is a sign in the office at WalMart that says "Tell us how we're doing Canada" No one seems to notice the irony (?) of the poor punctuation.

  4. Nan, I've often wondered how the people who run Walmart sleep at night. If they changed their business model to encourage higher pay and benefit packages for their employees, those employees would, in turn, spend their money in their own communities AND in their own stores using their discount cards.
    Being the largest private employer out there, that would do wonders for the nation's economy. But even more uplifting would be the working pay and standards of the employees who supply Walmart products world-wide. If Walmart took a slightly lower slice of the profit in order to justify making it a beacon of good management instead of being known as the Merchants of Evil currently in place, all ships would rise with the tide.
    Why be the scourge of the labor world when you can be admired AND still be incredibly profitable???


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