Autumn Wille
Honors 1105
Unions vs. Wal-Mart: Would a Union Really Help?
Cub Foods is one of the many stores associated with SuperValu, the leading U.S. grocery retailer and the largest publicly held food wholesaler in the U.S. (Corporate Profile, 2006). SuperValu, like Wal-Mart, strives for the lowest possible prices and gains them with it’s own distribution centers, new technology, and work with suppliers. But unlike Wal-Mart, it is fully unionized.
After working for Cub Foods for about a year, I was frustrated by the knowledge that friends of mine working at the Wal-Mart down the street were being paid a whole two dollars more then me. We had started cashier positions at the same time and with the same level of experience. The only difference was that I worked for a union. If we had the same options for benefits and were working roughly the same hours, what was I paying the union for? And I was paying the union quite a bit. On my weekly paycheck, $6.25 was deducted, with an additional $7.50 initiation fee for the first two months. That means I paid the union roughly fifty-five dollars per month for two months and twenty-five dollars every month after that, and I was still making two dollars less per hour then workers at my local Wal-Mart. And it is one dollar less then the national average pay for Wal-Mart employees according to the United Food and Commercial Workers’ (UCFW) union web site (n.d). And like Wal-Mart workers, I still didn’t get holiday pay for the first 3 months of my employment there, and if I had wanted benefits I wouldn’t have had access for 2 years.
So the question arises, would a union really make a difference for Wal-Mart, either the corporation or employees? My research on the topic brought me a lot of information and my conclusion is that it would not help either, though there are other possibilities to help the lower wage earners of the country.
There has been a very clear stigma surrounding the Wal-Mart Corporation for the last few years. As the success of this giant retailer grows, so does the knowledge about its less than positive aspects. Wal-Mart’s treatment of its employees, called “associates,” has become very controversial and many people feel that a union would help those who toil to support its massive weight. The unions very clearly support this idea, and are fighting very hard to gain entry to Wal-Mart’s wage earners.
“Change to Win” is just one example of a large budget attack against Wal-Mart by unions. It is a new six-million-member labor federation working with the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) to gain union organization within Wal-Mart. They intend to spend $25 million to launch a campaign to unionize the corporation (Prah, 2005). Two of Wal-Mart’s most aggressive attackers are union based organizations including WakeUpWalMart.com and Wal-Mart Watch. Theresa M. Welbourne and Rosemary Batt wrote an article on unions for the Center for Advanced Human Resource Studies through Cornell University that started in 1999 and went through 2002. They claim that, “Research on the relationship between unions and firm performance has generally found a positive relationship between unionization and productivity, and a negative relationship between unions and financial performance or profitability” (p.4). This implies that a union could be both good and bad for Wal-Mart.
Unions do have some very positive attributes. “Unionized workers are 16.4% more likely then similar nonunion workers to be covered by an employer-provided health insurance plan, and 18.8% more likely to participate in an employee sponsored retirement plan” (Budd, 2005). According to the Union Members Summary (2006), full-time wage workers in 2005 earned an average weekly salary of $801, compared to $622 for non-union workers. Mark A Sity wrote an article for the Free Republic stating, “Were it not for unions there wouldn’t be a thriving middle class. Were it not for unions a workers life would be nasty, brutish and short” (2002).
Unions can be beneficial to the business as well. According to Welbourne and Batt, “Unionized workers may ‘shock’ management to remove unfair or incompetent managers or provide better supervisory training” (p.8). Unions prevent turnover, which lowers the cost of training. And they help to regulate major corporations by preventing laissez-faire in regulating business though what they give their workers (Kelly, 2001). In the book, The Divine Right of Capital, Marjorie Kelly quotes Bill Fletcher of the AFL-CIO. ‘Unions can be “instruments for much more then narrow collective bargaining purposes.” They can be agents of “social change and transformation”’ (Kelly, 2001, p. 184). Welbourne and Batt wrote, “Unions provide incentives for firms to compete on the basis of quality rather then primarily on the basis of low cost” (Welbourne, 2002, p. 8).
On the other hand, there may be a cloud behind this silver lining. The idea posed by Welbourne and Batt on unions helping to change the focus from low cost to quality is directly against Wal-Mart’s goals in keeping the lowest possible prices for its customers. And they also claim that “where unions raise productivity they may lower profit margins” (Welbourne, 2002, p. 4). Unions are generally inflexible to the necessary changes a company makes to stay successful, and may ask too much from a company or even become counter productive. In 2002, Mark A Sity also wrote about a company he had worked for saying, “The union pushed for too much in a soft labor market. The company caved in, but in order to keep its profit margin (and its livelihood) it found it necessary to eliminate its low seniority high pay people.” In fighting for the lowest waged workers, the union may allow the higher end (short of management) take the hit.
Sity makes another important point when he writes, ‘There is a billboard off of I-94 in Kenosha County that for years has had a “don’t shop at Wal-Mart” message, sponsored by the union. Should they really be trying to eliminate people’s jobs… they are trying to “protect?”’ Unions are designed to be source of protection for employees but in the effort to organize within Wal-Mart, they may be just as much of a source of problem. In 2005 the Canadian Press published an article about one of Wal-Mart’s first unionized stores. It noted how Wal-Mart workers in Windsor voted against the union in a secret ballot stating that “the retail giant and the union both engaged in unfair labor practices” noting how both the union and the store were intimidating, spying and bullying associates. The vote carried nearly 75% of the workers and marked the fourth vote against unionizing in Canada in less then 2 years (Canadian Press, 2005).
Unions do allow the perspective of the employees to be heard in the upper levels of management, but it may not have a substantial effect on the things many workers take for granted. Most union jobs in general consist of higher wage construction or factory jobs or higher yet, teaching, piloting, and other educated positions. These occupations come with a higher end pay scale and better set of benefits than the average cashier or floor associate jobs. They generally have a much lower turnover making unionization more effective and fighting more worthwhile. Because of the high turnover and low academic ability and training required to do many of the bottom line cashier type jobs, they usually just are not meant to be high paying high benefit jobs.
A union may not be the solution for Wal-Mart’s associates but they, and many other workers, still need help. Wal-Mart has been targeted by nearly all union web sites as paying at or near minimum wage in some stores. This wage is a perfectly legal salary because it is the amount set by the government as a wage that is the minimum amount adequate for employees The problem lies in that it is simply not enough to live on. Even H. Lee Scott, Wal-Mart’s chief executive feels that this wage is too low, and Wal-Mart is pushing the government to bring minimum wage up to date so that it can pay its associates a healthier check without loosing any competitive edge (BBC News, 2005). This solution would also help the millions of other people that do not work at Wal-Mart and are making the bare minimum to survive.
Raising minimum wage would assist in many of the problems faced by Wal-Mart’s employees, but it may not be a possible solution in the political sense. Marjorie Kelly’s Book provides several other ideas though that may assist in raising the standards for large retailer practices toward its workers. She writes, “A different approach might be to create a separate employee house-a bicameral legislature-modeled on the works counsels of Germany, which are employee assemblies that must approve all major corporate decisions” (Kelly, 2001, p.156). She also suggests that many of the problems faced by lower workers is that the power in the corporation is held by the shareholders, creating a demand for little besides profit. If the tools that stockholders have could be shared by the associates some of the power would shift as well (Kelly, 2001, p.157). Finally, she notes that “Pricing information is a fundamental piece of what makes markets work, yet the price of labor is a closely guarded secret” (Kelly, 2001, p. 184). If all wages were made public, maybe a corporation would be embarrassed into better payment to its employees. All of these ideas have a root in forcing large corporations to take the employees into account as a primary issue rather then a way to cut costs.
Ultimately, cashier and other lower retailing positions are generally not meant to be high paying positions, though some people do rely on these positions to support not only themselves but their families. A union would likely have a similar affect on Wal-Mart as it does in the stores of SuperValu, meaning that it would not really help the situation for the workers, and would be expensive for both corporation and employees. Other solutions can be found that would turn corporate goals toward including what is best for their associates and not just the corporation and these would likely be more effective as well as more encompassing.
References
Budd, J. W. (June 29, 2005). The Effect of Unions on Employee Benefits: Recent Results from the Employer Costs for Employee Compensation Data. Retrieved
Apr. 1, 2006, from http://www.bls.gov/opub/cwc/cm20050616ar01p1.htm
Kelber, H. (April 27, 2005). UCFW Adopts New Organizing Strategy With Ties
To Groups Fighting Wal-Mart. Retrieved March 24, 2006 from http://www.laboreducator.org/ufcwneworg.htm
Kelly, M. (2001). The Divine Right of Capital. San Fransisco. Berrett-Koehler
Publishers, Inc.
Prah, P. M. (2005, September 1). Labor unions' future. The CQ researcher, 15, 709-732. Retrieved April 10, 2006, from http://library.cqpress.com/cqresearcher/cqresrre2005090200. Document ID:cqresrre2005090200.
Sity, M. A. (Nov. 21, 2002). Let Down by the AFL/CIO Again. Retrieved March 24, 2006, by http://www.freerepublic.com/focus/fr/793236/posts
SuperValu at a Glance. (April, 2006) SuperValue Corporate Profile. Retrieved March 7, 2006, from http://www.supervalu.com/sv-webapp/downloads/Company_Fact_Sheet.pdf
The Wal-Mart Threat (n.d.) UFCW Retrieved March 24, 2006, from http://www.ufcw.org/issues_and_actions/walmart_workers_campaign_info/index.cfm
Union Members Summary. (Jan. 20, 2006). Bureau of Labor Statistics. Retrieved March
9, 2006, from http://www.bls.gov/news.release/union2.nr0.htm
Union Representative, Feb. 19, 2006. Supervalu Unions? Retrieved Mach 24, 2006, from
http://www.youareworthmore.org/node/21286
Wal-Mart calls for higher wages. (Oct. 6, 2005). BBC News. Retrieved Apr. 9, 2006, from http://news.bbc.co.uk/2/hi/business/4377344.stm
Welbourne, T. M. & Batt, R. Cornell University (2002) Performance and Growth in Entrepreneurial Firms: What do Unions do? Retrieved March 9,
2006 from http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1100&context=cahrswp
What do Unions Do? (Aug. 11, 2001). Student Labor Action Coalition (SLAC) Retrieved
March 9, 2006, from http://slac.rso.wisc.edu/what_do_they_do.html
What We Stand For. (2006) Change to Win Uniting workers for a better America.
Retrieved Apr. 19, 2006 from http://www.changetowin.org/
Windsor Wal-Mart Workers Vote to Not Join Union. (March 9, 2005). Canadian Press. Retrieved Apr. 2, 2006, from http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/1110370096271_5/?hub=Canada
Honors 1105
Unions vs. Wal-Mart: Would a Union Really Help?
Cub Foods is one of the many stores associated with SuperValu, the leading U.S. grocery retailer and the largest publicly held food wholesaler in the U.S. (Corporate Profile, 2006). SuperValu, like Wal-Mart, strives for the lowest possible prices and gains them with it’s own distribution centers, new technology, and work with suppliers. But unlike Wal-Mart, it is fully unionized.
After working for Cub Foods for about a year, I was frustrated by the knowledge that friends of mine working at the Wal-Mart down the street were being paid a whole two dollars more then me. We had started cashier positions at the same time and with the same level of experience. The only difference was that I worked for a union. If we had the same options for benefits and were working roughly the same hours, what was I paying the union for? And I was paying the union quite a bit. On my weekly paycheck, $6.25 was deducted, with an additional $7.50 initiation fee for the first two months. That means I paid the union roughly fifty-five dollars per month for two months and twenty-five dollars every month after that, and I was still making two dollars less per hour then workers at my local Wal-Mart. And it is one dollar less then the national average pay for Wal-Mart employees according to the United Food and Commercial Workers’ (UCFW) union web site (n.d). And like Wal-Mart workers, I still didn’t get holiday pay for the first 3 months of my employment there, and if I had wanted benefits I wouldn’t have had access for 2 years.
So the question arises, would a union really make a difference for Wal-Mart, either the corporation or employees? My research on the topic brought me a lot of information and my conclusion is that it would not help either, though there are other possibilities to help the lower wage earners of the country.
There has been a very clear stigma surrounding the Wal-Mart Corporation for the last few years. As the success of this giant retailer grows, so does the knowledge about its less than positive aspects. Wal-Mart’s treatment of its employees, called “associates,” has become very controversial and many people feel that a union would help those who toil to support its massive weight. The unions very clearly support this idea, and are fighting very hard to gain entry to Wal-Mart’s wage earners.
“Change to Win” is just one example of a large budget attack against Wal-Mart by unions. It is a new six-million-member labor federation working with the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) to gain union organization within Wal-Mart. They intend to spend $25 million to launch a campaign to unionize the corporation (Prah, 2005). Two of Wal-Mart’s most aggressive attackers are union based organizations including WakeUpWalMart.com and Wal-Mart Watch. Theresa M. Welbourne and Rosemary Batt wrote an article on unions for the Center for Advanced Human Resource Studies through Cornell University that started in 1999 and went through 2002. They claim that, “Research on the relationship between unions and firm performance has generally found a positive relationship between unionization and productivity, and a negative relationship between unions and financial performance or profitability” (p.4). This implies that a union could be both good and bad for Wal-Mart.
Unions do have some very positive attributes. “Unionized workers are 16.4% more likely then similar nonunion workers to be covered by an employer-provided health insurance plan, and 18.8% more likely to participate in an employee sponsored retirement plan” (Budd, 2005). According to the Union Members Summary (2006), full-time wage workers in 2005 earned an average weekly salary of $801, compared to $622 for non-union workers. Mark A Sity wrote an article for the Free Republic stating, “Were it not for unions there wouldn’t be a thriving middle class. Were it not for unions a workers life would be nasty, brutish and short” (2002).
Unions can be beneficial to the business as well. According to Welbourne and Batt, “Unionized workers may ‘shock’ management to remove unfair or incompetent managers or provide better supervisory training” (p.8). Unions prevent turnover, which lowers the cost of training. And they help to regulate major corporations by preventing laissez-faire in regulating business though what they give their workers (Kelly, 2001). In the book, The Divine Right of Capital, Marjorie Kelly quotes Bill Fletcher of the AFL-CIO. ‘Unions can be “instruments for much more then narrow collective bargaining purposes.” They can be agents of “social change and transformation”’ (Kelly, 2001, p. 184). Welbourne and Batt wrote, “Unions provide incentives for firms to compete on the basis of quality rather then primarily on the basis of low cost” (Welbourne, 2002, p. 8).
On the other hand, there may be a cloud behind this silver lining. The idea posed by Welbourne and Batt on unions helping to change the focus from low cost to quality is directly against Wal-Mart’s goals in keeping the lowest possible prices for its customers. And they also claim that “where unions raise productivity they may lower profit margins” (Welbourne, 2002, p. 4). Unions are generally inflexible to the necessary changes a company makes to stay successful, and may ask too much from a company or even become counter productive. In 2002, Mark A Sity also wrote about a company he had worked for saying, “The union pushed for too much in a soft labor market. The company caved in, but in order to keep its profit margin (and its livelihood) it found it necessary to eliminate its low seniority high pay people.” In fighting for the lowest waged workers, the union may allow the higher end (short of management) take the hit.
Sity makes another important point when he writes, ‘There is a billboard off of I-94 in Kenosha County that for years has had a “don’t shop at Wal-Mart” message, sponsored by the union. Should they really be trying to eliminate people’s jobs… they are trying to “protect?”’ Unions are designed to be source of protection for employees but in the effort to organize within Wal-Mart, they may be just as much of a source of problem. In 2005 the Canadian Press published an article about one of Wal-Mart’s first unionized stores. It noted how Wal-Mart workers in Windsor voted against the union in a secret ballot stating that “the retail giant and the union both engaged in unfair labor practices” noting how both the union and the store were intimidating, spying and bullying associates. The vote carried nearly 75% of the workers and marked the fourth vote against unionizing in Canada in less then 2 years (Canadian Press, 2005).
Unions do allow the perspective of the employees to be heard in the upper levels of management, but it may not have a substantial effect on the things many workers take for granted. Most union jobs in general consist of higher wage construction or factory jobs or higher yet, teaching, piloting, and other educated positions. These occupations come with a higher end pay scale and better set of benefits than the average cashier or floor associate jobs. They generally have a much lower turnover making unionization more effective and fighting more worthwhile. Because of the high turnover and low academic ability and training required to do many of the bottom line cashier type jobs, they usually just are not meant to be high paying high benefit jobs.
A union may not be the solution for Wal-Mart’s associates but they, and many other workers, still need help. Wal-Mart has been targeted by nearly all union web sites as paying at or near minimum wage in some stores. This wage is a perfectly legal salary because it is the amount set by the government as a wage that is the minimum amount adequate for employees The problem lies in that it is simply not enough to live on. Even H. Lee Scott, Wal-Mart’s chief executive feels that this wage is too low, and Wal-Mart is pushing the government to bring minimum wage up to date so that it can pay its associates a healthier check without loosing any competitive edge (BBC News, 2005). This solution would also help the millions of other people that do not work at Wal-Mart and are making the bare minimum to survive.
Raising minimum wage would assist in many of the problems faced by Wal-Mart’s employees, but it may not be a possible solution in the political sense. Marjorie Kelly’s Book provides several other ideas though that may assist in raising the standards for large retailer practices toward its workers. She writes, “A different approach might be to create a separate employee house-a bicameral legislature-modeled on the works counsels of Germany, which are employee assemblies that must approve all major corporate decisions” (Kelly, 2001, p.156). She also suggests that many of the problems faced by lower workers is that the power in the corporation is held by the shareholders, creating a demand for little besides profit. If the tools that stockholders have could be shared by the associates some of the power would shift as well (Kelly, 2001, p.157). Finally, she notes that “Pricing information is a fundamental piece of what makes markets work, yet the price of labor is a closely guarded secret” (Kelly, 2001, p. 184). If all wages were made public, maybe a corporation would be embarrassed into better payment to its employees. All of these ideas have a root in forcing large corporations to take the employees into account as a primary issue rather then a way to cut costs.
Ultimately, cashier and other lower retailing positions are generally not meant to be high paying positions, though some people do rely on these positions to support not only themselves but their families. A union would likely have a similar affect on Wal-Mart as it does in the stores of SuperValu, meaning that it would not really help the situation for the workers, and would be expensive for both corporation and employees. Other solutions can be found that would turn corporate goals toward including what is best for their associates and not just the corporation and these would likely be more effective as well as more encompassing.
References
Budd, J. W. (June 29, 2005). The Effect of Unions on Employee Benefits: Recent Results from the Employer Costs for Employee Compensation Data. Retrieved
Apr. 1, 2006, from http://www.bls.gov/opub/cwc/cm20050616ar01p1.htm
Kelber, H. (April 27, 2005). UCFW Adopts New Organizing Strategy With Ties
To Groups Fighting Wal-Mart. Retrieved March 24, 2006 from http://www.laboreducator.org/ufcwneworg.htm
Kelly, M. (2001). The Divine Right of Capital. San Fransisco. Berrett-Koehler
Publishers, Inc.
Prah, P. M. (2005, September 1). Labor unions' future. The CQ researcher, 15, 709-732. Retrieved April 10, 2006, from http://library.cqpress.com/cqresearcher/cqresrre2005090200. Document ID:cqresrre2005090200.
Sity, M. A. (Nov. 21, 2002). Let Down by the AFL/CIO Again. Retrieved March 24, 2006, by http://www.freerepublic.com/focus/fr/793236/posts
SuperValu at a Glance. (April, 2006) SuperValue Corporate Profile. Retrieved March 7, 2006, from http://www.supervalu.com/sv-webapp/downloads/Company_Fact_Sheet.pdf
The Wal-Mart Threat (n.d.) UFCW Retrieved March 24, 2006, from http://www.ufcw.org/issues_and_actions/walmart_workers_campaign_info/index.cfm
Union Members Summary. (Jan. 20, 2006). Bureau of Labor Statistics. Retrieved March
9, 2006, from http://www.bls.gov/news.release/union2.nr0.htm
Union Representative, Feb. 19, 2006. Supervalu Unions? Retrieved Mach 24, 2006, from
http://www.youareworthmore.org/node/21286
Wal-Mart calls for higher wages. (Oct. 6, 2005). BBC News. Retrieved Apr. 9, 2006, from http://news.bbc.co.uk/2/hi/business/4377344.stm
Welbourne, T. M. & Batt, R. Cornell University (2002) Performance and Growth in Entrepreneurial Firms: What do Unions do? Retrieved March 9,
2006 from http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1100&context=cahrswp
What do Unions Do? (Aug. 11, 2001). Student Labor Action Coalition (SLAC) Retrieved
March 9, 2006, from http://slac.rso.wisc.edu/what_do_they_do.html
What We Stand For. (2006) Change to Win Uniting workers for a better America.
Retrieved Apr. 19, 2006 from http://www.changetowin.org/
Windsor Wal-Mart Workers Vote to Not Join Union. (March 9, 2005). Canadian Press. Retrieved Apr. 2, 2006, from http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/1110370096271_5/?hub=Canada
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