Nick Simberg
Honors 1105
5-8-06
1,714 words
“We Don’t Need No Stinkin’ Unions!”
Wal-Mart vs. Organized Labor
A labor union is, “an organization of workers formed for the purpose of advancing its members' interests in respect to wages, benefits, and working conditions” (Merriam-Webster, 2006). Labor unions first appeared back in the time of the Industrial Revolution of the late 18th and early 19th centuries, when unsafe working conditions and low pay forced employees to band together for their ever-decreasing rights and wages. All American workers have the democratic right to form a union, according to Section 7 of the National Labor Relations Act (the “Employees have the right to self-organization…” clause), but fewer and fewer workers choose to exercise this right nowadays (National Labor Relations Board, n.d.). The whole reason for even having a union is that it is easier to fight your employer as a group instead of as an individual – there is strength in numbers. Wal-Mart, however, is very proud of the fact that they are not unionized and do not need to be to operate efficiently. Wal-Mart does not need unions; they are a thing of the past.
“Wal-Mart is fervently NOT anti-union,” claims Bemidji, Minnesota, Wal-Mart General Manager, Andy Abello, “We are pro-associate” (Abello, 2006). (An associate is another name for a Wal-Mart employee.) Abello rose to his current GM position after only eight years of Wal-Mart employment, and he believes that any individual with the motivation necessary can do the same. “You don’t need a union to do well in Wal-Mart,” he boldly states, “Just look at me.”
The union with the largest membership base currently (and the source of some of Wal-Mart’s most outspoken opposition) is the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), with about 16 million members (Windham, 2003). However, the AFL-CIO lost 300,000 union jobs between 2001 and 2002, and is still on a steady decline in membership. In 2005, another blow hit the AFL-CIO – they lost 1.8 million members, one-sixth of their membership base, when their biggest subsidiary, the Service Employees International Union (SEIU) split from the AFL-CIO after losing confidence in the AFL-CIO’s ability to find and recruit new union members (“Teamsters, SEIU split from AFL-CIO,” 2005).
The Wall Street Journal paints a similarly bleak picture for the increasingly dark future of unions. In an August 15, 2005, piece, Journal reporters Robert Guy Matthews and Kris Maher pointed out, “…in 2004, just 7.9% of private-sector workers belonged to a union, down from 16.8% in 1983, the first year for which the Labor Department has comparable figures” (Matthews, 2005, paragraph 6). What will save unions? Not Wal-Mart, that’s for sure. They did try a union once, however, with terrible results
April 2005: a Jonquière, Quebec, Wal-Mart – the only unionized Wal-Mart in North America – closed after having been unionized just a few months earlier, in August, 2004. Why? Wal-Mart’s official reason for the store closing, stated by Andrew Pelletier, director of corporate affairs at Wal-Mart: “The Jonquière store is not meeting its business plan, and the company is concerned about the economic viability of the store… We felt the union wanted to fundamentally change the store’s business model” (Bianco, 2006, p. 81), with increased pay and about thirty workers being added to the payroll. Interestingly enough, when the unionization vote came up, it lost, 53% to 47%. However, after the mandatory three-month cool-off period, enough signatures on union cards were collected in secret to unionize the store without management’s knowledge or approval (Bianco, 2006, p. 81). Jonquière’s Wal-Mart closed eight months later.
The Jonquière closing would be used for a long time afterwards in public relations battles by both anti-Wal-Mart and anti-union advocates. Wal-Mart managers would use the “Jonquière example” in their stores to discourage the formation of unions amongst their associates, and the media would use the “Jonquière example” as a supreme display of the potential cruelty of Wal-Mart. “See? I told you unions were a bad idea,” Wal-Mart seems to say.
The main reason a union was formed in Jonquière in the first place was the huge wage differences between cashiers (the women, especially Sylvie Lavoie, the leader of the Jonquière Wal-Mart rebellion, felt that they were getting shortchanged by the corporate office). According to Wal-Mart’s official by-the-numbers website, WalMartFacts.com, the myth of low wages is simply untrue. Regarding wages, it states:
The majority of Wal-Mart's hourly store associates in the United States work full-time. That's well above the 20 - 40 percent typically found in the retail industry. Wal-Mart’s average full-time hourly wage for store associates nationally is $10.11 an hour, and even higher in urban areas. For example: $11.58 in Denver (2006, paragraph 10).
Of course, as it is Wal-Mart’s website, there is a positive spin on the numbers presented. This statistic only applies to full-time workers in the U.S. A competing statistic from the anti-Wal-Mart site WakeUpWalMart.com gives $8.23 per hour as the average wage, but they are only giving numbers for sales associates (the most common job) for 2001 (the last year Wal-Mart released wage figures for most positions). Wal-Mart’s official website is supposedly updated regularly and should not contain any five-year-old statistics. There is no date on the WalMartFacts.com information, however. WakeUpWalMart.com also states, “A 2003 wage analysis reported that cashiers, the second most common job, earn approximately $7.92 per hour and work 29 hours a week. This brings in annual wages of only $11,948” (paragraph 1). This is more than $5,000 short of the current annual poverty line of $17,184 (EPI.org, 2006), not to mention if you have a family to support on your miniscule Wal-Mart wages.
However, Wal-Mart makes it clear that ANY associate can advance through job titles and pay scales quickly in the Wal-Mart infrastructure without third-party representation. Bemidji Wal-Mart General Manager Andy Abello made it, and he doesn’t even have a college degree. You don’t need a union to get ahead at Wal-Mart.
No discussion of unions would be complete without a mention of health care coverage. According to WalMartFacts.com, 73% of all employees are eligible for health care coverage, and 46% currently choose to enroll (2006). Even if not using Wal-Mart’s health care, Wal-Mart estimates that roughly three-fourths of their employees have some sort of coverage, be it through Wal-Mart, a spouse, a parent, or another provider. After revamping their health care system recently in response to Wal-Mart dissidents, Wal-Mart employees are now able to receive health care benefits even if they are merely part-time workers (health insurance was formerly available only to full-time associates). Wal-Mart also added a new Value Plan available for associates in some locations starting at just $11 per month, plus just thirty cents per child, per day, with no maximum number of children. Wal-Mart is not as ruthless as the media makes it out to be, or at least it’s trying to get better.
Wal-Mart has had so much bad PR in recent years over unions, wages, urban sprawl, and few employee benefits that it finally decided to fight back against the media and try to increase the quality of living for everyone. Besides offering more affordable health care options to its employees (18 different plans at least count), Wal-Mart is now able to truthfully say to its employees, “You don’t need unions, because we are lobbying to raise the minimum wage for you!” An October 25, 2005, article in the Wall Street Journal chronicles H. Lee Scott’s (the CEO of Wal-Mart) bargaining with the U.S. Congress to raise the national minimum wage (“Wal-Mart Urges Congress to Raise Minimum Wage”). Some critics blame the sudden show of good faith by the notoriously greedy company on a desperate bid for some good PR. Wal-Mart, if it chose, could easily just raise its own wages, and say codswallop to the national minimums. Also, a boost in the minimum wage would harm Wal-Mart’s less profitable competitors more than Wal-Mart itself would be harmed. Could the whole minimum wage debacle merely be another of Wal-Mart’s ploys to become even more powerful? Possibly, but its workers will benefit, so what’s the risk?
Unions and Wal-Mart. Wal-Mart and unions. They don’t go together, nor should they. Jonquière proved that. You – an INDIVIDUAL – can succeed in Wal-Mart without third-party representation. Wal-Mart did not become the biggest, most profitable company in the world by falling prey to the whims of union organizers. They simply cannot pay $25 an hour to a unionized grocery stocker, give him and his family extensive health care benefits, and still keep their costs and prices lower than anyone and everyone else in the world. They are Low Costs. They are Low Prices. It’s a motto; it’s a way of doing business. If a consumer does not want to pay an extra two cents for a box of cereal so that an associate may have a $1 per hour wage increase, then Wal-Mart will keep their Always Low Prices. Always.
References
Abello, A. (March 29, 2006, 3:00 p.m.). Public presentation to Honors 1105 class.
Associated Press. (July 25, 2005, 6:43 p.m., ET). “Teamsters, SEIU split from AFL-CIO: Federation's president says move is a 'grievous insult' to workers.” Retrieved April 11, 2006, from http://www.msnbc.msn.com/id/8682415.
Bianco, A. (2006). The Bully of Bentonville: How the High Cost of Wal-Mart’s Low Prices is Hurting America. Currency Books. Excerpted in Business Week, February 13, 2006, pgs. 78-81.
Economic Policy Institute. (2006). “Poverty and Family Budgets Issue Guide.” Retrieved April 11, 2006, from http://www.epi.org/content.cfm/issueguides_poverty_povertyfaq.
“Labor Union.” In Merriam-Webster OnLine. Retrieved from http://www.webster.com/cgi-bin/dictionary on April 11, 2006.
Matthews, R. G., & Maher, K. (August 15, 2005). “Labor’s PR Problem.” Wall Street Journal, pgs. B1 & B4.
National Labor Relations Board. (n.d.) National Labor Relations Act. Section 7, Paragraph 1. Retrieved April 30, 2006 from http://www.nlrb.gov/nlrb/legal/manuals/rules/act.asp.
United Food and Commercial Workers International Union. (2005). The Real Facts About Wal-Mart: Wal-Mart Wages and Worker Rights. Paragraph 1. Retrieved April 30, 2006 from http://www.wakeupwalmart.com/facts/.
WalMartFacts.com. (2006). “Competitive Wages.” Retrieved April 11, 2006, from http://www.walmartfacts.com/associates/default.aspx#a41.
Windham, L. (February 25, 2003). “Economic Downturn Reverberates in Union Membership, Membership Decline in 2002 Despite Half a Million Workers Newly Organized.” AFL-CIO Press Releases, Speeches, and Testimony. Retrieved April 20, 2006, from http://www.aflcio.org/mediacenter/prsptm/pr02252003.cfm
Zimmerman, A. (October 25, 2005). “Wal-Mart Urges Congress to Raise Minimum Wage.” The Wall Street Journal. Pages A2 & A8.
Honors 1105
5-8-06
1,714 words
“We Don’t Need No Stinkin’ Unions!”
Wal-Mart vs. Organized Labor
A labor union is, “an organization of workers formed for the purpose of advancing its members' interests in respect to wages, benefits, and working conditions” (Merriam-Webster, 2006). Labor unions first appeared back in the time of the Industrial Revolution of the late 18th and early 19th centuries, when unsafe working conditions and low pay forced employees to band together for their ever-decreasing rights and wages. All American workers have the democratic right to form a union, according to Section 7 of the National Labor Relations Act (the “Employees have the right to self-organization…” clause), but fewer and fewer workers choose to exercise this right nowadays (National Labor Relations Board, n.d.). The whole reason for even having a union is that it is easier to fight your employer as a group instead of as an individual – there is strength in numbers. Wal-Mart, however, is very proud of the fact that they are not unionized and do not need to be to operate efficiently. Wal-Mart does not need unions; they are a thing of the past.
“Wal-Mart is fervently NOT anti-union,” claims Bemidji, Minnesota, Wal-Mart General Manager, Andy Abello, “We are pro-associate” (Abello, 2006). (An associate is another name for a Wal-Mart employee.) Abello rose to his current GM position after only eight years of Wal-Mart employment, and he believes that any individual with the motivation necessary can do the same. “You don’t need a union to do well in Wal-Mart,” he boldly states, “Just look at me.”
The union with the largest membership base currently (and the source of some of Wal-Mart’s most outspoken opposition) is the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), with about 16 million members (Windham, 2003). However, the AFL-CIO lost 300,000 union jobs between 2001 and 2002, and is still on a steady decline in membership. In 2005, another blow hit the AFL-CIO – they lost 1.8 million members, one-sixth of their membership base, when their biggest subsidiary, the Service Employees International Union (SEIU) split from the AFL-CIO after losing confidence in the AFL-CIO’s ability to find and recruit new union members (“Teamsters, SEIU split from AFL-CIO,” 2005).
The Wall Street Journal paints a similarly bleak picture for the increasingly dark future of unions. In an August 15, 2005, piece, Journal reporters Robert Guy Matthews and Kris Maher pointed out, “…in 2004, just 7.9% of private-sector workers belonged to a union, down from 16.8% in 1983, the first year for which the Labor Department has comparable figures” (Matthews, 2005, paragraph 6). What will save unions? Not Wal-Mart, that’s for sure. They did try a union once, however, with terrible results
April 2005: a Jonquière, Quebec, Wal-Mart – the only unionized Wal-Mart in North America – closed after having been unionized just a few months earlier, in August, 2004. Why? Wal-Mart’s official reason for the store closing, stated by Andrew Pelletier, director of corporate affairs at Wal-Mart: “The Jonquière store is not meeting its business plan, and the company is concerned about the economic viability of the store… We felt the union wanted to fundamentally change the store’s business model” (Bianco, 2006, p. 81), with increased pay and about thirty workers being added to the payroll. Interestingly enough, when the unionization vote came up, it lost, 53% to 47%. However, after the mandatory three-month cool-off period, enough signatures on union cards were collected in secret to unionize the store without management’s knowledge or approval (Bianco, 2006, p. 81). Jonquière’s Wal-Mart closed eight months later.
The Jonquière closing would be used for a long time afterwards in public relations battles by both anti-Wal-Mart and anti-union advocates. Wal-Mart managers would use the “Jonquière example” in their stores to discourage the formation of unions amongst their associates, and the media would use the “Jonquière example” as a supreme display of the potential cruelty of Wal-Mart. “See? I told you unions were a bad idea,” Wal-Mart seems to say.
The main reason a union was formed in Jonquière in the first place was the huge wage differences between cashiers (the women, especially Sylvie Lavoie, the leader of the Jonquière Wal-Mart rebellion, felt that they were getting shortchanged by the corporate office). According to Wal-Mart’s official by-the-numbers website, WalMartFacts.com, the myth of low wages is simply untrue. Regarding wages, it states:
The majority of Wal-Mart's hourly store associates in the United States work full-time. That's well above the 20 - 40 percent typically found in the retail industry. Wal-Mart’s average full-time hourly wage for store associates nationally is $10.11 an hour, and even higher in urban areas. For example: $11.58 in Denver (2006, paragraph 10).
Of course, as it is Wal-Mart’s website, there is a positive spin on the numbers presented. This statistic only applies to full-time workers in the U.S. A competing statistic from the anti-Wal-Mart site WakeUpWalMart.com gives $8.23 per hour as the average wage, but they are only giving numbers for sales associates (the most common job) for 2001 (the last year Wal-Mart released wage figures for most positions). Wal-Mart’s official website is supposedly updated regularly and should not contain any five-year-old statistics. There is no date on the WalMartFacts.com information, however. WakeUpWalMart.com also states, “A 2003 wage analysis reported that cashiers, the second most common job, earn approximately $7.92 per hour and work 29 hours a week. This brings in annual wages of only $11,948” (paragraph 1). This is more than $5,000 short of the current annual poverty line of $17,184 (EPI.org, 2006), not to mention if you have a family to support on your miniscule Wal-Mart wages.
However, Wal-Mart makes it clear that ANY associate can advance through job titles and pay scales quickly in the Wal-Mart infrastructure without third-party representation. Bemidji Wal-Mart General Manager Andy Abello made it, and he doesn’t even have a college degree. You don’t need a union to get ahead at Wal-Mart.
No discussion of unions would be complete without a mention of health care coverage. According to WalMartFacts.com, 73% of all employees are eligible for health care coverage, and 46% currently choose to enroll (2006). Even if not using Wal-Mart’s health care, Wal-Mart estimates that roughly three-fourths of their employees have some sort of coverage, be it through Wal-Mart, a spouse, a parent, or another provider. After revamping their health care system recently in response to Wal-Mart dissidents, Wal-Mart employees are now able to receive health care benefits even if they are merely part-time workers (health insurance was formerly available only to full-time associates). Wal-Mart also added a new Value Plan available for associates in some locations starting at just $11 per month, plus just thirty cents per child, per day, with no maximum number of children. Wal-Mart is not as ruthless as the media makes it out to be, or at least it’s trying to get better.
Wal-Mart has had so much bad PR in recent years over unions, wages, urban sprawl, and few employee benefits that it finally decided to fight back against the media and try to increase the quality of living for everyone. Besides offering more affordable health care options to its employees (18 different plans at least count), Wal-Mart is now able to truthfully say to its employees, “You don’t need unions, because we are lobbying to raise the minimum wage for you!” An October 25, 2005, article in the Wall Street Journal chronicles H. Lee Scott’s (the CEO of Wal-Mart) bargaining with the U.S. Congress to raise the national minimum wage (“Wal-Mart Urges Congress to Raise Minimum Wage”). Some critics blame the sudden show of good faith by the notoriously greedy company on a desperate bid for some good PR. Wal-Mart, if it chose, could easily just raise its own wages, and say codswallop to the national minimums. Also, a boost in the minimum wage would harm Wal-Mart’s less profitable competitors more than Wal-Mart itself would be harmed. Could the whole minimum wage debacle merely be another of Wal-Mart’s ploys to become even more powerful? Possibly, but its workers will benefit, so what’s the risk?
Unions and Wal-Mart. Wal-Mart and unions. They don’t go together, nor should they. Jonquière proved that. You – an INDIVIDUAL – can succeed in Wal-Mart without third-party representation. Wal-Mart did not become the biggest, most profitable company in the world by falling prey to the whims of union organizers. They simply cannot pay $25 an hour to a unionized grocery stocker, give him and his family extensive health care benefits, and still keep their costs and prices lower than anyone and everyone else in the world. They are Low Costs. They are Low Prices. It’s a motto; it’s a way of doing business. If a consumer does not want to pay an extra two cents for a box of cereal so that an associate may have a $1 per hour wage increase, then Wal-Mart will keep their Always Low Prices. Always.
References
Abello, A. (March 29, 2006, 3:00 p.m.). Public presentation to Honors 1105 class.
Associated Press. (July 25, 2005, 6:43 p.m., ET). “Teamsters, SEIU split from AFL-CIO: Federation's president says move is a 'grievous insult' to workers.” Retrieved April 11, 2006, from http://www.msnbc.msn.com/id/8682415.
Bianco, A. (2006). The Bully of Bentonville: How the High Cost of Wal-Mart’s Low Prices is Hurting America. Currency Books. Excerpted in Business Week, February 13, 2006, pgs. 78-81.
Economic Policy Institute. (2006). “Poverty and Family Budgets Issue Guide.” Retrieved April 11, 2006, from http://www.epi.org/content.cfm/issueguides_poverty_povertyfaq.
“Labor Union.” In Merriam-Webster OnLine. Retrieved from http://www.webster.com/cgi-bin/dictionary on April 11, 2006.
Matthews, R. G., & Maher, K. (August 15, 2005). “Labor’s PR Problem.” Wall Street Journal, pgs. B1 & B4.
National Labor Relations Board. (n.d.) National Labor Relations Act. Section 7, Paragraph 1. Retrieved April 30, 2006 from http://www.nlrb.gov/nlrb/legal/manuals/rules/act.asp.
United Food and Commercial Workers International Union. (2005). The Real Facts About Wal-Mart: Wal-Mart Wages and Worker Rights. Paragraph 1. Retrieved April 30, 2006 from http://www.wakeupwalmart.com/facts/.
WalMartFacts.com. (2006). “Competitive Wages.” Retrieved April 11, 2006, from http://www.walmartfacts.com/associates/default.aspx#a41.
Windham, L. (February 25, 2003). “Economic Downturn Reverberates in Union Membership, Membership Decline in 2002 Despite Half a Million Workers Newly Organized.” AFL-CIO Press Releases, Speeches, and Testimony. Retrieved April 20, 2006, from http://www.aflcio.org/mediacenter/prsptm/pr02252003.cfm
Zimmerman, A. (October 25, 2005). “Wal-Mart Urges Congress to Raise Minimum Wage.” The Wall Street Journal. Pages A2 & A8.
posted by Louise Mengelkoch at
12:35 PM
