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Blog: Pay and Working Conditions at Wal-Mart Run Counter to the Joy of the Gospel Message

Jun 05, 2014 | By Carolyn Burstein

This past Sunday, June 1, my parish (Our Lady Queen of Peace in Arlington) hosted a presentation on pay and working conditions at Wal-Mart by a 14-year veteran associate at Wal-Mart and a founder of "Our Walmart" along with a union supporter. Cindy told her personal story, including years of being disrespected despite having an impeccable work record. She described how family leave policies passed by Congress (the Family Medical Leave Act, or FMLA) are routinely ignored; how new associates are not given a Policy Handbook, so they are unaware of the thinking behind certain policies as well as not understanding their employee rights; and most disconcertingly, how only part-time associates are hired today with no benefits. Cindy reported that fear is endemic among the 1.4 million U.S. workers at Wal-Mart. She described how "Our Walmart," was launched after more than a decade of attempts to unionize in the face of intimidation by Wal-Mart officials.

"Our Walmart," which stands for Organization United for Respect at Wal-Mart, is composed of hourly associates who work from within to try to bring about change. "Our Walmart" maintains their independence by clearly stating that their organization is not affiliated with Wal-Mart. They have had some recent nationwide successes: after a campaign they led for pregnant women's rights, Wal-Mart changed its policies to allow pregnant women to be given less physically-demanding duties.

Besides cultivating awareness of the issues facing Wal-Mart employees, one of the key purposes of the presentation on June 1 was to encourage our parishioners to join the march from Union Station in D.C. to the rally being held at the Wal-Mart on H Street, NE on June 6. Rallies like this are being held in more than 20 U.S. cities across the country starting on May 29 and culminating on June 6, the day of the Wal-Mart annual shareholders' meeting. Hundreds of "Wal-Mart Moms" (a large group of Wal-Mart associates) and others will converge on the University of Arkansas in Fayetteville where the shareholders' meeting will be held to provide a visual presence to shareholders. The rallies are demanding wages of at least $25,000 per year, more full-time openings and an end to retaliation against workers who speak out against their conditions.

As a matter of fact, the National Labor Relations Board (NLRB) filed a complaint against Wal-Mart earlier this year, according to The Guardian, for illegally retaliating against 60 workers who had engaged in legally-protected strikes and protests.

Let's look at some of the conditions within Wal-Mart. The Teamsters' Union points out that Wal-Mart wages and benefits are so low that it forces workers to go on Medicaid and receive housing assistance, child care subsidies, food stamps and more -- to the tune of $6,000 per employee. In other words, like other companies that pay minimum wage or slightly more per hour, taxpayers are subsidizing the managers and shareholders of these companies!

The Guardian reports that Wal-Mart made a $16 billion profit in 2013 and the Walton family, which owns more than half of Wal-Mart stock, is worth $145 billion. Yet, the company pays 825,000 associates, around 2/3 of its workforce, less than $25,000 per year.

In a Reuter’s “Breakingviews” video in late May, the editor Rob Cox says, “Wal-Mart has been vilified for its low wages. This (referring to his suggestion that Wal-Mart throw its weight behind raising the minimum wage) could be Wal-Mart’s Henry Ford moment.” (Henry Ford revolutionized industries world-wide when he doubled his employee’s wages to $5 a day in 1914. The pay increase allowed his employees to purchase the cars they assembled each day and in the process helped give rise to the American middle-class and also doubled Ford’s profits).

Because so many of Wal-Mart’s customers work in minimum wage jobs, Wal-Mart’s support in raising the minimum wage would mean, according to “Breakingviews,” that the company would net an additional $13 billion, far more than it would cost.

"Wal-Mart Moms" are especially upset over the failure of the company to provide fixed schedules. Wal-Mart (and many retail employers) use "just-in time" software to set employees’ schedules, which give workers fewer work hours and less notice. Unpredictable work schedules make it nearly impossible for women to make time for other important responsibilities, such as getting the education and training they need to help them get a better job, attending a meeting at school, arranging for child care and taking care of their families. It's one thing to demand "just-in-time" delivery from suppliers, which has been used in the best-managed companies since the 1980s, and quite another to schedule employees' work in the same way. At least in the first instance, the company's employees expected to make suppliers' deliveries are already at work.

Sarah Jaffe summarizes the evolution of female workers at Wal-Mart in a May 29th article for In These Times. In the early days of the company, she says, many women worked part-time at Wal-Mart to supplement the income of their husbands, many of whom also worked at Wal-Mart. Now, however, the company is the largest employer of women who largely depend on these low-wage jobs to support their families. Many of these women are single moms or have husbands or partners who also earn low wages. Many of them work part-time through no fault of their own. They have requested full-time work but have been spurned by the company.

Retail is one of the top industries employing women and one projected to add substantial numbers of jobs over the coming decades. The choice that major retailers make regarding wages will play a crucial role in determining not only the welfare of its workers, but also the nation's economic future.

A June 2 study, released by the research organization Demos, found that if the nation's largest retailers (including Wal-Mart) raised wages to the equivalent of $25,000 a year for full-time workers, it would cost consumers only about $17.73 annually. The author of the study, Amy Traub, cites numerous convincing studies to show that companies could easily afford to pay workers more because such an action would a) improve employee productivity, and b) give workers more money to spend in those very stores. This improvement alone would advantageously impact nearly 6 million employees and their families and be a source of greater stability to families and to the national economy.

Traub warns that if present trends continue, by 2022 more than 100,000 additional women will be added to the ranks of the working poor or near-poor, meaning that the 2.5 million family members they help to support will be living in or near poverty in 2022. And if present trends continue, public costs for safety-net programs will continue to grow.

Wal-Mart’s actions reflect a loss of purpose of business, which is not at all the maximization of short-term profit or shareholder value. While including profit and shareholder value, its purpose also includes two other significant stakeholders – employees and customers. The delivery of goods and services to customers is largely accomplished through employees who interact with them, thereby assuring a mutually beneficial transaction. This transaction will never be beneficial if employees are browbeat and disgruntled.

Are there any actual models out there that retailers could follow? Bloomberg Businessweek points out that the retail giant Costco has never had significant labor troubles and has witnessed its stock price doubling since 2009. Costco pays its hourly workers an average of $20.89 an hour, not including overtime, and 88% of its employees have company-sponsored health insurance. Only about 4% of its workers are part-time and employed by contractors, including those who give away samples and sell mobile phones. Maybe part of the answer lies in the fact that in 2012, Costco's CEO made $650,000, plus a $200,000 bonus and stock options worth about $4 million, compared to Wal-Mart's CEO, who had a base salary that year of $1.3 million, plus a $4.4 million bonus and $13.6 million in stock options.

Over the last few years, Nordstrom, the Container Store, Sephora, REI and Whole Foods, all of which are known for treating employees well, have outpaced rivals. "This is the lesson Costco teaches," says Doug Stephens, author of The Retail Revival. "You don't have to be Nordstrom selling $1200 suits in order to pay people a living wage. That is what Wal-Mart has lost sight of. A lot of people working at Wal-Mart go home and live below the poverty line. You expect that person to come in and develop a rapport with customers who may be spending more than that person is making in a week? You expect them to be civil and happy about that?"

Ellen Bravo, executive director of "Family Values @ Work" has accused Wal-Mart of creating a crisis for many families in America because of its pay practices and policies regarding family leave, among others.

We, at NETWORK agree, but would add that Wal-Mart's pay and policies regarding employees are not at all in sync with Catholic Social Teaching. If we look only at Pope Francis' Evangelii Gaudium, we see that the joy of the gospel is for all people: no one can be excluded (and that includes all minimum-wage workers living below the poverty line). Wal-Mart would do well to heed the admonitions in chapters three and four. In the latter, Pope Francis proclaims that "solidarity" presumes a new mindset which thinks in terms of community and the priority of all over the appropriation of goods by a few. He goes on to say that above all everyone must have access to employment, "for it is through free, creative, participatory and mutually supportive labor that human beings express and enhance the dignity of their lives. A just wage enables them to have adequate access to all other goods which are destined for our common use."(Italics added).    

"As long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and by attacking the structural causes of inequality, no solution will be found for the world's problems or, for that matter, to any problems. Inequality is the root of social ills." Evangelii Gaudium, chapter four, (202)