Published on Sunday, November 28, 2004 by Common Dreams.org
by Ralph Nader
Law-breaker, union-buster, tax-escapee and shifter of costs to others, the world’s largest retailer, Wal-Mart, announced last week that it would respect the wishes of its Chinese workers to form a union. As is usual with Wal-Mart announcements, a substantial overstatement is working here.
In China, unions are not independent; they are government-controlled with the Chinese communist party turning them into what would be called “company unions” in the U.S. With 40 stores in China already, Wal-Mart understands that these essentially Communist Party-controlled unions serve as a controlling mechanism over workers – a one-stop system which often have an in-company manager in charge.
China is seen by Wal-Mart as the future. With the U.S. market approaching saturation (Wal-Mart has 3,600 big and bigger stores here), the company with the biggest gross revenues in the world -- $258.7 billion last year – is importing more from Chinese factories then is the entire country of Germany.
Its message to U.S. suppliers is that if they cannot meet the “China price,” they should close down in America and open up in the world’s largest communist dictatorship. Astonishing, isn’t it, that this giant capitalist corporation is using this Communist regime as its labor enforcement arm to drive down wages and benefits in the U.S.
In Western Europe, Wal-Mart has to treat its workers better than it treats its American workers. European labor laws are much tougher than those in the U.S. Wal-Mart has to give its workers paid vacations (from four to eight weeks depending on the country), better benefits and working conditions. There is no “off the clock” work or wages not fully paid for long periods of time. Wal-Mart has even agreed to collectively bargain with a large German union.
In the country of its birth, Wal-Mart is wreaking havoc with worker standards of living. It forces other large grocery chains to demand from their unionized employees lower wages and benefits to be able to compete with Wal-Mart’s race to the bottom. This direction is a historically tragic reversal for the U.S. economy that before World War II featured rising wages that increased consumer demand and improved livelihoods.
Increasingly, Wal-Mart’s immense arc of influence here is pushing wages and benefits downward. With hundreds of thousands of its nearly 1.4 million workers making under $7.50 an hour, before payroll deductions, (the average wage is between $7.50 and $8.50 an hour), the average-on-the-clock workweek is only 32 hours. Since Wal-Mart defines anyone working fewer than 34 hours per week as part-time, they have to wait for two years before qualifying for health insurance whose co-payment takes one-fifth of the average paycheck. Get the idea of what is meant by the Wal-Mart way.
Waiting periods are key to Wal-Mart’s phony health insurance boasting in their television ads. Impoverished employees don’t stay, with turnover rates for these hourly employees at 50 percent to 100 percent at many stores.
Wal-Mart is devilishly ingenious in thinking up ways to have taxpayers fill in its wage gap. Put them on partial welfare, says the very well-paid company bosses who make millions of dollars each per year. These workers are given advice on how to apply so that taxpayers subsidize Wal-Mart’s profits.
For example, in Georgia, over 10,261 children of Wal-Mart employees are enrolled in the state’s Peachcare program for health insurance in families meeting federal poverty criteria.
According to the report, Everyday Low Wages, one 200-person Wal-Mart store could cost federal taxpayers over $420,000 per year. These costs include subsidized lunches, health insurance and housing assistance, federal tax credits and deductions for low-income families, among other examples of Wal-Mart’s freeloading.
Enough is never enough for this corporation. It often demands substantial local tax breaks from municipalities as a condition for locating there. Although successful local opposition is blocking dozens of Wal-Mart location plans, this corporate welfare King still manages to escape its fair share of taxes, while local homeowner and small businesses ante up for local public services and assume Wal-Mart’s share. That is, small businesses that manage to remain in the hollowed out Main Streets that are the aftermath of a Wal-Mart opening. Minimal thinking by consumers says Wal-Mart is a bargain; maximum thinking starts adding up the local, national and global costs of this Goliath depressor of purchasing power by workers.
For more information on these cost burdens, see the website WalMartWatch.com which also shows how communities have stopped the Wal-Mart invasion.