*always* low prices

October 2, 2006

The New York Times has just published a typically well-researched article on retail giant Wal-Mart’s plans to cap wages for its associates–their euphemism for “employees,” or perhaps for “minions”–and also to push more aggressively towards having a higher percentage of part-time and night workers, responding to Wall Street pressures and the company’s never-ending quest for market dominance. Though the strategy is obvious (make more money by maximizing efficiency as much as possible ), the implications are much more complex than one might think.

Unsurprisingly, there seems to be a disconnect between the company’s public statements and positions and the realities of their implementation. Consider spokeswoman Sarah Clark’s infuriating non-statement, calling the changes “a productivity improvement through which we will improve the shopping experience for our customers and make Wal-Mart a better place to work for our associates.” Bravo, Ms. Clark, for telling us absolutely nothing while putting a “happy face” on the new policies. It’s nearly disgusting, and even more so when examining reports from employees affected by them.

Though Wal-Mart denies forcing out senior employees to make way for cheaper, younger ones, the article cites cases of zealous managers denying requests for schedule accommodations–to avoid, for instance, having to work in the middle of the night–and the comments of E.V.P. of HR M. Susan Chambers in a confidential memo, which included the statement, “Given the impact of tenure on wages and benefits, the cost of an associate with 7 years of tenure is almost 55 percent more than the cost of an associate with 1 year of tenure, yet there is no difference in his or her productivity.”

As an exemplification of utilitarianism, the implied philosophy is perfect, and it is naive to think that it is not involved in these new policies. I argue, then that when thinking of its uses in a corporation responsible, at least to some degree, for the well-being of its employees, it is an unqualified disaster. Her figures are not the issue here; itis certainly the case that senior employees cost more, even significantly so. But to use that as justification for getting rid of them–or, at least, for moving in that direction–is scandalous, even unbelievable. Productivity and profits are important to a business, but there are other considerations that ought to carry at least as much weight, chief among them being the cultivation of a culture of excellence and dedication among those who work within it.

Sam Walton certainly believed that, making it one of the “three principles” on which he founded the company, and the current leadership claims to as well. So I ask, is it not worth sacrificing a bit of profit to enrich the lives of Wal-Mart employees, thereby strengthening the company as a whole? Any corporation, even one so domineering as Wal-Mart, is only as strong as its members and must look to preserving them before anything else.

Wal-Mart caters to and employs the lower classes of our society (just have a look at their “associate stories“) and the competition for entry-level jobs is sufficiently fierce to permit the sort of activity that the company is perpetrating. (The article references the fact that each opening in a new store receives “an average of seven applications,” and there are no openings visible on Wal-Mart’s website.) Employees have little choice but to live with whatever Wal-Mart executives decide, including perhaps a reported policy of “open availability,” the existence of which is supported by several anecdotes involving store managers who “demanded 24-hour availability” from their employees, and of course with a widely criticized health-care program and zero tolerance for workers’ unions.

While it is possible or even likely that the incidents related in the article are merely the result of undue pressure on managers from those above them in the hierarchy, their very occurrence is more than enough cause for alarm. In one way or another, Wal-Mart is responsible for the actions its employees take on its behalf, and something is clearly very wrong with some subset of the empire. It is quite like that quote from The Matrix: “if an employee has a problem, the company has a problem.” I believe that.

This all adds up to a portrait of a company that distinctly unwell despite stellar revenues and an admirably refined supply chain. We all want low prices, but not, I think, at the cost of supporting a set of values that are severely misaligned with what reason and a desire for good would prescribe. It is for this reason that I do not shop at Wal-Mart, that I ask those I know not to do so. That I ask you not to do so.

Note: For further reading, I highly recommend a Pulitzer Prize-winning series of articles written by The Los Angeles Times in 2004. View them at www.pulitzer.org by clicking on the year and then on the “National Reporting” category. The Wal-Mart website also makes for interesting reading once you get past the whited tone of the thing. Finally, PBS’ Frontline has an illuminating set of interviews with company executives and outsiders together with an hour-long documentary under the moniker “Is Wal-Mart Good For America?”

–D. S. W.


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