Wednesday, January 03, 2007

Wal-Mart strikes again

David Seaton's News Links
Wal-Mart is America's largest retailer and that is because of its amazing efficiency. It is retailing in its purest expression. Its only values are cost and consumer satisfaction. The fact that its employees instead of being called employees are called "associates," is in itself a profound ideological statement. Wal-Mart is at the center of today's deepest question of political philosophy: are we all merely just "consumers" or are we citizens with any responsibilities for each other's welfare as fellow citizens? A person in disagreement with the direction the world is moving, a person who wanted to engage in political activism, could find nothing more rewarding in its long range effects, nowhere where he or she could make more of a "difference", than to join the struggle to unionize Wal-Mart. DS
Wal-Mart Seeks New Flexibility In Worker Shifts - Wall Street Journal - Page A1

Abstract: The nation's biggest private employer is about to revamp the way it schedules its work force, in a move that could shake up many employees' lives. Early this year, Wal-Mart Stores Inc., using a new computerized scheduling system, will start moving many of its 1.3 million workers from predictable shifts to a system based on the number of customers in stores at any given time. The move promises greater productivity and customer satisfaction for the huge retailer but could be a major headache for employees. The change is made possible by a software system that can crunch an array of data, part of a shift toward computerized management tools that can help pare costs and boost companies' bottom lines. But it also could demand greater flexibility and availability from workers in place of reliable work shifts -- and predictable paychecks.(...) while the new systems are expected to benefit both retailers and customers, some experts say they can saddle workers with unpredictable schedules. In some cases, they may be asked to be "on call" to meet customer surges, or sent home because of a lull, resulting in less pay. The new systems also alert managers when a worker is approaching full-time status or overtime, which would require higher wages and benefits, so they can scale back that person's schedule. That means workers may not know when or if they will need a babysitter or whether they will work enough hours to pay that month's bills. Rather than work three eight-hour days, someone might now be plugged into six four-hour days, mornings one week and evenings the next. Some analysts say the new systems will result in more irregular part-time work. "The whole point is workers were a fixed cost, now they're a variable cost. Is it good for workers? Probably not," says Kenneth Dalto, a management consultant in Farmington Hills, Mich.(...) Paul Blank, campaign director for WakeUpWalMart.com1, funded by the United Food and Commercial Workers union, says the new scheduling system has "devastating implications" for employees. "What the computer is trying to optimize is the most number of part-time and least number of full-time workers at the lowest labor costs, with no regard for the effect that it has on workers' lives," he says.(...) all full-time cashiers and customer-service workers are encouraged to consider including "if at all possible" a weekend shift every week. "Limiting your personal availability may restrict the number of hours you are scheduled,"(...) Tami Orth, a full-time cashier in Ludington, Mich., says she used to work a regular schedule of nearly 35 hours a week, with Mondays and Wednesdays off. In May, managers began to assign her as few as 12 hours a week, and her shifts began to fluctuate. "You can't budget anything," says Ms. Orth, who earns $9.32 an hour.(...) Ms. Clark denied managers use the system to pressure people to change their availability or force out seasoned workers. She also said the new system makes schedules more consistent. READ IT ALL (subscription)


Anonymous said...

Mr. Seaton, I think you're wrong on this one. Criticizing Walmart is en vogue and, yes, there are things to criticize. I think that some parts of the US have pitiful education systems and a pitiful minimum wages. The two go hand in hand, and ought to both be changed. Those who criticize the one without considering the other do their readers a disservice.

It's not until you look in detail at how other chains were run that you realize just how much waste there was in the grocery business, and why Walmart deserves a lot of respect. Until Walmart came along, the sentiment at the other chains was that you had to have a certain size to be a real grocery chain and that once you had it nobody would ever be able to put the entrenched chains out of business; so why bother to run a tight ship? Just like GM vis-a-vis Toyota, and with the same results. I associate more than a few of the management practices in those chains with my memories of visits to Egypt and the like.

Staffing stores when they need to be staffed will definitely increase productivity, and hence lower prices and or raise wages. Granted, depending on how it is implemented it may be a pain in the neck for the employees during the transition, but it may also allow more employees to work part-time or trade shifts. I could even see an ebay like setup which allocates workers between chains depending on how business is, which would allow workers to maximize their earnings. Ultimately those who don't like it and can do better will leave. Those who do like it, or can't do better will do well to stay on. And most if not all will ultimately be better off with this system.

David Seaton's Newslinks said...

This comment is a fine example of the mentality I'm talking about. Human beings are mere objects to be moved around by forces they cannot control, all in the service efficiency.

"Ultimately those who don't like it and can do better will leave. Those who do like it, or can't do better will do well to stay on."

Anonymous said...

Mr. Seaton, you misconstrue my comments.

Please note my big caveat, that it all depends on how this decision is implemented. I didn't at all exclude that there are ethical issues surrounding how this transition is made.

By no means do I believe that Walmart is beyond criticism; there is no debating that there have been abuses. The trick of our day is striking the right balance between the interests of workers and those of management and customers.

I'm sure you'll agree with me that it would be absurd for journalists to refuse to use word processors or the internet. Or news syndicates and for that matter even the telegraph. I think you and I are just as much hostages of technological progress as Walmart employees are. This is, at the same time, both a delight of our time, and a reason for fear.

If you were to tell your boss that you intended to revert to only using a typewriter and that your working for your newspaper was conditional on its henceforth being published on an antiquated press dating back to the 1940s, I have no doubt that you would be looking for a new job rather quickly.

At one of Walmart's competitors, I literally saw at least a hundred million dollars a year, and more likely at least 5 times that, be wasted because management and the unions refused to adopt technology in use since the early 90s that allowed labor-savings. By my lights this is a clear abuse of the customer, especially of the less affluent who spend a larger portion of their wages on food. It was, quite literally, stealing food out of the mouths of the poor.

Unfortunately the press never ran stories such as "Grocery chains' unwillingness to be efficient raises price of food for the indigent by 30%." Perhaps they should have.

Walmart, warts and all, is a company from which both customers and workers can walk away. The competitors it has so clearly upstaged based their business on the premise that the customers would never be able to escape them. We may have to agree to disagree, but I strongly feel that Walmart is far and away the lesser evil, especially with all the journalists breathing down its neck.

David Seaton's Newslinks said...

I really haven't had time to reply to all of this till now. I wonder if our friend "anonymous" here works in the misinformation campaign that Edelman is organizing. I especially liked touches like, "Walmart, warts and all, is a company from which both customers and workers can walk away." and "I could even see an ebay like setup which allocates workers between chains depending on how business is, which would allow workers to maximize their earnings. Ultimately those who don't like it and can do better will leave. Those who do like it, or can't do better will do well to stay on."
Wonderful! Like I said, anybody who is looking for some place where they can make a difference and really change things should join the struggle to unionize Wal-Mart.
I'll be posting more about Wal-Mart, just to see if the replies always come this thick and fast.

Anonymous said...

I'm afraid it's even worse than that. My only connection with Walmart is from shopping at their stores. My great respect for Walmart comes from my time (24 months) toiling for one of their competitors! It was always funny to run into co-workers while shopping at Walmart.

I am not averse to work, not even hard work, but I harbor an animus towards businesses that knowingly and deliberately sell inferior products. I lost any respect for bosses who told me that nobody would ever challenge them, so why try to do a really good job? Hubris comes before the fall.

As you accuse me of bad faith, if you'd like, and undertake to respect my privacy, I'll be happy to share my experiences with you via email.

My take on the retail business, is that its mix of low skills and being very labor intensive means that either management or labor will have the upper hand.

Management will tend to press all that it can out of labor, to the point that it had better stop squeezing its employees lest it lose them. (Hence my ready acknowledgment that there is a very real potential for abuse in the industry.) Labor will try to unionize and then use the huge network effects in the grocery biz, and huge size of the chains to rip management and the general public off for everything it possibly can.

It's the same in every huge labor intensive and mainly low skill industry: look at the cr*p that GM and the UAW were calling a car before Toyota came around, look at the dismal service that the unionized USPS provided before UPS and Fedex got off the ground.

In my opinion Walmart and the American consumer need unions at Walmart just as much as they need a new hole in their cranium. I object to Walmart being crucified for the excesses of the let-them-eat-cake wing of the GOP, which is all too easy because Walmart often employs people with limited career options.

I know from personal experience that the lot of the less skilled workers who work at places like Walmart is not always the nicest.
But if you're going to do something about income inequality, which ultimately is a public policy issue, legislation such as a more generous EITC and subsidies towards health care and education are the answer, and not unionization. Free markets and all that.

Trying to get rich at others' expense (i.e. unionize), rather than through hard work and education is and always has been a tempting road to nowhere...

The reason for my "hot and heavy" responses is that I really enjoy your many quite thoughtful blog posts, and felt as if I'd all of a sudden found a proverbial fly in my soup. As it turns they've allowed me to gain a new friend.

David Seaton's Newslinks said...

Without strong unions there will never be universal health care or even a minimum wage. Everything that has ever been gained in the way of social welfare, down to the 40 hour week, has been won by workers being organized. Nothing was ever given "graciously" to the workers, it all had to be taken through strikes. If the unions evaporate it will all be taken back and in fact in the case of Wal-Mart, it is being taken back. There are very good discount stores in Germany like Aldi and Lidl, but the social legislation is still in place and workers are protected... Germany still has strong unions.

"Customer satisfaction" is only a part of the story. It probably would be better for Americans to drive "crappy" cars, if that meant that Detroit was still a place where strong Unions permitted workers and their families to have a decent life and all sit down to dinner together on Sundays.

kelly said...

I wouldn't mind chiming in here too... although I'm not sure if my history qualifies or disqualifies my opinion. My great-grandfather was killed by Pinkerton "security" guards for joining the brewers union in Chicago; I've worked at Walmart for some extra cash ( and could write a book on the strange things that went on there); I now live and work in Germany where, as Mr. Seaton mentioned, unions are inseparable from every incarnation of employment.

Walmart failed here in Germany after an 8 year attempt (sold in July 2006) and many blame the laws that prevented Walmart from eliminating competition using their usual tactics of undercutting the competition.

Also to blame was the unpreparedness of Walmart regarding the German mentality that employees' humanity is equally as important as profit.

Finally they didn't understand the market. Germans would rather pay more for products if they know the products contain quality, if they know the seller and the seller knows his product and often if the product is environmentally friendly. Germans like "cheap", like anyone else, but they are more cautious, skeptical and are not so addicted to shopping that they just blindly buy, buy, buy.

My union, who makes sure my desk and computer are ergonomically adjusted to hinder injury, at the same time prevents me from working from home because they can't "protect" me here. They do sometimes hinder the profitability of my company, but I, fortunately, work for a company who is not driven purely by profit.

So to Anonymous and to Mr. Seaton: I wonder if unions are a concept that will never fit into the American mindset - even those of the workers themselves - simply because of the dehumanization that capitalism has brought. Employees, Iraqis, criminals, consumers, communists... there are no human faces behind these titles. And Americans need a human face with a story to take any action.

Walmart and the US military compete for uneducated kids with no future to feed their machines... but there is just as much hope for unionizing the military as there is for unionizing Walmart.

As long as consumption is America's raison d'être, unions have no chance.

Anonymous said...

Having devoted years of my life to the dismal science, I think it is more complicated. What's happened in the last few years, and this is a damning indictment of the Republican party, is that income for the poorest parts of American society have fallen because of

1) the refusal of the Republican congress to enforce immigration laws, which was a wage cut on the sly

2) with the internet and globalization, jobs are ever more being sent to less affluent countries,


3) while the poor are getting poorer, the Republicans' tax policies were helping the rich to get richer.

I believe the US has problem, and encourage the less fortunate to fight for their cause. But trying to solve that at its heart is a problem of taxation and redistributing wealth by intervening in the labor market makes as much sense to me as invading Iran to "solve" Iraq. The Soviet Union tried to redistribute wealth by regulating the market place, and ended in tears.

As for Germany - unlike the US - it has been dominated by cartels for more than 500 years and has very rigid labor laws. If you're trained as a plumber, you can't work as a carpenter without a new diploma. In such circumstances, collective bargaining is the only way to go. (But when the unions tell Kohl he has to reunify Germany with the West Mark to Ost Mark at 1:1 or 1:4 instead of a more realistic 1:16, and immediately adopt West Germany laws, which drove tons of Ossies into penury and dependence on the welfare state, I am disgusted.)

Bismarck at least had the brains to realize that the right had better take care of the less fortunate lest the left come with pie in the sky nostrums, hence his introduction of social security. But then again, Bismarck never would have had the lack of stature necessary to run for congress.

I also notice Germany's staggering unemployment rate, and that the German press frequently writes of the many young Germans leaving Germany for greener pastures.

kelly said...

I think you've quilted various true details with some rumors here.

Germany: I assume you are defining labor unions as a cartel, and with the number 500 years you are reaching back to the Hanseatic League (which was a merchant trade monopoly, not a cartel and not having to do with labor)?

And being able to career-jump from being a plumber to a carpenter has little to do with unions: it has more to do with being officially recognized as being qualified to do a specific task (extremely important to Germans, as opposed to Americans who base qualification on ability and/or willingness). German companies can lose their ISO 9000 approval if they cannot prove that their employees have the corresponding education for their task. For companies who don't care about ISO 9000, a plumber can work as a carpenter, as long as the company payrolls the employee, deducts taxes, pays into health benefits, social security etc. The "diploma" that you mention is an apprenticeship lasting 3 years - even those who work in a store like Walmart in Germany, would need to have his three year "salesman apprenticeship" under his belt.

Kohl's introduction of the West DM, again had little to do with unions. He was just repeating the same economic principles which had been successfully implemented by the Allies in Western Germany after WW2 - he thought he could pull a mini-Marshall Plan out of his a**.. - but the solution was too simple for the complexities of the situation in the East.

Germany's unemployement rate is actually not so staggering, it is just meticulously recorded and reported. Here you are forced to report yourself as unemployed, even if there is a one month interruption between 2 jobs, or if you just graduated from college and are on the job search, or if you decide to stay home with the kids for longer than the "Parental Leave" granted. And many are officially listed as unemployed, although they are working freelance. Unfortunately those who are leaving Germany for greener pastures are those who also would never have a problem finding a job here - they are seeking better pay and better conditions - ironic for an economy with such powerful labor unions!

Imagine Germany and the United States attending their first AA meeting: Hello, my name is the Federal Republic of G. and I am a socialist, well sort of, my drink of choice is capitalism, but by the end of the night, I'm downing socialist-shots to ease the pain. Hi, my name is the United States of A. and I am a capitalist pure and hard, but there are these urges I get for socialism every now and then, I'm so ashamed. Too much coffee, sorry for that, but let's get back to WALMART and Unions - what about America, its free market economy? Don't unions go against the American grain?