Peter Gorman Archive
Award-winning investigative journalist (and dad) Peter Gorman has spent more than 20 years tracking down stories from the streets of Manhattan to the slums of Bombay. Specializing in Drug War issues, he is credited as a primary journalist in the medical marijuana and hemp movements, as well as in property forfeiture reform. His work has appeared in over 100 national and international magazines and newspapers.
Peter Gorman's love affair with the Amazon jungle is well-known to people in the field. Since 1984 Mr. Gorman has spent a minimum of three months annually there generally using Iquitos
DAY WORK - Better Than Nothing but Not by Much
by Peter Gorman © all rights reserved
Out on Highway 121, just off the Beach Street Exit, a new Walmart Supercenter is going up. The 25-acres of oak trees it is replacing with cinderblock and pavement will serve clients from Downtown Fort Worth, Richland Hills, Haltom City, Riverside and Meadowbrook. Its commercial neighbors include McDonalds, Gradys, Kentucky Fried Chicken, Whataburger and a half-dozen other fast food joints. It’s non-commerical neighbors include a mix of low-income Blacks, Hispanics and Asians whose houses line the streets in the immediate neighborhood. Nearly 400 of those neighbors will get jobs at about $6.50 an hour in the new Walmarts. They won’t bring in much but it’s better than nothing. They’ll be able to work for 10 years, until Walmart, if true to its tradition, abandons the space and moves elsewhere, leaving the cinderblocks and pavement and many of the workers like litter near the highway.
When folksy Sam Walton opened his first Walmart in Arkansas in 1962, his intention, aside from growing wealthy, was to provide Americans with affordably priced, quality products that were Made-in-America. To do that he cut all of the fat out of the factory-to-retail supply line that he could: he built his stores on inexpensive lots with good highway accessability to several country towns. He used a simple cinder-block box design to save on building costs. He purchased goods for several stores at one time, increasing his savings on bulk orders. He ran a non-union shop using primarily hourly workers rather than salaried employees, but kept his workers happy with several benefits that no union could supply: a personal stake in the store in which they worked, the ability to access managers and voice complaints freely, and a wage system that ensured substantial pay increases ($1.00 an hour at a time was fairly regular at Walmart but unheard of elsewhere) for work well done. He paid his employees, his family as he called them, time-and-a-half for Sunday work. He employed hundreds of people in the neighborhoods in which he built his stores. He gave the United States countryside large warehouse-sized stores that allowed one-stop shopping—not unlike the Ben Franklin chain of five-and-dimes he’d previously owned, but several times larger and with a correspondingly greater variety of goods—at prices even poor people could afford. He had every one of his customers greeted as they entered his stores, and thanked when they left. He made every client feel important shopping with him. In short, he made both his employees and customers trust him by giving his trust to them: where else in America could someone buy something, go home, use it, lose the receipt, then return it several days later, out of its box, simply claim they’d purchased it at the story and get a full refund? And where else could potential employees fill out an application that asked them what shift and days they preferred and have that part of the application be treated seriously?
America, in turn, made Sam Walton’s clan the richest family in the United States. And America loved doing it. Sam Walton, despite being a shark of a businessman, was perceived as David, fighting against the Goliath of an impossible cost-of-living for the rights of the little guy, the rights of the us in the US.
But something has happened. David has become Goliath. Walmart is beginning to be perceived as fighting for the rights of Walmart, not us anymore. The prices havn’t gone up and the store continues to be the single largest retailer in the world, with over $245 billion in sales last year. Everybody, or everybody who can get to one, still shops there. Every customer is still greeted when they arrive and thanked when they leave. But the love affair is beginning to grow stale. America’s countryside and highways are dotted with hundreds, perhaps as many as two thousand, abandoned Walmart cinderblock shells and thousands and thousands of acres of useless parking lot pavement. Whole towns have seen their central shopping district vanish when a Walmart Superstore or Sam’s Club moves into driving range.
Worse, the cherished ideal Sam Walton held so high, the right of Americans to buy American, has now become a national joke: a recent Washington Post report noted that more than 80% of the 6,000 factories in Walmart’s database are now in China, rather than the US.
In short, the Walmart tag line, “Always low prices” might now be amended to read, “Always Low Prices. At Any Cost.”THE WALMART STORY
Large discount department stores first hit the United States in the 1950s. They hit Berryville, Arkansas, not far from where Sam Walton ran one of his 15 Benjamin Franklin Walton variety stores, about 1960. Walton, an active student of retailing whose family vacations always included visits to variety and department stores, was quick to see that the days of his high-mark-up stores were coming to an end, and in 1962, at age 44, he switched gears and opened his first Wal-Mart, in Rogers, ARK. It was the same year that saw the launching of K Mart, Woolco and Target.
“Once committed to discounting, Walton began a crusade that lasted the rest of his life: to drive costs out of the merchandising system wherever they lay—in the stores, in the manufacturers' profit margins and with the middleman—all in the service of driving prices down, down, down,” wrote John Huey in the December, 1998 Fortune magazine. Huey, who co-authored Walton’s autobiography Sam Walton: Made In America (Doubleday, NY; 1992).
“Using that formula,” wrote Huey, “which cut his margins to the bone, it was imperative that Wal-Mart grow sales at a relentless pace. It did, of course, and Walton hit the road to open stores wherever he saw opportunity. He would buzz towns in his low-flying airplane studying the lay of the land. When he had triangulated the proper intersection between a few small towns, he would touch down, buy a piece of farmland at that intersection and order up another Wal-Mart store, which his troops could roll out like a rug.”
By 1966, Sam Walton had 20 Walmarts open for business, and shortly thereafter he’d computerized his operations for better merchandise control, both for inventory and logistical purposes, perhaps the first large store to do so. (By the late 1990’s Walmart’s computer database was alleged to be second only to the Pentagon’s in capacity.)
In 1970, Walmart went public, with an initial offering of 300.000 shares at $16.50 per share. During the next decade, Walmart would grow to several hundred stores, it’s stocks would split four times, and an initial investment of $1,650 on 100 shares would have become 1,600 shares worth $80.000. It was as grand an American success story as any in the history of business. It was built on hard work and a keen business savvy, but its real foundation lay in the simple philosophy of Sam Walton. That philosophy was made of these three beliefs: Respect for the Individual; Service to Our Customers; Stive for Excellence. The three tenets of the Walton philosophy still grace the front page of the walmart.com website, with explainations of how they are utilized by the corporation. “We are a group of dedicated, hardworking, ordinary people who have teamed together to accomplish extraordinary things,” notes Don Soderquist, a retired senior vice chairman of Walmart. “We have very different backgrounds, different colors and different beliefs, but we believe that every individual deserves to be treated with respect and dignity.”
“We want our customers to trust in our pricing philosophy as to always be able to find the lowest prices with the best possible service. We’re nothing without our customers,” writes Walmart Vice Chairman Tom Coughlin of the second tenet.
Lee Scott, president and chief executive officer explains the third this way: “Sam [Walton] was never satisfied that prices were as low as they needed to be or that our product’s quality was as high as they deserved—he believed in the concept of striving for excellence before it became a fashionable concept.”
Those tenets were backed by two rules: The Sundown Rule, which says that any question raised by a customer should be answered before the sun goes down on the day on which it was asked; and The 10-Foot Rule, which says that any associate at Walmart—as the employees are known—who makes eye contact with a customer at a distance of 10 feet or less must stop and ask that customer if they can help them with anything.
The corporate Walmart rode those rules through a wild expansion during the 1980s. In 1983, the first SAM’S CLUB opened in Midwest City, Okla., bringing to fruition Walton’s dream of a store where those with large families could buy bulk items at even lower than the trademark Walmart Everyday Low Prices. In 1985, Forbes Magazine named Sam Walton the richest man in America. In 1987, the Walmart Satellite Network, the largest private satellite communication system in the US was completed. And in 1988, the first Supercenter (then called a Hypercenter), an idea he’d cribbed after seeing it in Europe, opened in Washington, Missouri. By the time Sam Walton retired in 1988, Walmart had grown to about 1,500 stores nationwide, and its stock had split four more times. That initial investment of $1,650 for 100 shares in 1970 had become 25,600 shares worth about $1.7 million dollars. The dream was still alive and growing wildly.
Two things which offered a glimpse of what was to come occurred just prior to Walton’s retirement, however. Six months before he left Walmart, the corporation did away with the automatic time-and-a-half for Sunday work, saying it was simply impossible to pay people extra for Sunday work and still keep prices down. Too, with the opening of the first Supercenter, a giant Walmart with a supermarket included, the first of the old-time Walmart department stores became obsolete. It was the start of a trend which continues today.
The 1990s saw Walmart’s growth expand exponentially. In 1990 it became the nation’s No. 1 retailer. In 1991 it entered the international market with the opening of a Walmart in Mexico City. In 1992, shortly after Sam Walton’s death that same year, Walmart opened a store in Puerto Rico. In 1993 the corporation had its first billion-dollar sales week. In 1994 it acquired 122 Woolco stores (Woolworth’s entry into the big box store game) in Canada. In 1995 Walmart opened stores in Argentina and Brazil. In 1996, Walmart entered China through a joint-venture agreement. In 1997 it became the No.1 employer in the United States with 680,000 employees, including more than 100,000 outside the US. That same year Walmart broke the $100 billion sales barrier for the first time. In 1998, Walmart acquired 21 Wertkauf stores in Germany, changing their name to Walmart Germany, and entered Korea via a joint venture agreement. By 1999, Walmart had over 1.1-million employees, making it the largest private employer in the world. That same year it also moved into the UK with the acquisition of 229 ASDA Group stores there, which later became Walmart UK. And as it had during its first two decades as a public stock, the stock split three more times during the 1990s, increasing that initial $1,650., 100 share block to a whopping 204,800, valued at 89.75 each, or roughly $18 million dollars.
The last three years have been just as successful: there are now nearly 3,500 Walmart stores, Supercenters, Sam’s Clubs and Neighborhood Markets in the US, and another 1,400 overseas in 10 countries. Walmart also has a 36% stake in Seiyu, Japan’s largest retailer with 400 stores. Walmart has an option for an additional 34% of that company and according to Amy Wyatt, plans to exercise that option in the next couple of years, taking over the retailer, renaming it Walmart Japan, and becoming Japan’s largest retailer overnight. It has expanded into a total of 10 foreign countries, with plans to continue that expansion. In 1998, Walmart’s then-President and CEO David Glass told USA Today busines reporter Lorrie Grant that "Our priorities are that we want to dominate North America first, then South America, and then Asia and then Europe,"
While Walmart is well on the way to the Global Walmartization Glass was dreaming of when he spoke with Grant—an idea that brings to mind the image what the Tibetans call Hungry Ghosts, ghosts who perpetually consume but can never be sated—the cost of doing such big business is beginning to show a little wear on the company. Where Walmart employees ranked their employer as the 66th best company to work for on Fortune Magazine’s annual list of “100 Best Companies to Work For” as late as 1999, the company had dropped to No. 80 in 2001, No. 94 in 2002, and it didn’t make the list at all in 2003. It’s a small but significant chink in the armor that Walmart has worn all these years.DOING BUSINESS WITH WALMART
There is no question that Walmart saves money for the customer. It simply stretches your dollar further than any other single store, and it does it conveniently, particularly if you’re shopping at a Supercenter. Teens can go check out audio equipment or video games, younger kids can wander through aisles of toys and games; everybody can shop for clothes, dad can have his oil changed while he’s picking out a nice perfume for mom, who may be off buying shoes for the kids. Your uncle can shop for dinner in what an Aussie friend once described as “the biggest fuggin’ market I ever saw. I could spend a week just lolling around the food aisles.” And grandma might head to the garden center for a new weed-eater, lawn-tractor or those tomatoes and hot peppers she’s been meaning to plant in the garden. You can also get your eyes checked, your nails cut and painted, buy a telescope or go-cart, pick up a couple of tons of various stones for your backyard Japanese garden, then put in that barbeque and watch your meal cook from one of the swinging chairs they have for about $100. Or say the heck with it and buy a 4’ deep 24’ diameter swimming pool that can be set up in less than an hour and just read one of their magazines or a romance novel while you take a dip.
It is truly an amazing store and a fantastic shopping experience. At least at first. After you’ve been shopping there a while, you begin to notice that the clothing department, for all its immensity, doesn’t really have much of a selection. By offering clothes for both sexes and all ages, there simply isn’t much for any one group. Long sleeve business shirts: Three colors, one brand. Tee-shirts: One or two brands, half-a-dozen colors. Shoes? Maybe 50 pair for each size, male and female. Car stereos? Maybe a selection of a dozen, where a specialty shop might carry three or five times that. Sports goods? Nice for a quick pick-up, but it doesn’t compare to a real sporting goods store. Magazines and books? Only what Walmart approves of and can make money from. And with Walmart representing roughly 10% of all US retail sales at the moment, if they don’t carry you, you may be out of business soon. Of course, if Walmart does carry your product, you may not need any other outlet for your goods.
But the idea of the Supercenter isn’t to lure you in with the promise of a great sports section. The idea is to get you in the doors to do your grocery shopping, and once you’re there, if you realize you need something else you’re probably willing to take what they’re offering rather than drive elsewhere to look for it. Particularly since it will be cheaper at Walmart, and if you’re not a connoisseur of what you’re after, their middle-of-the-road quality will probably do.
And if you are an average wage-earner trying to get by, it’s difficult to resist the lure of grocery shopping at Walmart. This reporter recently compared prices at the two large supermarkets near him. Near is relative: both Albertons and Walmart are nine miles away, in different directions. Closer to home there’s a Levels, but that’s only for a few items, not shopping for six.
The numbers were outstanding: for about a week’s worth of groceries (including toilet paper, lightbulbs and dog food) the cost at Walmart is about $250. The same—or as close to the same as possible—items at Albertsons, came to about $380. Yes, Albertsons is a classier joint. Yes, Albertson’s has Walmart beat by a mile on the quality of its meat. But that price difference comes to over $500 monthly. That’s the phone, electric and water bills for free, with maybe $50 bucks left in your pocket. It’s not actually, since your kids spend the savings on those video games they sell at Walmart, but still, those are games and toys they wouldn’t otherwise be able to have.
So what’s not to like? More than that, how do they do it?
Walmart doesn’t do it with magic. It keeps its promise of Everyday Low Prices by keeping its staff skeletal and low paid, it’s employees largely hourly wage-earners instead of salaried (which eliminates benefits for most of them), and it sets the prices on the goods it will sell, rather than the manufacturer setting the price, as in most other businesses.
The classic case of a manufacturer doing business with Walmart was detailed by Charles Fishman in the December, 2003 issue of FastCompany magazine. In his story, “The Wal-Mart You Don’t Know”, Fishman talks about pickles. Vlassic pickles to be precise. The Walmart Vlassic Gallon Pickle Jar that was such a mainstay in-store advertisement for Walmart for several years.
“The gallon jar of pickles is a display of abundance and excess,” writes Fishman; “it is entrancing and also vaguely unsettling. This is the product that Wal-Mart fell in love with: Vlassic’s gallon jar of pickles.”
The price for the jar was set at $2.97. It was, perhaps, a year’s supply of pickles for under three bucks. Fishman quotes the designer of the gallon jar of pickles, Pat Hunn, as saying “Wal-Mart was putting it before consumers, saying ‘This represents what Wal-Mart’s about. You can buy a stinkin’ gallon of pickles for $2.97.’ And it’s the nation’s number-one brand.”
But as Fishman notes, Vlassic had spent decades convincing consumers to pay premium prices for its pickles, and now Wal-Mart was turning that whole idea topsy-turvy. But the pickles sold: in no time, Wal-Mart was selling 240,000 gallons of Vlassic pickles a week. It didn’t matter that to bring them to the store Vlassic was only making a few cents on the gallon, and Wal-Mart less than that. It was, as Fishman noted, a ‘statement’ item, a loss-leader to get people into the store.
The success almost killed Vlassic. While volume of sales shot up, profits dropped sharply. New suppliers of cucumbers had to be found. New employees to find those suppliers had to be hired, further eating profits. Steve Young, a former VP of Vlassic, talked about going into Walmart with the idea of raising the price to $3.49. Fishman quotes Young as saying that Walmart’s response was more than a ‘no.’ “They said,” says Young, “’If you do that [raise the price] all the other products of yours we buy, we’ll stop buying.’ It was a clear threat.”
Walmart’s business with Vlassic on its other pickle products was so indispensable that it had to go along with them. It was only a few years later that Walmart finally relented and allowed Vlassic to stop making the gallon jar and sell half-gallon jars of pickles for $2.79.
What Walmart did to Vlassic, it appears to do with all of its suppliers. Its demands for low prices are so severe that companies either find a way to streamline and cut the fat out of their own operations, or simply not do business with Walmart.
A different way to cut costs was recently utilized by Levi Strauss jeans, a company which had resisted selling to Walmart for 25 years. But with sales slumping for several years, Levi Strauss finally agreed to place its product on the shelves at Walmart. The problem was that Levi Strauss didn’t have any jeans it could sell at a price Walmart was willing to carry. So the company developed a new line of jeans, the Levi Strauss Signature Brand, a low-end jean with the quality Levi Strauss brand name. They’re not real Levis, not real classy jeans, but they may save the company. Naysayers think the jean maker may wind up cannibalizing its high end products as well as diluting a respected label, but the company evidently didn’t think it had another choice.
Many people who have purchased brand-name goods at Walmart think that what Levi Strauss did has probably been done by other quality companies as well, with Walmart selling a low-end product they’ve developed especially for the chain and its pricing demands.
But Walmart doesn’t stop with demanding prices it wants: In addition to making near impossible demands on suppliers (and don’t forget truckers, who are given 15-30 minute windows for delivery and if they can’t make it on time, regardless of the reason, can be put on suspension or dropped), Walmart markets of its own lines of goods, from furniture to apparel to pudding. The products are only of cheap-to-reasonable quality, but the prices are considerably lower than the already low prices of brand names. Walmart did not get back to the Fort Worth Weekly to give a breakdown of exactly how much of their $245 billion in gross sales in 2003 was made in house brand sales, but with a full line of products it’s safe to say it was considerable. The Fishman story estimated that Walmart’s Faded Glory house brand jeans alone did $3 billion in sales in 2003. And not one pair was made anywhere near the US of A.
Beyond setting prices on many goods, and then throwing an inexpensive house brand into competition with their suppliers, at Walmart perennial products are expected to drop in price every year. That dartboard that went for 24.95 last year has got to go for $23.95 this year. Those sox better come six-pair-in-a-pack instead of five if the price stays the same. A consumer’s dream, a supplier’s nightmare.
The Third World Component
It's an impossible request, unless suppliers take their jobs out of the US and have their goods made in Third World countries. Most of them have. In a February 8, 2004 article in the Washington Post article by Peter S. Goodman and Philip P. Pan note that “More than 80 percent of the 6,000 factories in Wal-Mart's worldwide database of suppliers are in China. Wal-Mart estimates it spent $15 billion on Chinese-made products last year, accounting for nearly one-eighth of all Chinese exports to the United States. If the company that Sam Walton built with his "Made in America" ad campaign were itself a separate nation, it would rank as China's fifth-largest export market, ahead of Germany and Britain.”
Conditions in those Chinese factories are not US Union-Label level. To its credit, Wal-Mart sends inspectors out to the factories to try to enforce labor standards and ensure that safety, child-labor laws and wages are in compliance with Chinese law. But there are only 100 auditors to do the job. In 2003, those auditors suspended 400 supliers, primarily for “exceeding limits on overtime,” and another 72 factories were “blacklisted permanently…almost all for violating child labor laws”.
But WalMart’s auditors only look into the factories of their suppliers; they don’t inspect the factories of subcontractors that sell goods to the WalMart inspected factories, leaving a huge hole in the system.
That hole was exposed several years ago—not in relation to China, but connected with WalMart—when it was discovered in April, 1996, in testimony on Capitol Hill that Kathie Lee Gifford’s clothing line, sold at WalMart, was being made by under-paid teens in Central American sweat shops. Gifford, an advocate for children’s issues, was stunned. She was even more surprised when shortly after the first bombshell it was discovered that some of her clothing line was actually being made in deplorable conditions by unpaid workers in a sweatshop in New York City, just a few minutes walk from where she filmed her top-rated television show. In that instance, Kathie Lee and her husband Frank Gifford made a public display of handing out hundred dollar bills to the unpaid workers, and WalMart publicly decried the use of sweatshops to manufacture their products.
But the use of such sweatshops is often the only way to produce products at the cost WalMart demands.
On “Naming Names” a PBS program, in a broadcast that aired shortly after the Kathie Lee Gifford scandal broke, how the use of sweatshops comes into play was detailed by Bud Konheim, the CEO of Nicole Miller. “Price is driving the issue,” he said, “and the answer to unraveling it is a) to make the punishment so severe that nobody wants to get caught doing this stuff, and…to make an incentive that is beyond price, where people make a quality decision at the customer’s level.” Asked by program moderator Charlayne Hunter-Gault how companies like WalMart wind up encouraging sweatshops, Konheim, who said the problem was huge in the apparel industry, explained it this way: “Well, let’s say I go to Walmart…and I say, I’ve got something…I want to sell you this blouse, my price is $3. [Walmart says] but I can get it from the other guy for $2.50. I go back and refigure…call my contractor in, who is not a sweatshop [and say] ‘Listen, I’ve got a chance to get 50.000 blouses but I’ve got to come down $.50 or else they’re not going to buy them…can you do it?’ What does the contractor say? Yes. He wants the business….
“Now the thing is, how the hell do we fill the order… . That’s where the sweatshop comes in. It comes in in the subcontractors. Nobody knows about them. It’s impossible to police.”
In some cases, sweatshop workers in Third World countries have tried to organize to demand better conditions and pay. And sometimes, the response of those in charge is not dissimilar to union busters at the turn of the century here in the US. In his book, In Sam We Trust: The Untold Story of Sam Walton and How Wal-Mart Is Devouring America (Times Business, 1998), Bob Ortega, a Wall Street Journal reporter tells the harrowing story of Flor de Maria Salguedo, a union organizer who arranged for Ortega to speak with sweatshop workers making clothes for Wal-Mart and other retail giants in Guatemala City. Salguedo, whose husband was murdered in the midst of a union organizing drive in Guatemala City, was kidnapped, beaten and raped shortly after Ortega left Guatemala City. One of her attackers told her “This is what you get for messing about with foreigners.”
Walmart and the other retailers—along with the consumers who shop with them--who are ultimately responsible for the sweatshops are of course well-insulated from any criminal charges that might arise in connection with them. They are buying from contractors who run clean shops, after all, and they are policing those to see that they are up to speed. In many cases even the first subcontractor is policed. But money has to be saved somewhere, and the subcontractor’s subcontractor who runs the sweatshop is too far removed from Walmart to be policed.
Some workers are pushing for change despite stories like that told by Flor Salguedo. At the recent World Social Forum 2004 held in Mumbai (formerly known as Bombay), India, representatives from nearly 40 countries—including garment workers, union representatives, lawyers and activists from industrialized countries—came together to discuss what could be done to improve working conditions. The Forum was conducted by Sweatshop Watch—a coalition of over 30 labor, community, civil rights, immigrant rights, women's, religious and student organizations, and many individuals, committed to eliminating the exploitation that occurs in sweatshops. The result of several days of discussion? The foundation was laid for what’s being called the “Campaign to Fight Walmart”, as Walmart represents the largest of the exploiters.
So much has been written about the sweatshops that produce the goods sold by Walmart and other big name companies that typing “Walmart, sweatshops”, into any of the large Web search-engines produces dozens of web pages devoted to the topic. Dozens more call for a boycott of Walmart precisely because of the conditions under which much of their merchandise is manufactured.Workers Here At Home
Many Walmart employees feel much closer to being sweatshop workers than the Respected Individuals of Sam Walton’s philosophy. But it was never supposed to be that way. As Mark Gimein notes in his Fortune Magazine story “Sam Walton Made Us A Promise” (March 3, 2002), “It was a deal, in short, that promised Wal-Mart would be different—more human, more caring—than any other employer in the low-wage service sector.”
According to Gimein, “Walton's deal promised that cost-cutting could coexist with a moral center—that Wal-Mart could be both the cheapest place to shop and the best place to work. But there are some unsettling indications that the deal that Walton and his successors made with their employees is fraying.”
Among those indications is a sex-discrimination suit brought against Walmart by a coalition of law firms and advocacy groups that seeks to discover why women, who make up more than 65% of its rank-and-file employees represent only one-third of its managers. In Washington State, evidence of Wal-Mart skimping on paying workers' compensation, forced the company to get an outside manager to handle its claims. Labor unions, particularly the United Food and Commercial Workers (UFCW), the largest North American organization of retail workers, have made efforts to organize stores in Nevada, Texas, Colorado and elsewhere. Those efforts have sometimes been met with worker surveillance and interrogation by Walmart, and several complaints have been lodged against the company with the National Labor Relations Board for its illegal anti-union and surveillance activities.
According to the UFCW, workers in Denver, Paris, Texas and Orlando Florida have charged Walmart managers with telling their “employees their union activities were being monitored; Asked employees to spy on co-workers on behalf of the company; Verbally harassed union supporters; and Interrogated workers about their union activities.”
The Orlando complaint also alleges that Walmart managers refused to allow a worker “to have a witness in an investigatory interview. Further, managers threatened to fire workers who exercise their right to an employee witness, a right commonly known as Weingarten rights.”
In 2002, an Administrative Law Judge of the NLRB found Walmart guilty of violating a worker’s Weingarten right in a case in Alaska. “Walmart demanded that an employee continue to participate in an interview about another co-worker and unlawfully fired him after he twice refused to participate without a witness. ‘Whether in a union or non-union context, it is, of course, patently unlawful for an employer to terminate an employee because he/she invokes his/her Weingarten rights,’” wrote the judge.
In that case, the judge ordered the employee reinstated with full back pay and benefits and ordered Walmart to post a notice stating: "WE WILL NOT require that our employees, who have a reasonable belief that the matters to be discussed may result in their discipline, continue to participate in investigatory interviews after their request for the presence of their own witness has been denied by us.
“WE WILL NOT discharge our employees because they request the presence of their own witness before participating in an investigatory interview which they reasonably believe may result in discipline against them."
According to the UFCW, “Wal-Mart agreed to a similar posting in College Station, Texas, to avoid a trial on a similar Weingarten complaint issued by the NLRB.”
Nearly 50 complaints have been brought against Walmart with the NLRB, representing 25 states. As of 2003, Walmart has been found guilty in 10, settled eight, and the rest are pending.
With 1 million workers nationally, that number doesn’t seem like many; it’s the fact that most have involved surveillance and anti-union activity that’s disturbing.
In an editorial published on Sept. 1, 2003 in The Capital Times in Madison, WI, writer Leslie “Buzz” Davis cites several reasons why
Workers at Walmart are beginning to want to unionize:
“Low wages: Nearly half of Wal-Mart’s workers earn less than the federal annual poverty income for a family of three—$15,300 per year.
“Few benefits: 700,000 of the workers get no health care from Wal-Mart. The rest who do pay for it.
“Little retirement: No retirement plan is provided for 35% of the workers. The other 65% are in the Wal-Mart profit sharing and 401(k) plans. And most of the investment is in Wal-Mart stock.
“Low wages, little health care and retirement—what else could be wrong? Thousands of workers are suing Wal-Mart because some managers force people to work unpaid overtime. Thousands more are suing for gender discrimination.”
Not every employee at Walmart is an unhappy camper by a long shot. In Mark Gimein’s Fortune piece, he tells the story of a family of five, all of whom work at Walmart, for whom the store is a way of life. He describes a husband and wife given compatible hours and the husband moving up to an Assistant Manager’s salaried position. And Gimein could have gotten similarly positive stories from employees at almost any Walmart in the nation. In an informal poll taken at the Burleson Walmart Supercenter found that 12 of the 15 day-shifters were happy with their jobs, though they had minor complaints of wanting more money or hours; nearly the same number of night workers interviewed by the FWW also liked their jobs. Few however, said they felt like it was anything more than a job, and none said they would stay if the opportunity to work at the Fort Worth Lockheed Martin plant, where the pay starts at about $12 an hour, became available. Which is to say that what Sam Walton had in mind may no longer be holding up.
Gimein points to several reasons for the deterioration of the Walmart Family, from expansion that has eroded the closeness of associates with their managers, to the changing nature of the retail business. And, writes Gimein, “as Walmart managers across the country fixate every more narrowly on the bottom line, their relationships with workers deteriorate.”
Walmart Spokesman Jay Allen disagrees that the foundation of the Walmart culture has changed. As he told Gimein, “[the] People Make the difference” slogan is still a prominent part of the company thinking. As for people wanting more money, Allen says, “Managing payroll—managing expenses in general—has always been a huge priority. To get everyday low prices you have to have everyday low costs. There’s always been a huge intensity for managing expenses.”
Allen may be glossing over things with his generalities. In January of this year, information about an internal audit at Walmart Stores done three years ago was published by the New York Times. The audit is currently under court seal, but released information indicated that employee records at 128 stores pointed to extensive problems with workers. According to the Times, “The audit of one week’s time-clock records for about 25,000 employees found 1,372 instances in which minors apparently worked too late at night, worked during school hours or worked too many hours in a day. It also found 60,767 instances in which workers apparently did not take rest breaks, and 15,705 instances suggesting that employees had worked through their meal times.”
Walmart’s vice president for communications poo-poo’d the allegations, saying the audit “means nothing when you understand Wal-Mart’s timekeeping system” and that what looked like violations might simply be a reflection of employee sloppiness at clocking in and out.
But Johh Fraser, who ran the federal Labor Department’s wage and hour division during the 1990s, was quoted by the Times as saying, “When you find the frequency of this kind of violation in such a large employer, such a pervasive employer, it has to be a source of great concern,”
Surprise! Not Every Town Want’s a Walmart
This is how Leslie ‘Buzz’ Davis describes Walmart in the September 1, 2003 The Capital Times editorial he penned: “Wal-Mart is the piranha of American capitalism. You put the pretty little pirañha in your backyard fish pond and soon all the fish are gone except the pirañha. You step into that little fishpond and, poof! your foot is gone. This is what Wal-Mart is doing to hundreds of communities across the United States.”
Some people would say the image is over the top. Others might simply deny its veracity. But many communities, having seen what has happened elsewhere when a Walmart, and particularly a Walmart Supercenter comes to town, have begun objecting to having them nearby.
In Utah, Walmart has six standard Wal-Mart stores, seven Sam's Club warehouse stores and 16 Supercenters, with three more under construction in Salt Lake City and nearby Linden. The company also operates four Neighborhood Market grocery stores with a fifth set to open this Spring. Additional stores are planned.
From an employment point of view, Walmart is a boon to Utah. The company took out $130 million in commercial construction permits in 2003—roughly 13% of the value of nonresidential permits issued for that year in the entire state. That’s a lot of people working. The good-money work won’t last long, however; it’s short-term work.
Overall, Walmart is Utah’s largest private for-profit employer in the state, with more than 12,000 employees, and sixth-largest overall.
But not all is rosy in Utah. According to Mark Knold, senior economist for the Utah Department of Workforce Services, Walmart is causing some retailers to downscale or go out of business, costing as many jobs as it’s creating. Particularly affected, says Lesley Mitchell, a writer with the Salt Lake Tribune, are the grocery stores, which are being ‘cannibalized’ by Walmart.
“Retail sales in Utah overall will increase by about 2 percent in 2003, the Utah Tax Commission estimates,” writes Mitchell in the Jan 2, 2004 Salt Lake Tribune. “Food store sales, however, will likely drop 4.7 percent for the year, reflecting the growth of the Walmart Supercenters, said Doug Macdonald, Utah State Tax Commission chief economist. The foot store category includes only grocery store sales and not food sales at the Walmart stores.”
Macdonald does on to say that neighborhood stores can still compete because of their proximity to residential neighborhoods, but Walmart’s smallish Neighborhood Market grocery stores are trying to close that hole in the market.
The near-5% drop in food sales doesn’t mean people will eat less, only that existing grocery stores will sell less as Walmart sells more. But with grocery stores operating on slim margins to begin with, a drop of 5% will be all that’s needed to drive a number of them out of business.
Community opposition to Walmart has only begun in Utah, bu† it has been strong enough to stop progress on a 158,000-square-foot Supercenter planned for northern Salt Lake City.
About the same time that store was stopped, in Taos, New Mexico, a coalition of 400 business owners and dozens of unionized grocery store workers successfully campaigned to block a Walmart Supercenter there.
In Austin, environmentalists and local business owners partnered up to successfully stop a Supercenter planned to sit over the Aquifir.
Such partnerships may seem odd at first glance, but according to Stacy Mitchel, writing on AlterNet on September 8, 2003, they are not as odd as they seem. “The notion of a single, unified business interest —as in ‘a pro-business policy’ or ‘business vs. labor’—is long gone, if it ever existed. The natural allies of small business today are not those advancing corporate interests, but those fighting consolidated economic power: organized labor, environmental groups, and consumer activists. These unfamiliar allies are beginning to work together. And when they do, the combination is potent.
The Wall Street Journal, in a story datelined October 21, 1999, noted that by that time legislation had already been passed inTucson, Arizona, and Clark County, Nevada (Las Vegas), effectively banning any store with over 100,000 square feet if more than 15,000 square feet of the space was devoted to groceries—a clear shot at Walmart. In California, by 1999 five cities had banned Supercenters.
Currently in Rogue Valley, Oregon, a coalition of community activists, the Southern Oregon Central Labor Council and environmentalists and are trying to halt the construction of two new Supercenters in the cities of Central Point and Medford. The two new buildings would replace regular Walmart stores in nearby Talent, OR. Becca Croft, a community activist from Central Point says that the members of her group, Central Point First, are not against Walmart, per se, but that Walmart’s intention to close profitable stores and replace them with Supercenters suggests the company plans to market them as regional shopping centers.
Jim Alexander of the Southern Oregon Central Labor Council is opposed to the new Walmart because of its unfair practices against workers. Medford City Councilor Jim Key is also against the new stores, but for him it’s more a question of the impact it will have on his city. “All of our efforts to revitalize downtown have been hampered by these kinds of developments,” he told Joe Flaherty of the local Howdy Neighbor. Barbara Johnson, of Medford, was a small business owner in Saint Helens when Walmart arrived there. “It [the store] just devastated the small businesses there. It emptied the street we were on.” Moreover, she added, “they only carry part of the cost of the infrastructure they need. Property taxed will have to be raised to pay for sewage, roads, utilities and sidewalks.”
Walmart denied that any infrastructure costs were paid by anyone buy Walmart.
A similar battle is raging in Lakeway, TX, where a 24-hour Walmart Supercenter is planned. Activists think a new store will destroy the community that is already living in Lakeway, produce traffic problems, draw crime, increase trash, bring down residential property values on land bordering the Walmart lot, and diminish the overall quality of life in Lakeway. Residents agree: Lakeway’s residents have been polled and 76% are opposed to another big-box retailer in the area, and Walmart, they say, has a reputation as a bad neighbor.
Walmart proponents counter with the argument that the store will bring needed sales tax revenue to Lakeway, a suggestion many consider bunk. Additional income is frequently offset by loss of better paying jobs and expenses cities incur due to the presence of Wallmart: increased crime, which necessitates more police, which costs cities more to provide. One internet bulletin on the Lakeway situation notes that “The quality of life that we all enjoy here in Lakeway is not worth sacrificing for the promise of a few bucks.”Here In Fort Worth
“It’s going to be interesting. I guess we’ll find out whether or not they’re a good neighbor soon enough,” says Robert Chasser, a retired Fort Worth Police Officer and President of the Bonnie Brae Neighborhood Association. The Bonnie Brae is one of the Neighborhood Associations that make up the Riverside Alliance, an alliance of seven neighborhood associations that will be shopping at the new Walmart Supercenter just off Airport Freeway at Beach Street, a ten minute drive from downtown Fort Worth.
Chasser is also one of the few who voiced dissent last year when the City Council met to discuss the prospect of opening a 220,000 square foot Supercenter on 25 acres of old-growth trees across the street from Sylvania Park.
As Ken Shimamoto discussed in an earlier piece in this paper (“Lube Job: Raising a stink gets Wal-Mart to bend but not break over the development of a new store in Riverside”; July 23, 2003) in April, “the conflicting imperatives of economic development, public safety, and environmental preservation collided in city council chambers over a development project in the Riverside area of northeast Fort Worth.” In fact, it wasn’t much of a conflict. Few voices were raised against the giant store, and even they quieted once the beautiful old stand of trees was cut.
There were some arguments and a couple of trips back to the drawing board to satisfy the environmental desire to save at least some of the trees, but once Walmart agreed to save about one-quarter of the stand, or 200 of the trees on the site—then went further and agreed to save or plant an additional 45—even those arguments ceased.
“I think it was a done deal even before the meetings,” says Chesser. “There were at least two other sites that I think would have been better for building a Walmart, and would have suited a Walmart Supercenter better than this one, but I think they thought they were too far away from downtown to get that traffic. I think they were already here before we began to talk about it.”
Chesser’s complaint is one heard frequently about Walmart: the economic impact of the store in a neighborhood is so immediate that it frequently calls the shots on where it will go, rather than the areas in which they want to put a store telling Walmart what it can and cannot do.
There may be more to it than that. In a sense, many people feel as though it is some sort of prize to have a Walmart plunked down in their neighborhood, as if it means that their neighborhood is something special. It doesn’t, of course. Walmart opening in your area simply means they think you’ve got enough families living nearby, enough poor families really, who can’t afford top-of-the-line merchandise, that they can make money there. Yet that’s not how it’s perceived, and that perception is part of the genius of Sam Walton. His folksy demeanor and the prices he offered made people feel like they were part of something. Getting a Walmart was like being accepted into his fun, folksy, fair and honest family.
Talking with Sarah Walker, moderator of the Riverside Alliance, was like talking with someone who’d just won the top-shelf stuffed animal at the local carnival.
“Oh, we wanted a Walmart here. We wanted one for a long time. People are thrilled about it,” she told the FWW. “Residents here wanted this facility, were overwhelmingly in favor of this Walmart and thrilled when this site was chosen.”
“Why?” she was asked.
“In this area we do not have any nice restaurants. We have no big box stores where we can shop. We have to go out of this neighborhood to shop at Walmart.
“Walmart told us they could come in here and in 10 years make millions of dollars and bring us the services we need. Everybody is happy. Thrilled. Tell you the truth, we’re hoping that a Starbucks will open here too. And some nice restaurants now that Walmart is here. That is the sort of thing we are looking forward to and may finally get. Until now, we have had no services, no restaurants, no nice places to go eat, no convenient shopping.”
The neighborhood will need the savings they get from buying Walmart’s cheap Third World goods to afford the $3 coffee Walker is dreaming about.
“There are also the other benefits. Until now we have nothing here. Now we will get the tax benefits of having this Superstore. We will get people from several neighborhoods bringing their money here, rather than our money going elsewhere. Our residents will earn money here, they will spend it here. Walmart will pay taxes here. There will be tremendous benefits coming into this neighborhood.”
Moderator Walker was asked what would happen if in 10 years Walmart, as it so often does, leaves the neighborhood. What would happen to those jobs, what the 25 acres of empty concrete would be like to live with.
“So what if they leave in 10 years. Honey, I don’t think either you or I will be here in 10 years to worry about that. Let’s just enjoy these 10 years.”
Walmart has, in fact, left two nearby sites already: it abandoned a regular Walmart not far from the new site on 820, and a Sam’s Club on Highway 10. The Supercenter will service many of the clients the earlier Walmart’s had serviced.
“I believe the Sam’s Club left, at least what I was told, because it couldn’t sell liquor there,” says Chassen. “That’s why they opened that new one on Rufe Snow. I don’t know why they left the Walmart.”
Walmart representatives, who’d promised for several days to get back to the FWW, never did, so the question is unanswered. Speculation is that they left because the site was no longer large enough. In fact, Walmart leaves sites regularly after 10 years. Not always, but frequently. Sometimes it’s because the store is unprofitable, sometimes because it’s too small. And frequently when they leave they leave an eyesore of an island of concrete with an ugly box building. Up by 820, the building has finally been torn down after sitting vacant for several years, but the parking lot remains. Over on Highway10, the 106,000 square foot building and lot are for lease. According to Chassen, the land was leased from several owners who are still collecting checks because Walmart’s lease wasn’t up when they left.
There are, of course, alternatives to simply leaving eyesores—which skateboarders love—dotting the landscape. Some towns have had the abandoned Walmart buildings and land donated and refurbished for neighborhood recreation centers. Grant, Oklahoma is one such site, and the rec-center, like the Walmart before it, is now the center of the town’s activities.
Asked whether she’d brought up the idea of asking Walmart whether they might make a deal to turn over the 25 acres and building to Fort Worth or the Riverside Alliance if and when they leave, Sarah Walker said she hadn’t. No one apparently had thought of it.
It’s no one’s fault that no one had thought of trying to make that deal. “How would a neighborhood association be sophisticated enough to think of something like that?” asks Kimberly Clark, one of the strongest voices to oppose the Airport Freeway Walmart Supercenter. “Particularly when everyone was so enthralled with the idea of having the store here. How could they be expected to come up to speed and know and understand the politics enough to get Walmart to make that sort of promise?”
Clark, who with her partner Jyl DeHaven would have preferred to see the 25-acre site put to a different use—“a commercial strip on the frontage road, with private homes surrounded by those old trees, and that beautiful building that was there refurbished and turned into a multi-use facility”—is right, of course. But that might be one of the things Walmart depends on. People are so happy to get their Walmart that they don’t think things through. At the new location, for instance, aside from the 121 access road, all of the streets around the new Walmart are two lanes with little or no shoulders. Along the side of the property opposite Sylvania Park, park-goers generally park their cars, making the street quite narrow if it is expected to handle the couple of hundred cars per hour that the Supercenter will need in order to do enough business. The primary access to the store parking lot will be narrow Race Street. Aside from the loss of the beautiful trees, Chassen’s primary argument to the Walmart location was precisely that: there simply isn’t sufficient roadway. Who will pick up the tab if those narrow streets become a problem and need widening? Who will pay if a new “Walmart Exit” is needed on 121, just up from the Beach Street exit?
No one at the City of Fort Worth Planning and Development knew, and when passed around to several other agencies, no one had an answer at those either.
The answer is that the city will pick up that tab. Not that it will become necessary, and Tom Galbraith, project manager for Wal-Mart's developer, Dunaway and Associates, insisted that it would never become a problem. “The frontage road there is adequate for the traffic they anticipate. And so is the Beach street exit.”
He added that, “We are improving two traffic areas at street corners and putting in traffic lights. Walmart is picking up all the costs for those improvements. We are the ones triggering the changes, and so we are picking up all the costs related to those changes.”
Actually, without the traffic lights, people would have difficulty conveniently accessing the Supercenter, as Beach Street is already backed up during the late afternoons. But it’s not impossible that the traffic light and intersection improvement that Walmart needs is also a diversion: with the city happy that Walmart is not griping about the tab for that work, it has not bothered to look further and make a deal if more work is needed in the future.
It is only a matter of months until the new Airport Freeway Wal-Mart Supercenter opens. It will look and feel the same as any other Wal-Mart Supercenter. Its aisles will be stocked with the same fishing poles and trampolines and underwear and Cheerios that can be found in an Oregon or Florida store. Another member of the Wal-Mart family will have arrived.Many parts of the Riverside area are very stable neighborhoods, filled with families who are in their second or third generations in the area -- people who indeed will be there in another 10 years. They’ll be the ones to find out if Walker was right, and the neighborhood really did win big.