Friday, October 06, 2006

Wal-Mart's Wager: Bad Bet for Anyone

In today's NY Time$ the columnist Paul Krugman lashes out against the Wal-Mart war on workers' wages. In fact, he sees the Wal-Mart campaign to cut labor costs as part of a national trend by employers all across the country. As he points out, "But after tax profits have more than doubled, because workers' productivity is up, but their wages aren't..."

Krugman sees Wal-Mart as the exemplar of this national trend; "The problem from the company's point of view, then, is that its workers are too loyal; it wants cheap labor that doesn't hang around too long, but not enough workers quit before acquiring the right to higher wages and benefits." In order to accomplish this the company is seeking to raise the number of its part-time workers from 20% to 40%.

Another aspect of the strategy is to impose wage caps on the workers and to find ways to make older workers more discomfited so that they no longer will stick around. As Krugman observes, "It is a brutal strategy." In the past this would have sparked a fierce and successful union organizing drive but for the fact that "the people who are supposed to enforce labor laws are on the side of the employers..."

The key point in all of this is that the glittering promise of low prices is a fools gold illusion that is built on the foundation of a corporate philosophy that sees workers as a "disposable commodity, paid as little as possible and encouraged to leave after a year or two." This is a clear message to the good folks in New York City and its neighbors up in Rockland who are looking at the prospect of a Walmonster in Monsey.

Wal-Mart will destroy companies that are paying good wages and benefits-supermarkets such as Pathmark, Shoprite, Key Foods and A&P- while at the same time wiping out immigrant and ethnic entrepreneurs who own the independent stores in the areas surrounding the invading box store. This is precisely the " Big Box Swindle" that our friend Stacy Mitchell has written so eloquently about. It certainly is no bargain for any community.