First, a history lesson: Labor practices in the newspaper industry nearly ruined that business by the 1980s. Thanks to the unions, there was so much overstaffing at printing presses, a practice known as featherbedding, that pressmen could come and go almost at will (picture eight pressmen operating a four-man press). The New York Daily News nearly had to shut down due to such practices -- until management put their feet down and said "No more."
Next consider today's automobile industry: It has almost been destroyed by the inflexibility of labor. Legacy retirement and healthcare costs are so high that the Big Three can no longer make money in North America.
And, yesterday, Wal-Mart Stores, Inc. (NYSE:WMT) took another public relations hit by telling it's employees that they need to come to work when it snows.
Maybe it's just me, but that doesn't sound like such a tough policy -- especially for a company with virtually flat same-store sales in the U.S, a company that is struggling to get back on its feet in its home market. When people don't come to work, it hurts productivity. And someone else has to do their job. The customer experience may suffer.
Groups like union-backed WakeUpWalMart also object to the fact that employees have to call in to a toll-free number to report an absence. What would they prefer? That Wal-Mart outfit employees with carrier pigeons?
Labor organizers are going down a path that is not good for Wal-Mart's investors or its workers. The answer to less productivity in most industries is cutting the work force.
At least they won't have to call in.
Douglas McIntyre is a partner at 24/7 Wall St.











Reader Comments (Page 1 of 2)
11-02-2006 @ 10:38AM
Melly said...
Well... that's one opinion. One I certainly don't subscribe to.
It is interesting how immediately any company's woes are blamed on high labor costs instead of on... oh, I don't know... say bad management?
It is also interesting how usually it is the low paying jobs that need to pay the price of bad management. If it's anything from simple not knowing how to run a business, to greed, to corruption, the workers end up losing.
Or perhaps some think that Wal-Mart employees should get on their knees and thank Wal-Mart for the opportunity to work there?
And if we're at it, why not just bring the old laws back. I say, we should just make them go to work, even when they're sick.
Remember those good ole days of mining towns and army-backed mining corporations? I miss those days!
11-02-2006 @ 11:30AM
Susy McMahan said...
Obviously you have a good paying job and a car that works. It may be tough to get to work when the city bus system doesn't run because of the weather.
Unions made this country what it was until the 80's, when union busting and reselling companies (again,union busting) became all the rage. Now many people have two (or more) Full/part-time jobs, no health care, no paid vacation time. Now how does that build family values? No wonder married couples have become the new minority in America.
Is that what business really wants? Or does personal greed of the rich run this country?
If this United States makes it, unions in some grass roots form will be back.
Susy McMahan
11-02-2006 @ 11:33AM
douglas mcintyre said...
If the unions had not insisted on "featherbedding" at newspapers and unusually high benefits packages at the car companies, the would have a lot more employed worker now.
You must be a socialist.
Doug McIntyre
11-02-2006 @ 11:46AM
Jack said...
Sounds like lots of turnover so every time you choose to shop in this enviornment you will be scowled at by new desperate employees. These constant new employees will never know anything about the products or where they are. And they won't care! They know their time at Walmart is temporary and will most likly be preoccupied with seeing how much junk they can stuff in their pockets before the end of their shifts. The shopping experiance will become worse!
11-02-2006 @ 11:41AM
John said...
I agree with you, Melly. Standard corporate tactics are to blame the workers for every dime of profit lost. Forget the outrageous salaries of top end corporate execs, their myriad of perks and thier questionable accouting practices or investment plans. It's the price of health care benefits for the floor level people who do the actual hard work that is "ruining" the company profits.
Big retail chains all use this same formula for success: Give the workers low pay, part time status and thus no health care benefits, then see if you can get them to do 40 hours worth of work in a 20 hour week, even when they're sick as a dog or there's a blizzard outside.
11-02-2006 @ 11:54AM
Michael said...
Hey Doug -- what's a "socialist"? Sounds pretty scary! It's intresting to note that the terrifying Communist Manifesto of 1848 called for the following radical craziness: free public education, progressive income tax, and a central bank. Oh my!
It's easy for Wall Street wannabes to reject anything they don't like as 'socialist' but trying to use such terms to frighten people simply reflects your own profound ignorance of the historical development of capitalism -- which by now includes many 'socialist' features that ironically enough help stabalize a deeply unstable system. Without 'socialist' developments such as decent wages, public healthcare, legally limited work hours, and retirement programs, capitalism would be in far worse shape then it is today. And as these 'socialist' features are systematically stripped away in the name of never ending capital expansion, we will likely return to the grim situation that gave rise to socialist demands in the first place. Wal-Mart workers, working for poverty wages, without healthcare or basic rights, are a glimpse of our collective future.
11-02-2006 @ 11:58AM
Ernie Taylor said...
FYI. wal-mart offers health coverage as low as $15.00 every 2 weeks for family coverage!!!and paid vacation time and personal time and sick time...but you do have to show up to work...although many show up and forget about the work part..wal-mart has been offering these benefits...this is not...new stuff..these are facts...just go into your local wmt and see for yourself..plus wmt offers profit sharing that an associate doesn't have to put any of his money into..completely company contributed..wal-mart is not all bad...
11-02-2006 @ 12:22PM
Don B. said...
Wal-mart was a great company for being family oriented before Sam Walton died. Since then it is not what wm can do for the employee and his/her family, but what can wm get out of the employee before he/she burns out and quits. I worked for wm in management for 10 years. been there done that!
11-02-2006 @ 12:39PM
douglas mcintyre said...
Well, what you fail to mention is that if there is not a "bottom line" then there are no employees. You seem to think Wal-Mart wants to have fewer people working at the company. I doubt that.
By your reasoning, the could end up like the car companies.
Doug McIntyre
11-02-2006 @ 12:43PM
david r. said...
Sam Walton expected all his associates to go above and beyond the customer expectations.retail is definitely not for everyone. And store mgmt is a burnout zone in retail period. Sam was a workaholic.not too many like him. don't think he would be much different at handling wmt today. he did seem more family oriented.
11-02-2006 @ 12:47PM
MD said...
Hey Melly, I miss those days too! Back then, employees knew their place, and were grateful for the opportunity to work 12 hour days for their gruel and crusts of bread. That's the problem with America these days -- workers think they should get paid a living wage and have healthcare and retirement! Well, at least some workers. Probably not those at Wal-Mart though. They're too tired, frightened and poor to put up much resistance. The important thing is to keep them that way. Cut their hours! Refuse to give them regular schedules! Pay them low wages! Deny them healthcare benefits! Maybe then they'll learn to repsect their superiors on Wall Street and in the White House.
11-02-2006 @ 12:59PM
Gary E. Sattler said...
Socialist... one click from Communist.
You know who you are.
American labor unions have been in bed with the American Democratic party for so long now, they're beginning to spawn what we call inbreeds. Those are the retarded social upstarts who think they can run this country from leather enterior Escalades while the rest of us put another used set of tires on our '97 Escorts.
Show me where the millions of dollars of weekly paid union dues are reaping benefits for blue collar sweat and blood donors on the shop floor.........
You can't.
The labor unions would do well to spend some time down on the ocean docks turning back some freighters loaded with Chinese goods for market. THAT would help their rank and file members. Like back in the day when Jimmy Hoffa stood up against the oppression of Teamster backed truckers... and got whacked for it.
Todays labor unions have no backbone. NONE
They sissy slap at American corporations, whine about nothing but what affects their own bottom line and rape the work force for the benefit.
I'd love to have a talk with James Hoffa "son of Jimmy" and tell him just what I think about his flaccid pandering to what used to be the Teamsters and his Democratic political associations. The first thing I'd tell him is.
James Hoffa,
You ain't got no balls.
But of course, that's just my opinion.
.
11-02-2006 @ 1:49PM
MD said...
Hey Gary -- so American labor unions have a long and glorious history of corruption. So what? What does that have to with 'socialism... one click from communism'?
The problem with concentrating on union corruption is that it lets the people with real power off the hook. Sure, the unions have done a piss poor job fighting for American workers over the last 30 years. But that doesn't mean that the fight is somehow illegitimate or unnecessary. What's needed is some form of social organization -- a political party, a workers union, a class-bsed special interest group -- that can stand up to the likes of Wal-Mart and Merrill Lynch.
Call it socialism if you have to -- but without it, people who work for a living are screwed.
11-02-2006 @ 1:52PM
Teresa R said...
From the sounds of some posters here, it seems like people think businesses are in business for their employees. That's not how it is. Businesses exists to make money for their stockholders; they are the owners of the company. Management and BODs have to answer to them, not to the employees. If the employees don't like the company's policies, they should get another job. Don't tell me they can't find another similar paying type job. Wal-Mart doesn't have to explain itself to anyone.
11-04-2006 @ 6:29PM
Natalie O said...
Well I don't know about anyone else but I do know for a fact that other companies have the same kind of attendance policies. Gee, who would have thunk that a company that Hires an employee would have the gall to expect that employee to show up for work and be on time. HOW DARE THEY. As for the FMLA for over three days of missing work. THATS WHAT IT IS FOR. To protect someone who needs time off for their family. There are companies in this country that have Call in Numbers, Attendance policies, tardy policies and discipline for people who choose not to come to work. This policy is aimed at weeding out the people that wake up and say " ya know, I don't feel like working today, I'm Calling in." not the people that actually are sick and normally have a good attendance record. As management myself and a former union member before that I will admit that most unions do good work in protecting the employees but some of those unions also try to get more for less. More money, less work and let the business suck it up. Yeah what about the good old days when you got 8 hours pay for 8 hours work.
11-02-2006 @ 2:26PM
Sonia Gonzales said...
I JUST CAN'T WAIT FOR WAL-MART TO GO DOWN AND OUT!
11-02-2006 @ 3:40PM
Bill Lumbergh said...
Um...yeah. Gosh, is that all it would have taken for the New York Daily News to shut down? But what would I have lined my birdcage with? My bird is a socialist, and is exceedingly demanding.
Our friend Doug McIntyre is exactly right: cutting jobs is a sure-fire way to increase productivity. Look at the huge surge in U.S. productivity in 2002-2003, when companies were downsizing right and left. They paid the CEO of my former employer $30 million dollars to come up with a magical number of employees to eliminate: 10%. Now that is impressive. So...even. So...round. I'd love to see the formula he toiled day and night for coming up with such a magical number.
What's truly disturbing isn't the layoffs, nor Mr. McIntyre's lack of compassion for human beings. It's the dishonesty. His history lesson takes us all the way back to...the 1980's. He only stopped 100 years short. If only he could be a laborer back then.
I'm sure he puts in long hours as a 'partner.' I'd go a step further and say he probably puts in more hours than the baseline employee. Of course, that's from the comfort of a high-back chair, in a plush air-conditioned office. Think he's up to the 12-14 hour days those encamped in Colorado in the early 1900's were faced, that is, when they weren't running in panic from the spray of machine gun bullets?
But if history shows us anything, it shows even the biggest scoundrel has at least the capacity to change. Once John D. Rockefeller, Jr. went to Colorado and observed personally his folly, he actually felt compassion.
Of course Wal-Mart workers aren't going to get much sympathy for having to work when it snows, as most of us do. But neither do they get any sort of sympathy from the millions of Americans who claim to be 'neighbor-loving' Christians when they really need it. They're just unskilled labor we're told. They can get different jobs we're told. It's that easy.
Of course maybe it is that easy, for those who were fortunate enough to be born into the right families, with plenty of drive and determination, connections, and worry-free college expenses.
I could at least respect Mr. McIntyre's honesty if he just said: "Screw you people. You don't count."
11-02-2006 @ 10:53PM
ikumah said...
Wow, this is the beginning of Wal-Marts dictatorship rule. I am shocked anyone would agree with this new policy. I agree that ruled are needed to prevent chaos, but this is to the extreme. Only a natural disaster is the only excuse allowed. I worked at Wal-Mart for seven years. I remember after hurricane Wilma hit Miami, associates were told to still come in to work. Wal-Mart is a dictatorship, either an associate is going quit or bend over and take it!
11-02-2006 @ 9:40PM
MD said...
The analysis is dishonest from the start. Wal-mart's new policy is not that workers have to work when it snows. That has always been the case. Rather, the policy establishes a new system of monitoring and punishment.
That's where the problem lies. Low wage work is all about domination. Workers have no voice, no input to what they do with their time. Management power is absolute. Of course, it's not the workers time, is it? They've sold it. Therefore, Wal-mart can do whatever it wants. And if you want to complain, you can always vote with your feet. Go find another $7 an hour job! Thanks to the Republican party and their plutocratic backers, there are plenty those to be had. Hope you don't get sick or old though...
11-02-2006 @ 7:24PM
Bill said...
Good thing you folks don't work for Rural Metro medical services..........you get a demerit every time you are 1 minute or more late you are allowed 9 such awful crimes for one year then you are fired. yes thats right i said 1 minute. oh ya they also work a standered 60 hour week and expect you to work overtime at 12 hours at a time