Welcome to the 99th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions, and just a bit of everything else when it comes to a very hot topic these days: Wal-Mart.
Wal-Mart Stores, Inc. (NYSE: WMT) has had a pretty good track record in clamping down on labor unionization inside its global contingent of stores. In North America, the retailer actually shut down the automotive department of a Canadian location after it unionized.
Will unions be able to ever crack the Wal-Mart barrier and sign up the retailer's employers to some kind of collective bargaining agreement? Wal-Mart's million-plus labor force would probably welcome union choice if it appeared in U.S. locations. The wages offered to many employees are not really in the realm of livable, and the retailer's critics have been extremely vocal about the company's growing sales and revenue -- even in this economy -- happening at the same time as employee wage stagnation.
The union and the boardroom
Like almost every industry in the last few decades, retailers have been moving away from labor unions to at-will employment for most entry-level and non-contract employees. The reason is simple: labor unions are a complete headache to most companies because they attempt to place human capital above all else. Whereas most of corporate America is shooting for nothing but sales and profits, labor unions attempt to balance that with employee compensation and needs at an equal level. That's a pretty narrow description, but you get the gist. As we saw with the mortgage meltdown in the last 18 months, mortgage companies and countless other industries were more interested in growth than with anything else of importance in business.
In a way, one could say that unions stand poised to make a comeback. That is, if the absolute power held by corporations continues to become throttled downward due to the absolute lack of intelligence in many board rooms and corner offices these days. Tie that with the fact that a civilian revolution (however that can be defined) may be forming around all this financial nonsense and it's easy to see that the greed and profit lust of the 1990s and early 2000s could be turned on its head.
Could the power of labor return as a result? In the Wisdom of Crowds, Jerome Surowiecki explained that businesses, economies and nations are all shaped by the many, not the few. In a way, the few that have held power in corporate boardrooms are not making some of the best decisions. In fact, I'd posit that less than 10% of active CEOs at the helm of U.S. companies have ever visited the front lines of customer service or manufacturing for their companies (or any other front-line position). That's a travesty, and if even remotely true, explains the nonsense that has caused the current recession we're all facing together.
The Employee Free Choice Act
Oddly, those in power like politicians and those who believe they are in power (like celebrities) all tend to look down on the standard citizen as a sheep-like merchandising, baby-making and consumption machine that keeps the U.S. economy running and those in power continuing to have what they cherish most. Make no mistake: the collective intelligence of the U.S. population would squash the collective intelligence of those in power if given a chance. It's arguable that if a corporation would give more to its employees and less to itself and its shareholders (the two greedy parties), that company would have the best-performing employees and would tower over its competitors.
Would fairer working conditions, better wages and best-in-class benefits help Wal-Mart become even more successful than it already is? The retailer is already the largest in the world and continues to grow its sales every quarter, regardless of the ongoing recession. Consumers have opened their hearts, wallets and purses to Wal-Mart in this tough day and age to continue providing for themselves and their families by spending as little as possible. Indeed, Wal-Mart's "Save Money. Live Better." corporate slogan tells each of us that while it may position itself to the retail trend of the day every year, it still have one goal in mind: value for the consumer. Period.
So, even though it continues growing every quarter, the Wal-Mart employee -- all of them -- are not really participating in all that success beyond continuing to have a job. Unionizing these workers is not like going to a local tire shop and organizing a few dozen workers. We're talking the largest private employer in the U.S., and one that has virtually any power over its employees as it needs.
Former Wal-Mart CEO Lee Scott responded to the Employee Free Choice Act by indicating that Wal-Mart was behind the driver's seat of the bus and that it intended to keep things that way. This indicates that Wal-Mart management really does think it's superior as a decision maker than the collective brains of its entire employee base. Who is right here -- Suroweicki or Scott? Only time will tell.
Join me right here this time next week for another edition of the Wal-Mart Weekly. Until then, have a great week.
Will Rich Ross really have a positive impact on Disney's movie operations?
Consumers sick of recession, may spend extra on holidays
Corrections, seasonality and Santa Claus
Reader Comments (Page 1 of 1)
2-24-2009 @ 1:10PM
shep21998 said...
Walmart doesn't need a union. Employees are treated well and have many benefits. In this day and time when other companies are laying off, Walmart employees are grateful to be working. If unions got into Walmart, the prices would have to go up and we consumers cannot afford that at this time. Walmart knows how to run a retailer, and unions do not. I can picture now a strike at Christmas because you know unions always strike at the worst possible time. I personally don't patronize union businesses when I have a choice. Why pay more?
2-25-2009 @ 4:41PM
Mike said...
So this time you just linked right to one of the anti-Walmart websites Brian? It wasn't hard to figure out your bias all along, but I really figured you would at least TRY to appear fair/balanced.
2-25-2009 @ 5:01PM
roudy11z said...
I hate to take up for Lee Scott but he and Wal-Mart will be right in the end.Wal-Mart has and will overcome most obsticles as times goes on. I am will to bet on this.Remember "just say no to unions".
RoudMan
2-27-2009 @ 11:11PM
davestraitjacket said...
Unionization would be good for WM and lousy for the associates. WM could simply end all benefits and cut everyone's pay to starting salary - reducing their financial burden to stores that go union - then let the union negotiate them back...piecemeal. You might get some of what you had before but not the total package. If the associates are turning to unions for help it's because they either no longer trust management or feel that management is no longer on their side. Management treats the associates like robots, like replaceable parts in a machine, not like human beings with real concerns. This is not an isolated, one-store incident.
3-24-2009 @ 9:55PM
Nameless in Northern Illinois said...
I work at wal-mart and I'm not saying where. They pulled each and everyone into out breakroom this weekend and the store manager sat down and gave us a speech on unions. Marking down who was there and making anyone who hasn't been to a meeting drop everything that they are doing to watch this movie and hear this speech. It goes something like I'm sorry that I had to bring your back here today but this was just so important that it could not wait and there is this movie on unions you need to see. They start out the movie showing you all these associates that have moved up in the company. People who started at a cashier and told them she wanted to be a manager so she was trained and been a manager ever since. Very unlikely. All those types of stories. And then if the union becomes a part of your store this will all change. Because they will pick someone who has been here longer then someone who works harder and stuff like that. If we are approched by a union rep on walmart time or property we will get in trouble. That it is our choice on our own time and property. But that they hope we make the right choice and know what we are signing that a union will take money out of our checks and give us nothing back. And the person who wrote in last knows nothing at all about what is going on there. Things have never been worse. I used to get 30 hours a week easy and now I am lucky to get 12. And I can't live on that. I make $10.50 an hour and an dollar more on sundays and I have been there 7 years now. They won't let anyone be full time anymore. Overtime is not allowed even if your helping a customer. They need a union but I doubt we can have one. They will find out who signed those cards and they we find a way to screw with your hours, time off, or try to find something to fire you for. Or as I have read and don't doubt they will find a way to close that store so everyone is out of work. They absolutely use and abuse us. There has never been such bad coverage and they won't let us work if they need help ruins there stupid scorecard. So where my dept had no closer four days straight from 4pm till close and I needed the hours. I was not allowed to work. Had lots of screw ups that day by people who weren't trained in the dept. Anyway if I didn't need the job I'd leave. I stay for my customers and for the money. But Wal-mart is a cult. They do bad things and get away with them. They are too big now to stop.
10-11-2009 @ 9:40PM
donjohnson said...
I am a member of the UFCW and i dont think wages would really go up by that much if walmart was to go union anyway! actually in one way i would be a plus to a company that size!!!