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Robert Reich
NationofChange / Op-Ed
Published: Thursday 22 November 2012
Most new jobs in America are in personal services like retail, with low pay and bad hours.

Why You Shouldn’t Shop at Walmart on Friday

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A half century ago America’s largest private-sector employer was General Motors, whose full-time workers earned an average hourly wage of around $50, in today’s dollars, including health and pension benefits. 

Today, America’s largest employer is Walmart, whose average employee earns $8.81 an hour. A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits. 

There are many reasons for the difference – including globalization and technological changes that have shrunk employment in American manufacturing while enlarging it in sectors involving personal services, such as retail. 

But one reason, closely related to this seismic shift, is the decline of labor unions in the United States. In the 1950s, over a third of private-sector workers belonged to a union. Today fewer than 7 percent do. As a result, the typical American worker no longer has the bargaining clout to get a sizeable share of corporate profits. 

At the peak of its power and influence in the 1950s, the United Auto Workers could claim a significant portion of GM’s earnings for its members.

Walmart’s employees, by contrast, have no union to represent them. So they’ve had no means of getting much of the corporation’s earnings.

Walmart earned $16 billion last year (it just reported a 9 percent increase in earnings in the third quarter of 2012, to $3.6 billion), the lion’s share of which went instead to Walmart’s shareholders — including the family of its founder, Sam Walton, who earned on their Walmart stock more than the combined earnings of the bottom 40 percent of American workers. 

Is this about to change? Despite decades of failed unionization attempts, Walmart workers are planning to strike or conduct some other form of protest outside at least 1,000 locations across the United States this Friday – so-called “Black Friday,” the biggest shopping day in America when the Christmas holiday buying season begins. 

At the very least, the action gives Walmart employees a chance to air their grievances in public – not only lousy wages (as low at $8 an hour) but also unsafe and unsanitary working conditions, excessive hours, and sexual harassment. The result is bad publicity for the company exactly when it wants the public to think of it as Santa Claus. And the threatened strike, the first in 50 years, is gaining steam. 

The company is fighting back. It has filed a complaint with the National Labor Relations Board to preemptively ban the Black Friday strikes. The complaint alleges that the pickets are illegal “representational” picketing designed to win recognition for the United Food & Commercial Workers (UFCW) union. Walmart’s workers say they’re protesting unfair labor practices rather than acting on behalf of the UFCW. If a court sides with Walmart, it could possibly issue an injunction blocking Black Friday’s pickets. 

What happens at Walmart will have consequences extending far beyond the company. Other big box retailers are watching carefully. Walmart is their major competitor. Its pay scale and working conditions set the standard. 

More broadly, the widening inequality reflected in the gap between the pay of Walmart workers and the returns to Walmart investors, including the Walton fammily, haunts the American economy. 

Consumer spending is 70 percent of economic activity, but consumers are also workers. And as income and wealth continue to concentrate at the top, and the median wage continues to drop – it’s now 8 percent lower than it was in 2000 – a growing portion of the American workforce lacks the purchasing power to get the economy back to speed. Without a vibrant and growing middle class, Walmart itself won’t have the customers it needs. 

Most new jobs in America are in personal services like retail, with low pay and bad hours. According to the Bureau of Labor and Statistics, the average full-time retail worker earns between $18,000 and $21,000 per year.

But if retail workers got a raise, would consumers have to pay higher prices to make up for it? A new study by the think tankDemos reports that raising the salary of all full-time workers at large retailers to $25,000 per year would lift more than 700,000 people out of poverty, at a cost of only a 1 percent price increase for customers.

And, in the end, retailers would benefit. According to the study, the cost of the wage increases to major retailers would be $20.8 billion — about one percent of the sector’s $2.17 trillion in total annual sales. But the study also estimates the increased purchasing power of lower-wage workers as a result of the pay raises would generate $4 billion to $5 billion in additional retail sales. 

This seems like a good deal all around.

This article was originally posted on Robert Reich's blog.



Author pic
ABOUT Robert Reich

 

ROBERT B. REICH, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org. Robert Reich's new film, "Inequality for All" is available on DVD
and blu-ray, and on Netflix in February.

I would appreciate a citation

I would appreciate a citation for the statistic that only 7% of private sector workers are now unionized. I've used this statistic in arguments for unionization, and have been challenged.

I remember kids going to work at the GM plant in the San Fernando Valley in California, making enough money to buy modest homes and raise families. Right out of high school. No such opportunity exists for kids like that today.

I believe that income

I believe that income inequality is at the root of so many things in this country and the world, that by changing the Tax Code, would in the long run help Wal-Mart workers. We need "20 Brackets to $20Million, & top marginal rate of 60%. Everyone should pay some income tax, if only to shut up the Republicans that say 40% don't pay any income tax. I believe in: 3% for income to $30K, 6%for $30K-$50K, 9% for $50K-$70K, 12% for $70K-$90K, 15% for $90K-$120K, 18% for $120K-$150K, 21% for $150K-$200K, 24% for $200K-$300K, 27% for $300K-$400K, 30% for $400K-$500K, 33% for $500K-$600K, 36% for $600K-$800K, 39% for $800K-$1Mil, 42% for $1Mil-$2Mil, 45% for $2Mil-$3Mil, 48% for $3Mil-$5Mil, 51% for $5Mil-$10Mil, 54% for $10Mil-$15Mil, 57% for $15Mil-$20Mil, and 60% for all income over $20Million. Now that is "Fair & Balanced". This change in the tax code is very similar to what our great leaders of the past used to get us out of the Great Depression. In 1938 we had 33 tax brackets from 4% for income up to $64K(adjusted for inflation) all the way up to 79% for income over $79Million. This extra revenue at the top would pay down the National Debt, lower the runaway inequality in wages, that has been occurring for the last 30 years ever since President Reagan lowered the top marginal rate from 70% to 50%. This extra revenue would help the government hire more people to rebuild the crumbling infrastructure, which would help rebuild the Middle Class, which would raise the wages of the working poor (Wal-Mart workers), due to the multitude of jobs available to the public. It's common knowledge now that by helping & expanding the Middle Class, it helps the whole country, those below and above. It's also common knowledge that we have always had a progressive tax system, and we need to stop or at least slow down all the multi-millionaires from becoming Billionaires. God Bless the Middle Class.

BOYCOT WALMART. Support the

BOYCOT WALMART. Support the 99%. You are probably one of them.

Carlos, why was the middle

Carlos, why was the middle class so much better off when we had more union jobs than we have now?

I'm not being paid for what

I'm not being paid for what I'm about to say. This is only from what has happened to us because of the unions. I have my own business so I don't work for someone who wants me to say this.
Unions, The biggest A-Wholes in the world. All of those people from Hostes who lost their jobs. You guys should thank the unions for the crap they did you. My dads plant shut down in the 70's because of these morons. Now they want to screw Walmart. No wait. They won't screw Walmart, it's the associates who gets screwed. Unions want you to get more so they can get more from you to pay for their classy cars, mortgages on their 5 bedroom houses, buy nice things for their wives and misstresses. So hey associates, are you going to be happy for those "True Pick-Pockets" that you most gladly pay from you're checks while they're living it up? Makes you wonder who the real scums are.

CARLOS: I don't agree with

CARLOS:

I don't agree with what you said. Personally, I've never belonged to a union, because I usually had supervisory or managerial positions. But I don't like to see people putting down the unions. It's because of union efforts and Democratic legislation that we have a 40-hour work week, and Overtime Pay, not because business owners were caring or compassionate. So even though I've never belonged to a union, I know they did a lot in the 20th century to improve the lot of salaried employees. Too many people take things for granted nowadays.

I have known union representatives who did not have classy foreign cars or McMansions, and who, for all intents and purposes, really cared about the welfare of their members. I'm not saying they are all little angels, but then, neither are managers and business owners.

I really have to question your motives for saying what you have. It sounds too much like right-wing propaganda to me. Maybe you really did have experiences with insincere union people, but if so, you shouldn't stereotype them all because of the behavior of a few.

If it wasn't for the unions and Democratic politicians, we'd still have child labor, 6-day work weeks, no O/T pay, no family leave, pensions or insurance, and I don't think any salaried worker should forget that. Now many of these things are in jeopardy or already disappearing, and if unions were still powerful in America, and jobs weren't shipped overseas, none of this would be happening.

You spoke about the Hostess company and blame their troubles on unions, yet you say nothing about the CEO's salary being tripled, and other executives being given big raises when they were supposedly in dire financial straits. Yet it always seems to be the fault of the workers or their unions, if they even have any, never the fault of mismanagement or greed on the part of the CEOs.

If the associates in Walmart

If the associates in Walmart hate to work there, they should quit. There are thousands more who would love to take their place. I knew how things worked in Walmart many years ago when I started there. I didn't cry about it. I took it as a challange. I lasted seven years there then decided to move on. I started working the floor in automotive and left as department manager of electronics. If you don't like your job where ever it is, then leave and let someone else move in. Cry-babies don't deserve better things.

CARLOS: In case you haven't

CARLOS:

In case you haven't heard, there's a SHORTAGE of jobs in America, and I'm sure most Walmart employees are working there because they feel it's better than being on welfare. You say there are thousands more who would take their place, so you acknowledge that there's a big pool of unemployed job-seekers to replace them. In short, it's an employer's market, so the hell with the workers, right? They're all expendable, so if they don't like the salary or working conditions, screw 'em! And that's your position, as I take it.

I find it very hard to believe that you worked at Walmart for seven years yet have such an anti-employee attitude as you now display. Did greed turn you inside out? Now that you have your own business, you turn your back on your own experience and co-workers. Maybe you're the one with the classy car and the 5-bedroom house. You probably changed your party affiliation too.

I refuse to ever give a penny

I refuse to ever give a penny of my hard earned money to WalMart. Have you read Big-Box Swindle: The True Cost of Mega-Retailers and the fight for America's Independent Businesses by Stacy Mitchell? Bill McKibben, the autother of The End of Nature, says, "What Nickel and Dimed did for the Wal-Mart worker, Mitchell does for the community threatened by mega-retailers."

Here,s a news flash just

Here,s a news flash just dont work there all employees all at once just stop!!
Only return if they let you unionize I am quite sure that most Americans would support the Wal mart workers and most jobs would not be filled by scabs as all citizens want to end the wage disparity in this country. All workers should protest wage disparity it is the one issue all workers are in agreement unionized or not. Lastly piss on the poultry its genetically modified if it turns blue or maybe that the e.p.t test I cant remember!!

Corporate upper management

Corporate upper management thinking is completely divorced from retail sales and the workers who do the selling. Global world economy is code for, "The world is our customer. To hell with the workers in local stores."

The power is with the people

The power is with the people because we have the money they want. Other stores have no option but to compete with them so why not reward their efforts to survive by taking your business to a Walmart competitor.

Why are corporations waging a

Why are corporations waging a war against the American people?

They hate us for our freedoms.

I don't shop at

I don't shop at Wal-Mart--period. Many of their products are made by de facto slave labor, and their employees fare little better.

American industry thrived when it paid its workers enough that they could afford to buy the products they made. People who work at Wal-Mart cannot afford to shop at Wal-Mart. Some Wal-Marts are said to give out food stamp applications with the "paperwork" one receives when hired. If this is the case, Wal-Mart is essentially asking its employees to provide the corporation with a government subsidy.

Does anyone else remember when Wal-Mart carried only American-made products? That made Sam Walton rich, and benefited other American workers as well. Today's Wal-Mart merely feeds off the shell of what he built.

Your are right Dave. Walmart

Your are right Dave. Walmart typifies most of what is wrong in America. When you walk in the store in West Memphis, AR you can feel the greed in the air. The shopping carts all have square wheels. The products are scattered all over the store, which manipulates the customers to walk all over hell's half acre to find what they want. The managers know that if they can bounce the customers around, they will find a few more things that weren't on their shopping list so sales go up. Walmart was once an American store but now it's the great mall of China. It should be boycotted into extinction in America to create jobs at their competitors stores.

The avg person doesn't

The avg person doesn't realize that Wally World is NOT always the cheapest place to shop. They also refused to even discuss their genetically engineered sweet corn being sold last year.

Think about this: if sending our American jobs overseas was such an economic boon, why don't we in the retail world see any cost decreases? Really, the items i have to buy of decent quality are just as expensive as they used to be. I suspect that any cost savings flies right to the pockets of the suits running the corporations.

This is the critical thing to remember: Corporations have ALL their decisions made by people who are pretty wealthy making those decisions. If the "legal entity" of the corporation did not have people adjusting to market and other needs, they would not need mgmt. The legal papers would guide them each step of the way. That is not possible. It is all about rich suits making choices that increase their personal wealth/power, and take it from you.

how is not shopping at a

how is not shopping at a store help the people that work there... doesn't that in turn hurt there job?

What was the average retail

What was the average retail wage per hour 50 years ago?
did they get benefits 50 years ago?
why have cars always been so expensive?

When I got out of high school

When I got out of high school in 1963. the minimum wage was $1.25/hour.

Can remember exactly how much a new car was, but it was somewhere in the $3,000 range. Now, at the time, most cars "died" at about 55,000 miles--so getting a new, not-too-expensive car was kind of a necessity. This was particularly true in the North, where the roads were salted during the winter. Since the 50s/60s, cars have seen a lot of engineering improvements which have reduced the need to replace them every 3-4 years. Cost-of-labor is a big issue, but there are some other considerations on the table, too.

One should NEVER "shop" at

One should NEVER "shop" at Wal-Mart!

http://www.davelippman.com/walmart/whyihatewalmart.html

CHET: I agree with your

CHET:

I agree with your sentiment, but it's not always possible to take such a principled stand. For example, I live in a smaller city that only has a Lowe's Grocery Store and a Walmart Super Center. Lowe's doesn't always have the foodstuffs I want, including the produce, and their prices are about the same. Also, I live much closer to Walmart than to Lowe's, since I live on the southern outskirts and Lowe's is on the north side of town.

We once had a couple more stores to choose from, including an Albertson's. Well, the latter closed their doors, as did the other one, so now I have two choices, unless I want to drive 65 miles to a larger city. So, what would you do? I've never liked shopping at Walmart, because I know they pay their workers peanuts, but at least when I lived in Santa Fe, I had a number of choices, so I rarely passed through the Walmart doors.

But I don't have that luxury now.

Most Walmart employees work pretty hard, and our store did away with their "greeters" to save money for the Walton family. It irks me that the Walmart spokesmen can threaten the "consequences" if the employees don't show up for work on Black Friday.

I am shunning the store on this Friday, however.

Yeah, I remember when Walmart advertised their store as selling goods "made in America." Now they seem to be running a Chinese emporium, with clothes assembled in Bangladesh and toilet paper made in the U.S.

Treating workers better would

Treating workers better would also reduce Walmart's $3B annual shrinkage expense.

They write that off and the

They write that off and the American tax payers pay it every April 15th. This is what happens in a country when the rich people are allowed to write their own laws for 236 years.

I live in Canada, where the

I live in Canada, where the gap between the rich and poor is nowhere near the distance it is in the USA, but it's growing at an enormous speed. OUR Walmart isn't organizing in Canada this fall, but I've signed the petition to get corporate to talk to this group about workers' greivances, and since they refuse, I and my family won't be shopping at Walmart on Black Friday or much at all. (My parrot only eats one brand of birdseed that they carry).

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