Operation Rollback: Wal-Mart's World of Business By Jefferson Decker
September 16, 2009
In October 2003 employees at more than 800 chain supermarkets in California walked out of their jobs after management demanded pay cuts and a reduction in health insurance benefits. The ensuing strike and lockout were notable for the number of workers involved (59,000), the duration of the conflict (more than four months) and the defeat eventually suffered by the United Food and Commercial Workers Union, which represented the workers. Just as notable was what had ostensibly provoked the showdown. In 2002, the discount chain Wal-Mart announced that it would place at least forty new Supercenters, the largest of its big-box stores, in California. A nonunion company famous for expanding its market share by undercutting its competitors' prices, Wal-Mart had proven hard to beat in the past. And in addition to offering a massive selection of housewares, toys and clothes, its Supercenters were outfitted with a full-service grocery. The mere prospect of losing customers to these new stores convinced Safeway, Albertsons and other large grocery chains that they could seek concessions from their workers on the pretext that wage cuts were a necessary measure for remaining competitive. Wal-Mart, it appeared, had changed the way the grocery business operated in California before it even entered the market.
In The Retail Revolution, Nelson Lichtenstein explains how Wal-Mart could shape, if not dictate, the agendas of so many third parties. And he suggests that the California grocery strike was just one particularly visible example of the profound impact of the Bentonville, Arkansas, chain on the broader economy. A labor historian best known for his biography of autoworkers leader Walter Reuther, Lichtenstein has become something of an authority on the discount Goliath. In 2006 he edited a collection of essays, published by the New Press, on the economics and historical circumstances of the Wal-Mart phenomenon. With The Retail Revolution, he provides a comprehensive story of the corporation's awesome growth and expansion. Drawing on sociological scholarship and reporting about the experiences of Wal-Mart workers in the United States and around the world, as well as information made public by lawsuits involving the company, Lichtenstein describes Wal-Mart's origins, expansion and current business practices, from its relationship with subcontracting manufacturers to its protocol for scheduling night shifts. He respects the company's argument for its own social utility--that it brings an abundance of goods to consumers at the lowest possible price--and admires its ability to solve complex logistical problems that have long bedeviled discount retailers. But he is horrified by the dispiriting low-wage, part-time economy that Wal-Mart has helped create.
Forty years ago Wal-Mart was a small chain of stores concentrated in a sparsely populated patch of the American South. Today it employs 2.1 million people, more than twenty times as many as ExxonMobil, the largest oil company in the United States. Its total revenue exceeds that of Target, Home Depot, Sears, Safeway and Kroger combined. It has prospered, Lichtenstein argues, by mastering the art of moving household products from manufacturer to consumer in the most efficient way possible, and by using economies of scale and low labor costs to undersell other stores. Its size and its just-in-time business model are now imitated by numerous companies looking to hold down costs while manufacturing and selling consumer goods in a global economy. And its success has put immense economic pressure on its competition, not to mention labor unions, governments and many of its own suppliers. Indeed, Lichtenstein argues that by squeezing the resources of the small-town, lower-middle-class Americans who flock to its stores, Wal-Mart's economic model also threatens its own bottom line. Global commerce in the twenty-first century is an uncertain, hyper-competitive affair--even for those companies that grow wealthy from perfecting it. ............(more)
The complete piece is at:
http://www.thenation.com/doc/20091005/decker
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