One of the most telling of all the criticisms of Wal-Mart is to be found in a February 2004 report by the Democratic Staff of the House Education and Workforce Committee. In analyzing Wal-Mart's success in holding employee compensation at low levels, the report assesses the costs to US taxpayers of employees who are so badly paid that they qualify for government assistance even under the less than generous rules of the federal welfare system. For a two-hundred-employee Wal-Mart store, the government is spending $108,000 a year for children's health care; $125,000 a year in tax credits and deductions for low-income families; and $42,000 a year in housing assistance. The report estimates that a two-hundred-employee Wal-Mart store costs federal taxpayers $420,000 a year, or about $2,103 per Wal-Mart employee. That translates into a total annual welfare bill of $2.5 billion for Wal-Mart's 1.2 million US employees.

Wal-Mart has also set off a particularly destructive form of competition among corporations, which seek competitive advantage by pushing down the wages and benefits of employees. A clear example of this has been the conflict provoked by Wal-Mart's decision in 2002 to enter the southern California grocery market with forty of its "supercenters"—where the shopper can buy everything from tomatoes to deck furniture and spare tires. Although Wal-Mart has not yet opened any of these new stores, the response of California supermarkets, led by Safeway, has been to demand cuts in their employees' wages and benefits, with the cuts falling heavily on newly hired workers. This posed a serious threat to the supermarket employees, 70,000 of whom are members of the Union of Food and Commercial Workers (UFCW) and have benefited from its bargaining with employers. While a sales clerk at Wal-Mart earns only $8.50 an hour, a worker holding a similar job at Safeway or Albertson could earn $13 an hour along with full health care benefits.[11] For employees that could make the difference between minimal financial security and a life spent scraping by on the poverty line.

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The failure of the California grocery strike, not to mention the history of labor relations at Wal-Mart, points to the urgent need for reform of labor law in the United States. Wal-Mart is a ferociously anti-union company, and the UFCW has yet to organize a Wal-Mart store. Every store manager at Wal-Mart is issued a "Manager's Toolbox to Remaining Union Free," which warns managers to be on the lookout for signs of union activity, such as "frequent meetings at associates' homes" or "associates who are never seen together...talking or associating with each other."

The "Toolbox" provides managers with a special hotline so that they can get in touch with Wal-Mart's Bentonville headquarters the moment they think employees may be planning to organize a union. A high-powered union-busting team will then be dispatched by corporate jet to the offending store, to be followed by days of compulsory anti-union meetings for all employees. In the only known case of union success at Wal-Mart, in 2000 workers at the meat-cutting department of a Texas Wal-Mart somehow managed to circumvent this corporate FBI, and voted to join the UFCW in an election certified by the National Labor Relations Board. A week later Wal-Mart closed down the meat-cutting department and fired the offending employees, both illegal acts under the National Labor Relations Act. The NLRB ordered Wal-Mart to reopen the department, reemploy the fired workers, and bargain with the union, but Wal-Mart has appealed the NLRB decision and the litigation continues.

# posted by Gerry Canavan @ 10:40 AM  |