Reuters is reporting that Lee Scott, Walmart's former CEO who gave up his position at the begining of this year, spoke at the World Food Business Summit in New York and had some pretty interesting things to say. In response to questions about what he would have liked to acomplish as CEO, Scott was quoted as saying, "one place I would have liked to have done more is helping people understand that Wal-Mart jobs, retail jobs in general, are good jobs, they pay well and they offer extraordinary opportunities."

Apparently Scott hasn't talked with any actual average associates in a while. Most of the associates we talk to would rate their jobs as something vastly less than 'good'. Of course in this economy, or any economy, having a job is far better than not having a job, and it's great that Walmart employs so many people, but Walmart's jobs aren't about quality.

To start with, despite what Scott says, Walmart's jobs do not pay well. Walmart pays about 16% less than the average retail company, and the average Walmart employee will make under $20,000 a year. Does that sound like a well paid job to you? Second, Walmart offers inadequte benefits and health coverage. While Walmart claims that 94% of their employees have some kind of helath coverage, Walmart only covers 52% of their employees under thier own plan, failing to cover 675,000 employees. Walmart also covers far fewer employees than most the industry as a whole, which covers 65% of employees, which means a large portion of Walmart's employees must rely on Government assistance to cover their medical costs.

Add that to discrimination, cuts in hours, a schedule that can be changed to the drop of a hat, no overtime, and intimidation in the face of union organizing, and Walmart's jobs don't sound like "good jobs" at all. The saddest part about all of this, however, is that Walmart's jobs COULD be good. We've been pushing for high quality jobs at Walmart for years now, to no avail. One way Mr. Scott could have made headway in "helping people understand that Wal-Mart jobs... are good jobs" would have been to offer a living wage, affordable and adequate health coverage, quality benefits, and more respect in general to all of Walmart's associates.

Lee Scott, Wal-Mart's CEO, had some interesting things to say at their recent sustainability summit. Essentially, he revealed what we've always known: Wal-Mart's basic business model is built upon selling stuff. Lots of stuff. Increasing amounts of stuff. And if they can't sell lots and lots of stuff, they can't make billions of dollars.

This is a problem for Wal-Mart because they would like us to think they are green. They would like us to think that they are incredibly good for the environment. And while they are focusing more on environmentally friendly products, they ultimately can't be good for the environment with a mass consumerist mentality.

The Treehugger blog comes to similar conclusions, here are a few passages:

Near the end of Wal-Mart's 2008 Sustainability Summit in Beijing, CEO Lee Scott addressed one of the greatest existential questions for the world's biggest retailer as it pursues its sustainability goals: Can true sustainability be reached without lowering -- lowering -- consumption, especially with the increasing growth of China's middle class?...

...But on the macro level, is Wal-Mart ironically -- cynically? -- using sustainability to sell more stuff to more customers? Surely, I don't want to be in the business of telling Mr. Wang or any other Chinese consumer not to buy another (energy-efficient) television. But Wal-Mart is in the business of telling people like Mr. Wang to buy another television, and perhaps a new (power-saving) DVD player, even as it pledges to make what they consume more sustainable.

It's a curious tension. As Sami pointed out last year, "If they use half as much energy to produce a T-shirt, but sell four times as many, the environment will still suffer."

For those of you who are not on our e-mail list, we sent out an Earth Day message:

"We are not green." --Wal-Mart CEO Lee Scott

Today is Earth Day. As you know, on April 22nd we typically focus on environmental stewardship, reducing our ecological impact, and preserving our planet for future generations.

Then again, if you happen to be Wal-Mart, you might just use Earth Day as a pretext for a national "merchandising and marketing campaign."

It's true--three weeks ago, Wal-Mart gleefully reported its intention to print nearly one third of a billion pages of "green" advertising this month, all inviting shoppers to splurge during it's "Earth Month" marketing blitz. Wasting a mountain of wood pulp in the name of sustainability is a surprisingly cynical move, even for Wal-Mart, but it is just a symptom of a broader problem--Wal-Mart is greenwashing, and it's getting away with it.

In spite of all the "green" hype, Wal-Mart's business model is linked to serious environmental problems. The long-anticipated Wal-Mart sustainability report cited a significant global increase in CO2 emissions in 2006, after the company's green campaign began. Worse still, at a recent conference, Wal-Mart's CEO Lee Scott flatly declared "we are not green," taking his audience aback. Still, despite the facts, some national and local news outlets continue to buy Wal-Mart's sustainability spin.

Let's set the record straight. Today, on Earth Day, let's ensure that America understands the truth about Wal-Mart's "green" hype.

Write your local newspaper about Wal-Mart's sustainability swindle

Frankly, we would rather have Wal-Mart hyping environmental sustainability than fighting food safety regulations or port security measures. At the same time, we can not sit idly while Wal-Mart uses slick, multi-million dollar marketing campaigns to mislead the American people.

Lee Scott agrees: Wal-Mart is not the "green" corporation depicted in Wal-Mart's advertising. This time, let's give Lee a hand. Help us debunk the myth of Wal-Mart's sustainability.

Set the record straight on Wal-Mart and the environment

Do it for the Earth!

Thanks for taking action,

The Team,
WakeUpWalMart.com

What does the public think about Wal-Mart's dubious claim that it saves the average family $2500 a year? Not much, apparently. According to the poll by our allies at Wal-Mart Watch, 96% of consumers don't believe Wal-Mart's "Save Money, Live Better" hype.

Consumers instinctively know they're being fed spin, and the facts are stacked against Wal-Mart as well. Zenith Management Consulting found 80% to 85% of the items Wal-Mart sells are more expensive than they are at other retailers.

Not only that, Wal-Mart actually reduces the buying power of the average consumer by driving down wages. The National Bureau of Economic Research showed that Wal-Mart's presence in a community reduced the residents' wages by 5%. That's in addition to the all the unpleasant externalities that follow Wal-Mart into town, like gender discrimination, unsafe Chinese products, traffic, pollution, child labor violations, and so on.

Considering the facts, I'm surprised Wal-Mart could convince even 4% of Americans to buy its spin.

In a new study released today, "The Wal-Mart debate: A false choice between prices and wages", the Economic Policy Institute considers whether low prices make up for low wages at Wal-Mart. The answer is a definitive no, for two main reasons:

1. Wal-Mart drives down wages not just of its own workers, but for all workers in the area of a store.

Dube (2005) and Neumark (2005), in papers reviewed in Wrestling With Wal-Mart, present strong evidence that Wal-Mart's expansion has driven down earnings for workers not just in competing retailers, but across stores throughout the region of Wal-Mart expansion.

2. Wal-Mart may slightly reduce prices for food and household goods, but these items constitute an ever-shrinking share of American families' expenditures.

Wal-Mart essentially gives people the ability to buy food, apparel, household goods, and furniture at reduced prices. The share of expenditure in each of these categories has shrunk over time. By contrast, the expenditure shares on health care, housing, and transportation for families have gone up over time. These cannot be bought at Wal-Mart, yet they constitute an ever-growing share of American household expenditures. In short, the benefits from the same price effect in Wal-Mart's product areas are shrinking over time. The real pressures on family income are coming from items that can't be bought at Wal-Mart. These products and services can, however, be bought with higher wages.

The idea that encouraging Wal-Mart's expansion constitutes a progressive endeavor that will provide big benefits to poor Americans in the future is misguided; truly progressive policy should focus on the big-ticket items in most families' budget—health care, housing, and education.

Today, the Economic Policy Institute released a new study called "The Wal-Mart debate: A false choice between prices and wages."

This study examines the false dichotomy of low prices vs. high wages and concludes that Wal-Mart could dramatically improve workers' earnings without raising prices.

The research finds that:

1. A study by the consulting firm Global Insight, which concludes that Wal-Mart's expansion has saved U.S. consumers $263 billion, is deeply flawed.

2. A robust set of research findings shows that Wal-Mart's entry into local labor markets reduces the pay of workers in competing stores. This effect is largest in the South, where Wal-Mart expansion has been greatest.

3. Wal-Mart could raise wages and benefits significantly without raising prices, yet still earn a healthy profit. For example, while still maintaining a profit margin almost 50% greater than Costco, a key competitor, Wal-Mart could have raised the wages and benefits of each of its non-supervisory employees in 2005 by more than $2,000 without raising prices a penny.

Throughout the day, we will continue to update the blog with more detailed information about this important study.

From Liza Featherstone at the Nation:

In response to accusations from Wake Up Wal-Mart, Wal-Mart denies funding the far-right Center for Union Facts (CUF), whose creepy and misleading anti-union ads you may have seen in the New York Times, Wall Street Journal, Los Angeles Times or the Washington Post. A press release from CUF amusingly registers some distress over the company's denials; acknowledging that Wal-Mart isn't funding the group, CUF spokeswoman Sarah Longwell says, "Come to think of it, why aren't they?" CUF is now calling upon Wal-Mart to remedy this oversight.

Wal-Mart would be wise to give this organization a wide berth. In addition to the newspaper ads, the group maintains a website, clearly aimed at union members and undecided workers, dedicated to smearing the labor movement...

If not Wal-Mart, then who is funding CUF? According to the website, the campaign is supported by "foundations, businesses, union members, and the general public." When I asked for further clarification, CUF's Sarah Longwell demurred, explaining the group's "policy not to offer specific information on any of our supporters" -- not a very transparent policy for a group claiming dedication to "showing Americans the truth" and professing not to be "part of a political effort" but "about education." If anyone has any idea who CUF's sugar daddies are, let me know. I would enjoy inflicting some pain and grief upon them, and I know I'm not alone in this.

Click here for the full text.

On the January 19 broadcast of the nationally syndicated Rush Limbaugh Show, American Enterprise Institute resident scholar and director of economic policy studies Kevin A. Hassett explained the lack of unionization at Wal-Mart by falsely claiming that "workers at Wal-Mart haven't voted to be unionized." In fact, meat cutters at a Wal-Mart store in Texas voted for union representation only to see Wal-Mart eliminate their department less than two weeks later. Moreover, Hassett's claim ignores the aggressive -- and often illegal -- campaign that Wal-Mart has used to discourage unionization. According to The New York Times, from 1998 to 2002, Wal-Mart racked up 10 National Labor Relations Board (NLRB) rulings against its anti-union tactics, while NLRB attorneys filed dozens of complaints against Wal-Mart alleging anti-union practices.

It is true that Wal-Mart has successfully hindered the work of labor organizers, who have had little success unionizing Wal-Mart. In some instances, Wal-Mart employees have indeed voted to reject union representation. But Hassett's assertion that "workers at Wal-Mart haven't voted to be unionized" is false.

Click here to read the whole story from Media Matters

January 11, 2006

Dear Maryland State Legislator,

My name is Cynthia Murray and I am a Wal-Mart associate in the Laurel, Maryland store. I am coming forward today, because the issue of health care is extremely important to me and something has to be done.

I've worked at Wal-Mart for more than 5 years, and I still can't afford their health care. I know many of my co-workers can't afford it either. I think it’s fair to say a majority of the workers in my Wal-Mart store don't have Wal-Mart's health care because they can’t afford it.

The sad truth is many of these associates are scared to speak out, but I felt this bill is too important to stay silent. That is why I am taking a public stance to ask every legislator to listen to the hardship of workers who can't afford health care and personally ask Maryland lawmakers to help improve life for me and my co-workers by making sure corporations do the right thing and provide us health care.

I cannot tell you why Wal-Mart has treated me or other workers this way. I have a disability, and Wal-Mart still ignores my health care needs. It is wrong and shows Wal-Mart is more interested in squeezing out extra profits than in doing the right thing for its workers.

Big business and special interests want to kill Fair Share Health Care, but I can tell you, personally, workers like me need this bill. We can't afford health care and this bill would go a long way to make Wal-Mart spend a minimum amount of money to provide health care for its workers.

Please, on behalf of all the Wal-Mart associates in Maryland and every worker who works for a large, profitable company and doesn't have health care, override Gov. Ehrlich's veto and make Fair Share Health Care the law in our state.

I hope you do what is right for workers and Maryland.

Sincerely,

Cynthia Murray
Wal-Mart Associate

The Economic Justice Project at the Brennan Center has just released a new report, titled "What Do We Know About Wal-Mart? An Overview of Facts and Studies for New Yorkers." The study is a comprehensive overview of the available information on Wal-Mart’s wages and health benefits, compliance with workplace laws, cost to the taxpayer, and impact on local economies.

The report is available as a PDF on the Brennan Center website, located here.

Wal-Mart and their supporters tend to be on message, repeating the same tired themes and excuses for their failings. I found a piece today written by Moira Herbst that I think exhibits a series of great rebuttals to these oft-repeated themes. Here’s a sampling.

Wal-Mart defense #1:

When our critics cry, “a company with $10 billion in profits can do better,” it sure sounds like we should. But with sales of $285 billion last year, Wal-Mart earned a return of 3.6 percent – as compared to 8.5 percent for Exxon-Mobil. Seen another way, retailing’s more labor-intensive business model means that in 2004 Wal-Mart earned roughly $6,000 in profit per associate; Microsoft, by contrast, earned $143,000 per associate. For General Motors, the number was almost $12,000." - Wal-Mart CEO Lee Scott, 2/23/05

Why is Mr. Scott comparing Wal-Mart to Exxon-Mobil, Microsoft, and GM, instead of using other retail examples? Well, because it's not necessarily retail that is more labor intensive, it's Wal-Mart's business model. Here is a quote from Herbst's piece:

A 2004 Business Week study ran the numbers to test Costco’s business model against that of Wal-Mart. The study confirmed that Costco’s well-compensated employees are more productive.

The study shows that Costco’s employees sell more: $795 of sales per square foot, versus only $516 at Sam’s Club, a division of Wal-Mart (which, like Costco, operates as a members-only warehouse club). Consequently Costco pulls in more revenue per employee; U.S. operating profit per hourly employee was $13,647 at Costco versus $11,039 at Sam’s Club.

The study also revealed that Costco’s labor costs are actually lower than Wal-Mart’s as a percentage of sales. Its labor and overhead costs (classed as SG&A, or selling, general and administrative expenses) are 9.8% of revenues, compared to Wal-Mart’s 17%.

Wal-Mart defense #2:

“For example, there are some who say that Wal-Mart’s wages and benefits have some kind of negative impact on wages across the board. That’s just plain wrong. Here are the facts:

Wal-Mart’s average wage is around $10 an hour, nearly double the federal minimum wage. The truth is that our wages are competitive with comparable retailers in each of the more than 3,500 communities we serve, with one exception -- a handful of urban markets with unionized grocery workers.

This is only common sense. If Wal-Mart weren’t an attractive place to work, we wouldn’t find ourselves, as we typically do, with thousands of applications for the hundreds of jobs we create when we open a new store.
-Wal-Mart CEO Lee Scott, 2/23/05

Competitive wages at comparable retailers, Mr. Scott? Well, Costco is a competitive retailer, with only about 18% of their workforce unionized, and we learn from Herbst’s piece that:

Costco CEO Jim Senegal has said: “We pay much better than Wal-Mart. That’s not altruism. It’s good business.”

Chief Financial Officer Richard Galanti explained: “From day one, we’ve run the company with the philosophy that if we pay better than average, provide a salary people can live on, have a positive environment and good benefits, we’ll be able to hire better people, they’ll stay longer and be more efficient.”

[…]

By compensating its workers well, Costco also enjoys rates of turnover far below industry norms. Costco’s rate of turnover is one-third the industry average of 65% as estimated by the National Retail Foundation. Wal-Mart reports a turnover rate of about 50%.

Also, Lee Scott claims that Wal-Mart, the largest private employer in the U.S., doesn’t have an effect on industry wages. Again, Herbst disagrees:

Though only about 18% of Costco’s total workforce is unionized, union representation creates a ripple effect and helps determine labor standards in all stores. The Teamsters represent about 15,000 workers at 56 Costco stores in California, New York, New Jersey, Maryland and Virginia. Workers are covered by West coast and East coast contracts, negotiated in February and April of last year. “The agreements lock in wage and benefits packages that are the highest in the grocery and [discount] retail industries,” said Rome Aloise, chief IBT negotiator for Costco and Secretary-Treasurer of Local 853 in San Leandro, Calif.

Costco passes on similar compensation packages to its non-union workers; the contracts act as templates for other stores’ employee handbooks.

“The union contracts raise the bar and set the standard for all employees,” explained Aloise. “Still, while the company extends wage and pay raises to non-union employees, only union members enjoy benefits like seniority-based promotions, a grievance procedure and minimum hours for part-time workers,” he added.

To read the rest of Moira Herbst’s article, click here.

To read the text of Lee Scott’s speech where the above quotes were taken from, click here [PDF].