Wal-Mart - Empowerment Through Collective Voice

Empowerment Through Collective Voice

Throughout history we see the effects that continuous innovation has on both the economy and the employees that make up the workforce. Big business thrives, as do those at the top, but the unfair treatment of the lower-tier, immigrant, workers has continued on from the times of sharecropping, to today’s retail industry in efforts to eliminate and reduce costs. The power of collective action through unionization provided a gateway to fight for better wages, working conditions, and benefits, although has now been stumped by large corporations who seek to eliminate costs at the expense of their employees. Through Nelson Lichtenstein’s book, The Retail Revolution: How Wal-Mart Created a Brave New World of Business, we see the development of a new form of capitalism that has created a culture of high turnover that drives costs down in order to boost profits. While this business model has been extremely successful, much of their success has come at the expense of the low-rung employees termed “associates”. In turn, we also see the growth of a new form of collective action in Janice Fine’s, Worker Centers: Organizing Communities at the Edge of the Dream, through the empowerment of workers centers and their ability to advocate, organize, and educate as a more effective way of unionizing in today’s world. Although different than the formerly successful unions of the 20th century, the growth of workers centers are planting a seed in order to fight for immigrant workers compensation and benefits by challenging large corporations like Wal-Mart. 

In 1962 Sam Walton opened the first Wal-Mart in Bentonville, Arkansas with a simple business model; keep prices low by ordering in bulk and count on the rapid turnover of goods to make profit. Timing was instrumental, as the modernization of industry provided a market that was extremely attractive to small business owners. By ordering in bulk and minimizing the markup on prices Walton was able to beat out his competitors, mainly mom-and-pop stores, while offering opportunity to work in retail. Walton’s innovative, yet simple, business plan minimized the opportunity for merchandise to sit around by creating extremely high product turnover at a low price for customers. Despite ordering in mass quantities directly from producers, Wal-Mart eliminated stock warehouses and created a digital warehouse and inventory through the use of Universal Product Codes and a satellite network that continuously tracked purchases and automated the stocking and restocking process. Walton successfully cut costs by eliminating the middleman, and, in turn, bought directly from wholesalers. This, along with Wal-Mart’s ability to specialize in everything from fashion to kitchenware to groceries was instrumental in changing the ways of retail stores. With that being said, the growth of Wal-Mart marked another time in history where business thrived at the expense of their employees. 

        The business plan that Wal-Mart was founded on was incremental to the success of the retail store, although the behind the scene practices of reducing labor costs through supplier and immigrant worker exploitation was also instrumental. Though Wal-Mart does not own factories abroad; they do contract with numerous suppliers in order to stream inexpensive products. This is extremely beneficial in terms of cutting costs through Wal-Mart’s economies of scale, as “the company can demand a lower overall cost per unit than any of its competitors. This generates an excruciating squeeze on all of its suppliers, resulting in a cascade of social pathologies which corrupt and distort every supply chain relationship” (Lichtenstein 161). For this exact reason we see largely unregulated low-wage environments that have no consequent affect on Wal-Mart because of their subcontracting agreements that eliminate the burden of factory regulation and blowback. Wal-Mart’s subcontracting plan with a number of Chinese factories that allows for the cheap purchasing of wholesale is just one way they have cut back expenses, while exploiting the overseas factory workers. 

        As mentioned earlier, Wal-Mart’s low-level employees in their retail stores are termed “associates”, and are often immigrant workers that are hired at minimum wage without the guarantee of health benefits. They companies automated scheduling system ensures no overtime and also provide irregular and constantly changing hours to accommodate for store needs. This sort of worker exploitation makes it extremely difficult to manage a stable life, and has resulted in extremely high employee turnover that has actually benefited the company because it reduces costs. Though “associates” face some extremely unfair conditions, the rapid expansion of Wal-Mart’s has created callous store-to-store competition that is constantly exploiting managers. Not only is relocation of managers constant, but also the competition between local Wal-Mart’s is the cause of manager exploitation, as intramural cost competition is the driving factor for bonuses. This has resulted in store managers forcing employees to work off the clock in order to finish a job without earning overtime, as well as the subcontracting of immigrant nighttime cleaning crews. Managers are faced with extremely long hours and hard work, as their only opportunity to earn bonuses is through cutting labor costs. While the managers may be aware of the violations and exploitive practices Wal-Mart is essentially promoting, the lower-level “associates” are many times immigrant workers who lack work-education, preventing them to speak out.