Wal-Mart Workers of the World Unite

[Charles Brown <cbrown@xxxxxxxxxxxxxxxxx>]

Wal-Mart Workers of the World Unite



http://www.politicalaffairs.net/article/articleview/133/1/31/

By Wadi'h Halabi


If a company can single-handedly spur on international labor unity,
Wal-Mart's it. This and similar corporations - Target, Nike, France's
Carrefour, etc. - feed off misery, inequality and competition among workers
worldwide. But their anti-social behavior is also breeding global
resistance. Effective resistance requires highly coordinated initiatives and
leadership by workers' parties and trade unions worldwide.


 <http://ufcw.org/>

Wal-Martization is one face of capitalist "globalization." Wal-Mart cannot
be understood except in the context of capitalism's global problems with
"overproduction" and the corresponding mass unemployment. Of particular
interest is the attempted Wal-Martization of China, the work of Chinese
unions to resist and the potential of developments there in ending
Wal-Mart's practices.

Nature of Crisis
The rise of Wal-Mart is closely related to the cycle of crisis inherent in
capitalism. For an economy to avoid crisis, a broad balance must be
maintained between production and the demand of both producers and
consumers. Capitalism cannot prevent the inevitable small imbalances in any
economy from ballooning into big ones. Crises ensue. Marx and Engels termed
these "crises of overproduction."

"Overproduction" really refers to imbalances that result from more being
produced than can be sold profitably, not more than can meet human needs.
Hunger repeatedly accompanies food "overproduction." Since the capitalists
produce only to enrich themselves, they perceive an inability to sell their
commodities profitably as "overproduction." Losses ensue, along with
wage-cuts, factory closings and unemployment. Since the end of World War II,
the years 1973-75, 1980-82, 1989-92, 1997-98 and 2001 all marked measurable
turns for the worse in world capitalism's economic imbalances.

Growth in technology and monopolization has the effect of magnifying, not
correcting, imbalances under capitalism. Wal-Mart is a child of
monopolization, "overproduction" and the associated unemployment and
poverty. Wal-Mart in turn is breeding even greater imbalances, poverty and
unemployment.

Wall Street Origins
How can Wal-Mart be a child of monopoly? After all, half a century ago,
Wal-Mart did not even exist. Retailing was already largely monopolized by
giants such as Sears and A&P. Today, Wal-Mart dwarfs Sears, while A&P fights
irrelevance. Isn't Wal-Mart a triumph of competition, a tribute to US
economic vitality? No. Beneath Wal-Mart lies Wall Street - monopoly capital.


To understand how, let's look at Japanese industry's "miraculous" post-war
rebirth. In the decades after World War II, Wall Street arranged for the
transfer of technology to Japan, and quietly invested both directly and
through massive loans into rebuilding that industry. Its immediate interest
was to ward off the advance of socialism in Asia.

A crucial piece of the puzzle was Japanese industry could not have survived
without access to the US market. For all the talk of "free trade," the US
market was and remains tightly guarded through quotas, tariffs, sanctions
and innumerable other measures. But the US market was in fact selectively
opened to Japan's industries. After all, Wall Street had profits to make -
from royalties on the transferred technology, direct ownership interests and
interest payments on the loans.

But in addition, the "Asian imports" ripped the ground under the United
Steel Workers, United Auto Workers and other US unions. Labor here was
weakened and cheapened. And the financiers stoked racism and national
chauvinism in the bargain.

Of course Wal-Mart arose under different historical circumstances.
"Overproduction's" threat to profits is not as decisive as a socialist
revolution's. But Wall Street's prints are all over Wal-Mart. Today,
Wal-Mart is eroding the ground under the United Food and Commercial Workers,
the Teamsters and several other unions and even challenges the huge
All-China Federation of Trade Unions and the Chinese state itself.

Sam Walton opened the first Wal-Mart in 1962, in tiny Rogers, Arkansas,
paying its mainly women staffers 60 cents an hour when minimum wage was
$1.15. Well into the 1960s, it was a regional retailer, with a dozen stores
in small towns. Sales were less than one percent those of Sears or Kmart.
Histories of the company are consistent in depicting a Walton desperate for
capital to expand. He found it, first in the form of loans from Republic
National Bank of Dallas, whose "correspondent" ties subordinated it to Wall
Street banks. More significantly, in 1969 Massachusetts Mutual Insurance and
in particular White, Weld & Co. invested in Wal-Mart. Wall Street had sunk
its teeth into Walton's baby.

In Empire of High Finance (1957), Victor Perlo identifies White, Weld as one
of the top five US investment banking houses of the early 1950s, part of "a
group of companies [with] important ties with the First Boston Corp. and its
associated banks, notably the Rockefellers." White, Weld subsequently became
a subsidiary of Merrill Lynch, now in the Rockefeller orbit.

In addition to its investment activities, White, Weld had a history of
promoting ruling-class initiatives against labor at home and in favor of
imperialist expansion abroad. According to Thomas Reifer, a University of
California scholar, White, Weld helped finance what were called the
Plattsburgh military training camps favoring US entry into World War I.
Francis Weld was a member of the American Citizens Committee in London,
linked to the National Security League, which worked to check the power of
labor domestically and ensure US participation in the war and overseas
expansion.

It should come as no surprise that union-busting Wal-Mart today maintains a
working association with the Pentagon, with ominous implications for the
dozens of countries where it operates.

So Wall Street was on the Wal-Mart bandwagon nearly from birth. To be sure,
Wall Street was also invested in every other significant retailing venture
in the US. But Sam Walton was doggedly proving his skills at keeping
distribution costs down.


Sam Walton opened the first Wal-Mart, paying its mainly women staffers 60
cents an hour when the minimum wage was $1.15.



Walton ran a highly centralized structure - with considerable freedom of
expression for managers until a decision was reached. Walton also appears to
have provided managers and even workers with timely information both on
their own stores' performance and on Wal-Mart as a whole, allowing them to
develop more knowledgeable approaches to solving the problem of keeping
costs down and margins up.

But Walton was especially focused on labor costs and keeping unions out.
John Tate, a professional union-buster, played a central role in Wal-Mart's
rise. In his history of Wal-Mart, Wall Street Journal reporter Bob Ortega
writes that for Tate, union-busting "wasn't just a job; he loathed unions
with a passion." According to Ortega, a union-fighting seminar led by Tate
in 1970 "laid much of the foundation of what would become Wal-Mart's
corporate culture."

The key formula was giving managers and longer-term employees a stake in
exploiting those below them, in part through stockholdings and say on olicy.
So store managers, to get their bonus, have an interest in forcing workers
not to take breaks. Buyers have a similar interest in cutting supplier
prices or deadlines. Even a layer of workers is made to believe - through
propaganda and the stockholdings - that they have an interest in keeping
costs down, even if that means super-exploitation of temporary and
subcontracted workers. In some ways, then, Wal-Mart is this terrible
exploitation-pyramid scheme.

"Overoduction" Boosts
In 1973, as mentioned earlier, capitalist problems with "overproduction"
took a marked turn for the worse. Profit margins fell, losses rose. Labor
had to be cheapened, circulation costs cut. Wal-Mart's time had arrived.

Wall Street began to channel its resources into the company's expansion,
from loans and investments to technology and publicity. The company's
atellite network grows second in size only to the Pentagon's. And its debts
mount. The company's liabilities as of January 2003 were $55.3 billion, with
long-term debt of $15.6 billion - more than many mid-size countries.

Also beginning in the mid-1970s, the monopoly press begins promoting
Wal-Mart as the company that can do no wrong, with the lowest prices,
always. This in spite of mounting evidence of systematic discrimination,
violation of labor laws, even that its prices are not always lowest.

In less than 30 years, Wal-Mart vaults from non-entity to #1 on the Fortune
500 list, with over 1.3 million employees. If you are looking for a job,
Wal-Mart will probably hire some 700,000 employees this year. It will also
lose almost as many, through resignations, firings and other turnover. And
pay and work conditions will be so low that you will likely need a second or
third job and public assistance to keep a roof over your head, and to pay
the divorce lawyer.

Wal-Mart's sales in 2003 topped $258 billion, $45 billion more than #2 Exxon
Mobil. But Exxon's profits of $21.5 billion dwarfed Wal-Mart's $9 billion.
Over 200 other Fortune 500 companies had a higher margin of profit on sales.
Wall Street's "support" for the latecomer carries a steep price. Japanese
companies can attest to that.

Parallel Practices, Home and Abroad
The seeming affluence in the US is a world apart from the terrible poverty
in Bangladesh or Kenya, and the differences are in fact huge. Yet startling
parallels emerge in Wal-Mart's labor practices at home and abroad, both for
workers directly employed by the company and those employed by its suppliers
and subcontractors.

Take overnight locking of workers. Bob Ortega, in his revealing history of
Wal-Mart, In Sam We Trust, reports that after a Wal-Mart worker collapsed
while restocking shelves on the night shift, "neither her co-workers nor the
paramedics they called could open the store's locked doors until police
drove to an assistant manager's home to get a key." The worker died. "During
the lawsuit brought by her family, it was discovered that Wal-Mart's
operating manual called for locking in night-shift workers and for
padlocking the fire-doors - to prevent 'shrinkage.' After a federal health
and safety investigation, Wal-Mart agreed to change its policy, and paid a
modest $6,600 fine."

That was in 1992. But Wal-Mart had not changed its policy. In January 2004,
an electronic cart crushed a nightshift worker's ankle. The New York Times
reported that the policy is still in force "in about 10 percent of its
stores..." "The multinational corporation says locking the doors increases
productivity, controls 'shrinkage' (theft) and 'protects employees in
(so-called) high-crime neighborhoods," according to the People's Weekly
World.

Perhaps no single practice is more vile than the reliance here and worldwide
on night work, which is extraordinarily damaging to health and the social
fabric. A damning 2004 report on "Wal-Martization" by Oxfam
(maketradefair.com>) reveals worldwide use of night work - and overnight
locking - until "team" quotas or production deadlines are met.

Bob Ortega relates that in a December 1992 interview of Wal-Mart president
David Glass, NBC's Brian Ross documented use of child labor locked overnight
at the Saraka garment factory in Bangladesh. Ross showed Glass
"black-and-white photographs of the bodies of 25 children who'd died, locked
in during a fire at the factory two years earlier, less than a year before
Wal-Mart moved production there." Glass responded blandly, "Yeah, there are
tragic things that happen all over the world."

As for child labor:


        In January 2004, the New York Times reported on an internal Wal-Mart
audit which found 'extensive violations of [US] child-labor laws and state
regulations requiring time for breaks and meals.' One week of time records
from 25,000 employees in July 2000 found 1,371 instances of minors working
too late, during school hours, or for too many hours in a day. There were
60,767 missed breaks and 15,705 lost meal times,


according to California Representative George Miller's February 2004 report
on Wal-Mart's practices. Note that those thousands of violations were
recorded in one week among a small fraction of Wal-Mart's US employees.
Oxfam documents repeated violations of child-labor laws and rights to breaks
worldwide.

Congressman Miller estimates that "one 200-person Wal-Mart store may cost
federal taxpayers $420,000 per year" in healthcare, housing assistance,
food-stamp and other costs because so many Wal-Mart workers' wages fall
below the poverty line. With the average store employing 350, the $420,000
is likely an underestimate. Those pushed-off costs alone would account for
over 15 percent of Wal-Mart's 2002 profits. "Externalization" of social
costs is practically official Wal-Mart policy worldwide.

Miller and others have pointed out that despite all the propaganda,
Wal-Mart's prices are not consistently the lowest. But even if the price of
a box of detergent is 10 percent lower, hasn't Wal-Mart effectively raised
its price if it helped cut wages 20 percent? Miller points out that since
the 2001 recession, the US


        has seen a dramatic shift from high-paying to low-paying jobs. For
instance, in New Hampshire, which still has not recovered the number of jobs
it lost in the recession, new jobs pay 35 percent lower wages than lost
jobs. In Delaware, those wages are 43 percent lower...


"Wal-Martization" parallels worldwide continue: systematic discrimination
against women; forced unpaid work; illegal overtime and no pay for overtime;
sharp restrictions on bathroom breaks; massive "churning" of the labor
force; the use of immigrant labor, sometimes effectively enslaved.

Oxfam reports that "In the past six years, there have been five federal
prosecutions for slavery in Florida's agricultural sector." Fortune last
year documented industry use of enslaved immigrant workers in capitalist
Asia, producing faceplates for Motorola cellphones, among other commodities.


And everywhere "Wal-Martization" spells opposition to organizing efforts by
workers, extending to blacklists and sometimes even use of death squads.

Ironically, Wall Street's backing of Wal-Mart has contributed to massive
"overproduction" of retail stores and supermarkets in the US and the world.
In the past four years, Kmart, Ames, Bradlees and Caldor's have all declared
bankruptcy, leaving huge bad debts and mass layoffs. Over 10,000
supermarkets have shut down in the US. Wal-Mart offers an illustration in
the link between "overproduction," losses and unemployment, and how
capitalism's "solutions" end up exacerbating the problem.

Wal-Mart's negative impact on labor in the US is large indeed. Its impact in
China is also large, through both its growing number of stores and use of
suppliers and subcontractors. But Wal-Mart could meet its match in China.

Unlike technology companies that bring know-how to China, there is little
evidence that Wal-Mart contributes much if anything to China. On the
contrary, the evidence points to Wal-Mart plundering China's workers and the
Chinese state.

Hourly wages in China are now more than double those prevailing in
Indonesia, Bangladesh and several countries in Africa. Yet over 80 percent
of Wal-Mart's 6,000 supplying factories worldwide are in China. Why? One
reason is that China's workers, from engineers to assembly workers, are
better educated. And they were not educated at Wal-Mart's expense, but at
China's. Furthermore, the Chinese state, which is a product of a socialist
revolution, has built a remarkable infrastructure, from highways and
seaports to electric grids. This infrastructure greatly reduces Wal-Mart's
effective costs. Social accounting of the real cost to China of Wal-Mart's
$15-billion-plus annual purchases - more than one percent of China's GDP -
points to plunder.

A US condition for China's admission to the World Trade Organization was
that it open its market to Wal-Mart and similar retailers. This too is
directed against labor. Why?

Because the expansion of Wal-Mart stores could rapidly devastate the
relatively primitive distribution network in China, from the millions of
Mom-and-Pop stores to the department stores with roots in the nationalized
economy. It could thus contribute to greater unemployment and instability in
the country, and to weakening labor and the Chinese state itself.

But this outcome is by no means inevitable. Labor law in China mandates
union representation in workplaces with 25 or more employees. All Wal-Mart
stores, and probably a majority of its suppliers and subcontractors, are
violating this law. In fact, Wal-Mart's subcontractors are notorious for
sweatshop conditions, violations of labor standards and laws, even physical
abuse of workers and evasion of payment of wages. An investigation by
Business Week documented several such violations in China in 2000 - and
placed the blame squarely on Wal-Mart as the party ultimately responsible
for them.

The All-China Federation of Trade Unions (ACFTU) developed into its present
form largely as the result of the 1949 socialist revolution. The revolution
nationalized industry and instituted a planned economy. But important
questions of economic development were not resolved. Great concessions have
been made to capitalism in an effort to resolve them. For the ACFTU, this
has meant difficult, even wrenching changes. One of the most difficult is
that, unlike the situation at state-owned enterprises, the fundamental
interests of managers of private enterprises are opposed to workers.

The ACFTU - China's equivalent of the AFL-CIO - is facing the challenge. Led
by Wang Zhaoguo, its new chairman, the 14th National ACFTU Congress last
fall amended its constitution to stipulate that defense of workers' rights
was its fundamental task, period. Previously, this was one of several
non-binding social functions, together with building the economy, cultural
development of workers, etc. This important change may set the stage for a
"division of labor" within China, where greater ACFTU independence and
defensive capacity strengthens the Chinese state and labor's power.

And the ACFTU has been calling to unionize Wal-Mart. Wal-Mart management's
response has been to reject the demand and ignore the ACFTU. Its defiance
and the practices of its suppliers and subcontractors are setting the stage
for cooperation between the ACFTU and unions in various countries where
Wal-Mart operates, including the US.

Zhang Hongzun, chairman of China's 22-million-member Educational Workers'
Union, told Roberta Wood of the People's Weekly World at last summer's
conference of the Asian Pacific American Labor Alliance, "If we can organize
Wal-Mart in Beijing, it would be a way to show support for the American
labor movement. We'd like to join hand-in-hand to make common efforts for
workers' rights."

China is where Wal-Mart, the largest corporation in the world, could meet
its match. By addressing workers' common interests and concerns across
borders, labor will bring an end to the miserable practices of Wal-Mart and
its classmates. Those interests range from good jobs, decent housing,
childcare and education for all, to avoiding the havoc caused by night work.
In 1871, the Paris Commune called for banning all unnecessary night work.
Tomorrow's victories will necessarily arise on the shoulders of the 1949
socialist revolution in China, and 1917 and 1871 before it, on the way to
even greater struggles and victories. With Communist and union initiatives,
the world's largest corporate outlaw will yet spur on increased
international labor unity.

--Wadi'h Halabi is a contributing editor of Political Affairs.
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