Black Friday and Walmart’s ‘Race to the Bottom’

 By Andrew Goutman

(November 18, 2014) Walmart employees are promising another round of protests on Black Friday, 2014, over the same issue the drove the past two Black Friday actions: a living wage of  $25,000 a year. (Walmart has admitted that less than half its employees make that amount.) According to organizers, protests are expected in 1600 stores this year. It was reported that “employees at more than 2,100 Walmart stores across the country have signed an online petition asking for higher wages and better working conditions.”

Last year’s Black Friday protests might have pressured Walmart to make some positive changes. The retail behemoth announced that it would increase the wages of its lowest-paid employees above the federally mandated minimum of $7.25 an hour. Walmart also promised to overhaul its scheduling program and make life easier for pregnant employees.

Here is an encore presentation of the article I wrote about last year’s Black Friday protests. I wrote it before the website was formally initiated, so you probably didn’t read it. The issues remain the same…the wealth gap continues to be appalling…the personal stories are just as compelling.

It’s that time of year again. On Black Friday (the term originated in Philadelphia around 1961), November 29, 2013, scores of Walmart associates and community leaders led by the United Food and Commercial Workers (UFCW) Local 1776 will converge on Walmart stores throughout the eastern seaboard and beyond to distribute leaflets and speak out for a living wage starting at $25,000 a year.

Leaders of the Black Friday action emphasize that this is not an organizing drive. No union cards will be slipped into employees’ palms. According to training materials distributed to participants, the activity will occur both inside and outside Walmart stores, but purposeful disruption of customer-employee interaction will be strictly prohibited. “Be peaceful, professional and polite” is counseled for all Walmart associate and community activist participants.

Union “Boss”

“The purpose of this” said William Epstein, director of communications for UFCW Local 1776, “is to call on the company to raise wages and increase access to full-time hours so that no worker at Walmart makes less than $25,000 a year.”

Epstein, whose union local represents 24,000 workers in numerous retail chain stores and Pennsylvania’s wine and spirits shops, pushes back the curtain to reveal an underlying objective. “We want to focus attention to the fact that Walmart is leading our nation in a race to the bottom,” he says. “It is ridiculous that someone who works full-time has to rely on Medicaid and food stamps to provide for his family.”

Indeed, the average pay for a Walmart worker is $8.81 an hour. This translates to an annual wage of $15,576, based on a “full-time” status of 34 hours per week…way lower than the $22,050 federal poverty level for a family of four. Further, according to an article in the Huffington Post, “Walmart employees represent the largest group of Medicaid and food stamp recipients in many states, costing the taxpayers $1,000 per worker.”

(The blues of the Walmart worker took on a pathetic timbre when it was revealed online that a Walmart in northeastern Ohio was holding a holiday canned food drive—for its own employees. But even if the canned food drive is successful, most associates won’t have the time to enjoy it. That’s because Walmart intends to open its stores for Black Friday sales at 6 pm on Thanksgiving Day.)

William Epstein doesn’t look anything like the stereotypical union boss. Before joining the UFCW in 2005, Epstein earned an undergraduate degree at Penn State and an MBA at Wharton. He started out as a “news guy” before working for several political leaders. At age 65, he still plays softball almost every Sunday in a leafy Philadelphia suburb. He especially doesn’t like what Walmart has done to Main Street America. “It’s predatory. They squeezed out all the small-time vendors,” he observes sadly.

The Big Box

Walmart earned $16 billion of net income (profit) on $469 billion of sales last year. According to the investor website Trefis, “the company accounts for about 10% of non-automotive consumer spending in the US, and caters to more than 100 million customers every week.” (Amazon is changing that as we speak.) So, if employees are not sharing in that incredible bounty, then who is? That would be the family of the founders of the company, Bud and Sam Walton. (Not the TV Waltons:  Wikipedia actually sees the necessity to direct viewers to another site.) The Walton family, about a dozen or so in the family tree, is the richest family in the world, with all of their wealth inherited from the fruits of the founders’ labor. The Walton family owns over 50 percent of the publicly-traded company, and are collectively worth $150 billion; thus the richest family crown. Samuel Robson Walton, 69, is currently board chairman.

Chairman Samuel Robson Walton, please meet Charmaine Givens-Thomas, an associate at the Walmart in Evergreen Park, IL, just outside Chicago. She’d like to tell you her story. “None of us can afford health care at Walmart,” Givens-Thomas told CBS News. “We just had open enrollment and the deductible went up to $1,500,” so she and many or her co-workers have had to rely on food stamps and Medicaid to get by.

Givens-Thomas, who makes $11 an hour, continues, “You can’t take care of your basic needs on that. I run a household, so I need to pay my rent and my utilities…a company, a country, anything–is only as great as its smallest component.”

Taking It to the Streets

The November 29 Black Friday action will take its place as one of the many recent outbursts of employee discontent at Walmart and other low-wage enterprises. Two weeks ago in Los Angeles, five Walmart workers and 49 other activists were arrested while staging a two-day strike against a LA-Chinatown Walmart. Their primary demand: that each full-time worker earn at least $25,000 a year. The protesters were sitting in the street in front of the downtown store, and refused to disperse when ordered to by police.  Organizers claimed victory in what was characterized the single largest act of civil disobedience in Walmart’s history.

One of the protesters, Anthony Goytia, a 31-year-old father of two, told the Huffington Post that on wages totaling $12,000 yearly, it’s a daily struggle “to make sure my family doesn’t go hungry.

“I had to run around to get two payday loans to pay my rent from the first,” Goytia explained. “Yesterday we went to a food bank.” Besides juggling payday loans, Goytia participates in paid clinical trials and sells his blood plasma. He claims that he has been asking Walmart management for full-time work for the last 18 months…requests all denied as he watches a parade of temporary workers performing hours that he could use to make ends meet.

Last summer, Walmart fired 11 associates and disciplined many others for traveling to Walmart’s headquarters in Bentonville, Arkansas, to stage protests in advance of a June 7 shareholders’ meeting. A several-day strike by the associates’ group OUR Walmart preceded the Arkansas action, and resulted in disciplinary reprisals for over 100 employees. “Power concedes nothing without demand,” Rep. Keith Ellison (D-MN) told The Nation. “If these…big companies are reaping ultra-profits out of the hard work of these workers, they’re not about to give it up easily.”

We’re (Not) Lovin’ It

Walmart might find comfort in the fact that it is not the only low-wage operation enduring a challenge from its employees. Fast-food workers have been beating their drums for months now, with “wildcat” strikes in several US cities…all demanding  a “living wage” of $15 an hour. Data from the US Census Bureau and other research organizations show that 52 percent of fast-food cashiers and cooks have relied on at least one form of public assistance, such as food stamps or Medicaid, between 2007-11. The pro-labor National Employment Law Project found that the 10 largest fast-food companies in the US cost taxpayers more that $3.8 billion each year in public assistance costs because, obviously, the workers don’t make enough to get by.

The fast-food companies aren’t budging on wages. In a comically-inept response to employee discontent, McDonald’s set up an online “personal budget” for its workers. The line items have become fodder for late-night comedy routines. The monthly “budget” lists a mere $600 for rent (try that in NYC), $20 for health insurance and zero dollars for heating costs (now revised to $50…uh, not everyone lives near the Equator.) And just this week, posting on McResource Line, its employee help line, McDonald’s had the temerity to suggest to cash-strapped workers that they hock or sell “unwanted” Christmas gifts, and to “break food into pieces” so they can feel more full. That just speaks for itself.

Upward Mobility?

But whether it’s fast-food or Walmart, a decent living wage remains elusive; the employees (or “associates”) have got their work cut out for them. Walmart’s company line has been the standard “free market” argument: Our employees might start out on the low end of the pay scale, but there are many opportunities for upward mobility. Upward mobility? I can think of examples of upward mobility.

Unionizing a Walmart store is a tough slog, to say the least. Labor laws are open to interpretation when it comes to “hit-and-run work stoppages” and other kinds of protest, and there are few punitive consequences for companies, especially those as large as Walmart, that either ignore them or flaunt their loopholes. (And our states sure haven’t helped. Since 2010, 15 states have passed laws restricting public employee unions’ ability to collect “fair share” dues through payroll deduction; 19 states have introduced “right-to-work” laws affecting private sector collective-bargaining, according to the Economic Policy Institute.)

  But there have been breakthroughs. In 2000 the butchers at a Texas Walmart voted to join the United Food and Commercial Workers. Walmart responded by closing all of the store’s meat counters. By 2004, Walmart simply closed entire stores after the employees voted to join a union. Last summer, when the Washington, DC city council voted to establish a living wage for large retail stores within the district, Walmart threatened to close three stores affected by the legislation. (The DC mayor vetoed the bill.) Now that’s mobility…whether it’s upward or downward depends on your point of view.

Dark Cloud Formation

The Black Friday action is occurring when there are dark clouds on the horizon for Walmart. Simply put, the company isn’t doing that well. A tepid retail environment due to cautious consumer spending has driven same-store sales lower for the last two quarters. It is generally known that Walmart has reduced orders with its vendors due to low demand and excess inventory. The website Trefis notes: “Much of the US retail industry is going through a slump as consumers are spending more on…automobiles and furniture [to take advantage of very low interest rates] while holding back on other categories such as apparel and general merchandise.”

To make matters worse, just this week the National Labor Relations Board (NLRB) announced its intention to prosecute Walmart for “its widespread violations of its workers’ rights.” The NLRB general counsel is investigating two specific violations of legally-protected rights: the firings and disciplinary actions of over 117 workers who went on strike last June in conjunction with the shareholder meeting protest; and Walmart’s actions one year ago in advance of Black Friday 2012. According to the NLRB press release, a spokesperson for Walmart “went so far as to threaten workers on national television, saying ‘there will be consequences’ for workers who did not come in for their scheduled shifts on Black Friday [2012].”

Learn from Henry Ford

So we are now at a stalemate…battle lines have long since been drawn. Even if Black Friday participation exceeds all expectations, don’t expect Walmart to come running to the bargaining table. The hope is for that prized one step forward. Robert Reich, the esteemed political commentator and former labor secretary, recently inquired in the Huffington Post: What if Walmart took to heart the lessons of auto baron Henry Ford? Dust off those history books and recall that a century ago, Ford boosted the wages of his factory workers three times the prevailing wage…so that his workers could afford to buy the very cars they were making. Ford’s actions had a rippling effect throughout the US manufacturing sector, and he helped create America’s middle class.

In a study published in April 2011 by the University of California, Berkeley, researchers posited a parallel “what if:” What if Walmart established a $12 per hour minimum wage for all of its hourly employees in the US? What would be its impact on Walmart workers and shoppers? The study found that 41.4 percent of the pay increase would go to low-to-moderate income workers (those below 200 percent of the federal poverty level). The study revealed that those employees could earn an additional $1,670 to $6,500 a year in vital income for their families.

And the impact on shoppers? Even if Walmart passed through 100 percent of the wage increase to its customers, the impact would be quite small: 1.1 percent of prices, which is well-below Walmart’s famous discounts for its merchandise. The study estimates that, based on the average consumer who spends $1,187 yearly at Walmart, the minimum wage hike would mean an added 46 cents per shopping trip, or $12.49 per year for the average shopper. The math is compelling.

The Day After

The day after Black Friday, November 30, is designated “Small Business Saturday.” It is tempting to harken back to the good old days of a thriving Main Street, and employ some wishful thinking about solutions that call for fundamental simplicity. Obviously, it’s not all that simple: it seems I forgot to pack the magic wand that would remedy the cruel reality that many people don’t earn a living wage. It is a heart-breaker, to be sure. So maybe you have some ideas. There are thousands of good folks standing in payday loan or food stamp lines who are dying to find out.