Wal-Mart, already under fire for its shoddy labor practices, low pay, locking cleaning crews in at night, nonexistent benefits, encouraging their workers to make up a living wage by seeking welfare benefits, antitunionism, et al., is sinking even deeper into the mire of worker exploitation by introducing wage caps and relying more on part-timers.
Wal-Mart executives say they have embraced new policies for a large number of their 1.3 million workers to better serve their customers, especially at busy shopping times — and point out that competitors like Sears and Target have made some of these moves, too.
But some Wal-Mart workers say the changes are further reducing their already modest incomes and putting a serious strain on their child-rearing and personal lives. Current and former Wal-Mart workers say some managers have insisted that they make themselves available around the clock, and assert that the company is making changes with an eye to forcing out longtime higher-wage workers to make way for lower-wage part-time employees.
It’s one thing for a highly-paid professional like a doctor or a lawyer to be available around the clock; quite another for a part-timer with no benefits who barely makes minimum wage to do so.
Though the company denies it, there is a target for the use of part-timers vs. full-timers, and it’s a substantial change.
Investment analysts and store managers say Wal-Mart executives have told them the company wants to transform its work force to 40 percent part-time from 20 percent. Wal-Mart denies it has a goal of 40 percent part-time workers, although company officials say that part-timers now make up 25 percent to 30 percent of workers, up from 20 percent last October.
Here’s Wal-Mart’s problem: it has few new markets to break into, so its ability to grow and therefore to keep profits up is limited. So it’s going to balance its budget on the backs of its workers, which is exactly the kind of thing that’s keeping the company from establishing a presence in New York City, which is a union town. Now, NYC has Targets and Costcos and Whole Foods, all of which, if I’m not mistaken, discourage unionizing by their employees. However, they don’t do it by exploiting the workers and making them fear for their livelihoods. Costco, for example, pays quite well and still manages to turn a profit.
These companies, however, also have been relying more on part-timers, though their influence on the labor market is not as great as the 800-pound gorilla, Wal-Mart:
These moves have been unfolding in the year since Wal-Mart’s top human resources official sent the company’s board a confidential memo stating, with evident concern, that experienced employees were paid considerably more than workers with just one year on the job, while being no more productive. The memo, disclosed by The New York Times in October 2005, also recommended hiring healthier workers and more part-time workers because they were less likely to enroll in Wal-Mart’s health plan.
Other big retailers, with or without unions, have begun using more part-time workers, adopted wage caps and instituted more demanding work schedules in one form or another. But because Wal-Mart is such a giant — its $312 billion in sales last year exceeded the sales of the next five biggest retailers combined — its new labor practices may well influence policies more broadly.
The work schedules are particularly burdensome for workers with families, since child-care arrangements and simple family routines are thrown into disarray every time the worker has to move to a different shift. And the wage caps?
The adoption of wage caps has also been difficult for many workers to swallow. Workers will never receive annual raises if their pay is at or above the cap, unless they move to a higher-paying job category. Wal-Mart says the caps will encourage workers to seek higher-paying jobs with more responsibility.
To compensate for lost future wages under the new system, Wal-Mart made one-time payments of $200 to $400 to workers whose pay was near or over the caps. Several workers described that as “hush money.”
Ramiro Gonzalez, who works in the produce department of a Wal-Mart in El Paso, said that many longtime workers were fuming about the caps.
No matter how hard people work, “we won’t get anything else out of it,” said Mr. Gonzalez, who earns $11.18 an hour, or about $23,000 a year, after six years with Wal-Mart. “The message is, if I don’t like it, there is the door. They are trying to hit people who have the most experience so they can leave.”
$23,000 a year. After six years. And nowhere to go, since those higher-paying jobs within the company are going to get filled, fast. And the company isn’t happy about paying even that $23,000:
In the confidential memo sent to Wal-Mart’s board last year, M. Susan Chambers, who was recently promoted to be Wal-Mart’s executive vice president in charge of human resources, questioned whether it was cost-efficient to employ longtime workers. “Given the impact of tenure on wages and benefits,” she wrote, “the cost of an associate with 7 years of tenure is almost 55 percent more than the cost of an associate with 1 year of tenure, yet there is no difference in his or her productivity.”
The memo said, “the shift to more part-time associates will lower Wal-Mart’s health-care enrollment” even though Wal-Mart was reducing the amount of time to one year, from two, that part-time workers would have to wait to qualify for health insurance.
That’s not the only memo that has been leaked out.
In August, Wal-Mart sent all store managers a confidential document called “Facility Manager Toolkit.” It instructed them to tell workers that the new pay system helped “establish pay levels that are competitive in the local job market, helping us to attain and retain the talent we need.”
If a worker asked whether the wage caps were “one more attempt to get rid of long-service Wal-Mart workers,” the manager was to respond that this was “not an attempt to ‘get rid’ of long term associates,” but was “consistent with our objective to maintain internally equitable pay levels,” according to the document. The memo was supplied to The New York Times by WakeUpWalMart.com, a group funded by the United Food and Commercial Workers, which has tried to organize Wal-Mart workers in the past.
The sad thing is, things are so bad that even though some employees have quit over this new policy, the company says it receives seven applications for each opening. People need work, bad, and if their options are limited enough, they’ll accept wage caps because they have nothing better. OTOH, at some point, Wal-Mart will go just too far and the drive to unionize Wal-Mart employees will catch fire.