Atlas-Mart
Ah, the French-Canadians! Looks like they’ve successfully closed down a WalMart store in Jonquiere, Quebec. How did they do this? The workers there were on the verge of unionizing, which would make them the first-ever Wal-Mart store to do so.*
Wal-Mart steadfastly refuses to allow unions. Rather than have just one store set a precedent for all others, they announced yesterday that they will be closing the Jonquiere location in May.
This scorched earth policy follows a similar move in 2000. Seven out of ten butchers at the Jacksonville, Texas store successfully voted to unionize. Wal-Mart’s response: they closed down all 180 of their butcher shops and switched exclusively to pre-packaged meat.
I think this is an amusing tactic, highly reminiscent of Atlas Shrugged (though without the arson). I doubt, though, that Wal-Mart is acting on some enlightened form of Objectivism.
On the one hand, I suppose I’d have to pity workers unable to get a better job than working at Wal-Mart, with all its alleged abuses. On the other hand, though, it’s clear that unionizing Wal-Mart would hurt the poor and working class the most. As Jane Galt explains in a post on the modern labour movement:
The problem with [unionization], as a strategy for raising living standards, is of course that when you create this sort of oligopoly, the money doesn’t come out of shareholder’s pockets, as I presume the left wants it to. When you raise wages across the board, I would think you would also see an increase in prices across the board, since all the employers know that their competitors’ cost structures have also changed and it’s safe to raise prices. And since the demographic that works at WalMart is, by and large, the demographic that shops there, this can’t be a very good strategy for increasing their standard of living. Certainly, it is the poor who benefit the most from Wal-Mart’s low cost . . .
Unions are a good vehicle for redistributing income from one class of workers to another; they don’t seem to me to be a very good vehicle for redistributing income from one economic class to another.
Of course, closing down a single store or departments is one thing. Forty stores is quite another: * China is different than Quebec.
24 Responses to “Atlas-Mart”
I never cease to be amazed at the ways some conservatives find to justify people being treated like crap. Should I pray that Wal-mart’s wages could somehow be cut in half so the poor will benefit even more?
Good post Zach. I think this whole interplay between workers and Wal-Mart would make a great game theory case study.
If I worked at Wal-Mart I’d also want to unionize, I suppose, and I support their ability to try, but Wal-Mart should be free to do exactly what they’re doing as well.
It is a wonder, isn’t it, that people choose to work there at Wal-Mart at all if their alleged abuses are so bad.
Yes, I support the Constitutional right to treat people like crap. However, God’s justice will not forever be denied. Those who are small in grace in this life will have a proportionate reward in heaven.
Well I’m not sure that preventing unionization is “treating people like crap,” but yes, Wal-Mart isn’t bending over backwards for workers.
Well, I was more specifically referring to wages paid and benefits offered as opposed to unionization. On the other hand, the intimidation and harrassment tactics that Wal-mart sometimes uses to discourage unionization are themselves pretty crappy.
Generally speaking, it seems to me that the time when unions were a net benefit to society ended awhile ago. OSHA and other government regulatory bodies are in place today to ensure safe workplaces. And as far as wages go, what’s wrong with letting the free market determine them? If Wal-Mart is paying its workers less than they’re worth, they have every incentive to take their labor elsewhere.
I know libertarians are against the minimum wage, too, but I think if we eliminated unions and increased the minimum wage by a few bucks the labor market would be a lot more fair and efficient for everybody.
By the way, it appears from the article that Wal-Mart was actually considering allowing these workers to unionize but ended up rejecting the union’s demands.
When y’all make the free-market argument, that “If Wal-Mart is so bad then people would find other places to work”, you’re missing out on a couple of important points.
First of all, Walmart’s working conditions, and more importantly their pay conditions, are actually quite terrible. In fact, they’re terrible to the point that the people working there are well under the poverty line if that’s their only job. Because Walmart’s workers are well under the poverty line, they often qualify for a large variety of government benefits, such as reduced-cost medical care, or even free treatment at nationwide government-funded clinics designed to take care of those in poverty.
Yes, you can say that if Walmart was really so bad people would work elsewhere, but you’re ignoring the fact that there is one hell of a massive government subsidy (to the tune of billions of dollars per year) helping to fund Walmart in the form of the government paying their health care plan and giving their workers other benefits.
In California a few years ago, there was even 1 example of Walmart handing out company-produced pamphlets explaining how they could go to Medicare, Food Stamps, and other temporary assistance programs and apply for state and federal benefits and use the fact that they’re employed as justification for the fact that they deserve the government assistance.
There have been several studies that actually confirm this behavior. One UC Berkely study found that WalMart, by opening stores that pay peopel so little, was actually constituting a drain of tens of millions of dollars on California’s budget, even after their taxes were paid. Georgia did a survey to find out who employed the most people with children in the state-funded day care system, and found 10,000 Walmart workers on there. (The next biggest company was in the 700’s).
Interesting point, Balta. So, are you saying that because Wal-Mart’s employees qualify for gov’t assistance, they’re actually better off than they would be if they went to work for Target or K-Mart instead?
If that’s true, then why don’t other retailers (or fast food restaurants, etc.) lower their wages and take advantage of this de facto subsidy? Because of their superior ethics? But if their employees will actually be better off, where’s the harm in taking advantage of govt’ programs?
Eric, there are several who are actually doing so…Walmart is just that big that it’s the only one which really makes a dent in most states.
On top of that…most retail places which employ people at low wages are treated mostly as short-term employments. What happens with most employees at those places is that either they move on from McD’s to somewhere else or they move upwards in the organization to management, which in the case of those companies pays better than Walmart.
The problem for most retailers with this pay scheme, where people who stay on longer get continual raises, is that in the end it ends up driving the company into bankruptcy; as the work force stays there longer, they qualify for more benefits and higher pay, which in the end makes keeping stores open more expensive and in the event of a downturn in sales can damage business.
Walmart has thus far managed to avoid this through 2 efforts; they keep turnover very high so that people don’t stay there for very long, and when people do stay there, they don’t rise in pay like other places. In other words, people would get hired at Walmart just like at McD’s, but after they stay there for a time, they’re not getting promoted or getting decent pay raises, which ends up moving them onto the payrolls of the nation whenever someone does get sick.
Pay increases for hourly “managerial” roles at a Wal-Mart are worth a $0.25 pay increase. In order to move into one of those positions you frequently need 1-3 years experience doing the regular gig. Pay increases are done yearly and are 1-5%.
Salaried assistant-managers usually make about $5-$6 an hour once you factor in the hours required of the position.
Store managers make $35k base and with bonuses tend to make $80k a year.
Disclaimer, I worked at WalMart during high school and took an internship with them during college. The conditions usually described are accurate.
As much as I hate WalMart, I have to agree that unions have outlived their usefulness. Many of the reasons that they were created in the first place have been addressed by government regulations anyway.
Just last weekend I made a post on my own blog about the UAW and how the motor companies will be paying out $1.3 billion dollars this year to employees who aren’t even working. With the unions creating situations like that, it’s no wonder most large plants are being moved overseas. Just wait and see: within fifteen years, China will most likely surpass most of the major auto suppliers.
“Paying out $1.3 billion dollars this year to employees who aren’t even working” is done because the companys choose not to put those employees to work. They are effectively paying those employees to sit on their butts because the company can’t find a way to use 10,000 employees. Because the company is run by MBAs, not people who have ideas.
They aren’t required to send these employees home — they could put them to work. They *choose* to have the employees sit at home because they can’t think of anything for them to do.
The thing is, many MBAs have only one ability — the ability to do addition and subtraction. They can look at a sheet of paper and figure out how to make one number bigger by combining a couple other numbers. And that’s about it.
They have no practical knowledge whatsoever, and thus when they turn up a resource of 10,000 workers, they would rather have those workers sit at home than have to actually think about practical ways to put such people to work.
Take Carly Fiorina, the CEO of Hewlet Packart who convinced the company to merge with Compaq. This week, FINALLY, HP let Carly go, because the merged company just keeps getting crappier and crappier. The reason? Fiorina’s merger plans were all on paper — she had no IDEAS, she just wanted to play with numbers to make bigger numbers.
That sort of play is all too common with business people these days. They have no interest in actually accomplishing anything — they just want to re-arrange people who ARE accomplishing stuff, in order to try and find “synergies. “Synergies,” of course, basically means “employees, we’re going to skim off more of the wealth you’re creating, by firing some of you and having the rest do more work!”
But of course, it’s UNION’S fault, because they demand that the MBAs actually show leadership and innovation in order to get wealthier — demand that employees be treated as part of the company, and not just as numbers to be juggled around in the endless, generally pointless search for “synergies” while people who actually work and create get shafted reapeatedly.
It’s like the classic Dilbert cartoon where the manager says something like “stop worrying about maintaining quality — if we can get labor costs low enough, we can make a profit without even selling anything!”
They aren’t required to send these employees home — they could put them to work.
Doing what? The auto companies are paying these folks not to work. One of two things must be true…
a) These companies have all the labor they need to make all the products they can sell, but their agreement with the UAW forces them to keep paying unneeded labor.
b) These companies could put these folks to work making more cars which they could sell and make a profit off of, but they are choosing not to.
In order for b) to be the case, the auto corporations would have to be both stupid and ungreedy.
They aren’t required to send these employees home — they could put them to work. They *choose* to have the employees sit at home because they can’t think of anything for them to do
The following is from the article that I referenced on my own blog:
When an automaker adds plant jobs, it also goes back to the jobs bank to recall workers. If the new job is within 50 miles of where the worker used to be, he or she must take the new job. If the opening is more than 50 miles away, they don’t have to take it
In other words, the only way that they could put them back to work is if they find them a new job within 50 miles of the old one. Now really, how many of these employees would choose to work somewhere else when they know that they can just stay in the job bank and keep collecting a paycheck of $130,000 a year for doing nothing?
For those of you who are interested, you can read the entire article about the jobs banks here
The unions are not interested in helping WalMart employees. They are interested in making the consumers pay….for unions. When WalMart goes into a new marketing area the unions go out of business. They lose their “franchise” much like they did in Indiana at the stroke of the Blade.
“the only way that they could put them back to work is if they find them a new job within 50 miles of the old one.”
So, again, I ask: why isn’t the company putting these workers to work? If they’re really paying them “$130,000 a year for doing nothing” isn’t that a great reason to MAKE USE OF THEM? Heck, have them lick company stamps all day in their own homes (or anywhere within 50 miles of their homes) — ANYTHING, just put them to good use.
The company signed this contract. They knew what they were getting into, and *at the time* it was worth it. To whine now that it’s the unions fault is absurd. The fact that they have $130,000 a year workers twiddling their thumbs (if that’s the case) is their own fault for poor planning. It’s not because of unions.
Correct me if I’m wrong, but I see conservative Republicans saying that unions aren’t necessary because of government programs that have addressed their concerns. These are, of course, the same Republicans who wish to eliminate these government programs (like OSHA).
I’m a conservative-liberatrian Republican. My distaste for unions has nothing to do with the availability of government programs. It has to do with the needless level of bureaucracy that they represent and, more importantly, their incompatability with free markets. They artificially raise wages to above-market levels, which is good for the people they represent but bad for the consumer. They (not just the teachers’ unions) tie pay to seniority alone and resist efforts to tie pay to productivity. They create legalistically-defined job classifications, and insist that a worker must not engage in *any* activity not explicitly listed in the stone tablets from Sinai that says what that job classification does.
(I recall that Moe Thacker, the head of the call screeners union in NYC (why does such a union exist?), used to file complaints against Rush Limbaugh when Bo Snerdly would do something not in the union rules for what call screeners can do. Usually the infraction was Snerdly bringing Rush a cup of coffee.)
OSHA is a bad idea because it has no incentive for accurately assessing workplace safety. It earn no benefit for being right, and pays no penalty for either underestimating or (what is moe often the case) overestimating safety issues. And it shamelessly fines companies if they make honest mistakes on their paperwork. A company’s insurer has a profit incentive in workplace safety, thus OSHA’s duties could easily be transferred to the private sector.
Jane Galt’s piece notes:
Unions are a good vehicle for redistributing income from one class of workers to another;
And WalMart is a good vehicle for redistributing money from the U.S. to China. I don’t believe in erecting trade barriers, but I will NEVER go inside a WalMart because of the China issue.
“A company’s insurer has a profit incentive in workplace safety, thus OSHA’s duties could easily be transferred to the private sector.” What motivation is that? Nothing makes them pay out to an employee in the real world without some of that government interference that you whine about. All they have to do is come up with some reason, any reason, any excuse or technicality to give them cover and a little nudge to the employer reminding them of how much their rates are going to be jacked up if the insurance company has to pay out. And if they do pay out, just jack up the rates. That takes care of that inconvenient profit problem. It’s not like they can be sued for any meaningful amount of money anymore.
What motivation is that?
Uh, less workplace safety means more workplace accidents, which means more insurance claims, which means smaller insurance company profits.
Three WalMarts in Quebec have received bomb threats since the company announced it was closing the Saguenay store.
Correct, the Jonquiere store was unionized but unable to negotiate a contract. Another Quebec Walmart in St-Hyacinthe was unionized last month, and is attempting to get a contract.
The Provinces Labour Board will be asked to look into Walmart’s claims the Jonquiere location wasn’t profitable.
Walmart will be appealing the certification of the St. Hyacinthe union in court.
Walmart has 262 stores and 70 thousand employees in Canada.
Incidently, Germany’s WalMart’s are unionized.