To the Teacher:
With more than 2.1 million employees, Walmart, the big-box retail outlet known for its low prices, is the world's largest private employer. But bargains for consumers and profits for the company's owners do not come without a cost, most of it borne by Walmart's lower-level employees. For years, Walmart's labor practices have been the subject of controversy, with the company facing charges that employees work for low wages under unfair conditions.
Beginning in late November 2012, during the holiday shopping season, over 500 Walmart workers from stores across the country took part in a series of strikes. In their ongoing campaign, employees hope to force the company to recognize their right to publicly speak out and organize free from intimidation and retaliation. However, Walmart has historically been very successful in preventing stores from going union.
This lesson is divided into two readings. The first reading provides students with an overview of Walmart's business model, with a focus on the company's labor practices. The second reading examines the recent protest campaigns at Walmart stores across the country. Questions for student discussion follow each reading.
Student Reading 1:
Walmart's Track Record on Workers' Rights
With more than 2.1 million employees, Walmart, the big-box retail outlet known for its "low-low" prices, is the world's largest private employer. But bargains for consumers and profits for the company's ownership do not come without a cost, much of it borne by Walmart's lower-level employees.
For years, Walmart's labor practices have been the subject of controversy. Much of the furor has focused on conditions faced by workers in China who manufacture most of Walmart's merchandise. But the company is also under fire for its labor practices here in the U.S.
The company has faced charges that employees work for low wages under sometimes difficult conditions. Another charge: Walmart purposely prevents workers from getting enough weekly hours to be considered "full-time" employees, thus freeing the company from having to provide these workers with benefits such as healthcare. Additionally, Walmart has been very successful in discouraging employees from unionizing.
Walmart's employment practices also reflect wider trends among employers. Former Secretary of Labor Robert Reich argued in the Huffington Post on November 21, 2012, that the prevalence of Walmart-level wages and benefits are tied to the steady decline of the labor movement over the past several decades:
Today, America's largest employer is Walmart, whose average employee earns $8.81 an hour. A third of Walmart's employees work less than 28 hours per week and don't qualify for benefits.
There are many reasons for the difference -- including globalization and technological changes that have shrunk employment in American manufacturing while enlarging it in sectors involving personal services, such as retail.
But one reason, closely related to this seismic shift, is the decline of labor unions in the United States. In the 1950s, over a third of private-sector workers belonged to a union. Today fewer than 7 percent do. As a result, the typical American worker no longer has the bargaining clout to get a sizable share of corporate profits.
At the peak of its power and influence in the 1950s, the United Auto Workers could claim a significant portion of GM's earnings for its members.
Walmart's employees, by contrast, have no union to represent them. So they've had no means of getting much of the corporation's earnings.
Walmart earned $16 billion last year (it just reported a 9 percent increase in earnings in the third quarter of 2012, to $3.6 billion), the lion's share of which went instead to Walmart's shareholders -- including the family of its founder, Sam Walton, who earned on their Walmart stock more than the combined earnings of the bottom 40 percent of American workers.
Walmart is known for employing a range of aggressive tactics to prevent its stores from going union. A 210-page Human Rights Watch report entitled "Discounting Rights: Walmart's Violation of U.S. Workers' Right to Freedom of Association" detailed some of these tactics. In the 2007 report, author Carol Pier, senior researcher on labor rights and trade for Human Rights Watch, found that while many U.S. employers use our nation's weak labor laws to keep workers from joining unions, Walmart's practices are especially aggressive. According to Pier, Walmart begins pressuring workers not to organizing during its orientation for new employees, which includes having workers watch an anti-union video. If managers see any signs of union organizing, they can call a 24-hour hotline, and Walmart will send out a "labor relations team" to assess the situation. Workers may also be called in to mandatory "captive audience" meetings to hear lectures about the evils of unionism. In some stores, the report found, Walmart resorted to conducting surveillance on employees, and disciplining or firing workers thought to be organizing a union.
Walmart responds to critics by noting that employees are happy to work at its stores and that reports of disgruntled employees are overblown. As the New York Times reported in 2005:
"It doesn't make sense," Mr. Scott said, "that people would line up for jobs that are worse than they could get elsewhere, with fewer benefits and less opportunity."
After pointing to headlines on editorial pages that say "Walmart's low prices come at too high a cost," Mr. Scott said, "I'd suggest a better headline, 'Walmart is great for America.' "
Critics respond that many employees who do not speak out about poor working conditions are motivated by fear. In the rare case that employees do succeed in winning union representation—as employees in two stores in Canada were—the company has responded by simply closing those locations.
Will the Walmart model continue to spread or will employees succeed in pushing back? A recent string of strikes by Walmart workers could mark the beginning of a more widespread movement for change.
- Do students have any questions about the reading? How might they be answered?
- Robert Reich argues that employees' working conditions at Walmart reflect the decline of labor unions in the United States. Do you think his argument is convincing?
- According to the reading, what are some of the tactics that Walmart uses to discourage workers from organizing?
- How does Walmart respond to reports that its employees are disgruntled?
- Walmart's low wages make it possible for the company to charge less money for their products, and this benefits consumers, especially people who might not otherwise be able to buy these products. Do these low prices justify the kinds of worker policies described in the reading? Why or why not?
Student Reading 2:
Walmart Employees Speak Out
Beginning in late November 2012, during the holiday shopping season, over 500 Walmart workers from stores across the country took part in a series of strikes. In their ongoing campaign, employees hope to force the company to recognize their right to publicly speak out and organize free from intimidation and retaliation. The strikes represented the largest organized action of workers in Walmart's history.
Supporters of the workers, including Robert Reich, quoted in the first reading, urged consumers to boycott Walmart during protests on "Black Friday" (the day after Thanksgiving, and traditionally a huge shopping day).
In February 2013, some employees went back to the picket line, claiming that Walmart was retaliating against them in response to their efforts to organize. As reporter Josh Eidelson wrote at the Nation on February 7, 2013:
The wave of strikes last fall galvanized public support—including sympathy from some members of Congress. Democratic Congressman Alan Grayson of Florida joined a group protesting at a local Walmart and wrote about it for the Huffington Post on November 24, 2012:
There were two points to this. One was to inform the workers of their rights. And the other was to demonstrate to them, vividly, that they are not alone.
The Walmart manager had the police escort us out of the building. For handing out sandwiches. And for showing Walmart employees that they are not alone.
One brave "associate," who had had enough of this mistreatment, walked out with us. Which is her right, under the law, to protest Walmart's unfair labor practices. In fact, a while back, 200 employees walked out of a Walmart store, all at the same time. That really shook up the bosses. By the way, she made sure that she finished serving her customer before she left. She's that kind of person. Walmart actually could use a few more like her....
Who will win? I don't know. But I do know whose side I'm on. And I know that I'm not alone.
Walmart executives launched a public relations counteroffensive in response to the protesters. Michael Bender, president of Walmart West contributed an editorial to the San Francisco Chronicle on November 29, 2012. He wrote:
Participants in the strikes dispute Walmart's claims about the extent of the support for the protests among employees. As Alice Hines and Kathleen Miles reported on November 23, 2012, for the Huffington Post:
Feeling that they have widespread support, workers trying to organize at Walmart hope they can continue to ride the momentum from the largest series of strikes in the company's history.
- Do students have any questions about the reading? How might they be answered?
- According to the reading, why have Walmart workers participated in strikes over the past six months?
- Walmart executive Michael Bender argues that his company's employees have freely chosen to work at their stores and are happy with their jobs. Should dissatisfied employees simply get a job someplace else? Is this a fair position for an employer to take?
- So far only a small minority of Walmart employees have participated in protests. Do you think this indicates a lack of support for their efforts?
- Would you consider boycotting Walmart or any other company over their labor practices? Why or why not?
- Have you had experiences where you have been unhappy at a job? Did you feel that you could join with others to speak out? Why or why not?