Wal-Mart’s fear of commitment

By Rebecca Smith
July 12, 2013

Wal-Mart distribution center in Bentonville, Arkansas June 6, 2013. REUTERS/Rick Wilking

“Seeking an energetic person willing to drop everything when I call. Must be available 24/7, although I will make no long-term commitment to you.”

If this were a personal ad, we’d assume the writer would stay single forever. But this is essentially the help-wanted ad that Wal-Mart and other retailers are posting these days.

Retail workers who don’t have the benefit of a union contract are all too familiar with low pay, erratic part-time schedules and job insecurity. But industry standards sunk to a new low earlier this month, when Reuters reported that Wal-Mart Stores, Inc. has been hiring only temporary workers at many of its U.S. stores.

These temporary workers must reapply for their jobs after 180 days. Meanwhile, existing full-time employees are seeing their hours cut to part-time, resulting in understaffed stores with long lines and un-stocked shelves.

Wages are low — roughly $10 per hour — and the part-time work schedules are irregular and unpredictable. Temporary part-time workers can’t make plans of any kind — for their weekends or their futures.

There’s no time to create satisfying relationships with co-workers or customers, the things that make work enjoyable. No way to organize a union, as Wal-Mart is virulently anti-union. And no opportunity to work their way up. Instead, they work their way out, and on to the unemployment rolls.

Of course, retailers commonly hire temporary workers during the holiday season. But it’s not clear why Wal-Mart would choose a strategy of hiring temps in mid-summer. Or is it?

Wal-Mart insists that putting workers on temporary contracts is not a cost-cutting move. In particular, it contends that this practice has nothing to do with the Affordable Care Act, set to take effect in January 2014. But surely, Wal-Mart must know that the healthcare law allows companies to delay health coverage for up to a year while they determine whether or not an employee working less than full-time must be offered benefits.

Wal-Mart is notorious for low wages, bad labor practices and shifting costs to taxpayers. Wal-Mart’s wages and benefits are so low that many employees are forced to turn to the government for aid and emergency rooms for healthcare, costing taxpayers between $900,000 and $1.75 million per year per store, according to a recent report analyzing data from Wisconsin’s Medicaid program. According to that report, taxpayers already pick up a tab totaling $5,815 per Walmart employee.

This new temp-worker-only scheme could generate a seismic shift in retail jobs beyond Wal-Mart’s empire. As the nation’s largest employer, Wal-Mart has the power to exert enormous downward pressure on the entire retail industry, where median annual wages are under $21,000. 

One study found that each new Wal-Mart lowers the average hourly wage of retail workers in the surrounding state by two-tenths of a percent. That translates into a 10 percent average wage reduction in states with 50 Wal-Mart stores.

As more and more states are carpeted with Wal-Mart stores, local retailers and grocers and their workers get squeezed.

Retail is projected as the second-largest growth job in the country between now and 2020. Retail jobs need to be improved — not downgraded — for the good of both retail sales workers and our economy.

Workers who have money in their pockets can buy things. Since consumer spending accounts for some 70 percent of our national gross domestic product, good jobs create a virtuous cycle of more sales, the need for more employees and revenues to support better wages.

If we want to build a real, sustainable economy for all of us, we have to raise pay and create job security and good benefits in the industries fueling job growth.

We can reward work. We can save taxpayer dollars. We can create new consumers and grow our economy. But it will require employers like Wal-Mart to let go of their poverty-wage, part-time temp worker schemes — and get over their fear of commitment.

 

PHOTO (Insert A): Employees of Wal-Mart Stores, Inc. leave the U.S. associates meeting with a giant portrait of company founder Sam Walton hanging in the background, in Fayetteville, Arkansas, June 5, 2013. REUTERS/Rick Wilking

PHOTO (Insert B): A man holds a sign during a protest for striking Wal-Mart employees at a store on Black Friday in Paramount, California, Nov. 23, 2012.  REUTERS/Bret Hartman

 

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