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Economy

Walmart’s Low Wages Cost Taxpayers Millions Each Year

Due to low wages and few benefits, Walmart workers at a single 300-person Supercenter store rely on anywhere from $904,542 to $1,744,590 in public benefits per year, costing taxpayers, according to a new report from the Democratic staff of the House Committee on Education and the Workforce.

The report focused its analysis on Wisconsin, because the state’s data is the most comprehensive and up to date. It looked at how many workers enroll in the state’s Medicaid program and extrapolated how many services they rely on from programs such as the Supplemental Nutrition Assistance Program, Earned Income Tax Credit, school lunch program, Low Income Home Energy Assistance Program, and Section 8 housing vouchers, among others.

Looking at just those currently enrolled in Medicaid, the report estimates that each employee takes in $3,015 in public benefits a year. But that may be a low estimate, as other workers may enroll in other programs. Assuming a higher number, each employee could use more like $5,815 in benefits a year.

Walmart’s wages are some of the lowest in the industry, despite the fact that it is the country’s largest private employer and one out of every ten retail workers is employed there. Workers make $8.81 per hour on average, according to IBIS World, 28 percent less than those who work for other large retailers.

Its employees also get few benefits through their employment. Only about half of Walmart workers are covered by its health care plans, in part because the costs may be to high. While the company decided to expand health care coverage to part-time workers in 2006, it has since reversed course.

Walmart’s model isn’t the only way in the discount retail space, however. Rival Costco, which competes with Walmart’s Sam’s Club stores, pays employees about 40 percent more. The average Costco worker makes $21.96 an hour. Nearly all of the workers who are eligible for the company’s benefits are enrolled.

Costco has come under analyst pressure to lower wages and boost profit, but the company’s CFO has thus far refused to do so. Its bottom line, however, seems strong: Profits rose by 19 percent to $459 million last quarter.

Meanwhile, Walmart’s sales have been struggling. Its sales suffered during the first quarter of the year and the company has come under criticism for failing to keep shelves stocked thanks to too few employees working at a time. That has led to long lines and customer dissatisfaction, which helped it rank at the bottom of the American Customer Satisfaction Index in February.

While Costco has a lower profit margin than Walmart, it gets much more revenue and profit per employee and generates a higher return for investors.

Economy

Walmart Workers Plan Next Action Amid Allegations Of Anti-Union Tactics

This week, workers affiliated with OUR Walmart, the group that orchestrated strikes on Black Friday, is gathering about 100 members for a cross-country bus ride to headquarters for its latest action. The bus, which they have dubbed the “Ride for Respect,” plans to arrive on June 2 to stage a protest at the annual shareholder meeting in Bentonville, Arkansas on June 7. Workers will come from various cities, including the Bay Area, Los Angeles, Denver, Chicago, Washington, Miami, and a dozen others, as Businessweek reports.

A Walmart spokesperson told Businessweek, “The Union and its subsidiary, ‘Our Walmart,’ is comprised of a few number of people, most of whom aren’t even Walmart associates and don’t represent the views of our associates. This latest publicity stunt by the unions to generate attention for their fleeting cause won’t impact the festivities [of the shareholder meeting].”

But Walmart has long been known for an anti-union climate, going back to when Sam Walton opposed labor rights when he opened his first store in 1962. That climate may have intensified as workers organized with OUR Walmart, according to allegations in a new report from American Rights At Work. Based on accounts from workers, the report alleges that the company has fired or disciplined workers, altered their wages or benefits, given them more difficult assignments, interrogated and surveilled workers, and used other tactics against those who organized with OUR Walmart. The document compiles the stories of workers who describe retaliation:

  • Angela Williamson had been working at a Walmart in Pensacola, Florida for a year when she became an outspoken member of OUR Walmart. As a mother of three on a Walmart wage…[s]he also spoke out about Walmart scheduling practices which made it impossible for associates to count on a consistent income. Williamson was ostensibly terminated for taking too many sick days, even though a manager had approved the absences for both her own illness and for her to care for an ill grandmother.
  • Alex Rivera worked at Walmart for four years in the inventory control department. On July 20, 2012, he and other OUR Walmart members distributed leaflets outside his store. When Rivera went back to work the next day he was called into the office by a manager who told him that Walmart does not tolerate that kind of action and that he was violating company policy, even though he was off the clock. Management also prohibited him from handing out literature in front of the store and told him that he could only do so at the outskirts of the parking lot. Weeks later, Rivera distributed literature to co-workers at a Subway restaurant inside the Walmart. This time, the store management disciplined and threatened to fire him.
  • [W]hen [Alan] Forrest [who passed away in March 2013] advocated for a co-worker, a manager warned him not to “stick his nose” into others’ business. The manager told Forrest that he was not allowed to complain about working conditions, hours or wages to other employees or to speak to other workers about OUR Walmart while working.

There have been other allegations of illegal labor retaliation at the retail behemoth, including telling workers who ask about forming unions they could lose benefits.

The workers who show up at the shareholder meeting will be asking for full-time work for those who want it and a minimum yearly salary of $25,000, Businessweek reports. When it first began organizing strikes, OUR Walmart presented a “Declaration of Respect” calling for a minimum wage of $13 an hour, predictable work schedules, affordable health care, and wages and benefits high enough that workers don’t have to turn to government assistance. Walmart says the average hourly wage for full-time workers is $12.40, but an IBISWorld report put that figure at $8.81. Walmart workers are also more likely to rely on government benefits, as in California, where employees’ families use 40 percent more publicly funded healthcare and 38 percent more public assistance programs than the average employee at a large retail company.

Some of these labor practices may be hurting more than just the workers, though. Recent reports show that its reductions in workforce have led to challenges in keeping shelves stocked. This has upset many of its customers, leading to a slight decline in sales. On May 16, the company reported that same-store sales fell 1.4 percent, “the first drop after six straight gains,” Bloomberg reports. Earnings per share also missed analyst expectations. In response to empty shelves, the company has proposed tying manager and executive pay to performance at keeping shelves full and has asked an outside auditor to use neon green dots to alert workers to which items to focus on restocking.

Update

Walmart workers also went on strike on Tuesday in Miami, Massachusetts, and the Bay Area, Josh Eidelson reports. These will be the first “prolonged strikes” in the company’s history and will last until the shareholder meeting on June 7. At least 100 workers pledged to join the strikes.

Economy

Walmart And Gap Refuse To Sign Broad Safety Agreement In Bangladesh

After six major European retailers announced on Monday and Tuesday that they would sign onto a broad safety upgrade agreement in Bangladesh, American companies Walmart and Gap announced that they would not sign on. Gap has been the most outspoken about its opposition, reports the New York Times:

By far, Gap has been the most vocal company opposed to the plan, expressing concerns that overzealous American lawyers could seize on the agreement to sue American companies on behalf of aggrieved factory workers in Bangladesh — perhaps in the event of a factory fire. Gap said it supported much of the plan, but it proposed changes that would greatly limit any legal liability for a company that violated the plan.

Walmart cited “requirements, including governance and dispute resolution mechanisms” in the agreement as its reason not to sign on, saying they are “appropriately left to retailers, suppliers and government, and are unnecessary to achieve fire and safety goals.”

The company plans to instead use its own safety plan. It began its own factory inspections of 279 Bangladesh facilities this year after the fire in November that killed 110 and it will release the names and inspection information as well as provide fire safety training for every worker in the factories that produce its goods. The inspection results will be posted on June 1.

Labor groups criticized Walmart’s plan, which is voluntary. The broader plan signed by the other companies is legally binding. Labor groups characterized Walmart’s proposal as merely aspirational.

Meanwhile, documents provided to the New York Times show that Walmart sourced clothing from the collapsed factory that killed 1,127:

The Bangladesh Center for Worker Solidarity has provided The New York Times with photos of several documents not disputed by Wal-Mart that were recovered in the building’s rubble, showing that a Wal-Mart contractor from Canada had produced jeans last year at the Ether Tex factory, which had been situated on the fifth floor of the collapsed Rana Plaza building.

The only American company to sign onto the agreement thus far is PVH, owner of Calvin Klein, Tommy Hilfiger, and Izod. A handful of smaller European companies also signed on Tuesday: Benetton, Marks & Spencer, and El Corte Inglés.

Economy

Retail Workers Protest Part-Time Work And Erratic Schedules

Workers in at least 100 Walmart stores will confront their managers today over the company’s scheduling system. As Josh Eidelson reports, today’s showdown could rival November’s Black Friday strikes against the store:

If organizers’ estimates hold, Wednesday’s coordinated worker delegations will represent the largest mobilization of OUR Walmart members since last November’s Black Friday strikes, in which organizers say some 400 workers walked off the job. In some stores, workers will go together to talk to management before or after their shifts; in others, workers will do so during the work day.

Confrontations over scheduling aren’t unique to Walmart: Workers at the high-end clothing retailer Juicy Couture in New York have begun a campaign to protest what they claim is the practice of making full-time employees part-time to avoid paying benefits. And the number of workers who are in part-time positions who want to get full-time work has been rising lately, clocking in at 7.6 million in March, up by three million since the beginning of the recession. The trend has been occurring for two decades now in the retail sector, however, as many retailers have gone from a majority of full-time staff to a majority of part-time workers. Thirteen percent of retail workers are working part time involuntarily.

Part-time work not only often means fewer hours, making it harder to earn enough to get by, but also tends to come with lower pay and few benefits. While full-time wages for hourly workers can reach over $14 an hour, the high end of wages for part-time workers is just over $9. Only about a quarter of part-time employees get health care benefits, compared to 86 percent of full-time workers. Many employers are also using “just-in-time” scheduling that seeks to match workers with demand, but it can mean unpredictable schedules, creating challenges for employees who need to schedule things like child care.

Beyond making life difficult for workers, these practices can also harm the companies themselves. Walmart has lately been criticized for struggling to stock its shelves because it doesn’t have enough employees working enough hours to get enough merchandise on the floor. It’s also led to long lines and customer dissatisfaction. That may mean losing business to other chains that have higher staffing levels. The company ranked last among department and discount stores in the American Customer Satisfaction Index in February.

Other discount retailers have taken a different approach. Costco, for example, offers a starting hourly wage of $11.50, predictable schedules, and good benefits. That has led to higher productivity and a lower rate of turnover. While it has a lower profit margin than Walmart, it gets much more revenue and profit per employee and generates a higher return for its investors.

Climate Progress

April 18 News: And The Latest Big Corporate Clean Energy Push Comes From … Walmart

Walmart’s new policy calls for a 6-fold increase in renewable energy from 2010 levels, and 20 percent less energy consumption. [E&E News]

The retail behemoth is throwing its full economic muscle behind energy sustainability. Local utilities that don’t get on board with Walmart’s green energy programs could be left behind like an old, worn-out shopping center.

The company’s new energy policy, announced this week at its Global Sustainability Milestone Meeting, calls for Walmart to produce or procure 7 billion kilowatt-hours of renewable energy globally by the end of the decade, a 600 percent increase over 2010 levels.

At the same time, the retailer will make deep cuts to its energy consumption by shaving 20 percent from 2010 levels the amount of electricity required to power a square foot of a Walmart store or warehouse.

Environmental groups joined with NY, CT, DE, MA, ME, NM, OR, RI, VT, DC, and New York City to threaten a lawsuit over the EPA’s delayed carbon rules for new power plants. [LA Times]

The only public hearing on Keystone will be held today in Nebraska. [Washington Post]

Rep. Bobby Rush on Rep. Fred Upton: “He also believed in climate change. But now all of the sudden, since he became the chair, he’s had a new reorientation. He thinks that climate change now is a hoax.” [The Hill]

The IEA said that the world is not switching to renewable energy fast enough to stop climate change. [Reuters]

The EU’s carbon trading program will still be burdened with too many credits, but Connie Hedegaard, EU commissioner for climate action, said other reforms could work as well. [Guardian]

The Mississippi River could hit ten feet above flood stage next week — after being so low that barge traffic had been endangered last year. [New York Times]

Greenland’s fishing industry has been hurt by global warming, and therefore they are turning to … increased mining. [Bloomberg]

Sandy aftereffects: New Jersey is having to offer to buy flood-prone homes to encourage adaptation to rising sea levels and storm surge. [AP]

There are now more than 48,000 electric vehicle charging stations on the planet. [CleanTechnica]

Economy

Major Businesses Distance Themselves From Guns In Response To Sandy Hook Shooting

In response to the shooting at Sandy Hook Elementary, major businesses are rethinking their relationships to firearms. As the bodies of the 26 dead are lowered into the ground this week, three companies have announced they’ll break from the sale or association with the lethal weapon that took their lives.

Here are the companies that are reassessing guns in the wake of the tragedy:

Walmart takes the Bushmaster off its website. The gunman at Sandy Hook used a military-style Bushmaster gun in the assault. Authorities have not disclosed the model of weapon, but Walmart — one of the largest companies in the world — pulled the Bushmaster Patrolman’s Carbine M4A3 Rifle from its website on Monday without releasing any statement on the decision. Walmart is one of the biggest ammunition and gun sellers in the country, and has been profiting off — and encouraging — growing gun sales in recent years

Dick’s stops selling some semi-automatic weapons. Not only has sporting goods store Dick’s removed all guns from its stores around Newtown, Connecticut, but, in a much larger step, it has also stopped selling certain semi-automatic rifles at all of its stores across the country and on its website. The company made a public statement about the move, saying it was meant as a sign of respect “during this time of national mourning,” but it is also worth noting that some reports show the gunman tried to purchase a weapon at a Dick’s store last week.

Cerberus Capital Management will divest from Bushmaster. The private equity company that owns the maker of Bushmaster said it’s selling off its investment in the company and returning any profit to investors. In a statement, Cerberus Capital Management was forthright about its decision, saying, “It is apparent that the Sandy Hook tragedy was a watershed event that has raised the national debate on gun control to an unprecedented level….It is not our role to take positions, or attempt to shape or influence the gun control policy debate. That is the job of our federal and state legislators. There are, however, actions that we as a firm can take.”

Economy

Walmart Tells Workers Who Ask About Unions That Benefits And Vacation ‘Might Go Away’

Walmart staves off unionization attempts in its stores by telling workers who ask about forming a union that they may lose benefits and vacation time, a potential violation of American labor law that could further inflame relations between the company and workers who picketed its stores on Black Friday and have been attempting to organize.

Walmart workers and labor advocates held protests outside the chain’s stores throughout Thanksgiving weekend, protesting the low wages it pays its workers. The company, which paid its chief executive $18.1 million and made $15 billion in profits last year, has fought off union attempts before, and now it tells its workers that unionization could lead to the loss of bonuses and vacation time, a spokesperson told Bloomberg Businessweek:

Walmart has been opposed to unions since Sam Walton opened his first store in Rogers, Ark., in 1962. These days, “we have human resources teams all over the country who are available to talk to associates, and we will get questions about joining a union,” says David Tovar, a spokesman for the company. “We would say: ‘Let us remind you of all that Walmart offers, and of what might go away. Quarterly bonuses might go away, vacation time might go away.’ ”

Such tactics may not be illegal by themselves because they can be seen as predicting outcomes rather than threatening them, The Nation’s Josh Eidelson reported today. But the implication of such a “prediction” — that joining a union could be followed by actions resembling retaliation — is quite clear. Walmart’s anti-labor practices aren’t new: in 2008, the store’s workers spoke out about anti-union meetings they were forced to attend.

Though Walmart has long fought organization efforts in the United States, it sometimes lets workers in other countries unionize — particularly when unionization is contingent on Walmart getting to enter a new country. In the U.S. though, it has responded to unionization efforts by shutting down departments, fighting legislative improvements to labor law, and now, telling workers that joining a union may cost them their bonus.

Economy

100 Bangladeshi Garment Workers Died In Factory Fire After Walmart Refused To Finance Fire Safety Improvements

More than 100 workers died in a garment factory fire on November 24 in Bangladesh. The Dhaka plant, which was making products for Walmart and Sears, had no emergency exits or emergency evacuation procedures.

But in a meeting last year, Walmart officials decided against agreeing to pay suppliers more so that they could upgrade their manufacturing facilities and pay for the costs of safety improvements. “Specifically to the issue of any corrections on electrical and fire safety, we are talking about 4,500 factories, and in most cases very extensive and costly modifications would need to be undertaken to some factories,” Walmart officials said in documents obtained by Bloomberg News. “It is not financially feasible for the brands to make such investments.”

More than 300 Bangladeshi garment factory workers have died since 2006. Walmart reported a 9 percent increase in third-quarter net income, earning $3.63 billion.

Alyssa

‘Enlightened,’ And The Power And Danger Of Organizing

I loved the first season of HBO’s little-watched but truly remarkable comedy, Enlightened, about Amy Jellicoe (Laura Dern), a corporate drone who has a breakdown and returns to work determined to good in the world but resigned to the basement as punishment for her meltdown. It’s is one of the best depictions I’ve ever seen of how hard it is to try to live up to your values in corporate America, particularly when you have debt to pay off, because fulfilling work is so often dramatically underpaid, if it’s paid at all. So I’m particularly excited to see that in the second season, Amy’s leveling up—she fantasized about burning down the company she worked for last season, and this year, she’s found a way to do it, by becoming a corporate whistleblower:

“People are living under the illusion that the American dream is working for them,” Amy says in the trailer, in one of the baldest statements about inequality I can think of on scripted American television. And I hope Enlightened makes an important connection that’s implied in this clip. “I just don’t want to jeapordize everything because you’re pissed about your life,” Tyler (Mike White, also the show’s creator) tells Amy when she tries to enlist him in her whistleblowing scheme. But sometimes, you’re pissed about your life because of structural things that make it worse, that make things unjust, that prevent you from grabbing the resources and opportunities to fix your life by more gradual and reasonable means. Sometimes, you have to blow things up, and jeopardize everything, for a shot at something better. That’s one of the fundamental and scary truths of organizing, of the Walmart workers who walked out on Black Friday, of every whistleblower who ever lived. Last season, Amy wanted to change the world and be liked. Now, it seems, she’s truly reconciled herself to the fact that the first half of that equation may be more important.

Economy

Why Progressive Faith Leaders Joined Workers For Black Friday Walmart Protests

Our guest blogger is Jack Jenkins, a Writer and Researcher with the Faith and Progressive Policy Initiative at the Center for American Progress Action Fund.

When workers at Walmart stores across the country went on strike last Friday to protest the retailer’s allegedly low wages and poor working conditions, media outlets were quick to label the controversy as a disagreement primarily between the retail giant and labor groups.

But the Walmart strikers also appear to have another, less-discussed ally: faith groups.

Mixed in with the labor organizers and striking Walmart employees, religious leaders and faith-based groups showed up in force outside of Walmarts across the country on Friday in support of the workers, helping to lead protest actions in Wichita, Kansas, Davenport, Iowa, and Alexandria, Virginia, among others.

“We want to see them treating their workers fairly and paying fair wages and benefits for people who are making it possible for them to be in business,” said Rev. David Hansen, a minister who protested with workers in Wichita on Friday.

Faith groups have reportedly been an integral part of the strike since its inception. OUR Walmart, the main organizational force behind of the nation-wide protests, encouraged activists to hold ‘‘Black Friday Prayer Vigils” as a way of expressing support. Similarly, the Interfaith Worker Justice, a faith-based organizing initiative that “fight[s] for economic and worker justice,” pushed its organizers and activists to attend local Walmart strikes and even produced a liturgy for activists to use during the protest.

“We pray for justice at the work place for Walmart workers, and all workers who don’t get to share in the success and profit of the companies at which they work,” read one of prayers from the liturgy.

Strikers garnered support from religious sources outside of the picket line as well. The United Church of Christ, a Christian denomination that boasts more than a million members, offered its own website as an organizing hub for activists. In addition, faith writers authors such as Susan Thistlethwaite, a professor at Chicago Theological Seminary and a Senior Fellow at the Center for American Progress, and Noah H. Evans, an Episcopal priest in Massachusetts, publicly voiced their support for the strikers in various publications.

“Wal-Mart employees are trying to use tried-and-true labor actions to change [their situation],” Thistlethwaite wrote. “As a Christian minister, and one who cares about those driven to work harder while being kept at the poverty level, I support them.”

Like the strikers, many faith leaders and groups are making it clear that their support for the strikers is not a one-time event. Activists insist that if Walmart doesn’t begin listening to concerns about low wages and poor working conditions, workers and faith groups alike will keep protesting – and praying – until they do.

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