Wal-Mart: The Face of Twenty-First-Century Capitalism

by Nelson Lichtenstein

Book Overview

A collection of essays that "do an incredible job of balancing the wonders and horrors of the force that is Wal-Mart" (Booklist, starred review).

Edited by one of the nation's preeminent labor historians, this book marks an ambitious effort to dissect the full extent of Wal-Mart's business operations, its social effects, and its role in the United States and world economy. Wal-Mart is based on a spring...

• Format: Paperback
• Language: English
• ISBN: 1595580212
• ISBN13: 9781595580214
• Release Date: January 2006
• Publisher: New Press
• Length: 349 Pages
• Weight: 1.45 lbs.
• Dimensions: 1.1" x 8.0" x 8.0"

Customer Reviews

THE RACE TO THE BOTTOM MUST STOP HERE

This may not be the book of essays that finally gets people up in arms against the Wal-Martization of the world but it contains much useful information for those are interested in that perspective. This writer has just received news that the Massachusetts Federation of Teachers (MFT) has voted to support the Wal-Mart boycott. Thus, the MFT joins a growing number of other unions union federations nationally and internationally in support of this first step in the struggle to organize Wal-Mart. Every militant is obliged to and must support this boycott as a first step in the struggle against this greedy mega-corporation. To list the egregious labor practices of this corporation is like reading pages from the history relating the sweatshop conditions of the American labor movement at the turn of the 20th century. These essays detail that exploitation. Whatever piddling savings one might receive by shopping at Wal-Mart is negated by the degradation of its labor force. It is high time for the labor movement to move on this outfit and move hard. The race to the bottom stops here. Whatever the practical effect of the boycott it can only be a first step in the ultimate union organization of Wal-Mart. A boycott is not enough! A consumer boycott, as has been shown by past practices, is only as effective as the diffuse shopping public is aware of it. In general, a consumer boycott has little or no effect at all. In any case it is not decisive. There is no short-cut to effective organization at the point of production and, particularly in the case of Wal-Mart, distribution. The leadership of the organized American labor movement (now centered in the AFL-CIO and Change to Win Coalition) has chiefly used to the tactic of boycott to avoid the hard struggle to unionize the workforce. In the final analysis only organization in the field will bring unionization. To organize Wal-Mart means there must be the will to organize Wal-Mart. It is necessary to go all out to win once the decision has been made to organize this monster along industrial lines, like the automobile industry in the 1930's. Previous local efforts (such as in Quebec and Texas) to organize particular stores have shown that this strategy (or lack of strategy) has been a failure. Wal-Mart is just too big and powerful to be taken on piecemeal. This writer has seen estimates that the number of field organizers necessary to effectively organize Wal-Mart is at least 3000. Militants must call on the organized labor movement to fund and sent out that number en masse. The time is now. Those even slightly familiar with the Wal-Mart operation know that the corporation has a fleet of at least 7000 trucks to transport and deliver goods to its various locations. This should make every militant salivate at the prospect of organizing that fleet. Militants must demand that the Teamsters International Union to organize the fleet. Know this, if the trucks, the key to the distribution process are unionized that

very very useful academic perspective

Neither a polemic nor a whitewash, this book is critical yet strives to be fair. Its perspective is predominantly historical and a bit too academic, but it is well written and simply fascinating. Sam Walton was a natural salesman, passionate about building his retail business. When founded Wal-Mart in 1962, he did not entertain any dream of becoming the wealthiest man in America or creating the world's largest company. Instead, he wanted to bring big-city discounting to his corner of the rural American South, which would cut about 20% off the prices in local stores. But he wanted the discounts to be offered every day, rather than by one-time sales promotions of selected items. He chose to expand locally, opening stores in his native Arkansas and spreading slowly into Oklahoma, Missouri, and Louisiana. Thus, as the book points out, Wal-Mart's culture reflects where it was born, where its salaries were viewed as fair and people could live reasonably well on them and in a context without strong unions or organized workers. Walton's strategy was simple: to make up for his low profit margins, he would have to sell in higher volumes of sales in a large number of stores. In addition, his company developed a relentless drive to lower costs by going directly to manufacturers and constantly increasing worker productivity, which often translated into low salaries for a high-turnover work force. He also paid close attention to the competition as well as trained Wal-Mart workers to treat customers with courtesy and consideration of their needs. It was a phenomenal success. In 1985, with just under 1,000 stores, he was named by Forbes Magazine as the richest man in America. By 1991, Wal-Mart was recognized as America's largest retailer as it began to expand overseas. It was repeatedly hailed as the most admired company in America. In the aftermath of Walton's death, the expansion of the company accelerated with a combination of new technologies (the "logistics revolution") and the globalization of its operations. By 2004, Wal-Mart was number one on the Fortune 500 list, as both the world's largest corporation and the largest non-governmental employer. From the mid-1990s, Wal-Mart became a pioneer in technology-driven productivity enhancement. Elements included: 1) point-of-sale data collection, enabling managers to track inventory and demand in real time; 2) data mining in order to exploit trends to boost sales via novel merchandising techniques, e.g. placing diapers and six packs of beer near store entryways on Fridays, to exploit a spike in demand for both items at the end of the workweek; 3) the establishment of a just-in-time delivery system, which suppliers and distributors were obligated to participate in and obey, in effect joining Wal-Mart's data network. According to a widely cited estimate by McKinsey and Co., Wal-Mart alone was responsible for 25% of the "gain in productivity" of the U.S. economy from 1995 to 1999! Many of th

Good Insights!

The book begins by summarizing the 10/11/03 lockout/strike of 59,000 Southern California grocery workers from 850 supermarkets in an effort to maintain wages and healthcare insurance the UFCW had negotiated over 50 years. The lockout/strike ended Feb./Mar. of '04 with a decisive defeat for grocery workers - the new contract slashed starting pay and capped health insurance payouts. The one point of agreement was that the struggle was initiated by industry management trying to prepare for expected competition from Wal-Mart in their area. (Some experts see Wal-Mart becoming the nation's leading grocer by '08.) Wal-Mart is attributed to bring over 230,000 shipping containers across the Pacific each year - approximately 100 containership loads, and about 10-20% of transhipped through Southern California. Its overseas suppliers employ up to 65,000 at a single facility (Huyen-Binh-Chanh in VN). Discounters' labor costs average about 15% of sales (about half that of department stores); Wal-Mart's are another 25% less. One means of selling its low wages is to also offer profit-sharing - however, few take advantage because qualifying requires two years' employment to qualify (40%+ turnover/year). Only 7% of its employees try to support a family with children on a single Wal-Mart income -> reduced need for benefits. A 32-hour week is considered "standard" at Wal-Mart (some employees do work 40 hours. It probably has a higher percentage of managers start in low-paying jobs and lacking a college/university degree than any other large company in the world. <br /> <br />Adding groceries to Wal-Mart's existing stores typically increased sales of non-food items 30%. <br /> <br />Wal-Mart's "Plus One" principal: - each product's price should be lowered or its quality improved each year. Over 500 large vendors have a permanent sales office near Wal-Mart's headquarters. It requires suppliers to open their books and undergo detailed cost analyses; trade-promotions and direct-marketing campaign costs are deducted from the wholesaler's price. Vendors can access saels data directly, providing the ability to test new products more easily/quickly, and to simply product production and setting inventory levels. <br /> <br />Providing national brands helps Wal-Mart document its status a a low-price leader; store brands (abouat 40% of the total) appeal to the more price conscious shoppers. <br /> <br />Methods of Controlling Labor Costs: Making indenpendent contractors out of truckers bringing containers out of port prevents them from trying to organize or join a union - would bring anti-trust suits; in addition, a large portion are immigrants - particularly difficult to organize. Staffing distribution centers with temporary agencies/employee-leasing firms allows a quick change if organizing develops. <br /> <br />Wal-Mart originally incorporated each store separately, thus allowing sales/store to fall under levels that would require paying the minimum wage