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Despicable, but all too rational

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Wednesday, Oct 4, 2006

Wal-Mart is by no means the only employer who is guilty of the labor practices this NY Times article details, but as Ezra Klein never tires of pointing out, Wal-Mart sets the standard that others will have to follow to be able to compete. (After all, it is the world’s largest employer.) These most recent moves—purported to allow the company flexibility to efficiently deal with fluctuations in store sales volume due to seasonal variation, bagaries of the business cycle—seek to undermine the benefits that accrue to employees through longetivity. Also, old workers are prone to expensive inconveniences like sickness, and tend to be more “inflexible” in their ways (they are less amenable to having ther hours rejuggered at management’s whim) that put a burden on the company.


some Wal-Mart workers say the changes are further reducing their already modest incomes and putting a serious strain on their child-rearing and personal lives. Current and former Wal-Mart workers say some managers have insisted that they make themselves available around the clock, and assert that the company is making changes with an eye to forcing out longtime higher-wage workers to make way for lower-wage part-time employees.


Since most workers in discount retail don’t really gain any skills from long-term employment, and since they have been successfully prevented from unionizing, they are easily and ideally replaceable every so often, before they reach any service-related goals and raises that may have been dangled before them to keep them striving and focused while on the job. “These moves have been unfolding in the year since Wal-Mart’s top human resources official sent the company’s board a confidential memo stating, with evident concern, that experienced employees were paid considerably more than workers with just one year on the job, while being no more productive. The memo, disclosed by The New York Times in October 2005, also recommended hiring healthier workers and more part-time workers because they were less likely to enroll in Wal-Mart’s health plan.” Experienced employees figure out how to make the employer’s system work more to their advantage. That’s why you need to lean on them until they quit.


This is in no way surprising. Employers have no incentive to show any loyalty to their employees—the illusion that they have ever cared has always stemmed from the pressure the existence of strong unions exerted on them. Pensions, benefits and such—the entire concept of human resource departments (which are detestable precisely because they pretend to perform the function of union representatives while working in management’s interest)—were often concocted to forestall the progress of unions. But things have changed, and employers have nothign to fear anymore, nothing to prevent them from shifting all the insecurities of the business cycle onto workers, those least fit for coping with them. As Klein explains,


Folks forget sometimes that unions aren’t just there to argue for better benefits and salaries, but better working conditions, more stability in hours, more respect for seniority, and easier mediating between family and work. They exist, in other words, to ensure that employers uphold their end of the “work hard and get ahead” bargain. Except, unions don’t really exist anymore, and they certainly don’t at Wal-Mart. This is the result.


The point is that there is no such bargain in American society, and that there ever was one in the good old days is an illusion. Employers regard labor as a cost to be controlled, not as people whose welfare needs to be considered—such bleeding-heart sentiment was proven useless with the “defeat” of socialism and the proclaimed end of economic history. If workers and employers both prosper, it’s not because of some spirit of fair play and ethics, it’s not because some employers are congenitally nice and paternalistic, it’s because both sides have leverage over each other that forces them to split the proceeds. The bargain, to the extent that it existed, was forced by labor having a representative in the negotiation in the form of unions. Unions, though, have been systematically stripped of their ability to effectively organize, and the NLRB is staffed with Republicans hostile to their very existence. So employers rationally extend their advantage and insulate stockholders at the expense of employees. This leaves workers to fight with other workers for what protection remains, continually undermining one another while the company blithely sails along, meeting its growth targets and pleasing Wall Street. It’s an old story, and it probably sounds like a string of leftist cliches, but the utter boring predictability of it, and the reluctance to tell that same old tired workers-getting-screwed story yet again is one of the most potent weapons management has in its arsenal.

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