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Summer 2005

A World of Work that Awaits Us

As John Howard pushes Australia closer to a US-Style anti-union, free market workplace system. Read about the realities in America.

Jennifer McLaughlin is 22, has a baby, wears wide-leg jeans and spiky plastic chokers, dyes her hair dark red, and works at Wal-Mart. The shop in Paris, Texas is just down the road from the modest block of flats where McLaughlin lives with her boyfriend and her one-year-old son.

Five days a week she drives to work, puts on a blue vest with "How May I Help You?" emblazoned across the back, and clocks in. Some days she works in the Garden Center and some days in the toy department. The pace is frenetic, even by the normally fast-paced standards of retailing. Often, it seems, there simply aren't enough people around to get the job done.

On a given shift McLaughlin might man a register, hop on a mechanical lift to retrieve something from a high shelf, catch fish from a tank, run over to another department to help locate an item, restock the shelves, dust off the bike racks, or field questions about potting soil and lawn mowers. "It's stressful," she says. "They push you to the limit. They just want to see how much they can get away with without having to hire someone else."

Then there's the matter of her pay. After three years with the company, McLaughlin earns only $16,800 a year. "And I'm considered high-paid," she says. "The way they pay you, you cannot make it by yourself without having a second job or someone to help you, unless you've been there for 20 years or you're a manager." Because health insurance on the Wal-Mart plan would deduct up to $85 from her biweekly paycheck of $550, she goes without, and relies on Medicaid to cover her son, Gage.

Complaints about understaffing and low pay are not uncommon among retail workers -- but Wal-Mart is no mere peddler of saucepans and boom boxes. The company is the world's largest retailer, with $220 billion in sales, and the nation's largest private employer, with 3,372 stores and more than 1 million hourly workers. Its annual revenues account for 2 percent of America's entire domestic product. Even as the economy has slowed, the company has continued to metastasize, with plans to add 800,000 more jobs worldwide by 2007.

Given its staggering size and rapid expansion, Wal-Mart increasingly sets the standard for wages and benefits throughout the U.S. economy. "Americans can't live on a Wal-Mart paycheck," says Greg Denier, communications director for the United Food and Commercial Workers International Union (UFCW). "Yet it's the dominant employer, and what they pay will be the future of working America."

The average hourly worker at Wal-Mart earns barely $18,000 a year at a company that pocketed $6.6 billion in profits last year. Forty percent of employees opt not to receive coverage under the company's medical plan, which costs up to $2,844 a year plus.

As Jennifer McLaughlin puts it, "They're on top of the Fortune 500, and I can't get health insurance for my kid."

Angered by the disparity between profits and wages, thousands of former and current employees like McLaughlin have started to fight the company on a variety of fronts. Workers in 27 states are suing Wal-Mart for violating wage-and -hour laws. In the first of the cases to go to trial, an Oregon jury found the company guilty in December of systematically forcing employees to work overtime without pay. The retailer also faces a sex-discrimination lawsuit that accuses it of wrongly denying promotions and equal pay to 700,000 women.

And across the country, workers have launched a massive drive to organize a union at Wal-Mart, demanding better wages and working conditions. Employees at more than 100 stores in 25 states are currently trying to unionize the company, and in July the UFCW launched an organizing blitz in the Midwest, hoping to mobilize nearly 120,000 workers in Michigan, Kentucky, Ohio, and Indiana.

Wal-Mart has responded to the union drive by trying to stop workers from organizing, sometimes in violation of federal labor law. In 10 separate cases, the National Labor Relations Board has ruled that Wal-Mart repeatedly broke the law by interrogating workers, confiscating union literature, and firing union supporters.

At the first sign of organising in a store, Wal-Mart dispatches a team of union busters from its headquarters in Bentonville, Arkansas, sometimes setting up surveillance cameras to monitor workers.

"In my 35 years in labor relations, I've never seen a company that will go to the lengths that Wal-Mart goes to, to avoid a union," says Martin Levitt, a management consultant who helped the company develop its anti-union tactics before writing a book called 'Confessions of a Union Buster'. "They have zero tolerance."

The retaliation can be extreme. In February 2000, the meat-cutting department at a Wal-Mart in Jacksonville, Texas, voted to join the UFCW - the only Wal-Mart in the nation where workers successfully organized a union. Two weeks after the vote, the company announced it was eliminating its meat-cutting departments in all of its stores nationwide.

Since its beginnings, Wal-Mart has used "union avoidance programs." Martin Levitt, the consultant who worked on the program, says that Wal-Mart does "whatever it takes to wear people down and destroy their spirit." Each manager, he says, is taught to take union organising personally: "Anyone supporting a union is slapping that supervisor in the face."

And that's not the only underhand tactics used.

In the Oregon wage-and-hour case, a former personnel manager named Carolyn Thiebes testified that supervisors, pressured by company headquarters to keep payroll low, regularly deleted hours from time records and reprimanded employees who claimed overtime. In 2000, Wal-Mart settled similar lawsuits involving 67,000 workers in New Mexico and Colorado, reportedly paying more than $50 million.

Wal-Mart blames unpaid overtime on individual department managers, insisting that such practices violate company policy. "We rely on our associates," says spokesman Bill Wertz. "It makes no business sense whatsoever to mistreat them." But Russell Lloyd, an attorney representing Wal-Mart employees in Texas, says the company "has a pattern throughout all stores of treating their workers the same way."

Corporate headquarters collects reams of data on every store and every employee, he says, and uses sales figures to calculate how many hours of labor it wants to allot to each store. Store managers are then required to schedule fewer hours than the number allotted, and their performance is monitored in daily reports back to Bentonville. To meet the goals, supervisors pressure employees to work extra hours without pay.

"I was asked to work off the clock, sometimes by the store manager, sometimes by the assistant manager," says Liberty Morales Serna, a former employee in Houston. "They would know you'd clocked out already, and they'd say, 'Do me a favor. I don't have anyone coming in -- could you stay here?' It would be like four or five hours. They were understaffed, and they expected you to work these hours."

When Judy Danneman, a widow raising three children, went to work as an hourly department manager in West Palm Beach, Florida, she quickly realized that she would have to climb the management ladder in order to survive -- because, as she puts it, "my kids had this bad habit of eating." The only way to do that, she says, was to work off the clock: "Working unpaid overtime equaled saving your job."

When she finally became an assistant manager, Danneman knew she had to enforce the same policy: "I knew for my department managers to get their work done, they had to work off the clock. It was an unwritten rule. The majority of them were single mothers raising children, or else married women with children. It was sad, and it was totally demanding and very draining and very stressful."

To protect the bottom line Wal-Mart is as aggressive at fighting off unions as it is at cutting costs. Employees approached by co-workers about joining a union are "scared to even talk," says Ricky Braswell, a "greeter" at the store in Paris. "They're afraid they'll lose their jobs."

In Paris Texas, it was Jennifer McLaughlin's boyfriend, 21-year-old Eric Jackson, who first started talking about a union.

Jackson started as an evening cashier earning $5.75 an hour, and it wasn't long before he was regularly asked to perform the duties of a customer service manager, supervising the other cashiers and scheduling their breaks. He asked for a promotion, but three months later he was still doing the extra work for no extra pay.

"I took it because I wanted more money, but I never got the raise," Jackson says. "They knew they could do it to me."

But the company soon caught wind of the organizing effort. As one worker left an early meeting of union supporters, he spotted a Wal-Mart manager in the parking lot. From then on, workers seen as pro-union were watched closely by management.

"By the time we had our first meeting, they were holding their first anti-union meeting," says McLaughlin. The response came straight from the company's union-avoidance playbook: Troops from the Bentonville "People Division" were flown in, and employees were required to attend hour-long meetings, where they were shown anti-labor videos and warned about unions.

The meetings were just the beginning. "The videos and group meetings are the surface cosmetics," says Levitt, the former consultant. "Where Wal-Mart beats the union is through a one-on-one process implemented from Bentonville. They carefully instruct management to individually work over each employee who might be a union sympathizer." In Paris, Eric Jackson was called into a back room by five managers and made to watch an anti-union video and participate in a role-playing exercise.

"I was supposed to be a manager, and one of them was the associate who came to me with a question about a union," says Jackson. "So I quoted the video. I said, 'We do not believe we need a union at Wal-Mart,' and they were like, 'Good, good!' and then I said, 'We're not anti-union -- we're pro-associate,' just like I'm supposed to say."

With the company so determined to ward off unions, the prospects of Employees in towns like Paris, Texas, winning significant improvements in wages and working conditions seem awfully slim. "It's a long process," Jennifer McLaughlin concedes.

"I wish it could be done in the next year, but people come and go, and for every one union card you get signed, two other ones who signed cards have gotten fired or left. It's real frustrating, and a lot of times I don't want to do it no more. But I'm not going to give up until I end up leaving the store."

Putting together such a broad initiative can be "like pulling teeth," Hesse says, but the stakes are high. If employees succeed in improving wages and working conditions at the country's largest employer, they could effectively set a new benchmark for service-sector jobs throughout the economy. Some 27 million Americans currently make $8.70 an hour or less -- and by the end of the decade, Hesse notes, nearly 2 million people worldwide will work at Wal-Mart.

"These are the jobs our kids are going to have," he says.

With thanks to Mother Jones magazine.