THERE IS NO shortage of statistics testifying to the sheer size and power of Wal-Mart. Its revenues exceed the combined GNP of 36 sovereign nations. It imports more goods from China than Britain or Russia. It is worldâe(TM)s largest private employer. But how did it get to such dominant position and what does it say about the global economy?
The labour historian Nelson Lichtenstein argues in the introduction to this timely book that Wal-Martâe(TM)s success rests on the systematic destruction of the last vestiges of New Deal America. Its vast network of warehouse-style stores drive down wages, evade health-care responsibilities and undermine union deals.
Lichtenstein suggests that this low-benefit, low-wage business model has become the template for modern global capitalism. He points out that Wal-Martâe(TM)s competitors are forced to copy its wage structure and pricing policy in a race to the bottom.
It wasnâe(TM)t always like this. Half a century ago, General Motors was the global business template. It was the largest and most profitable company in the world. Yet it offered relatively high wages and benefits because union militancy had forced managers to guarantee annual wage increases regardless of inflation. Between the late 1940s and the 1970s the real income of autoworkers doubled.
Wal-Mart does not have this problem because it crushes any sign of collectivism, let alone union organization, by monitoring shop floor conversations and sending in crack anti-union management teams if stores face union recognition ballots.
Elsewhere in the book, social historian Bethany Moreton attributes Wal-Martâe(TM)s success to its origins in rural southern America. Neither the New Deal nor the civil rights movement really touched north-west Arkansas, where the company was born. The âe~folksyâe(TM) founder, Sam Walton, exploited out-of-work agricultural workers, playing fast and loose with minimum-wage laws and overtime standards.
The glint of hope in all this comes from trade unionist Wade Rathke, who considers what is to be done to challenge the Wal-Mart empire. He argues that labour laws and unions are too weak to organize across the company. Instead he proposes a Wal-Mart association that would provide a voice for current and former employees. As a first step this would be undoubtedly be positive. But âe" as the history of GM shows âe" only union militancy can truly tame corporate giants like Wal-Mart.âe"Tom Wall
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