Last week in San Francisco more than a hundred protesters joined demonstrations in 15 U.S. cities demanding higher wages for Wal-Mart workers.
Dozens were arrested nationally on Thursday, including nine in San Francisco. The wave of protest against the world’s largest retailer raises a question: Is this a boomerang for the Wal-Mart effect?
The ‘Wal-Mart effect’ — apparently coined by journalist Julie Morris in a USA Today article from 1990, and advanced in a 2006 book by Charles Fishman — refers to the combination of negative and positive effects of Wal-Mart opening a store in a community. Morris wrote:
“(Wal-Mart) has a reputation for hurting small-town businesses that can’t match the lower prices the chain can offer due to volume buying. … The Wal-Mart effect has been so huge it’s spawned the formation of consulting firms that specialize in advising small-town businesses on handling the arrival of a Wal-Mart.”
In 2003, Los Angeles Times reporters Abigail Goldman and Nancy Cleeland explored how the largest private employer in the U.S., at 1.3 million workers, got so big:
‘The company has prospered by elevating one goal above all others: cutting prices relentlessly. … Consumers reap the benefits every time they push a cart through Wal-Mart’s checkout lines … yet Wal-Mart’s astonishing success exacts a heavy price. … By scouring the globe for the cheapest goods, it has driven factory jobs from one poor nation to another.”
Calling themselves Organization United for Respect at Wal-Mart, protesters were joined by members of the United Food & Commercial Workers union in seeking an across-the-board raise for the lowest paid Wal-Mart employees.
Entry-level Wal-Mart workers earn from minimum wage up to $12 per hour, or about $25,000 a year for a full-time worker.
“Wal-Mart, Wal-Mart, you can’t hide!”
Shouted Dominic Ware of Oakland, California, through a megaphone, standing on Market Street in San Francisco.
In response, the crowd of demonstrators shouted:
“We can see your greedy side!”
Ware told the assembled crowd:
“They put profit over people ladies and gentlemen. … They fired me for standing up for my rights. I’m sick and tired man. I’m sick and tired of being treated with no respect. Being paid the wages that I cannot support my family. So we’re here to fight back, to fight back the right way.”
Wal-Mart protests were also held in Los Angeles, New York City, Seattle, Chicago, Denver, Boston, Orlando, Minneapolis and Washington D.C
USA Today’s Gary Strauss reported that a spokesperson for Wal-Mart, Brooke Buchanan, said the protests were having little impact on its 4,600 stores.
Buchanan suggested that many protesters were union activists and “professional protesters,” not Wal-Mart workers, and that these actions were a stunt to garner attention.
Raymond Bravo, 36, from San Pablo, California, responded to this point as he stood in front of the San Francisco demonstrators:
“Wal-Mart’s saying that this is a union-sponsored event; They’re claiming that we’re puppets of the UFCW, which is bullshit, which is a lie. … We all have something to lose here and if we choose not to fight we’re going to lose it. We can be examples, and stand up and win or be victims and lose.”
“I’m tired what Wal-Mart’s doing to my co-workers and myself. I’m tired of the retaliation, treating people like they’re second-class citizens.”
Bravo said he earned $10.25 an hour as a Wal-Mart janitor and was fired for missing work, even though he was using those days to join protesters in the company headquarters in Bentonville, Arkansas:
“I’m federally protected for being on strike. … They’re not honoring that. They fired me for going on strike. … The days they used that I was absent, I was on strike.”
As he stood in front of the Four Seasons Hotel on Market Street, UFCW Local 5 President Ron Lind debunked the suggestion the movement is led by union organizations:
“The UFCW is proud to support the OUR Wal-Mart workers but let me make it very clear, we are not running this movement,. We are not pushing the OUR Wal-Mart movement. The workers at Wal-Mart are moving us. They are inspiring us. They are leading us. They are the leaders here.”
Wal-Mart is not alone, however, in viewing this movement with skepticism.
In a recent article featured on The Daily Beast, economist Richard Vedder opined that if the worker’s demands were met, higher wages could lead to the company offering fewer jobs.
Vedder claims Wal-Mart now makes a profit of 3.6 cents for every dollar’s worth of sales. He estimates that raising labor costs will reduce those profits by half if they are not accompanied by price increases.
And, of course, lower prices are the basis for Wal-Mart’s success.
Vedder predicts that if the workers win, the price of Wal-Mart stock will fall perhaps as much as 50 percent, eliminating $120 billion in stockholder wealth.
He claims that about one-third of that wealth is held by institutions like pension funds and mutual funds, so people with money invested in those would lose as well.
On the other hand, writes Vedder, if prices are raised to cover wage increases, this will lead to a decline in living standards for Wal-Mart shoppers because their money would buy less and, even worse, these consumers could start shopping somewhere else.
San Francisco Supervisor Scott Wiener showed up at Thursday’s demonstration to voice his support for the workers:
“I’m here to show solidarity with Wal-Mart’s workers. … We work so hard in San Francisco to protect our middle class, to make sure that people have decent wages, have the right to organize, to make sure people have health care.”
“We need to make sure that that’s not just in San Francisco. We need to make sure it is everywhere in this country because we are losing our middle class, and … it is all of our responsibility to make sure that all of our employers do that. … And we need to all stand together to make sure we move in the right direction. So keep fighting.”