Wal-Mart's war on wages | Arkansas Blog

Friday, October 6, 2006

Wal-Mart's war on wages

Posted By on Fri, Oct 6, 2006 at 8:34 AM

Paul Krugman explains why the outlook isn't so rosy for those on the lower tier of the job market:

...Wal-Mart already has a well-deserved reputation for paying low wages and offering few benefits...; last year, an internal Wal-Mart memo conceded that 46 percent of its workers’ children were either on Medicaid or lacked health insurance. Nonetheless, the memo expressed concern that wages and benefits were rising, in part “because we pay an associate more in salary and benefits as his or her tenure increases.”

The problem from the company’s point of view, then, is that its workers are too loyal; ... not enough workers quit before acquiring the right to higher wages and benefits. Among the policy changes the memo suggested to deal with this problem was a shift to hiring more part-time workers...

And the strategy is being put into effect. ... Wal-Mart ... wants to transform its work force to 40 percent part-time from 20 percent.” Another leaked Wal-Mart memo describes a plan to impose wage caps, so that long-term employees won’t get raises. And the company is taking other steps to keep workers from staying too long: in some stores, according to workers, “managers have suddenly barred older employees with back or leg problems from sitting on stools.”

It’s a brutal strategy. Once upon a time a company that treated its workers this badly would have made itself a prime target for union organizers. But Wal-Mart doesn’t have to worry about that, because it knows that these days the people who are supposed to enforce labor laws are on the side of the employers, not the workers.

 


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