The free market is failing us

Are you feeling freer yet? From all the free market stuff happening, I mean.

What I’ve been noticing – and what you are probably noticing too – are all the vacant storefronts. Retailing must be in recession.

We have a tiny mall across the river from us. I was in there the other day looking for Christmas presents. It was in sad shape. It still has a couple of anchor stores: a JC Penny and a Target, but inside there were a lot of spaces for rent.

It’s similar in the little downtown in our city of 30,000. When we arrived four years ago, it was vibrant. It’s doing better than some but now there are plenty of storefronts to rent on what should be prime property: Main Street.

It’s not entirely bleak. Despite these empty storefronts, I still see a new small shopping plaza go up now and then. What’s going in though is not so much retail as mixed businesses: doctors offices, restaurants and maybe a fitness center. Increasingly, if I need to buy something I can’t get it locally, so I have to go online. I’d really prefer not to, but increasingly if I do want to buy it at a brick-and-mortar store, I have to drive twenty miles or so to Holyoke. Our local Staples went out of business. A Petco opened across the river at the mall and closed a couple of months later. Our local Walmart looks anemic. Here in Massachusetts, one of the few growth retail businesses is Dunkin Donuts. Apparently we can’t have enough of them.

Our city is at least trying to keep a local economy vibrant. Chain stores are fairly rare around here. We have one Starbucks downtown, but otherwise all our restaurants are local. There are local hardware stores, mainly because few want to cross the river to Hadley to go to the Home Depot or Lowes over there. While there are plenty of Dunkins, we don’t have a Wendy’s, and just one McDonald’s and Burger King on the north side of town. The reason these chains largely avoid us is probably that it doesn’t make economic sense: our market is too small and too far away. We have too few customers and too much hassle to truck stuff in, I’m guessing.

Another sign of the retail times: Amazon put up a new warehouse in Holyoke. It’s probably stocked by now, which means they probably have hired legions of employees at $15/hour to fulfill orders twenty four hours a day. Amazon pushes these people to crazy levels of productivity. They can walk nine miles or more day pulling stuff out of bins and they get metered to make sure they don’t take too many bathroom breaks. They might as well be cattle. They may get treated worse than cattle. Also new: Amazon trucks are making deliveries to the home. A couple of months ago, I never saw an Amazon truck.

Our area is trying to keep a local banking sector, with some modest success. The success is because they had one before the big banks arrived, but it’s not too hard to find a vacant bank storefront. Community banks are clearly suffering but fortunately seem to still dominate the local mega banks here. There is one Bank of America downtown, but they apparently don’t care about the local villages.

I confess I am part of the trend. While I’d like to set up an account at a local community bank, I can’t justify it. Online banks like the one I use, Ally, can offer us a much better deal because they don’t have expense of storefronts. We will get more than 2% interest on a CD at Ally. No community bank around here can compete with that. I also never changed my credit union, which recently offered a deal too good to pass up, though they are 400 miles away. I now get 2% cash back on my purchases, and no annual fee for their card. No local bank can match that either.

We are lucky though to have community banks. In many communities, they are gone. Back where we used to live in Northern Virginia, they were pretty much gone. There was a Citibank or Bank of America store every couple of miles or so, and if not a storefront, at least one of their ATMs. And you paid for the privilege with misery interest rates and plenty of creative fees.

Community banks at least tend to keep the money local, helping to stimulate the local economy. I’m sure Bank of America makes loans locally, but the profits don’t tend to stay in the area. They go to shareholders, or to inflated salaries. During the last recession, it was the big banks that tended to be most vulnerable, mostly because they were the most exposed. They held lots of toxic assets. Pushing those dubious home loans increased their profits in the short term, but when the recession hit it pushed them toward insolvency. Judged too big to fail, Uncle Sam largely bailed them out, letting them keep their short term profits while pushing the long term costs for their risky behavior onto taxpayers. There is every indication that we’ll see this scenario play out yet again in 2020 or 2021.

What I see is not so much competition as consolidation. I see lots of monopolies. I have no choice with my ISP, so it’s Comcast, unless I and a group of citizens can convince our city to create a municipal network. We pay Comcast close to $100 a month for 300 mbps download to the home. Airlines consolidate and raise prices. Entertainment companies consolidate and do the same thing. We saw a movie yesterday at the local Cinemark. We were assaulted but what felt like endless commercials before the movie, including three clips of popcorn popping and Coke fizzing. Need a potty break? They are playing in the restroom too.

These days, you buy out your competition while setting higher barriers for new entrants into these markets. The result is not really more efficiency, but a whole lot less competition, which makes these companies fat and sloppy. If they excel in anything it’s in buying out the competition and paying their employees poorly. Where else are they going to go? Their competition doesn’t largely exist anymore.

To me the worst of these is not Amazon, but ride sharing services Uber and Lyft. They represent everything that is wrong with our “free market” today. Their “innovation” was to sidestep regulators entirely, creating facts-on-the-ground of independent contractor drivers. Yes, it lowered fares, but it’s clear now that they are doing it by cheating their drivers, who largely don’t understand they are working for negative wages when you factor in the depreciation on their cars. Oh, and if you are a female passenger, you stand a decent change of sexual assault. Uber reported more than three thousand sexual assaults in 2018.

What we needed but don’t have is some sort of regulatory authority to decide whether these businesses should be allowed to start up in the first place. Uber and Lyft have, in effect, bypassed our wage and hour laws. In many areas of the country, you can’t get a taxi anymore. You must use Uber or Lyft if you don’t have a car.

What all this proves to me is that money talks. It gets us an oligarchy that is clearly in charge, at least at the federal level. For the rest of us, it just squeezes us more. It’s a new gilded age where only those with money get to profit. The rest of us are just lemon for the squeezing.

Black Friday protest at Walmart

Remember this post? Well, probably not. Anyhow, in it I promised to try to eke revenge against the retailers of the world for the shabby way I was treated when I was a retail worker (1978 to 1980) for the now defunct Montgomery Ward Corporation which today is even worse. Now that I am retired, lack of time was no longer an excuse, so I made a note on my calendar to attend a Black Friday protest at my local Walmart (Sterling, Virginia in my case) to protest their appallingly low wages and working conditions.

Signing up was easy. I was already a member of Making Change at Walmart, the site to go if you are not a Walmart employee but want to support their cause. I get regular emails from them and have even made a couple of contributions to their strike fund over the years. I was urged to find a Walmart Black Friday protest near me, so I simply filled in the web form and marked the date and time on my calendar. For several years now, the Our Walmart campaign has targeted Black Friday for protests because it is the busiest shopping day of the year. This year a record 1600 store protests was planned.

Thus far my protesting had been confined to mass events on the national mall. This kind of protest would be a lot different. The number of protestors was likely to be small and Walmart would doubtlessly be on the lookout for us. Protest rules were pretty murky, but seemed worth whatever minor risk it entailed. This is after all Walmart: the nation’s largest, nastiest and stingiest employer. Every year they find new ways to screw their “associates”. Among their egregious tactics over the last year were requirements to buy their own uniforms, canceling health insurance for certain part time employees (doubtless few could afford it in any event), cutting the hours of workers (leading to predictably long lines at cash registers and empty shelves) and erratic schedules. All this for an average wage of $8.80 an hour and where you might get an extra dime per hour the next time your performance was reviewed.

With several weeks of notice, I wanted to see if I could convince any others to join me. Notes on Facebook did not turn up any nibbles, so I sent a note to Paul, chair of the social justice committee at my local Unitarian Universalist Church. He agreed to sponsor the protest for our church. I made sure announcements were posted in the church bulletin and hoped a few members of my congregation would join me. We have less than 200 members, so I kept my expectations modest. Fortunately for me, it got the attention of certain influential women at the church (a.k.a. the Knitting Circle, which my wife attends) who were also suitably outraged and started making protest signs. On protest day, eight of us with signs in hand were ready to protest.

However, our protest organizer weaseled out. Early on Black Friday morning we found an email from him in our inboxes. He claimed insomnia the night before and canceled the event, but he did encourage anyone that wanted to to come out and protest. We took him up on it.

I confess it was hard to get in the protesting spirit when the temperature was in the low thirties with gusty winds, but we were ready. We met in the church parking lot, collected our signs and drove out to the Sterling Virginia Walmart. As we moved toward the entrance we encountered an older couple from Illinois in town but with signs. We were it, apparently, but at least with ten protestors we got into the double digits.

Black Friday protest against Walmart's labor practices at Sterling, Virginia store
Black Friday protest against Walmart’s labor practices at Sterling, Virginia store

For 10 AM on a Black Friday, there weren’t many people going into or out of this Walmart. We stood silently outside the Walmart entrances, being careful not to impede pedestrian or vehicular traffic. Occasionally we got a toot of a horn or thumbs up, but mostly we stood and shivered. We had a feeling though that it would not be long before Walmart management noticed us. We were prescient. After about ten minutes, a Walmart security officer told us we were on private property and we could only protest on public property. He pointed us to a hill at the far back end of the parking lot. Dutifully we walked back there. This was not an ideal location, but it was convenient to incoming traffic so we stood there with our signs and waved them up and down as cars went by.

Apparently we were not far out enough. After fifteen minutes or so we found we were observed by officers in two cars from the Loudoun County sheriff’s office. Eventually an officer approached us with the Walmart store manager. We patiently explained we were directed here by their store security. But, no, we were still on private property we were told. Walmart owned all of it. Some sort of conglomerate of course typically owns shopping centers, so it is in theory all private property. It’s pretty clear that Walmart wanted us way out of the way, like outer Siberia if possible. The closest truly public property, we were politely informed, was a median strip on Nokes Boulevard, which led into the parking lot.

And so we shuffled out there with our protest signs, dodging aggressive traffic to do so. We got the occasional thumbs up and toot of a horn in support, but mostly Walmart had gotten us out of the way, which is probably the strategy it emulated at many other stores. Had we had more protesters, perhaps we would have been harder to dislodge. After about an hour we ended our protest and moved on.

Nonetheless we were in reasonably high spirits. Without professional organization, we didn’t know what to expect or what was legal, but Walmart’s response felt very scripted. The store manager was never angry with us, but after the event one of our crew took a few of our signs into the store, and tried to give them to the store manager. She was intercepted by an assistant manager, and told she was unwelcome in the store, and ordered to leave.

Making change at Walmart is hard, not so much for us outside protesters, but certainly for Walmart employees who join the Our Walmart movement. They frequently suffer illegal firings or reduced hours. They are much braver than we were. We were just testing the protest waters, but I think I know where I’ll be next Black Friday. And hopefully we’ll be better-organized next time, and our organizer won’t use the weasely excuse of insomnia for not showing up.

As a practical matter, real change is happening in two fronts. First, many states and communities have realized that since retailers won’t raise wages and the federal government won’t, they must. So cities like Seatac in Washington State have raised their minimum wage to $15 an hour. In Northern Virginia, $15 is a living wage, but just barely. Those Walmart workers earning $8.80 an hour or so at their Sterling store are probably working a couple of other part time jobs just to get by. They may very well be getting some government assistance, which means your taxes are subsidizing Walmart and other retailers scandalously low wages. More recently, the city of San Francisco passed a retail workers bill of rights. It requires employers to make up work schedules for their part time employees two weeks in advance, helping to give them some predictability to their schedules. This addresses the sad reality that part time work these days does not supplement other wages, but is what many workers try to live on.

Do not assume that minimum wage workers are mostly students living at home and thus it’s okay to pay the $7.25 an hour. The average age of a minimum wage worker is 35. These people are hustling simply to survive in poverty. They deserve a living wage and better working conditions and hopefully just one job so they get some downtime. It’s quite clear though that Walmart will continue to frustrate and obfuscate attempts at justice for their employees until the price becomes unbearable, i.e. it seriously affects their profits and sales. I will do my part to make it unbearable.

The power and profitability of treating workers with dignity

It’s taken a few years but striking fast food and Walmart workers are slowly getting some national attention. This Black Friday there was a continuation of strikes and protests that happened on Black Friday 2012, only bigger, with at least 111 protestors arrested around Walmart stores nationwide. Organizers at Our Walmart, a group organizing Walmart workers (I have given to their strike fund) claim 1500 actions at Walmarts nationwide, up from 400 last year.

One-day strikes at fast food restaurants, which used to be rare, are now becoming routine as well. Just the other day a strike was held by workers at a McDonalds inside the National Air and Space Museum here in Washington, D.C. The workers there are making the minimum wage of $7.25 an hour. You would think that since these are federal facilities, contracts with fast food vendors would require contractors to pay their employees a living wage. But you would be wrong.

Even Walmart would agree that the facts prove their minimum wage jobs do not pay a living wage. Studies of various states routinely show Walmart employees as the largest group of recipients of food stamps in the state. Unsurprisingly, McDonalds is usually number two. On their employee web sites, both Walmart and McDonalds suggest their employees utilize public subsidies to increase their standard of living, a standard of living they refuse to provide.

This week in Washington D.C. the first two Walmarts opened in the city. There was much rejoicing, but not because their employees were going to be paid a living wage. Walmarts in the city mean that the city’s voluminous poor no longer need to take long and expensive subway and bus trips to the suburbs to get those Walmart low prices. It’s increasingly obvious though why their prices are so low. It’s because Walmart doesn’t see a point in paying a living wage when the government will keep their employees from starving for free. Food stamps will help provide basic nutrition for their employees, and Medicaid will provide health insurance of a sort thanks to the Affordable Care Act. In fact, don’t expect Walmart and McDonald’s lobbying firms to be pressing the government to get rid of food stamps and Medicaid. Their business model and profit forecasts depend on them.

What’s particularly infuriating though is that both of these employers could easily pay their employees a living wage and still make stockholders happy. They just choose not to do so. Various studies have looked at the cost of these benefits versus their profits, and it is easily affordable. They just see no point in doing this because federal subsidies effectively take taxpayer’s money and give it to their shareholders instead. And this is because we have no law that says employers must pay a living wage.

Critics of those proposing a national $15 an hour minimum wage simply say this means that employers will cut jobs. After all, they can hire two people at $7.25 an hour for one person at $15 an hour. The problem with this logic is that you cannot actually survive on $7.25 an hour without public subsidies and likely a second or third job as well. Naturally, this doesn’t bother these employers. They are in business to make money, not to be sensitive to their employees’ feelings and wallets.

If all public subsidies were removed tomorrow and the minimum wage was not raised, these employees would be showing up at work hungry (as many already do, particularly toward the end of the month) or, more likely, would have no fixed address because they could not afford rent. Their unwashed condition would probably not allow them to be employable at all. Which goes to prove that a minimum wage is not a living wage. Instead, it is a recipe for continued poverty.

There are reasons that even a Republican should embrace for paying a living wage. For those who think the government should do less, making employers pay a living wage means that federal and state governments don’t have to provide food and social services to these low wage earners. It reduces the costs and scope of the federal government.

It also ends indirect corporate subsidies. It allows companies to prove that they really are more efficient than other companies by removing the incentive toward employee inefficiency that comes with government subsidies. Think about McDonalds today and compare it to McDonalds thirty or forty years ago, if you are old enough to remember back that far. I am old enough and I can tell you for a fact very little has changed other than the menu has gotten unhealthier and the cash registers are now electronic. For forty years McDonalds has not really rethought how its restaurants could deliver better food, do so more efficiently and — here’s a crazy idea — with some actual employee engagement.

Yet Costco has found a business model that more than pays their employees a living wage, and still allows them to thrive as a business and be a leader of low prices. What incentive does Sam’s Club (a subsidiary of Walmart) have to prove their mettle when Costco can do what it refuses to do and Walmart’s profits can be boosted by government subsidies to its employees?

Perhaps most importantly, any employer worth his salt has learned long ago that employees will be more productive if you make it worth their while. They must have missed those videos by sociologist Morris Massey, such as this clip you can see on YouTube. If you want to get the best from your employees, listen to what they have to say.

It’s not that Walmart and McDonalds employees are unproductive. They are like a hamster on its wheel. They always work at top speed because they are always being monitored. They are also being told exactly how to do their job with no ability to be innovative. So mostly, they burn out or turn dull and unremittingly sullen. You can’t keep this up forever at $7.25 an hour so you will tend to quit. Even if the next job only pays $7.25 an hour, you quit on the hope that maybe you won’t have to run so quickly on the wheel with the next employer.

These “associates” have no particular loyalty because they are not given any incentive to be loyal. Give them incentives, in the form of higher pay, more interesting and challenging work, and by incorporating their ideas into the business, and you might earn some loyalty and by extension more profit. More importantly, you unleash the power of their imaginations. They’re not stupid and have plenty of great ideas on how to do things better, just no incentive to divulge them. Leveraging their ideas is a great business model. With Costco’s living wage they became keys to Costco’s success, and the key reason Walmart’s revenue stream is suffering.

The slaves on southern plantations gave all they could as well, and generally resented it. At some point they either rebelled or simply gave up. A death by beating is at least an end to suffering.

Walmart, McDonalds and most of these retailers and fast food outlets simply suffer from a poverty of imagination. The way to a sustainable business model and a happy workforce is to stop treating their “associates” like cogs in the great wheel of business. Instead, treat them as people with actual needs, like the need to have a roof over their heads and food to eat.

As a matter of public policy, there should be a national minimum wage guaranteed to be a living wage and it should be indexed automatically for inflation. It should probably vary geographically depending on the local cost of living. For those employers too unenlightened to understand that real profit comes from harnessing the minds and creativity of their employees, it at least sets a bar of decency. Any businessman worth his salt will be anxious to pay their employees more for the privilege of leveraging their thoughts and creativity to make their business thrive long into the future.

Revenge of the ex-retail worker

It’s no secret that I don’t like Wal-Mart. In fact, I pretty much abhor it. I abhor it not for its merchandise or its low prices, but principally because they give their workers the shaft. They push workers to crazy and dangerous levels of productivity, constantly look for ways to work them even harder, give almost nothing in the way of benefits or job security, and don’t begin to pay them enough to actually live on. On a Black Friday a few years back, bargain-crazy customers crushed a Wal-Mart worker to death.

Most of their employees are not full time employees, but part time workers. This is not unusual in the retail business, of course and it is fine as far as Wal-Mart is concerned. Part time employees cost less, are easily let go, can have hours cut on a dime and get no benefits like vacation pay. Granted that full time employees at Wal-Mart don’t make much either but they are entitled to some measly benefits such as overtime pay, if Wal-Mart will actually grants them, as they have been loathe to do in recent years.

The fact is that even full time Wal-Mart retail employees, with a few exceptions, cannot survive on Wal-Mart wages alone. This is true even if they have additional jobs. Most of them qualify as working poor. They can be found trying to make up the difference shuffling two or three jobs, hoping for handouts at food banks and when needed getting treatment at emergency rooms.

In most states, children of Wal-Mart employees make up the largest group receiving health care via the Children’s Health Insurance Program (CHIP). For example, in Alabama alone Wal-Mart employees have 4,700 children enrolled in the CHIP program, more than twice as many children as employees working at McDonalds in Alabama. Wal-Mart won’t raise salaries of their employees so they can afford health insurance, so taxpayers are left to pick up the tab.

Since Wal-Mart does not have to pay for their employee’s health insurance, and the few that are eligible for Wal-Mart’s very limited health insurance plan are able to afford it, this in part explains how they deliver low prices. In effect, taxpayers subsidize Wal-Mart’s low prices. Taxpayers are making up some of the difference between the real cost of living and wages that Wal-Mart is willing to pay. It is still not enough. Despite working forty or more hours a week, many Wal-Mart employees also qualify for food stamps. This strikes me as obscene: how can it be possible to be fully employed in this country and still not have enough to eat? How can we possibly permit a minimum wage that won’t even keep a person from going hungry?

In some ways though the workers in the stores have it good, at least compared to Wal-Mart’s warehouse workers. Wal-Mart will say that they are not their workers, so they don’t count, but the people who fill trucks at distribution centers mostly are loading trucks full of goods that are shipped to Wal-Marts. They are working in hellish and unsafe working environments. They too are often subjected to unpaid overtime, numerous violations of safety and overtime regulations as well as long and crazy hours.

Low prices of course are also made possible by squeezing the whole Wal-Mart supplier chain. When you keep squeezing distributors and suppliers, they keep finding ways to squeeze workers. The results are pretty obvious and accounts for much of the minimal wage growth over the last decade. Still, when you make as much in the way of profits as Wal-Mart does (about $15B a year), it’s clear that the company could afford to do a lot better for their employees, but simply won’t. Wal-Mart is emblematic of a general trend that stockholders win at the expense of workers. In the case of Wal-Mart, it is also at the expense of taxpayers. Arguably, Wal-Mart is a prime example of corporate welfare at work, which likely explains the company’s outsized contributions toward political candidates. However much they spend to influence politicians, it must be considerably cheaper than paying their employees a living wage.

It’s been ten years since I stepped inside a Wal-Mart. It’s possible I never will step inside a Wal-Mart again. My condition for shopping at a Wal-Mart again is that they have to pay their employees a living wage. Right now Wal-Mart simply refuses to do so, even for the full time ones, unless they are a store manager and maybe if they run a department. If an employee does earn a living wage, if you divide their wage by the number of hours these workers actually work, their wage per hour is still low. Many of them are salaried, which means you may be working sixty or more hours a week but being paid for forty.

Obviously Wal-Mart is not the only retailer screwing its employees. The same can be said for most of the major retailers out there, including Target and Kmart. However, there are prominent exceptions. Costco is one of the most successful retailers out there and is also quite profitable. Applicants are beating down its doors to get jobs there. That’s because Costco pays living wages and Wal-Mart does not. The grocery chain Wegmans also pays living wages. It’s obvious when you are in a Wegmans that its employees like their jobs. They almost gush with enthusiasm and energy. You can’t say the same for Wal-Mart greeters.

Recently, some Wal-Mart workers have realized they simply have nothing left to lose. There have been recent walkouts that resemble strikes at twelve Wal-Marts across the country. You can’t really call them strikes because Wal-Mart is famous for being non-unionized, at least here in the United States. Wal-Mart workers have made slight inroads elsewhere, like in Canada and ironically Communist China (although its unions are really puppets of the Communist Party.) Strikes are not problems at Costco and Wegmans, probably because management treats employees with respect and compensates them fairly. They happen when the frustration level becomes so acute that workers simply cannot endure it anymore. These Wal-Mart walkouts may be a harbinger of things to come.

I do know one thing: if the behemoth Wal-Mart can be made to scream uncle, then justice is possible for retail workers across the country. That it is starting to be felt at Wal-Mart through strikes and walkouts is poetic justice. If employees can be paid fair wages at Wal-Mart, it could create real change across the entire retail industry, whose employees desperately need to be paid living wages.

So I wish these strikers well, and hope that more Wal-Mart employees join them. I am glad to make a contribution to their strike fund and urge them to hang tough. For like many of us, I too was once an underpaid retail worker. More than thirty years has passed but I have not forgotten how shabbily I was treated. So far I have been able to do little more than avoid patronizing the more egregious employee-screwing retail chains like Wal-Mart. As I get older and find myself with more money in my pocket and time to become engaged in just causes, the more I feel the need to work for their justice and wreak some real justice on amoral corporations like Wal-Mart.

Give ’em a real holiday

I don’t know if you have noticed, but real holidays have been slowly disappearing. It’s getting almost impossible to find a holiday that is, well, a holiday. If you are thinking that a holiday is the same thing as having a paid day off during the week to shop, Madison Avenue blesses you. If you are thinking a holiday is a day where you stay home and your employer pays for it, and everything that represents the hassle of normal life pretty much shuts down then, like the Grinch, you have some idea of the true meaning of a holiday. A holiday is a day when life generally stops. It’s like being retired for a day. It’s a mental health day.

It’s hard to believe but this is the way it used to be. On Memorial Day during the decades following the Civil War, when it was better known as Decoration Day, the only work-like activity was decorating the graves of civil war soldiers and with about 700,000 of them there were plenty to decorate. The big event of the day was watching the parade down Main Street, but that was about it. If you felt ambitious, maybe you went back home and roasted some ears of corn or hamburger steaks on a grill in the backyard. Our Civil War seems almost trivial compared to the twenty million or so who died in the First World War. No surprise then that Veterans Day (when it was better known as Armistice Day) was also often a day for quiet contemplation and for expressing genuine gratitude for the freedoms we enjoy due to our veterans. Veterans Day might have also been focused around a parade down Main Street, where the populace would applaud or take off their hats as proud veterans marched past.

Today, most employers do not even give the day as a holiday. World War I is so 1919. The last American soldier that served in the Great War died a few years back. Instead, pretty much all our holidays have been co-opted to honor our real national religion: capitalism. Even Martin Luther King has been used by Madison Avenue as an excuse to sell stuff in what is otherwise a dead retail month. King did move mountains, but his legacy now is principally about moving mountains of mattresses, sheets, pillowcases and appliances.

Supporting this seemingly insatiable need to shop are millions of retail workers, who are virtually the worst paid people in the country. (Migrant workers may be worse off.) With a few exceptions, if you work retail not only are you working inconvenient hours, you are likely not even making close to a living wage. In fact, you are likely a part timer because few retail stores want to hire you full time. Then they might have to pay you benefits or overtime, which are expensive. If you haven’t compared the cost of living with retail workers’ income, you can trust me on this: you cannot earn even poverty line wages working retail. If you support yourself working retail, even with two or more jobs you are probably eligible for food stamps.

If all this were not enough for retail workers, then there are your hours, which are likely to be constantly shifting. If you work part time for our largest retail employer (Wal-Mart) expect to be batted around like a ping pong ball. You may work forty hours one week and four hours the next. Expect to be straightening store shelves at 2 a.m. and maybe back for more at 6 a.m. You may even be locked in the store overnight.

You sure would appreciate a real holiday where for just a couple of days a year you can just zone out while someone else helps pay your bills. But apparently even a couple of holidays a year are a couple too many for retail workers. Thanksgiving is no longer sacrosanct. That’s right, retail worker. No turkey with stuffing for you, not that you could afford turkey anyhow with organic turkeys going at $4.09 a pound this year. Better to keep your Thanksgiving meal modest: maybe a dozen Krispy Kremes for dinner instead. You will need all that sugar because increasingly Thanksgiving has become just another shopping day, which means retail worker drones like you will be hustling in the aisles and at the registers. Black Friday is giving way to Black Thursday.

With so many scuzzy retail chains out there, it is hard to pick from the worst of the worst, but any retail chain that is open on Thanksgiving is, by definition, among the worst of the worst. These include Wal-Mart (opening at 9 PM), KMart (open Thanksgiving for the last ten years straight), Old Navy and BooksaMillion. I know about BooksaMillion personally because my daughter had the misfortune to work there for a year. There they were on Thanksgiving at 9 AM as usual, fluorescent lights all ablaze and the parking lot virtually empty. This was of course some years ago. Today, increasingly you are thinking that even on Thanksgiving there will be some stores open at the local shopping center. If it’s BooksAMillion, you can practically count on it. And if you are an employee working on Thanksgiving, Thanksgiving dinner means bringing some substandard turkey loaf to heat up in the microwave in the break room during your doubtless too short break.

Here is what should be open on Thanksgiving: gas stations, hospitals, hotels, homeless shelters, police and fire stations and that’s about it. You say you need to run down to the local Food Lion on turkey day because you need an extra jar of turkey gravy? Too bad for you. You should have thought about that by Wednesday night. It’s a holiday, stupid! It’s a day to spend with people who are important to you or, if you prefer, a day to vegetate at home with a bad turkey loaf roasted in your oven in an aluminum container, instant potatoes from a box and some gravy from a package. If you can muster any such feelings because if you work retail, it’s a day to be thankful. Instead you may be at some register somewhere or prepping the store for opening at midnight on Black Friday. See, only privileged people with money to buy stuff get to have holidays. For retail workers, be glad to have a crappy job. At least you have flexible hours, if flexible means hours at the convenience of your employer.

Perhaps as part of any reforms coming out of the Occupy Wall Street movement, one of them will be laws to redefine holidays so they resemble, well, holidays. Imagine how much more blissful we could be if we all knew that on a holiday we would get the day off (or at least be compensated extra for it if we could not). Imagine if most holidays were like Christmas (which is doubtless itself under retail attack) and life just sort of stopped. Who could not use more mental health days? I know I could, but from my retail days I know who could use them even more: the millions of suffering, hassled, stressed and underpaid retail workers of our country. I say we need a law to shut down all retail stores on Thanksgiving by law. Give everyone including our retail workers a real holiday with pay on Thanksgiving.

Wal-Mart employee becomes a martyr for greed

Sometimes a news story epitomizes what is wrong with our society. Sometimes they come in double doses. Two stories in the news have drawn my attention and ire. Both need more press than they have gotten. In today’s post, I concentrate on the first outrage.

Black Friday this year turned black for an unexpected reason. No, it was not black because of the crappy economy. This Black Friday crazed shoppers at Wal-Mart’s Valley Stream store on Long Island trampled a store employee to death. A huge crowd estimated at two thousand pushed down the store’s doors at its early 5 a.m. opening time, trampling to death Jdimytai Damour, a Wal-Mart employee who had started only a week earlier. According to news reports, the door was crushed like an accordion by the weight of the crowd. Shoppers intent on snatching bargains poured through its doors, giving no thought to the man they were trampling and asphyxiating in the process. At least four others were injured in the melee, including one pregnant woman.

Wal-Mart was hardly the only retailer this Black Friday offering a limited stock of highly desired items at less than their cost. Yet, somehow if this tragic situation was fated to occur, you knew that it would happen at a Wal-Mart. After all, their motto has been “Low Prices, Always”. Clearly, employee safety is not high on their agenda, probably because it inconveniently gets in the way of profitability and lower prices. Generating excitement and sales were their top priorities and they certainly succeeded at 5 a.m. on Black Friday. A Wal-Mart spokesman called it an “unfortunate event”. Wal-Mart customers certainly indicated their feelings by their actions. They even kept shopping and hollered protests when an announcement went out over the store public address system that the store was closing because a man had been killed by their stampede. Apparently, saving money was more important than a tragic and unnecessary death unfolding around them. (Not to worry, the store only closed for a few hours. After all, profits are more important than people.)

Damour’s family is likely to sue, but I bet that within Damour’s employment contract is a provision exempting Wal-Mart from lawsuits like these. Morons obviously are not managing Wal-Mart, just heartless bastards that see retail workers as interchangeable and expendable. So Wal-Mart likely has their lawyers make sure their liability is limited even in these sorts of situations. Last that I heard, Wal-Mart was not a proactive enough company to do obvious things like put up a rope line in front of the store. Nor apparently is building reinforced doors important since that would mean, like, spending more money. However, the company is proactive enough to purchase life insurance for their employees. This life insurance though does not go to the family of deceased employees in their care, but into Wal-Mart’s coffers instead.

Pretty much everyone associated with this death should feel ashamed. Every shopper who rushed into the store, even if they did not actually trample on Damour’s body, should feel ashamed for contributing to the situation. How could they put the lust for stuff ahead of a human life?

I doubt though that anyone is feeling any shame. Chalk up one death of another interchangeable retail worker to the cost of doing business in the 21st century. The important thing is that Wal-Mart remains profitable! People with consciences, like me, figure the store manager should resign, both for not protecting this employee adequately and for not taking all steps to ensure that the crowds were controlled. Yet, the store manager reopened the store just a few hours after Damour’s death. I guess when you work for an amoral company, you are hired in part because you are amoral. Even if the store manager wanted to keep the store closed, the corporate office was probably on the phone demanding that the store reopen immediately!

Wal-Mart has pricey enough lawyers so that they will probably successfully dodge any financial judgment against them. They probably feel they suffered enough by closing the store for a couple hours on Black Friday of all days. Much more likely, Wal-Mart simply doesn’t care. The trampling to death of an employee, however regrettable, is the price someone else must pay to make sure they have “Low Prices, Always”. Consumers seem unmoved by this incident too. Nearly alone among major retailers, Wal-Mart is showing an increase in sales this holiday season.

Back in 2003, I wrote this post on the reasons why I will not shop at Wal-Mart. I disparaged not just the company for its contemptuous attitudes towards its employees, but also its customers. At the time, the post drew some heat (several nasty comments were removed) but it appears, if anything, that I did not hold its management or its customers in low enough esteem. Back in 2003, I said I would never shop in a Wal-Mart again until they treated their employees right. It looks like that date, which seemed far off even back then, has receded even further.

If there were a big box retail workers union (and god forbid Wal-Mart permit anything like that) the union should fund a national shrine to memorialize Jdimytai Damour and all the other vastly underpaid human beings who make American retail commerce possible. Damour is likely not the first martyr for the cause, but his death should be memorialized anyhow. If I had the power, I would require the monument to be in placed right in front of the main entrance. It would have huge lights shining on it. Damour’s name and date of death would be prominently inscribed with the words, “Damour died so that you could have Low Prices, Always”.

Instead, this tragic and preventable death is likely to be just a footnote. In a year or two, only a few of us cranks will even remember it at all. Meanwhile, the amoral Wal-Mart Corporation will of course be laughing all the way to the bank, its stockholders will be delighted in their weighty dividends and its customers will be thrilled at those low, low prices.

Overpaid at $11.59 an hour

I am very grateful that I did not make retail a career. It is a scummy business, operating on very low margins and subject to the constantly changing whims of consumer demand. If you do decide to make retail a career then with a few exceptions expect to be treated shabbily. We need no further proof of this than recent press reports that the electronics retailer Circuit City is firing its retail salespeople because it apparently thinks they are overpaid.

Steven Rash, 24, said he was one of 11 workers fired at a Circuit City in Asheville, N.C. The store manager broke the news during a meeting at 8:15 a.m. and escorted them out of the store. Rash said he has worked for the retailer for seven years and was one of the most junior members of the affected group.

He said he earned $11.59 an hour and worked from 15 to 20 hours a week. He received four weeks of severance pay. Though he has a full-time job at Bank of America, he said he needs to find part-time work to help pay his student loans.

“It’s not just a part-time job,” he said. “It’s about paying the bills.”

Like most people working retail, Steven Rash is working part time. Retailers, like many small employers, prefer part time workers for the obvious reasons: they do not have to pay them benefits, they are readily expendable and can typically be easily replaced, because their job is not highly skilled. My wife does not work retail but is one of the part-time work force who falls into this category. In her case, she works as a level-one computer troubleshooter for a doctor’s practice with a staff of about 50. I will not say how much she earns, but I can say when she was working full time she made about $10 more an hour than she makes in her current position, and she was then surviving on a school teacher’s pay. Now she keeps the computers working at two offices in this practice for very modest wages and typically works 20-30 hours a week.

It is a good thing that she has my financial wherewithal to rely on. If we were divorced, she would be in serious financial straits. Even if she could convert her job into a full time position, could she even afford to keep a roof over her head? (We live in the metropolitan DC area, and rents start at $1200 a month.) I doubt she could afford to live alone. Despite working in a doctor’s office, she would have minimal benefits. The practice she works for is feeling squeezed too, perhaps because Medicare is squeezing them with reimbursement rates that do not cover their expenses. It trickles down to substandard wages and high employee turnover. She says in a typical month about 10 people on the 50 person staff leaves for better offers. The same is true in the retail business too. At the wages they are paid, there is little incentive to stick around. There is even less incentive to feel any loyalty for your employer.

Mr. Rash depends on $11.59 an hour to pay off his student loans. He was probably drawn to Circuit City, not because it paid well, but because it paid better than other scummy retailers like Wal-Mart. Still, $11.59 an hour is hardly the sort of salary that would let you lead an opulent lifestyle. By my calculations, if he could have converted his sales job to a full time job he would make $24,000 a year.

For him his “expensive” $11.59 an hour salary is now moot. The severance pay will pay for a month of student loans. He can take some comfort in that. Many retailers would not even provide a severance check. Nevertheless, likely his next second job will pay even less. Circuit City is helping to lower the bar and to ensure even more Americans cannot earn a living wage. Way to go, Circuit City.

Mr. Rash is also fortunate in one other respect: he has a full time job. It is likely that Bank of America offers him some benefits. I do not know how typical he is of most Circuit City workers. Clearly though not all retail workers are part time workers nor depend on the income just to pay student loans. Many likely depend on these second, third or, in some cases, first jobs, to pay basic expenses.

Today I flew out of Denver International Airport. I happened to overhear one of the people working in one of the screening areas. “It’s a good thing I have my retirement to fall back on,” I heard him say. “Because this job pays $18,000 a year. I could not afford to live on this wage.”

I hope for his sake that he works part time. Because if he has a full time job, then he is earning $8.65 an hour, which would be the wage the airlines are willing to pay to deter future terrorist attacks. I do not know if Denver International is one of these airports that are required to use federal screeners. At these wages, I suspect not. It is hard for me to believe that any federal employee would be required to do this sort of grinding work, day in and day out, on Wal-Mart wages.

Not everyone in the retail business though is being screwed. As The Washington Post reports, Circuit City’s CEO is doing fine. While grunt salesmen and women suffer, his salary last year was $716,346. He also got $704,700 in bonuses, $3 million in stock awards and $340,000 in stock options. Imagine how much more he will get this year for this latest brilliant idea.

The Washington Post also reports that the average hourly wage for retail worker, as of March 2005, was $11.14 an hour. Therefore, it is unlikely then that Steven Rash was underpaid. He was likely earning the market rate. This makes me wonder if this latest strategy by Circuit City will prove to be counterproductive. Call me dubious, but I do not think this strategy will help the Circuit City bottom line. Were I a Circuit City stockholder, I would be calling for CEO Philip J. Schoonover’s head or cashing in my stock. Where will this strategy take Circuit City, already suffering from competition from retailers like Wal-Mart and Best Buy? My bet is that it will probably take it right off a cliff. As a stockowner and thus an owner of the company, I would want a retail employee who is motivated to work in the best interest of the company, not some retail drone counting the minutes until closing time.

I have empathy for retail workers because I was one of them myself. In the intervening 27 years, I have been only marginally successful in changing the retail worker market dynamics. I have joined the Wake Up Wal-Mart campaign, which has resulted in a few, modest successes. I have also supported politicians who advocate living wages with significant campaign contributions. I do know one thing: any company that improves its bottom line at the expense of its workers earns my disdain and contempt. Other retailers like Costco and Wegmans have figured out ways to pay living wages to their employees in highly competitive markets and have thrived. So can apparently scummy retailers like Wal-Mart and Circuit City. Their “leadership” is simply bereft of creative ideas.

Although I have not shopped at a Circuit City in years, it now joins a growing list of retailers that include Wal-Mart that I will boycott until it treats its employees decently. They are not cattle. They are people. Employees deserve nothing less than to be paid a living wage and to be treated with respect.

Continue reading “Overpaid at $11.59 an hour”