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Wal-Mart Makes Workers Pay

Published: October 29, 2003

The Atlanta Journal-Constitution
Wednesday, October 29, 2003

Wal-Mart makes workers pay
By Annette Bernhardt

On Thursday, federal officials took a seriously wrong turn when they arrested 300 undocumented workers who had been hired by contractors to clean Wal-Mart stores. The government is targeting workers, when the real offenders here are the employers, and not because they use undocumented labor. Wal-Mart relentlessly and systematically cuts costs on the wages and health benefits of both in-house and subcontracted workers, regardless of immigration status. This doesnt just leave Wal-Mart workers in the cold all taxpayers are hurt by this practice.

Jailing janitors after a long night shift of cleaning up after shoppers isnt the answer. Ultimately, the only answer to Wal-Mart and other low-wage employers who follow its lead is to reinstate the wage and workplace standards that have been decimated over the past thirty years.

Consider the following. Wal-Mart’s pay for in-house workers is only $7 to $8 an hour, which is below the federal poverty line. The companys health insurance is so costly that less than half of its workers can afford it. Many arent even eligible for it. Lawsuits against the company are pending in 30 states charging that workers are routinely forced to work off-the-clock without pay locked in stores until they finished cleaning up. Meanwhile, Wal-Mart had profits last year of $820billion and the CEO received $18 million in total compensation.

This isnt a matter of keeping prices low for consumers. A recent calculation showed that if Wal-Mart gave all of its workers a $1-an-hour raise, the impact on prices would be half of one cent.

How does Wal-Mart make billions in profits while treating its workers so poorly? For one thing, the company aggressively violates workers right to organize. As documented in the nearly 50 complaints issued by the National Labor Relations Board, Wal-Mart has prevented its employees from distributing union materials; interrogated and threatened employees who are trying to organize; taken unlawful disciplinary action and fired union supporters; and even gone to the extreme measure of closing down entire departments when its meat workers in Jacksonville, Texas successfully voted for a union.

In short, Wal-Mart is not playing by the rules. Nor are many other employers that are pursuing a low-wage, cost-cutting business model in a wide range of industries, including hotels, hospitals, manufacturing, call centers, laundries, food processing, child care, and home health care.

The cost to our society is enormous. There are now 30 million low-wage workers in this country. Every day, one if four American workers does not earn enough to live on and support a family. With no health insurance, they are forced to go to the emergency room for routine care. To make ends meet, they must apply for food stamps and rental assistance, use subsidized childcare vouchers, and draw on other government services.

In other words, we the taxpayers are effectively subsidizing low-wage employers, and in the process, are supporting a business strategy antithetical to the idea that hard work opens the door to upward mobility and economic freedom in this country.

Turning the tide will take an enormous commitment by all of us.

It will take re-establishing the right to organize for all workers both by enforcing existing labor laws, and by instituting long-overdue changes in those laws in order to cover millions of Americans, including many new economy workers.

It will take re-establishing our national wage floor. The minimum wage has been stuck at $5.15 an hour since 1997. Thats 40 percent lower in real terms than what it was in 1968, and a full $3.50 an hour below the federal poverty line for a family of four. This falling wage floor has created all the wrong incentives: High-wage employers can simply subcontract jobs to other firms who have no problem paying poverty wages.

It will take charting a clear path to citizenship for undocumented workers. With or without papers, immigrants have become an absolutely vital part of Americas economy. They do the backbone work that keeps this country running in construction and restaurants, child care and home care. Ensuring their right to the protections that the rest of us take for granted will go a long way toward stopping exploitative employers.

Above all, we have to escape the trap that Wal-Mart has set for us pitting consumers against workers with the myth that living wages are incompatible with affordable goods. The truth is that in the long run, poverty wages undermine the health of our workers, our families, our communities and, ultimately, our economy.

Annette Bernhardt, Senior Policy Analyst at New York University’s Brennan Center for Justice, is co-editor of Low Wage America: How Employers Are Reshaping Opportunity in the Workplace (Russell Sage, 2003).