Up against the Wal-Mart

I've thought Wal-Mart is a scummy company since learning several years ago that it had a well-founded reputation of undermining local economies. What it'd do is locate outside some community's downtown area and price things with deep discounts that local merchants couldn't hope to match. Business shifted to Wal-Mart, the downtown was undermined, and with it, over time, so was the local economy since the profits generated by the Wal-Mart were leaving the area and because three jobs were lost for every two the store created. As a result, after a time sales dropped at the Wal-Mart - so the company closed the store and walked away. Like the Nimons, they got established with promises of great benefits, sucked the area dry, and moved on.

It doesn't treat it's employees any better. It's been the target of more than 40 lawsuits alleging violations of numerous wage and benefit laws, such as requiring unpaid overtime (which managers kept off the books by waiting until someone clocked out before telling them "I need you to stay for a couple of hours"). It's also one of the most aggressively anti-union companies around. So except for the fact that it was an internal memo, none of this surprised me.

New York (AP, January 13) - An internal audit of about 25,000 workers at Wal-Mart Stores found thousands of labor violations, including minors working during school hours and workers not taking breaks or lunches, a newspaper reported.

The audit found 1,371 violations of child-labor laws, including minors working too late, too many hours in a day or during school hours. On more than 60,000 occasions, workers missed breaks and on 16,000 they skipped meal times, in violation of most state labor regulations.

The audit, conducted in July 2000 and distributed to top Wal-Mart executives, polled employee records at 128 stores across the country, the New York Times reported in Tuesday editions.

The Times article, linked here, adds some details and quotes from workers and a former manager supporting the audit's charges. It also explains how it came to have a copy

The audit was conducted in July 2000; a copy was given to The New York Times by a longtime Wal-Mart critic hoping to pressure the company to improve working conditions. Wal-Mart has asked various courts to seal the audit for the last two years - and they have complied - ever since the company gave copies to lawyers who accused it of making employees work off the clock.

Wal-Mart flacks, as would be expected, denied the audit's results. They insisted the methodology was seriously flawed - without, it seems, explaining in just what way - and said any problems were the workers' fault, claiming they often forgot to punch in and out when they should. One can only wonder how the company survives if it keeps hiring such forgetful staff.

Which Is Why This Makes Me So Happy Dept.: Forbes' magazine recently carried an article on the founder of Costco, a chain of "discount club" stores ala B.J.'s and Sam's Club (owned by Wal-Mart). Via Pandagon, posting coverage of the article, we hear that Costco offers

"the best wages and benefits in retail." Its starting hourly wage is $10. Full-time hourly workers earn annual salaries of $40,000 after four years.

And get this: Whenever Costco buyers negotiate a good deal on products, the savings are actually passed on to customers. No, seriously; markups are capped at 14 percent.

The manager of a nearby Costco told me last week that some of his employees have been there since that one opened 14 years ago. And the company is not only a success, it's eating Wal-Mart's lunch.

Sam's Club has 71 percent more U.S. stores than Costco, yet Costco's total sales are 5 percent higher. The average Costco store generates almost double the revenue of a Sam's Club.

This, of course, does not make Wall Street happy. Stock analysts say it has to cut health benefits "and to otherwise reduce labor costs." One such recently wrote, "Costco continues to be a company that is better at serving the club member and employee than the shareholder."

Which was meant to be criticism but sounds damn well like praise to me. Praise enough to get me to join Costco.