After losing a bitter battle to build a store in Inglewood, Calif.,
Wal-Mart (WMT) might like to write off the humiliating defeat
at the ballot box as an isolated event. But an unusual one-day
conference at the University of California Santa Barbara on Apr.
12 suggests that the world's largest retailer ain't seen nothing
yet.
"Wal-Mart:
Template for 21st Century Capitalism?" drew historians, sociologists,
and other academics from around the country. Community activists,
environmentalists, union workers, and others eagerly absorbed
the discussions as they pondered the kinds of coalitions that
might stop or transform Wal-Mart in the future. Three hundred
people, including students, attended the conference.
Yes,
there was admiration for Wal-Mart's powerful use of logistics
and information technology, the kind of activity that used to
get most of the public attention. But the bigger agenda at the
UCSB's Center for the Study of Work, Labor & Democracy focused
on Wal-Mart's "sins" -- from low wages and lackluster
benefits to stress-filled jobs and anti-union managers.
THEY
DON'T GO THERE. In this oceanside city some 30 miles from the
closest Wal-Mart, even the conference organizers expressed amazement
at how the company has become such a lightning rod for controversy.
Professor Nelson Lichtenstein, who teaches history at UCSB, says
the idea for the event came to him after fielding numerous inquiries
about Wal-Mart during the recent California grocery strike. "There's
no such thing as 'Wal-Mart studies,' but there's something going
on here," says Lichtenstein. Historian Susan Strasser from
the University of Delaware says when she mentioned her plans to
attend the conference to friends and acquaintances, she was stunned
at the level of interest it generated.
Not
surprisingly, on this liberal college campus in a city obsessed
with urban planning, those attending were a decidedly anti-Wal-Mart
crowd. One of the panelists was a United Food & Commercial
Workers researcher. Another was a lawyer involved in the massive
sex-discrimination suit against Wal-Mart. Many of the academic
participants acknowledged that they rarely, if ever, step foot
in a Wal-Mart store, and few had ever visited Bentonville, Ark.,
the company's headquarters.
Lichtenstein
says Wal-Mart was invited to participate. Peter Kanelos, a spokesperson
for Wal-Mart in California, says he didn't attend because he doesn't
have time to go to all the events he is invited to. He told BusinessWeek
Online that the anti-Wal-Mart reports at the conference were "the
typical rhetoric that's espoused by labor." He continued:
"I just have to question how fair and balanced the forum
was."
MORE
FACE-OFFS TO COME. So is this just the yapping of some Ivory Tower
eggheads and some longtime Wal-Mart enemies preaching to media
"elites" from BusinessWeek, The New York Times, The
Los Angeles Times, PBS, and other outlets? That's certainly the
way Wal-Mart's staunchest defenders are likely to paint it.
But
like it or not, the opinions of this far-flung group are helping
to shape a broad and growing anti-Wal-Mart movement that goes
well beyond organized labor. And considering that the retail behemoth
is in less than 40% of the top 100 grocery markets, Wal-Mart will
increasingly face this crowd as it tries to move into untapped
urban areas with its supercenters.
The
daylong litany of Wal-Mart's alleged failings should provide plenty
of fodder for its opponents. Take employee relations, once considered
a Wal-Mart strength. Ellen Rosen, a professor at the Center for
the Study of Women at Brandeis University, is using Wal-Mart as
a case study in a book on gender stratification in the retail
trade. She has been collecting the tales of dozens of current
and former Wal-Mart workers, from cashiers to store managers.
NO
TAX BONANZA? Many hit on similar themes: humiliating discipline,
constant stress, a lack of resources to do their jobs, and over
it all, the ironic veneer that everyone is part of the "Wal-Mart
family." Charges of sex discrimination and wage-and-hour
law violations are no fluke, insists Rosen, but a direct result
of the way Wal-Mart constantly strives to drive down labor costs.
David
Karjanen of the Center for Comparative Immigration Studies at
the University of California San Diego, sees few benefits for
communities from the jobs and sales-tax revenue Wal-Mart generates.
When he looked at the impact of one Wal-Mart project in San Diego,
he found that it brought in very little, if any, additional tax
revenue for the city, which gave $10 million in direct subsidies
to Wal-Mart. At the same time, most of the jobs created by the
redevelopment project were part-time and below "self-sufficiency"
levels in San Diego -- an hourly wage of $11.38, according to
the Center on Policy Initiatives, a local advocacy organization.
While
some studies have shown that Wal-Mart creates a small number of
net new jobs, "more important is the issue of job quality,"
insists Karjanen. "There's no reason why the world's largest
retailer can't talk to communities about raising the bar."
"DESPERATELY
AFRAID." Wal-Mart has argued that its wages and benefits
are competitive with others in retailing. And given its ambitious
growth plans, it contends, it would be self-defeating to treat
workers as badly as critics say it does. Professor James Hoopes
of Babson University, a conference participant, says "Wal-Mart
is desperately afraid of the reputation it's getting as a bad
employer."
Some
conference goers took solace in the presentations on Wal-Mart's
sometimes bumbling efforts abroad. Julio Moreno, a University
of San Francisco history professor, called Wal-Mart's performance
in Argentina "disastrous." He credits that in part to
the retailer's initial obliviousness to the building fiscal crisis
in that country and inflexibility in the store formats Wal-Mart
used there. On top of that, it faced stiff competition from French
retailer Carrefour.
Even
in Mexico, where Wal-Mart is now the largest retailer, with about
7% of total sales, there are reasons to believe its future gains
won't come easily, predicts Chris Tilly of the University of Massachusetts
in Lowell. "Wal-Mart actually charges higher prices than
the small stores" in Mexico, some 5% to 15% more, figures
Tilly, based on his studies there.
SIMILAR
FATE? Mexican shoppers don't have the "culture of convenience"
and are more likely to care about the freshness of their food,
prompting them to shop from street vendors, mobile markets, and
other small venues. And many consumers say they don't see a difference
in the service, prices, or assortments of the big chains, he says.
"I think the future of Wal-Mart in Mexico is going to be
marked with a question mark."
What
about its future in the U.S.? Historian Strasser points out that
Wal-Mart is hardly the first retailer to depend on low-cost labor
or to face strong resistance. Woolworth openly boasted of its
high turnover and low pay. Sears (S ) was so concerned about an
anti-mail-order campaign in 1906 that it started shipping its
packages in plain-brown wrappers. Through the 1930s and '40s,
anti-chain-store legislation proliferated across the country,
and A&P fought a massive antitrust case.
Today,
those campaigns are long forgotten. But Sears and A&P are
shadows of their former selves, while the Woolworth stores have
vanished. Is Wal-Mart destined to suffer the same fate? Strasser
notes that Wal-Mart's size relative to the economy and its suppliers
is much bigger than anything seen before. But, she says, "Wal-Mart's
success is stimulating countervailing forces."
INNER
CONFLICT. Whether those forces change or slow Wal-Mart remains
to be seen. And that's in part because Wal-Mart's success puts
so many people in conflict with themselves. Strasser cites her
hairdresser as a case in point. As a small-business owner, he
wants to oppose Wal-Mart. But still, he has bought seven low-price
bikes from the chain so every member of his household can enjoy
one. That seems like the stuff of which Wal-Mart ads are made.
Strasser
appears sympathetic but then asks a question that might make many
a shopper squirm: "Shouldn't kids learn to share? What's
happening in a culture where everybody gets to have his own bike
because they're so cheap? How do we move beyond the single-minded
self-interest of price?" That's a debate that's now echoing
far beyond the serene world of Santa Barbara.
