Scrooge with Hi-Tech Accounting Practices

“First and foremost, a culture of ethical behavior underlies all that we do at Wal-Mart. All of us who worked with my father remember the many talks he gave stressing the importance of honesty, integrity and fairness in our dealings with our Customers, suppliers, Associates and the communities in which we operate.”Rob Walton, Chairman of the Board, Wal-Mart 2003 Annual Report

“Wal-Mart is not anti-union. We just simply believe that a union is not right for Wal-Mart.”Wal-Mart spokeswoman Cynthia Illick, November 2002

A decade ago, one could drive through the southwest and see new landmarks: Wal-Mart superstores at the entrance or exit of almost every town and small city. In the once thriving downtown of Douglas, Arizona, for example, boards covered the furniture, hardware, appliance and dry goods stores. Likewise, the bakeries and small supermarkets display “closed” signs. Only one taqueria remains open in the area that most local residents considered the place to shop. At the end of town, however, with open highway on the other side, the full Wal-Mart parking lot showed signs of flourishing business inside the gargantuan structure (store?) whose very architecture challenged the very design of space, sky and landscape in the southwest.

But sentimentality holds little significance for modern capitalism in its heyday of globalization. In spite of the folksy veneer of founder Sam Walton (1918-1992), who quipped that “there’s a lot more business out there in small town America than I ever dreamed of,” Wal-Mart has come to symbolize the ruthless, world wide expansion of large multi-purpose corporations. These entities destroy competitors, ranging from small farmers and merchants to professionals (even optometrists must compete against the low price eye glasses sold at Wal-Mart). Their initially lower prices draw consumers more eager to save money than to preserve an old, shopping way of life an understandable choice in times of uncertainty.

Wal-Mart also becomes a target don’t confuse this with Wal-Mart’s competitor for both members of communities anxious to retain certain controls of their neighborhoods and organized labor as well.

Indeed, Wal-Mart became a factor in the October 11, 2003, California grocery workers’ strike against the supermarket chains Safeway, Kroger Co. and Albertson’s Inc. The 139 day long lock-out-strike came in response to the employers calling for a 50% cut in worker health insurance and retirement benefits. The larger threat, one Albertson’s striker explained, concerned “Wal-Mart’s encroachment on supermarkets with their supercenters that not only offer competitive prices, but worse, jeopardize the livelihoods of all workers by promoting low-wages, zero health care benefits, products made outside the US for cheap and an anti-union stance.”

On February 29, 2004, with Wal-Mart’s movement into the supermarket business and its fierce anti-unionism looming, the 60,000 grocery workers reluctantly ratified a contract. They got little and the supermarket’s achieved their main goal: lowering labor costs by instituting a two-tier wage system.

Having served as a symbol in the grocery strike, Wal-Mart, assumed its real life form in Inglewood, California, in Los Angeles County, a city of 113,000 people where union members round out 10,000 households. In this less than affluent community, 60 percent voted on April 6, 2004 against allowing Wal-Mart to open one of its 40 planned supercenters. Wal-Mart had tried to circumvent the city council, which demanded a public hearing and environmental study, and take its case directly to the voters.

The world’s largest retailer – annual sales total over $250 billion spent more than $1 million to persuade the Inglewood voters average household income $34,269 — of the virtues of having a mega store in their neighborhood.

The mostly black and Latino residents received a torrent of Wal-Mart propaganda about how the store would provide much needed tax revenue and jobs, offer lower prices for necessities, make shopping more convenient and provide a ladder on which poor people could climb as Wal-Mart employees.

The Inglewood residents didn’t buy the commercial messages on TV black and Latino actors describing the merits of humongous new markets in old neighborhoods nor did they need sociologists to explain that few progeny of the under classes make their way to homes in Beverly Hills or the quiet, crime free suburbs around LA. Most people of color have never bought into that myth and indeed most of the children and the elders — can see quite clearly that their incomes do not vary significantly from those of their parents.

The class mobility that characterized American society at certain periods was usually limited to white or light skinned people. The amount of middle class blacks has increased, but so has the number of very poor African Americans and Latinos.

As Paul Krugman observed in The Nation on January 5, 2004, “In modern America, it seems, you’re quite likely to stay in the social and economic class into which you were born.” Wal-Martization of the economy has come to represent the idea that jobs take on a permanent low-wage,dead-end character: the working class stays working class. It also symbolizes the morphing of the publicinto the consumers. Behind these words, however, lies the ugliest of capitalist realities.

Indeed, in order to bring the consumers what they need — that $8.63 polo shirt the Scrooges who run Wal-Mart extract cheap prices from 10,000 suppliers abroad, such as in Honduras, Bangladesh and China, the latter where Wal-Mart owns over 3,000 factories. According to columnists Nancy Cleeland, Evelyn Iritani and Tyler Marshall in the November 23, 2003 Los Angeles Times, “From its headquarters in Bentonville, Ark,…Wal-Mart buyers continually search the globe for still-cheaper sources of supply. The competition pits vendor against vendor, country against country.”

To reduce costs in Honduras, the Times reports, “…factories have reduced payrolls and become more efficient. The country produces the same amount of clothing as it did three years ago, but with 20% fewer workers, said Henry Fransen, director of the Honduran Apparel Manufacturers Assn., which represents nearly 200 export factories. ‘We’re earning less and producing more…following the Wal-Mart philosophy.'”

At home, Wal-Mart has practiced its “less is more” slogan by shaving worker hours. This cost-cutting practice, which Wal-Mart executives have acknowledged as the “one-minute clock-out,” screws workers out of wages they have earned. According to Steven Greenhouse in the April 4, 2004 New York Times, managers altered records of “workers who clocked out for lunch and forgot to clock back in before finishing the day.” If the worker forgot to clock back in after lunch, he only got paid up to his lunch break. Wal-Mart flaks responded to the Times article by maintaining that that their “intent was to draw the workers’ attention to problems with their time records, not to cheat employees” (April 7, 2004 New York Times).

Hour-shaving exists at other chain operations as well. The NY Times reported that Taco Bell and other franchise managers often trim the hours that workers have clocked in order to show a better bottom line to the head offices. The managers, often young men in their twenties with families, feel the pressure from above to cut, cut, cut or else. Fearful of losing their jobs, with salaries on the mind $20,000 and health insurance, these low-level managers see no area to shave other than wages.

But contemporary corporate compassion at Wal-Mart goes beyond cheating workers of their hard-earned wages. Even Ebenezer Scrooge, Charles Dickens’ stereotype of a cruel, capitalist employer, would not have thought of Wal-Mart’s scheme to capitalize on the death of its employees. Alongside corporations like Nestle and Procter and Gamble, Wal-Mart took out life insurance policies on its low wage employees, dubbed “dead peasant insurance,” often without workers’ consent. Consequently, noted the April 19, 2002 Wall Street Journal, “millions of current and former workers at hundreds of large companies are thus worth a great deal to their employers dead, as well as alive, yielding billions of dollars in tax breaks over the years, as well as a steady stream of tax-free death benefits.”

In a 2002 case, U.S. District Judge Nancy Atlas found Wal-Mart guilty of “improperly” utilizing George law to buy secret life insurance for 350,000 Texan employees (Houston Chronicle, June 6, 2002).

The Wal-Mart executives, most of them rock-solid Republicans and church goers, understand viscerally what George W. Bush meant when he called on Americans to practice compassionate conservatism. Unlike Scrooge, who transforms his mean-spirited miserly character through a revealing dream, the heavies at some of the globalizing corporations understand redemption through Rapture, not through changing their skin-flint practices into generous deeds.

The Wal-Mart God is the Lord of the Bottom Line. The Laws of Gods they translate in practice into exploitation of the most vulnerable sectors of the workforce. To protect themselves, the Wal-Mart execs and those of other globalizers pay the politicians, in campaign contributions. They are moving rapidly into food sales and other areas as well. Watch out, as Upton Sinclair warned in 1934 when he tried to End Poverty in California. “Autocracy in industry cannot exist alongside democracy in government.”

The Inglewood voters opted for democracy, but Wal-Mart will not allow a majority vote to obstruct their global ambitions. Watch for the next round. It could take place in your neighborhood. So prepare to come out swinging!

Saul Landau’s newest film, SYRIA: BETWEEN IRAQ AND A HARD PLACE, is available through Cinema Guild (800-723-5522). His new book is THE PRE-EMPTIVE EMPIRE: A GUIDE TO BUSH’S KINGDOM. He teaches at Cal Poly Pomona University and is a fellow of the Institute for Policy Studies.

Farrah Hassen is a senior Political Science student at Cal Poly Pomona.


Farrah Hassen, J.D., is a writer, policy analyst, and adjunct professor in the Department of Political Science at Cal Poly Pomona.