How Workers are Using Globalization Against Walmart

The recent Walmart strikes — beginning first among warehouse workers in California, then spreading to others in Elwood, Illinois, and finally to Walmart retail stores across the United States — raise the possibility that workers may be able to crack the anti-union wall at the country’s largest employer. The new momentum seems likely to spread among many more workplaces to come. But these wildcat strikes are a reminder that, if American workers are to have a better-organized future, they will have to better understand where their corporate opponents are vulnerable.

The Walmart strikes are part of a significant reevaluation of organizing strategy by labor unions and activists in the context of the continuing decline of unionism in the United States — where fewer than 7 percent of workers in the private sector belong to a union. As Nadine Bloch pointed out two weeks ago, such wildcat strikes on multiple levels of the supply chain at Walmart are unprecedented, and groups like OUR Walmart and Warehouse Workers for Justice are planning to escalate the campaign in the coming weeks.

Over the past three decades, there has been a tremendous shift in the work lives of almost everyone in the United States wrought by processes of globalization. With the deregulation of trade in favor of multinational corporations (exemplified in trade deals such as NAFTA), and the emergence of hyper-specialization, most major commodities are now produced with components manufactured all over the world, selected through a competitive bidding process that aims to extract the maximum profit.

Few have expressed this brave new world better than former General Electric CEO Jack Welch, when he said to Lou Dobbs in 1998, “Ideally, you’d have every plant you own on a barge.” The 1 percent, that is, could move the points of production at a whim to wherever the cost of labor was cheapest and the regulatory environment was weakest.

Walmart led the retail industry’s embrace of this system, though most other retailers now follow the post-globalization model as well. In the past, most retail operations would take place at regional or national population centers, with considerably higher transit costs that made local and higher-priced labor a necessity. But with the increasing automation of ports — as well as the deregulation of containerization in 1984 and of the trucking industry at the end of the 1970s — the global and national supply chain transit costs have been reduced. The increasing mobility of production and distribution has spelled disaster for the once-powerful trade unions. Rather than relying on a stable pool of labor, the key to Walmart’s success has been getting low-cost goods to customers at precisely the right moment according to microanalysis of market patterns. But that is also what makes it so vulnerable to work stoppages.

Workers at key points in the supply chain can create massive disruptions in the process. A report conducted in 2002 found that a West Coast longshoremen lockout cost the U.S. economy $2 billion daily. And, in the recent strike of just two dozen subcontracted Walmart warehouse workers in Elwood, Illinois, the strikers heard reports from allies at Walmart retail stores in the region that there were already shortages of goods. This occurred less than 10 days into the strike, Elwood warehouse worker Mike Compton told me.

By focusing on key links in the supply chain, and by using a strike at the beginning of an organizing campaign instead of at the end, Walmart workers are not only taking advantage of the company’s 21st-century weaknesses. They’re also harkening back to an earlier form of union organization, which was far more common prior to the passage of the Wagner Act of 1935.

The Wagner Act established a form of union organizing through secret-ballot elections and contract negotiations that has been the method by which most unions since then have organized. After its passage, wildcat strikes dramatically decreased. But with the decimation of the National Labor Relations Board under the Reagan administration and an ever-decreasing share of union workers in the private sector, groups like the Change to Win Federation — made up of four major labor unions — and the small, militant United Electrical Workers union are now backing worker centers with new strategies. Their primary focus is, first, improving working conditions on the ground; formal union recognition can then occur after such basics as permanent employment and freedom from retaliation are established.

Wildcatting certainly brings more aggressive tactics to the fore once again, but with the ever-increasing automation of most skilled tasks in the workplace and with more and more unemployed workers available to take the place of strikers, a traditional wildcat strike has little likelihood of success in many cases. Factories can be moved if the supply system is still intact, and low-skill retail workers are usually easy for management to replace, at least temporarily.

But at certain vital points in the global movement of commodities, organizers are seeing new opportunities. The magazine Labor Notes, for instance, has been analyzing the trends taking place on the supply chain and the global organization of labor for the past two decades.

“Here we have a company, Walmart, that’s not producing anything, but is selling things,” says Jane Slaughter, its co-founder and co-editor. “Walmart is the master of lean supply, they are known for squeezing every cent out of their suppliers. Walmart depends on daily deliveries, and if workers can throw a monkey wrench in that, it will cause them significant problems.”

A report by Warehouse Workers for Justice explains why it makes sense for organizers to focus on a place like Elwood in particular, given its location on the outskirts of Chicago:

The Chicago area is the only place in North America where six Class I railroads meet. Warehouses, distribution centers, container storage locations and intermodal facilities dot the landscape. The strategic node of transportation that exists in the greater Chicago area, dubbed the “Midwest Empire,” is a crucial link in the intermodal movement of goods in the United States.

The Elwood facility, owned by the company RoadLink, processes a staggering 70 percent of Walmart’s domestic goods, and the strike there has radically altered the balance of power in the workplace. Mike Compton, a former striker who is now back at work in the warehouse told me about the new climate of the warehouse. “Managers are being overly nice,” he said.

We ask for safety equipment, they get us safety equipment — shin guards, masks, gloves. They do seem a little scared to have us as a group. We’ve forced meetings on them. We’ve been using the Weingarten Rights [by which a union member has a right to have a union official or steward with them at any meeting or hearing that could potentially lead to discipline], whether or not it’s disciplinary.

That the two-dozen workers were able to get back to work after their time on strike — with full back-pay — is a far cry from most labor organizing campaigns, in which there is a one-in-three chance that an employer will retaliate by firing, and in which there are usually rampant threats and interrogations leading up to an election. But in Elwood managers seem to be terrified.

The importance of this link on the Walmart supply chain was indicated quite clearly by the response of the state of Illinois to a protest by Warehouse Workers for Justice and its community allies: police in riot gear, along with threats of deploying long-range acoustic devices and projectiles. The fact that a small minority of workers at a warehouse were able to cause such fear from management leads one to think that such links in the supply chain are just as tenuous as labor researchers have thought them to be.

The first strike of this autumn of discontent was among warehouse workers in Mira Loma, and workers went back to work with safety improvements. But the significant victory in Elwood — caused in part by its key location on the supply chain — now gives Walmart workers across the country a real and concrete victory to point to and to work from as they escalate toward a national day of protest on Black Friday.

In the latter half of the 20th century, it was almost axiomatic among theorists of industry that a low-wage, unsafe and high-turnover model of production would come at the expense of industrial peace. But for decades Walmart has escaped that danger through rampant outsourcing and a global supply chain that divides workers across the country and the world. As exploited workers are stepping up their tactics, the company’s lavishly-paid executives and consultants are probably beginning to rethink their ways of operating as well.