A small group of Walmart workers recently publicly confronted Alice Walton, the Walmart heiress who is probably the world’s richest woman. Earlier this year, Walmart increased the starting wage for store associates to $11 an hour, but competitors Amazon and Target agreed to $15, which is still not enough to make ends meet in many parts of the United States. Would Walmart follow their lead?
Walton attempted to deflect the question, saying, “That’s not my job.” The workers pressed Walton for an answer, pointing to Walmart CEO Greg Foran, who thanked the Walton family for their role in past pay increases during a meeting with investors in October. That sent a flustered Walton into a hasty retreat.
Foran also told investors that, in some areas of the country, $11 is still “the right amount to pay” a starting Walmart associate. Organization United for Respect (OUR), a nonprofit group that advocates for better wages and conditions at Walmart, used MIT’s Living Wage Calculator to take Foran to task.
In every state in the country, a Walmart associate working full time (which Walmart defines as 34 hours per week) at $11 does not make enough money to cover the basic costs of living for an individual, not to mention a family, according to the group’s analysis. Walmart did not respond to a request for comment.
“There are two major trends in retail: Corporations are squeezing people harder every day, and people are fighting back within that context to make some real gains happen,” said OUR co-director Andrea Dehlendorf, in an interview.
Last week, Walmart workers confronted Alice Walton again, this time with a demonstration demanding better pay held outside her Manhattan penthouse. They also paid a visit to the penthouse of Marc Lore, CEO of Walmart’s ecommerce arm. He reportedly bought his penthouse in Manhattan for $44 million.
Madeline Chambers, who works 32 hours a week at Walmart in North Carolina and lives on the brink of homelessness with her two children, was one the activists involved.
“Last year, four of the Walton family members made $12.7 billion in a single day,” Chambers said in a statement after the protests. “It would take a Walmart associate like me more than 650,000 years working full time to make that much.
Retail’s Race to the Bottom
The retail sector is experiencing “disruption,” to use the corporate buzzword. Companies with household names like Sears and Toys ‘R Us are going under as Wall Street hedge funds cash in on their debt. Retail behemoths Walmart and Amazon are duking it out over the emerging ecommerce market, where websites and robots are supposed to be changing the way we shop. Well, that’s the view from executive suite, at least.
Things look much different from the floors of sprawling superstores and vast fulfillment warehouses full of merchandise, where tens of thousands of people are working under the grueling conditions of the holiday rush to fuel mega-fortunes enjoyed by Amazon CEO Jeff Bezos and the Waltons of the world. Thousands of families are struggling to make ends meet now that Toys ‘R Us is out of business, and Sears and Kmart are closing stores across the country.
With the rise of online shopping and automation, big retailers appear to be in a race to the bottom. Conditions in retail warehouses and shipping centers are infamous, particularly during the holiday season, when temporary laborers are hired to meet an explosion in consumer demand. In the high-tech “centers” run by Amazon, wearable surveillance technology is used to ensure every Amazon Prime package is delivered on time.
Sheheryar Kaoosji, co-director of the Warehouse Worker Resource Center, said safety has always been a problem in the high-pressure warehouse environment, but now the risks are psychological as well as physical. Workers lose sleep because they feel like Amazon is “always watching,” and they can’t “turn it off when they go home.”
“People are getting hurt because they are moving too quickly,” said Sheheryar Kaoosji, co-director of the Warehouse Worker Resource Center (WWRC), in an interview. “In some cases, it’s a traditional manager yelling at you, in others cases it’s Amazon surveillance technology whispering in your ear, saying ‘go faster.'”
In the face of corporate expansion, activists from the retail sector are winning notable victories. About 33,000 workers lost their jobs as Toys ‘R Us went out of business last year, and $75 million in severance pay was lost in bankruptcy. By then, the company had been taken over by Wall Street lenders and hedge funds.
Former Toys ‘R Us workers, many of them mothers who spent years with the company, organized with a group called Rise Up Retail to pressure investors that liquidated the company to deliver $20 million in financial assistance. The campaign has inspired former Sears employees to launch a similar effort aimed at Wall Street.
Carrie Gleason, a policy director at Rise Up Retail, said Wall Street’s role in liquidating Sears and Toys ‘R Us reveals that robotic automation and online shopping at Amazon and Jet.com are not the only factors contributing to “disruption” in the retail sector that has pushed tens of thousands of people out of their jobs.
“We are seeing all these iconic American companies go under from crushing debt that they can’t pay back [to Wall Street],” Gleason said, in an interview. “These are man-made disasters that could have been avoided.”
Retail Protests Spread
Walmart is not the only major retailer facing protests now that the holiday shopping season is underway. Workers and activists are taking on the retail robber barons, creating a disruption of their own.
Across Europe, where many Amazon employees are unionized, Amazon workers marked Black Friday with a wave of strikes to protest conditions at shipping and sorting warehouses known as “fulfillment centers.” On “Cyber Monday,” the online shopping version of Black Friday, activists held protests across New York City against Amazon’s plans to build a major corporate headquarters in Queens, thanks in part to lucrative tax subsidies.
A broad coalition opposed the Amazon deal in New York, including housing rights groups concerned about gentrification and those opposed to subsidizing a wealthy company at taxpayer expense. Unions and labor groups said flatly that a company with Amazon’s labor standards does not deserve tax breaks — or to do business in New York City to begin with — citing a “disturbing pattern” of injuries and deaths in Amazon warehouses.
“We shouldn’t be paying for them to pay workers less; they should not even be able to open,” said Chelsea Connor, the communications director for the New York-based Retail, Wholesale and Department Store Union (RWDSU), in an interview.
The same goes for Walmart, which is absent from the five boroughs, largely due to community opposition and concerns over pay scale and labor standards. However, the company recently gained a foothold in New York with a warehouse in the Bronx for Jet.com, the Walmart ecommerce business founded by Lore.
Unions at Amazon and Walmart?
Whole Foods, the brick-and-mortar prize of the Amazon empire, heard rumblings of unionization in September, when groups of employees backed by the RWDSU circulated a letter urging fellow workers to consider unionization in the face of job cuts resulting from Amazon’s 2017 acquisition of the grocery chain.
Like Walmart, Amazon is known for swiftly crushing labor organizing efforts. Within weeks, a 45-minute training video distributed by Amazon among team leaders was leaked to the media. The video urged would be union-busters to be wary of “spies” and keep an ear out for fellow workers using “union words” like “living wage.” “We are not anti-union, but we are not neutral either,” the video states, adding that unions are “not in the best interest of our customers, our shareholders, or most importantly, our associates.”
Amazon was already under fire for poor working conditions and paying so little that considerable numbers of employees rely on public benefits like Medicaid and food assistance to survive, essentially forcing taxpayers to subsidize Bezos’s massive fortune. Soon, the company announced a base wage increase to $15 an hour — but simultaneously cut stock awards and other incentives that were popular among many workers.
It’s not hard to imagine that, after working long hours in a fulfillment center or attempting to survive on an $11 hourly wage, retail employees are left with little time and energy to advocate for their rights, much less organize collectively and form a union. Unions have made few inroads at retail behemoths like Amazon and Walmart, which spare no expense in fighting off labor organizers, according to Chelsea Connor, the communications director at RWDSU.
“It’s institutional insofar that these are major corporations that have a lot of money to spend on union-busting lawyers,” Connor said, adding that retail employees of brands like Zara and Guitar Center are members of RWDSU. “Amazon and Walmart have a lot more money to spend than Guitar Center even, though that is a multimillion-dollar corporation.”
In the absence of unions, groups like OUR, Rise Up Retail and WWRC work to fill the gaps, providing resources and support through training programs and even an app that allows workers to pool answers to questions about company policy and workplace rights. Such “worker centers” may receive some union backing, but they do not collectively bargain with employers like unions do. Instead, they help workers navigate company policies and advocate for better conditions with activist campaigns.
“Our model is to be an organization that supports people and builds community, so that people are able to improve their jobs and connect with each other, and then work collectively to advocate for change in the sector,” Dehlendorf said.
Connor said Sears, Kmart and Toys ‘R Us are going under because they failed to invest in their employees and the stores they work at. Cashiers and customer service representatives were not treated with the same respect as those working for other retailers, no matter how hard they worked. Stores became dull and disorganized. The quality of the customer’s shopping experience plunged, driving business toward ecommerce and away from traditional shopping centers.
“It’s a vicious cycle,” Connor said.
Employees at the massive warehouses that fuel online shopping for Amazon and Walmart do not interact with paying customers, so their employers have fewer incentives to invest in keeping them happy and healthy, according to Connor. Still, union organizing remains a huge challenge. Both companies are behemoths with large facilities spread out in rural areas. Part-time and seasonal employment is very common. Workers are spread out across the country, and many don’t stick around long enough to organize in the first place.
“Amazon is so big, it’s going to take big, coordinated efforts, sort of like Fight for $15 and things like that,” Connor said. “Amazon and Walmart think they can fix things by raising the minimum wage to $15, but $15 is not enough. We can do better.”
Unions are making progress in retail. The RWDSU has had success organizing younger retail workers at brands such as Zara and Guitar Center, which still run much of their business out of brick-and-mortar stores rather than online.
Millennials working retail are showing a significant and growing interest, with the young employees of H&M clothing stores in New York City recently organizing with the RWDSU, along with retail workers for medical marijuana companies and Babeland, a popular sex toy store.
Across every industry and sector last year, the biggest gains in union membership were among workers under the age of 35, according to the Economic Policy Institute. This makes sense. Millennials are much less financially well off than previous generations. Meanwhile, the Trump era has seen a new spirit of protest and activism.
Connor said the labor movement is getting younger every day, and if it can keep up with the times, then the momentum can spread deeper into the retail sector.
“I do think that the era of ‘unions are cool again’ is coming,” Connor said.