How much do lawyers make for Walmart
economy : Wal-Mart dictates the terms
By Greg Schneider
and Dina ElBoghdady
As a young man, Roy Bukrim decided to work at the Kroger supermarket. Working at the grocer - now one of the largest in the United States - seemed more attractive to him than making a living in the dangerous coal mining industry, as his relatives did. Today, 27 years later, he is responsible for replenishing the supermarket shelves in the evenings. He uses his salary to support his wife and two children and pay his mortgage payments.
If he had started at Kroger now, he probably would not have fared so well, suspects Bukrim. The young employees in his supermarket only receive a minimum salary and are not insured. After a few months they stop again. The grocery trade no longer offers career prospects, says Bukrim. “Everything has changed in our generation,” he says. He, his colleagues and also the Kroger managers also know the reason for the change: It is Kroger's most feared competitor, Wal-Mart. “We only ever hear Wal-Mart here and Wal-Mart there,” says Kroger cashier Victoria Marano. "They want to be like Wal-Mart so they can compete with it."
Wal-Mart is the largest retail company in the world and America's largest private employer. 1.3 million people work for Wal-Mart. The group turnover of 245 billion dollars is greater than the Swiss gross domestic product. The company, with more than 3,000 branches in the US alone, is so powerful that its business methods influence the entire US economy. Because of its enormous purchasing power, Wal-Mart dictates its ideas to manufacturers, from prices to packaging. With its rock-bottom prices, the chain has educated consumers to expect big discounts everywhere. The retail group's competitors have no choice but to follow suit or lose customers.
In addition to its great buying power, there is another reason why Wal-Mart is so cheap: The company is doing everything it can to keep labor costs down. That became apparent two and a half weeks ago when 250 illegal foreign cleaners were arrested at 61 Wal-Mart stores. The foreigners worked for external cleaning companies. Pennsylvania federal court is now investigating the role Wal-Mart plays in employing illegal workers.
Wal-Mart hires contractors for services like cleaning and employs low-paid part-time workers, unions and competitors say. Employees - incidentally not unionized - earn an average of seven to eight dollars an hour. In contrast, the Kroger employees, according to their own statements, receive an hourly wage between eleven and 13 dollars and are also, at least so far, fully insured. About 62 percent of Wal-Mart employees are entitled to health insurance; but less than half of the workforce also use it. This has to do with the high personal contribution that employees have to pay for their health insurance, say critical voices.
As other supermarkets follow Wal-Mart's lead, unskilled workers in the US are coming under increasing pressure. You are already on the losing side, as the industry is shedding more and more low-skilled jobs. Those who have no education usually no longer earn enough to be able to afford the standard of living of the middle class. “You used to belong to the middle class with a job like this. But because more and more attention is paid to tight cost structures in services, many of these jobs fall by the wayside, ”says Jared Bernstein, economist at the Washington Economic Policy Institute.
Nowhere is this change more evident than in the supermarkets. Chains like Kroger, Safeway, and Albertsons saw Wal-Mart become the market leader in just ten years thanks to its low-cost strategy. Bukrim and 70,000 other unionized supermarket workers are now protesting wage cuts and other deteriorations in their working conditions. But they are necessary, say their bosses, in order to be able to compete with Wal-Mart.
Pressure on prices
Some supermarket chains have disappeared from the market in the past ten years since Wal-Mart started the grocery industry. The retail group K-Mart still exists. But he - besides the Wal-Mart was tiny 15 years ago - had to initiate bankruptcy proceedings in 2002 and lay off 57,000 people. This was not least because the company wanted to compete with Wal-Mart on prices and was shipwrecked in the process.
Wal-Mart's business policy also has an impact on the illegal immigrant market. Wal-Mart's pressure on labor costs has increased the number of illegal workers, immigrant lawyers say. The cheap labor is welcome for employers because they are too afraid of deportation to protest against low wages and poor working conditions. Instead of hiring undocumented immigrants themselves, large chains usually hire inexpensive companies. These in turn pass the order on to smaller subcontractors. Among them there are windy one-man companies that deliberately employ illegal workers, say labor market experts.
What does Wal-Mart think about the criticism of its personnel policy? The group rejects them. All employees would have the option of taking out health insurance. The co-payment of the employees, which is 57 dollars for two weeks for insurance for the whole family, corresponds to the industry standard. As for wages: The entry-level jobs at Wal-Mart are "not suitable for someone who has to provide for the family alone," says a Wal-Mart spokeswoman. But for those who wanted to work their way up. Around two thirds of the Wal-Markt managers used to work for the chain on an hourly basis.
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