Today’s Economist: Nancy Folbre: Work in the Walmartocene

Nancy Folbre is an economics professor at the University of Massachusetts, Amherst. She recently edited and contributed to “For Love and Money: Care Provision in the United States.“

Some scientists contend that we should label the era we live in the Anthropocene, because we humans (anthropoi) have fundamentally altered our global ecosystem. Economists might, for similar reasons, consider labeling the current economic era the Walmartocene.

Today’s Economist

Perspectives from expert contributors.

The world’s largest retail company (and second-largest business), having easily survived recent skirmishes with workers, shareholders and the law, just announced that it would virtually guarantee jobs to most recent American veterans, who currently suffer from higher-than-average unemployment rates.

In some ways, Walmart represents the archetype of modern capitalism. It is Tyrannosaurus rex. It pioneers cost-saving methods of global outsourcing and resistance to unionization. It leaps national borders in a single bound. It generates huge profits for its shareholders by delivering a gazillion goods to consumers around the world at prices that few other big-box stores – much less small retail businesses – match.

Many of its regular shoppers adore it. Many of its workers, on the other hand, feel underpaid and underappreciated, and have filed numerous suits, accusing it of violations of labor law, including failure to pay overtime, locking workers in stores overnight, union-busting and sex discrimination. The details of the company’s bribery of Mexican officials, in a successful effort to bypass community opposition to store construction in proximity to a historic site, proved particularly embarrassing to its shareholders.

Walmart has long had a love-hate relationship with the American public. But the hate has become more visible in recent years, and the company has made active efforts to abate it.

Before announcing its most recent veteran-hiring initiative, it had thrown its considerable weight behind locally grown organic food and green energy initiatives, pursuing themes that seem intended to win approval from the Obama White House.

These efforts may represent nothing more than cost-effective investments in public relations. But they may also reflect the values of a new generation of Walton family members.

In terms of ownership and management, Walmart is not a classic capitalist company owned by shareholders buying and selling purely on the basis of price per share. It is a family operation, largely controlled by the Walton family, which keeps a tight hand on management.

Although the founder Sam Walton was an entrepreneur, succeeding generations represent a kind of feudal dynasty, largely based on inherited wealth.

Analysis of data from the Survey of Consumer Finances indicates that, in 2010, the Walton family controlled assets equivalent to those of the bottom 42 percent of American families.

This Arkansas aristocracy may feel a certain noblesse oblige. Offering to give jobs to all veterans honorably discharged on or after the plan’s announcement on Jan.15 is a patriotic gesture, even if it is sweetened by substantial tax credits.

The company values loyalty and its hierarchical management structure may look familiar to men and women who have participated in the armed forces.

However, most veterans taking up Walmart’s offer will have to tighten their belts. An Army private first class, with four years’ experience, earns a base pay of $24,178. The average active-duty service member receives a total benefits and pay compensation package worth $99,000 a year, because of substantial in-kind benefits in the form of housing, health care and food.

The average wage for a full-time hourly Walmart associate in the United States is $12.57, which adds up to $26,108 a year at 40 hours a week. But the primary benefits Walmart offers are slim: a health-insurance plan with high deductibles that workers can choose to sign on and contribute to, and a 10 percent discount on store purchases. As a result, Walmart workers make more use of public health and welfare programs, such as food stamps and Medicaid, than other retail workers.

Opportunities for promotion and annual raises are rather limited.

The new hiring policy may increase the proportion of men working the Walmart aisles, because veterans are predominantly men. On the other hand, female veterans may be more likely to apply for jobs in retailing.

Some of these women, bruised by a “brass ceiling” based on their exclusion from combat roles, may prove rather feisty when they learn of continuing class-action suits against Walmart, accusing it of restricting women’s access to management positions. Some may be heartened, however, by Walmart’s recent efforts to increase women’s representation on its board and to promote women’s businesses.

One could argue that efforts to shame Walmart have paid off. But it seems unlikely that the United States economy would look much different if Walmart had been slightly better behaved all along. The company itself is the product of increasingly global competition that has increased the scale of business enterprise, concentrated the ownership of wealth and weakened democratic governance.

In the Walmartocene Era of declining opportunities for American workers, some veterans may feel that even the promised entry-level jobs are worth fighting for.

Article source: http://economix.blogs.nytimes.com/2013/01/21/work-in-the-walmartocene/?partner=rss&emc=rss