Wal-Mart, a Nation Unto Itself

[Kooperman]

April 17, 2004

Wal-Mart, a Nation Unto Itself

By STEVEN GREENHOUSE

ANTA BARBARA, Calif., April 13 — We already know that Wal-Mart is the biggest retailer. (If it were an independent nation, it would be China's eighth-largest trading partner.) We also know that it is maniacal about low prices. (Some economists say it has single-handedly cut inflation by 1 percent in recent years, saving consumers billions of dollars annually.) We know that its labor practices have come under attack. (It charges its workers so much for health insurance that about one-third of them do not have it.)

But the more than 250 sociologists, anthropologists, historians and other scholars who gathered at the University of California here on Monday for a conference on Wal-Mart came looking for more than the company's vital statistics. Like archaeologists who pick over artifacts to understand an ancient society, the scholars here were examining Wal-Mart for insights into the very nature of American capitalist culture. As Susan Strasser, a history professor at the University of Delaware, said, "Wal-Mart has come to represent something that's even bigger than it is."

Indeed, with $256 billion in annual sales and 20 million shoppers visiting its stores each day, Wal-Mart has greater reach and influence than any retailer in history. "In each historical epoch a prototypical enterprise seems to embody a new and innovative set of economic structures and social relationships," said Nelson Lichtenstein, a history professor at the University of California here and the organizer of the conference. "These template businesses are emulated because they have put in place, indeed perfected for their era, the most efficient and profitable relationship between the technology of production, the organization of work and the new shape of the market."

In the 19th century, he said, the standard-setting company was the Pennsylvania Railroad; in the mid-20th century, it was General Motors; and in the late 20th century, it was Microsoft. Today's prototypical company, he declared in opening the conference, is Wal-Mart, which, he said, rezones American cities, sets wage standards and even conducts diplomacy with other nations.

"In short, the company's management legislates for the rest of us key components of American social and industrial policy," Mr. Lichtenstein said.

Wal-Mart has created a very different model from General Motors, he added, noting that G.M. helped build the world's most affluent middle class by paying wages far above the average and by providing generous health and pension plans. Mr. Lichtenstein said G.M.'s wage pattern spurred other companies to raise compensation levels, while Wal-Mart's relatively low wages and benefits — its workers average less than $18,000 a year — were doing just the opposite.

The company's pay scale and hard-nosed labor practices, said Simon Head, a fellow at the Century Foundation and author of "The New Ruthless Economy: Work and Power in the Digital Age" (Oxford University Press, 2003) mean that "Wal-Mart is certainly a template of 21st-century capitalism, but a capitalism that increasingly resembles a capitalism of 100 years ago." He added, "It combines the extremely dynamic use of technology with a very authoritarian and ruthless managerial culture."

Wal-Mart declined to send a representative to the conference. "We were invited to attend, but we passed," said Sarah Clark, a company spokeswoman. "The agenda looked pretty biased against Wal-Mart."

If Wal-Mart is helping revolutionize labor relations, it is also revolutionizing consumer patterns. Ms. Strasser said it was the leading exemplar of a shift toward mass merchandising, which in her view has transformed customers into consumers. Many Americans, she said plaintively, no longer deal daily with craftsmen and neighborhood shopkeepers who give them advice on goods. Advertising is the source of shoppers' information.

Wal-Mart has made a traditional sales force obsolete for another reason, said James Hoopes, a historian at Babson College, in Wellesley, Mass. When retailing began centuries ago, salesmen were needed to explain goods to customers. But Wal-Mart follows a different model. Using technology, the company collects detailed information on the billions of purchases its customers make each year. Based on that information, it orders products (at low prices), confident that customers will like the merchandise and the prices, thus eliminating some of the need for an informed sales force.

Everyone at the conference seemed to marvel at Wal-Mart's extraordinarily sophisticated use of technology. The temperature of every one of its more than 3,500 American stores is controlled from its headquarters in Bentonville, Ark. Logistics gurus keep track of hundreds of thousands of shipments at home and abroad. Computers also keep close tabs on workers' hours and productivity.

"One store manager told me, `I could tell you last year, July 12, how much in sales the store did and how much was rung up by Sally Jo, the cashier, within a particular hour,' " said Ellen Rosen, a professor of women's studies at Brandeis University, in Waltham, Mass.

Wal-Mart's in-depth knowledge of what consumers want, coupled with its immense size, has given the company huge power over its suppliers, effectively changing the traditional relationship between manufacturer and retailer. It usually knows more than manufacturers do about what shoppers want this week and will want next year. With some suppliers complaining that the company has bullied them, Wal-Mart has caused factories from South Texas to Shanghai to increase efficiencies continually and to lower their costs and prices.

"It's changed the balance of global manufacturing," said Gary G. Hamilton, a China expert and sociology professor at the University of Washington.

And not just manufacturing.

"What do low-cost goods mean in light of the pressing issues of the global environment, global human rights and the global labor force?" Ms. Strasser asked. "And how do we move beyond the single-minded self-interest of price?"

Low prices come at a cost, she and other speakers insisted, arguing, for instance, that Wal-Mart encouraged overconsumption and overdevelopment, which place strains on natural resources and the environment.

"Everything is based on the consumer first," said Edna Bonacich, a sociology professor at the University of California, Riverside. "Is this the way we want to live?"

To Ms. Bonacich, a hopeful sign that at least some people would answer no came just days before the conference. On April 6 in Inglewood, Calif., a largely black and Hispanic suburb of Los Angeles, voters rejected a ballot initiative allowing Wal-Mart to build a store there, with many saying they were unhappy with its wage levels, fierce anti-unionism and efforts to circumvent land-use regulations.

Other conference participants pointed to a four-month labor dispute in which the grocery workers' union fought a push by Southern California supermarket chains to cut wages and benefits for many workers because they feared Wal-Mart's expansion plans in the state.

"The fact that it is starting to produce a backlash in a lot of different areas has heightened the interest," Ms. Strasser said.

But Mr. Hoopes questioned whether price-minded American shoppers would ever rush to the barricades to battle Wal-Mart.

"Wal-Mart has been tremendously helpful to the American consumer," he said. "It's lowered prices for lots and lots of people. People are voting with their feet and with their dollars by shopping at Wal-Mart."

He added, "If anybody is proposing that they're going to solve what they see as the Wal-Mart problem by urging people not to think of themselves as consumers, they're barking up the wrong tree."

http://www.nytimes.com/2004/04/17/arts/17W...print&position=

[Ken]

I hear Wal-Mart is looking to buy some small island.

It shalt be called Wally World.

[DudeAsInCool]

I was pleased that the people of South Central resoundedly gave Walmart the boot and handed their asses back to them :)

[Redneck4sure]

They are ruining the retail business for everyone else and do so at the expense of their employees. I buy at walmart but less than I did years ago. I hate to see the day that they are the only retailer.

[DudeAsInCool]

Im pleased to say I have never bought anything from Walmart. They are on my list with ClearChannel... no business.

[Redneck4sure]

Dude! You are alright!!! I used to buy at kmart but they closed every store within a hundred miles of me.

[slum_goddess]

everyone here knows about their shitty working conditions, right? as well, there's a really good book by barbara ehrenreich called nickel & dimed ('on not getting by in amerika') where she talks about exactly what was expected of her and other low-level workers....just horrible, really.