Wal-Mart faces its first strikes at home, which could loosen its grip on labor abroad

October 10, 2012
October 10, 2012

Eighty-eight Wal-Mart workers in 12 US states walked out of their stores on Oct. 9 in the first widespread protests against working conditions in the company’s home country.

No doubt, it’s a teensy portion of the global retailer’s massive workforce. (The only larger employers in the world are US Department of Defense and China’s People’s Liberation Army.) But the workers pushing for regular hours are targeting the heart of Wal-Mart’s business plan, which could have a big impact on the company, especially as it expands into new markets like India.

Unions almost never win at Wal-Mart. In the US, it has fought labor into submission. In Canada, the company closed a store that unionized. And Wal-Mart pulled its operations out of Germany and South Korea because it couldn’t–or wouldn’t–work with the strong trade unions in those countries.

“The business model that Wal-Mart has established in the US doesn’t fit in other countries because they have different laws,” says Nelson Lichtenstein, a University of California, Santa Barbara labor historian and other of Retail Revolution, a book about the company.

Now it may have to adapt: With US business essentially maxed out, the company’s growth can only come abroad, where labor rules aren’t always the same. In China, the company’s labor force is unionized thanks to government pressure, and it cooperates with unions in the United Kingdom and South Africa. These relationships give US workers more leverage, at least on a rhetorical level.

Wal-Mart’s famed efficiency advantages include operating its stores with the smallest possible staff at any given time, so it is reluctant to adopt regular shifts for its workers. Its distribution network, the guts of the company, is owned but not operated by Wal-Mart, so the company isn’t responsible for labor conditions there. Last week, striking warehouse workers blamed Wal-Mart for poor working conditions, including, they said, warehouse temperatures over 100 degrees and limited access to water.

The US strikes at Wal-Mart’s retail centers have been organized by OUR Wal-Mart, a several-thousand member workers organization backed by the United Food and Commercial Workers Union. The organization isn’t seeking formal recognition to represent workers.

Activists have rarely succeeded at changing Wal-Mart’s mind, though the company does sometimes respond to pressure–for instance, implicitly backing President Obama’s health care reforms after pressure from labor groups. These latest demonstrations will be successful, Lichtenstein says, simply if picketing workers aren’t fired in retaliation.

“Over time that would mean that Wal-Mart would have to accomodate this pressure from its workforce for regular shifts, no cuts in hours,” he said. “It could mean that over time they will have more money to pay workers directly.”

That, in turn, could affect Wal-Mart’s operations in countries with more protective labor laws than the US—or those with fewer rights for workers. US sales still make up 60% of the company’s overall revenue, so Wal-Mart workers abroad are watching their US colleagues to see how changes in the company’s primary market could affect the business model it exports to them.

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