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November 14, 2007

Why Labor Matters

I've still got my problems with Wal-Mart, but the health care offerings for their valued "associates" do seem to be getting better.  This is, of course, entirely a function of the pressure unions have exerted on Wal-Mart -- pressure exerted despite the unions having almost no hope of actually unionizing Wal-Mart.  Organized Labor has expended tens of millions of dolalrs over the past few years on this campaign, and while it hasn't increased union density one iota, it has given a hundred thousand Wal-Mart workers health insurance, spurred Wal-Mart to launch an effort to drive down prescription drug prices, drove them into the "Divided We Fail" health reform coalition, and contributed to the company's focus on greening their stores (they needed good press to counteract all the bad).  This is why we need Organized Labor.  They act as a countervailing force to make corporations think seriously about their roles in our society.  No other powerful actors do that.  But it needs to be done.

November 14, 2007 in Labor | Permalink


Wal-Mart insures a higher percentage of their workers then Starbucks, should this same pressure now be expended on other laggards such as Starbucks to catch up? Which employers should be subjected to these multi-million dollar smear campaigns?

In Las Vegas the Union picketing Wal-Mart over insurance and pay hired homeless and unemployed individuals to walk the picket lines for them. They where paid minimum wage, provided no insurance or benefits, not even water on the line. Wal-Mart feed them and gave them water so they where ok in the 100 degree heat. Should we hold the Union to the same standard they are demanding from Wal-Mart?

Posted by: Nate O | Nov 14, 2007 1:00:29 PM

I'm going to go out a limb and guess, without looking it up, that Wal-Mart employs way more people than Starbucks.

Posted by: Jason C. | Nov 14, 2007 1:23:10 PM

I let Weboy respond to the 'bucks slander from Nate O.

My colleague Jason over at Foresight has some analysis of whether or not Walmart's health care benefits are likely to last.


I'll ask you the same question I asked him: do benefits packages lead to reduced employee turnover?

Posted by: Leigh | Nov 14, 2007 1:23:13 PM

..."Wal-Mart feed them..."

There is do doubt that Wal-Mart is all heart.

Posted by: bncthor | Nov 14, 2007 1:23:14 PM

You should have added "Period." Well done.

Posted by: Adrock | Nov 14, 2007 1:24:56 PM

Can someone print this post out on a whiffle bat so that we can hit people with it whenever they say that unions only look out for their own members?

Posted by: rufustfyrfly | Nov 14, 2007 1:28:13 PM

Jason C, I was remis in not clearly stating Wal-Mart covers a higher percentage of it's workers then Starbucks. Starbucks covers 42% Wal-Mart 46%.

Leigh what comment do you find slanderous? The insurance stat came from "Starbucked: A double Tall Tale of Caffeine, Commerce, and Culture"

Linked article was pretty shallow and full of assumptions and thoughts. If I remember correctly Wal-Mart has far lower turnover then most retailers. If that is correct that disproves a large part of his assumptions right there. Second Wal-Mart has a Health Care strategy that could potentially dwarf any cost of increased beneits disproving the rest.

Actually now my blood is boiling again, the article is complete crap written by someone with no clue of Health Insurance or corporate finance. I don’t see a date of when it was written but the author seems to have no clue about Wal-Marts huge leap into the delivery of Healthcare. He says this; “What Wal-Mart could do, however, is begin to push for changes in the American health system which would help it to achieve a higher rate of return on investments in employee health care. As health economist Len Nichols notes at the end of the Times piece: “If you really turned Wal-Mart loose and had Wal-Mart against the health care providers, it would be a fair fight.” I would venture to say that the chances of Wal-Mart becoming a premier provider of employee insurance and driving similar changes in employer practice across the retail sector are slim.

Now read this; “Clinics at Wal-Mart
Independent health clinics are now offering health-care services to our customers in select Wal-Mart stores nationwide. These clinics provide one-stop convenience for many basic health-care needs at affordable prices.”

WASHINGTON, D.C. – April 24, 2007 – Wal-Mart Stores, Inc., (NYSE: WMT) intends to contract with local hospitals and other organizations to open as many as 400 in-store health clinics over the next two to three years, and if current market forces continue, up to 2,000 clinics could be in Wal-Mart stores over the next five to seven years,

Scott will also announce that Wal-Mart customers have saved about $290 million on selected generic prescription drugs since September 2006, when the company began selling prescriptions for $4 each in Tampa, Fla.

Scott notes that surveys in existing clinics revealed more than half of those who visited a clinic said they were uninsured. Nearly 15 percent of customers said they would have gone to a hospital emergency room for their care – thus increasing the burden on already strained community health care institutions – if they could not have gone to the clinic inside a Wal-Mart.

Leigh do you feel no obligation to at least have a slight clue of what you people are talking about?

Posted by: Nate O | Nov 14, 2007 1:59:05 PM

"countervailing force to make corporations think seriously about their roles in our society"

Ezra recapitulating JK Galbraith. Hasn't been so true in the last 30-40 years, however, thus the growth in inequality of wealth and income.

Posted by: David in NY | Nov 14, 2007 2:06:10 PM

Having worked at Walmart, I think I can point to, what at the time (I don't know whether they still do this), is probably one of the reason's Walmart employees remained un-unionized: propaganda.

I remember my first day on the job, along with all of the other introductory information (don't cut with a knife towards yourself, don't throw Billy into the cardboard compactor as 'a joke', etc), there was a very (hilarious) video on how unions are evil incarnate. I'm glad I was the only one watching at the time, because I broke out laughing at least twice with the pure stupidity of it. Here I was a high school junior able to see through blatent corporate B.S. I felt great. And then I realized that most of the employees who saw the video didn't realize that the arguments it made were complete and total hogwash. And that made me sad and angry...

Posted by: john | Nov 14, 2007 2:47:04 PM

Lowering Generic Rx cost was huge profit generator; dramatically increased their foot traffic and sold more prescriptions. They also tapped a large market of uninsured individuals who thought they couldn't afford prescriptions. To give SEIU all the credit for that is BS. Same with the clinics, they have the chance to reinvent delivery of basic medical services. I hardly ever go to the doctor, its 100% a convenience problem not money, I don’t want to sit in a waiting room for 1 ½ hours reading stale magazines for a 5 minute visit or procedure. If their clinics take off they could totally change not only the utilization but cost as well. From what I have read they charge about 40% less then a normal office visit, full charged price not discount. Our HC system is a ton of fat and inefficiency in it, Wal-Mart is great at fixing those issues. This is a perfect example of how some capitalist profit mongering can be a good thing.

Look at their ad, isn’t this all stuff you have been clamoring for? Since Wal-Mart is the one offering it though you just can’t bring yourself to give them or capitalism the credit can you?

Here are a few ways clinics save you time and money:
• No appointment is necessary to visit the clinics
• Clinics are open seven days a week. View clinic locations and hours.
• Patient data is electronic, which means limited time spent filling out forms and follow-up visits are quick and convenient
• All prices are posted clearly, so you always know the cost before treatment
• A typical Get Well visit costs $65 or less. For additional pricing information, contact the clinic nearest you.

Posted by: Nate O | Nov 14, 2007 3:01:08 PM

You all really have no clue how to deal with someone like Nate, do you? You point at him and laugh. Because his ideas and his statements are a joke. Hell, he probably gets a check from Wal-Mart to be here.

Posted by: soullite | Nov 14, 2007 3:25:56 PM

Of course, Nate. It's nice to have clearly posted prices. So, what happens if that nasty cough I have diagnosed as bronchitis turns out to be lung cancer? Can I count on Wal-Mart?

Posted by: Magenta | Nov 14, 2007 3:32:22 PM

Magenta hopefully that's next.

Posted by: Floccina | Nov 14, 2007 3:36:37 PM

BTW I once heard Clark Howard say that Wal-Mart tried to open their own in store banks but the bank owned regulators would not let them leaving a certain class of Wal-Mart customers to check cashinng places.

Posted by: Floccina | Nov 14, 2007 3:39:23 PM

This is a perfect example of how some capitalist profit mongering can be a good thing.

Yes. It is. One thing that capitalism does really really well is make shit cheaper. Firms need to make their stuff cheaper in order to compete for market share. They can do this through economies of scale, reorganization, technological innovation, and cutting labor costs (i.e. screwing over their workers).

We need unions to keep the firms from screwing over the workers, so that the less-destructive cost cutting processes are used. It's not that complicated.

Posted by: rufustfyrfly | Nov 14, 2007 3:45:52 PM

Magenta, would you rather your doctor spend another 10 minutes discussing your lung cancer with you or that he run off to remove a wart?

Does it really make economic sense to have a Dr. who spent 8 years in school, has 100,000s in loans, and spends 50K+ a year for Malpractice insurance, removing warts or treating the flu? You can never lower the unit cost of their time enough to justify them doing that work. That's like calling an electrician out to change the batteries in your remote.

Doctors should be treating cancer not scrapes!

Posted by: Nate O | Nov 14, 2007 3:52:07 PM

Leigh is very kind to mention me - I happen to work for the 'bucks, and have insurance. It's not perfect, but it is, given my part time status, quite good. I can only offer a couple of theories as to the lower percentages: one, many Starbucks workers are students and other young people, who may still have coverage through their parents, or who live in that limbo that college students do (that's not good, but it is a reality to consider). Second, given the highly part-time nature of most Starbucks work, the positive point is that we have the opportunity for good insurance, but some people either don't need it or don't want it.

Finally I think the more salient point is that WalMart and Starbucks are really quite different, and WalMart should be compared to other retailers, like Costco, while Starbucks is more appropriately compared to other food service businesses. To my formerly retail employed way of thinking, the 46% figure is still horrendous, while I'd be curious if 42% is so out of line in food service. I don't know. But I don't think size alone should determine this comparison as the most salient.

As for Ezra's point, I think he's right that this is an encouraging sign of the power of unions, even when they don't directly benefit from agitating for workers they don't represent. I'm still not convinced that we've come up with the right approach yet to unionizing service workers, but getting unions to work on the case, even without membership seems like a good way to improve the PR, at least.

Posted by: weboy | Nov 14, 2007 3:58:08 PM

Nate O.'s criticisms actually strengthen the overall point of Ezra's post. A truly socially conscious Wal-Mart would be a great thing for society. There is no doubt that providing low cost prescription drugs and clinic services, indeed low-priced goods in general, is a good thing for working and lower class people. But there's also no doubt that Wal-Mart has inflicted great harm on communities, workers, and the environment in providing these benefits. Having organized labor as check, putting pressure on Wal-Mart to minimize the harm it does to society while providing the same benefits, is indeed necessary and beneficial.

Posted by: Anthony | Nov 14, 2007 3:58:40 PM

See? he isn't ever going to really respond to anyone. He's just going to keep talking like a retard, making sure his favorite shade of lipstick is smeared on every dick at wally world HQ. People like this are only as serious as you let them be. Some types of arguments are best defused with a ridicule, not with logic or reason.

Posted by: soullite | Nov 14, 2007 4:00:00 PM

I don't know if I agree with the statement that "This is, of course, entirely a function of the pressure unions have exerted on Wal-Mart."

Sure, some of the pressure is union pressure, and other forces are coming indirectly. But lots of bad press has come from Robert Greenwald, Naomi Klein, the LA Times, etc... And a huge amount of pressure--and there's no way to know, but I'd guess as much as comes from the SEIU, etc.--has come from consumers and consumer groups who simply refuse to buy anything at Walmart until they engage in better business. I'm not trying to denigrate union contributions here. I just think it's important to point out that part of the improvements to Walmart have come from people who have decided that they'd prefer to buy goods from decent companies rather than save a nickel on a role of toilet paper.

Posted by: brad | Nov 14, 2007 4:02:49 PM

Eh, to clarify: A lot of the consumer pressure is coming indirectly from unions, as Ezra implies above. My point was simply that walmart would not care at all about union pressure if regular people had ignored these campaigns. That is, had regular people ignored the union campaigns, I have no doubt that Walmart would have similarly ignored them.

Posted by: brad | Nov 14, 2007 4:10:25 PM

soullite what are you talking about? What was never really responded to? You've deisplayed neither logic nor reason so I question your abiity to judge their success. I don't see where you have asked a question or raised a point.

Posted by: Nate O | Nov 14, 2007 4:18:02 PM

Has Starbucks inflicted great harm on communities? Why is Wal-Mart held to one standard yet other companies act just as agreviously and get a fre pass. A Starbucks coffee costing $3.40 has atleast $.40 of profit. That's some pretty hefty margins, they can't afford to insure their workers with those margins?

weboy many Wal-Mart workers are old, very very old, and have Medicare, I've never once seen that takin into consideration when bashing Wal-Mart. Just as Starbucks has their busy time and thus employs a higher percentage of part-timers, so you know they have workers there at the same time customers are, so does Wal-Mart, they are constantly attacked for not offering full time positions. Have you looked into Unionizing? What sort of retirement package they offer you? Sounds like you and the other PTrs are being taken advantage of by a capitilistic bean slinger to me.

Wal-Mart gives 100s of millions to charity which has far lower ROI then providing employees insurance. Why do you have a problem believing they offered insurance to their employees for any reason but union or social pressure. Is all their charitable giving a direct result of said pressure?

Posted by: Nate O | Nov 14, 2007 4:32:14 PM

Actually now my blood is boiling again, the article is complete crap written by someone with no clue of Health Insurance or corporate finance.

So you wrote it, then?

weboy, I didn't know you worked for Starbucks. I did as well both as barista and manager. When I was part time my insurance benefits covered my whole family, and all I needed was to work 240 hours a quarter, with vacation hours counting.

There's a lot about SBUX that changed from when I first started until I left. I felt that the company did start to move away from the focus upon treating 'partners' well and more toward just generating a profit. Of course, that SBUX or any other company can be criticized doesn't in any way mean we're not allowed to point out our criticisms of Wal-Mart.

Posted by: Stephen | Nov 14, 2007 4:40:02 PM

nate o
your a transparent cut out

buzz off and let actual humans
comment here
no one real ...no one
bothers to point out pro walmart
job bene stats

names is all you get

Posted by: paine | Nov 14, 2007 4:41:35 PM

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