The Spreading Wave of Walmart Strikes

Moneybox
A blog about business and economics.
Oct. 11 2012 10:50 AM

The Spreading Wave of Walmart Strikes

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Thousands of protesters march in the country's largest anti-Walmart rally in Chinatown on June 30, 2012 in Los Angeles

Photograph by Joe Klamar/AFP/GettyImages.

Walmart, the world's largest private employer, is facing what looks to be a growing wave of strikes. What's most interesting here is that Walmart is—quite famously—not a unionized company. The current state of American labor law makes unionizing worksites at a company like Walmart extraordinarily difficult, and the political outlook for major revision to the relevant laws is extremely poor. So the question of whether it's possible for workers to effectively organize themselves and engage in industrial action outside the context of the formal legal framework that governs collective bargaining in the United States is a very important one. Legislative change has often been seen as the key to a revival of labor activism in the United States, but obviously unions didn't become influential in the first place because of a friendly political climate—like any new social movement they became powerful despite the hostile political climate and then thanks to their growing power were temporarily able to create a friendly climate.

Walmart's in a fairly low-margin industry but with net income before tax of a bit over $10,000 per employee there really is substantial economic surplus that workers could, in theory, capture.

Bryce Covert in The Nation emphasizes that this is important because there's been so much employment growth in the low-wage retail sector. I think I'd read the causality the other way around—one reason there's been so much employment growth at places like Walmart is because they've found a way to hire adequate workers for very low wages. If they end up needing to pay more, the business model will shift. I shop regularly at two different supermarkets, one unionized and one nonunion. I don't think it's a coincidence that the nonunion supermarket has more employees and the unionized one has more frequently-malfunctioning self-checkout machines. To the extent that wages in the retail sector start to rise across the board, you'll see more emphasis on perfecting and installing that kind of technology. Amazon is investing in warehouse robots for a reason and there are some broader economic trends away from big box retail and toward Internet-based commerce that might let you get buy with fewer, higher-paid workers.

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Which I think would be progress. I was struck the last time I was in France by the fact that the McDonalds' outlets in crowded parts of Paris (I wanted a soda with lots of ice in it, sue me) seem more technologically sophisticated than their US peers. Our fast food sector lags in this regard presumably because it's easier here to substitute cheap labor for advanced technology.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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