Down and Out in Discount America
by Lisa Featherstone
The Nation magazine, January 3,
On the day after Thanksgiving, the biggest
shopping day of the year, Wal-Mart's many progressive critics-not
to mention its business competitors-finally enjoyed a bit of schadenfreude
when the retailer had to admit to "disappointing" sales.
The problem was quickly revealed: Wal-Mart
hadn't been discounting aggressively enough. Without low prices,
Wal-Mart just isn't Wal-Mart.
That's not a mistake the big-box behemoth
is likely to make again. Wal-Mart knows its customers, and it
knows how badly they need the discounts. Like Wal-Mart's workers,
its customers are overwhelmingly female, and struggling to make
ends meet. Betty Dukes, the lead plaintiff in Dukes v. Wal-Mart,
the landmark sex-discrimination case against the company, points
out that Wal-Mart takes out ads in her local paper the same day
the community's poorest citizens collect their welfare checks.
"They are promoting themselves to low-income people,"
she says. "That's who they lure. They don't lure the rich
.... They understand the economy of America. They know the haves
and have-nots. They don't put Wal-Mart in Piedmonts. They don't
put Wal-Mart in those high-end parts of the community. They plant
themselves right in the middle of Poorville."
Betty Dukes is right. A 2000 study by
Andrew Franklin, then an economist at the University of Connecticut,
showed that Wal-Mart operated primarily in poor and working-class
communities, finding, in the bone-dry language of his discipline,
"a significant negative relationship between median household
income and Wal-Mart's presence in the market." Although fancy
retailers noted with chagrin during the 2001 recession that absolutely
everybody shops at Wal-Mart--"Even people with $100,000 incomes
now shop at Wal-Mart," a PR flack for one upscale mall fumed
- the Bloomingdale's set is not the discounter's primary market,
and probably never will be. Only 6 percent of Wal-Mart shoppers
have annual family incomes of more than $100,000. A 2003 study
found that 23 percent of Wal-Mart Supercenter customers live on
incomes of less than $25,000 a year. More than 20 percent of Wal-Mart
shoppers have no bank account, long considered a sign of dire
poverty. And while almost half of Wal-Mart Supercenter customers
are blue-collar workers and their families, 20 percent are unemployed
Al Zack, who until his retirement in 2004
was the United Food and Commercial Workers' vice president for
strategic programs, observes that appealing to the poor was "Sam
Walton's real genius. He figured out how to make money off of
poverty. He located his first stores in poor rural areas and discovered
a real market. The only problem with the business model is that
it really needs to create more poverty to grow." That problem
is cleverly solved by creating more bad jobs worldwide. In a chilling
reversal of Henry Ford's strategy, which was to pay his workers
amply so they could buy Ford cars, Wal-Mart's stingy compensation
policies-workers make, on average, just over $8 an hour, and if
they want health insurance, they must pay more than a third of
the premium-contribute to an economy in which, increasingly, workers
can only afford to shop at Wal-Mart.
To make this model work, Wal-Mart must
keep labor costs down. It does this by making corporate crime
an integral part of its business strategy. Wal-Mart routinely
violates laws protecting workers' organizing rights (workers have
even been fired for union activity). It is a repeat offender on
overtime laws; in more than thirty states, workers have brought
wage-and-hour class action suits against the retailer. In some
cases, workers say, managers encouraged them to clock out and
keep working; in others, managers locked the doors and would not
let employees go home at the end of their shifts. And it's often
women who suffer most from Wal-Mart's labor practices. Dukes v.
Wal-Mart, which is the largest civil rights class-action suit
in history, charges the company with systematically discriminating
against women in pay and promotions [see Featherstone, "Wal-Mart
Values: Selling. Women Short," December 16,2002].
Solidarity Across the Checkout Counter
Given the poverty they have in common,
it makes sense that Wal-Mart's workers often express a strong
feeling of solidarity with the shoppers. Wal-Mart workers tend
to be aware that the customers' circumstances are similar to their
own, and to identify with them. Some complain about rude customers,
but most seem to genuinely enjoy the shoppers.
One longtime department manager in Ohio
cheerfully recalls her successful job interview at Wal-Mart. Because
of her weight, she told her interviewers, she'd be better able
to help the customer. "I told them I wanted to work in the
ladies department because I'm a heavy girl." She understands
the frustrations of the large shopper, she told them: "You
know, you go into Lane Bryant and some skinny girl is trying to
sell you clothes.' They laughed at that and said, 'You get a second
One plaintiff in the Dukes lawsuit, Cleo
Page, who no longer works at Wal-Mart, says she was a great customer
service manager because "I knew how people feel when they
shop, so I was really empathetic."
Many Wal-Mart workers say they began working
at their local Wal-Mart because they shopped there. "I was
practically born in Wal-Mart' says Alyssa Warrick, a former employee
now attending Truman State University in Missouri. "My mom
is obsessed with shopping .... I thought it would be pretty easy
since I knew where most of the stuff was?' Most assumed they would
love working at Wal-Mart. "I always loved shopping there,"
enthuses Dukes plaintiff Dee Gunter. "That's why I wanted
to work for 'em."
Shopping is traditionally a world of intense
female communication and bonding, and women have long excelled
in retail sales in part because of the identification between
clerk and shopper. Page, who still shops at Wal-Mart, is now a
lingerie saleswoman at Mervyn's (owned by Target). "I do
enjoy retail' she says. "I like feeling needed and I like
helping people, especially women."
Betty Dukes says, "I strive to give
Wal-Mart customers one hundred percent of my abilities."
This sentiment was repeated by numerous other Wal-Mart workers,
always with heartfelt sincerity. Betty Hamilton, a 61 -year-old
clerk in a Las Vegas Sam's Club, won her store's customer service
award last year. She is very knowledgeable about jewelry, her
favorite department, and proud of it. Hamilton resents her employer-she
complains about sexual harassment and discrimination, and feels
she has been penalized on the job for her union sympathies-but
remains deeply devoted to her customers. She enjoys imparting
her knowledge to shoppers so "they can walk out of there
and feel like they know something." Like Page, Hamilton feels
she is helping people. "It makes me so happy when I sell
something that I know is an extraordinarily good buy," she
says. "I feel like I've done somebody a really good favor."
The enthusiasm of these women for their
jobs, despite the workplace indignities many of them have faced,
should not assure anybody that the company's abuses don't matter.
In fact, it should underscore the tremendous debt Wal-Mart owes
women: This company has built its vast profits not only on women's
drudgery but also on their joy, creativity and genuine care for
Why Boycotts Don't Always Work
Will consumers return that solidarity
and punish Wal-Mart for discriminating against women? Do customers
care about workers as much as workers care about them? Some women's
groups, like the National Organization for Women and Code Pink,
have been hoping that they do, and have encouraged the public
not to shop at Wal-Mart. While this tactic could be fruitful in
some community battles, it's unlikely to catch on nationwide.
A customer saves 20-25 percent by buying groceries at Wal-Mart
rather than from a competitor, according to retail analysts, and
poor women need those savings more than anyone.
That's why many women welcome the new
Wal-Marts in their communities. The Winona (Minnesota) Post extensively
covered a controversy over whether to allow a Wal-Mart Supercenter
into the small town; the letters to the editor in response offer
a window into the female customer's loyalty to Wal-Mart. Though
the paper devoted substantial space to the sex discrimination
case, the readers who most vehemently defended the retailer were
female. From the nearby town of Rollingstone, Cindy Kay wrote
that she needed the new Wal-Mart because the local stores didn't
carry large enough sizes. She denounced the local anti-Wal-Mart
campaign as a plot by rich and thin elites: "I'm glad those
people can fit into and afford such clothes. I can barely afford
Shopko and Target!"
A week later, Carolyn Goree, a preschool
teacher also hoping for a Winona Wal-Mart, wrote in a letter to
the Post editor that when she shops at most stores, $200 fills
only a bag or two, but at Wal-Mart, "I come out with a cart
full top and bottom. How great that feels." Lacking a local
Wal-Mart, Goree drives over the Wisconsin border to get her fix.
She was incensed by an earlier article's lament that some workers
make only $15,000 yearly. "Come on!" Goree objected.
"Is $15,000 really that bad of a yearly income? I'm a single
mom and when working out of my home, I made $12,000 tops and that
was with child support. I too work, pay for a mortgage, lights,
food, everything to live. Everything in life is a choice ....
I am for the little man/woman-I'm one of them. So I say stand
up and get a Wal-Mart."
Sara Jennings, a disabled Winona reader
living on a total of $8,000, heartily concurred. After paying
her rent, phone, electric and cable bills, Jennings can barely
afford to treat herself to McDonald's. Of a recent trip to the
LaCrosse, Wisconsin, Wal-Mart, she raved, "Oh boy, what a
great treat. Lower prices and a good quality of clothes to choose
from. It was like heaven for me." She, too, strongly defended
the workers' $15,000 yearly income: "Boy, now that is a lot
of money. I could live with that." She closed with a plea
to the readers: "I'm sure you all make a lot more than I.
And I'm sure I speak for a lot of seniors and very-low-income
people. We need this Wal-Mart. There's nothing downtown?'
From Consumers to Workers and Citizens
It is crucial that Wal-Mart's liberal
and progressive critics make use of the growing public indignation
at the company over sex discrimination, low pay and other workers'
rights issues, but it is equally crucial to do this in ways that
remind people that their power does not stop at their shopping
dollars. It's admirable to drive across town and pay more for
toilet paper to avoid shopping at Wal-Mart, but such a gesture
is, unfortunately, not enough. As long as people identify themselves
as consumers and nothing more, Wal-Mart wins.
The invention of the "consumer"
identity has been an important part of a long process of eroding
workers' power, and it's one reason working people now have so
little power against business. According to the social historian
Stuart Ewen, in the early years of mass production, the late nineteenth
and early twentieth centuries, modernizing capitalism sought to
turn people who thought of themselves primarily as "workers"
into "consumers." Business elites wanted people to dream
not of satisfying work and egalitarian societies-as many did at
that time-but of the beautiful things they could buy with their
Business was quite successful in this
project, which influenced much early advertising and continued
throughout the twentieth century. In addition to replacing the
"worker," the "consumer" has also effectively
displaced the citizen. That's why, when most Americans hear about
the Wal-Mart's worker-rights abuses, their first reaction is to
feel guilty about shopping at the store. A tiny minority will
respond by shopping elsewhere-and only a handful will take any
further action. A worker might call her union and organize a picket.
A citizen might write to her congressman or local newspaper, or
galvanize her church and knitting circle to visit local management.
A consumer makes an isolated, politically slight decision: to
shop or not to shop. Most of the time, Wal-Mart has her exactly
where it wants her, because the intelligent choice for anyone
thinking as a consumer is not to make a political statement but
to seek the best bargain and the greatest convenience.
To effectively battle corporate criminals
like Wal-Mart, the public must be engaged as citizens, not merely
as shoppers. What kind of politics could encourage that? It's
not clear that our present political parties are up to the job.
Unlike so many horrible things, Wal-Mart cannot be blamed on George
W. Bush. The Arkansas-based company prospered under the state's
native son Bill Clinton when he was governor and President. Sam
Walton and his wife, Helen, were close to the Clintons, and for
several years Hillary Clinton, whose law firm represented Wal-Mart,
served on the company's board of directors. Bill Clinton's "welfare
reform" has provided Wal-Mart with a ready workforce of women
who have no choice but to accept its poverty wages and discriminatory
Still, a handful of Democratic politicians
stood up to the retailer. California Assemblywoman Sally Lieber,
who represents the 22nd Assembly District and is a former mayor
of Mountain View, was outraged when she learned about the sex
discrimination charges in Dukes v. Wal-Mart, and she smelled blood
when, tipped off by dissatisfied workers, her office discovered
that Wal-Mart was encouraging its workers to apply for public
assistance, "in the middle of the worst state budget crisis
in history!" California had a $38 billion deficit at the
time, and Lieber was enraged that taxpayers would be subsidizing
Wal-Mart's low wages, bringing new meaning to the term "corporate
Lieber was angry, too, that Wal-Mart's
welfare dependence made it nearly impossible for responsible employers
to compete with the retail giant. It was as if taxpayers were
unknowingly funding a massive plunge to the bottom in wages and
benefits-quite possibly their own. She held a press conference
in July 2003, to expose Wal-Mart's welfare scam. The Wal-Mart
documents-instructions explaining how to apply for food stamps,
Medi-Cal (the state's healthcare assistance program) and other
forms of welfare-were blown up on posterboard and displayed. The
morning of the press conference, a Wal-Mart worker who wouldn't
give her name for fear of being fired snuck into Lieber's office.
"I just wanted to say, right on!" she told the assemblywoman.
Wal-Mart spokespeople have denied that
the company encourages employees to collect public assistance,
but the documents speak for themselves. They bear the Wal-Mart
logo, and one is labeled "Wal-Mart: Instructions for Associates."
Both documents instruct employees in procedures for applying to
"Social Service Agencies." Most Wal-Mart workers I've
interviewed had coworkers who worked full time for the company
and received public assistance, and some had been in that situation
themselves. Public assistance is very clearly part of the retailer's
cost-cutting strategy. (It's ironic that a company so dependent
on the public dole supports so many right-wing politicians who'd
like to dismantle the welfare state.)
Lieber, a strong supporter of the social
safety net who is now assistant speaker pro tempore of the California
Assembly, last year passed a bill that would require large and
mid-sized corporations that fail to provide decent, affordable
health insurance to reimburse local governments for the cost of
providing public assistance for those workers. When the bill passed,
its opponents decided to kill it by bringing it to a statewide
referendum. Wal-Mart, which just began opening Supercenters in
California this year, mobilized its resources to revoke the law
on election day this November, even while executives denied that
any of their employees depended on public assistance.
Citizens should pressure other politicians
to speak out against Wal-Mart's abuses and craft policy solutions.
But the complicity of both parties in Wal-Mart's power over workers
points to the need for a politics that squarely challenges corporate
greed and takes the side of ordinary people. That kind of politics
seems, at present, strongest at the local level.
Earlier this year, labor and community
groups in Chicago prevented Wal-Mart from opening a store on the
city's South Side, in part by pushing through an ordinance that
would have forced the retailer to pay Chicago workers a living
wage. In Hartford, Connecticut, labor and community advocates
just won passage of an ordinance protecting their free speech
rights on the grounds of the new Wal-Mart Supercenter, which is
being built on city property. Similar battles are raging nationwide,
but Wal-Mart's opponents don't usually act with as much coordination
as Wal-Mart does, and they lack the retail behemoth's deep pockets.
With this in mind, SEIU president Andy
Stern has recently been calling attention to the need for better
coordination-and funding-of labor and community anti-Wal-Mart
efforts. Stern has proposed that the AFL-CIO allocate $25 million
of its royalties from purchases on its Union Plus credit card
toward fighting Wal-Mart and the "Wal-Martization" of
Such efforts are essential not just because
Wal-Mart is a grave threat to unionized workers' jobs (which it
is) but because it threatens nil American ideals that are at odds
with profit-ideals such as justice, equality and fairness. Wal-Mart
would not have so much power if we had stronger labor laws, and
if we required employers to pay a living wage. The company knows
that, and it hires lobbyists in Washington to vigorously fight
any effort at such reforms-indeed, Wal-Mart has recently beefed
up this political infrastructure substantially, and it's likely
that its presence in Washington will only grow more conspicuous.
The situation won't change until a movement
comes together and builds the kind of social and political power
for workers and citizens that can balance that of Wal-Mart. This
is not impossible: In Germany, unions are powerful enough to force
Wal-Mart to play by their rules. American citizens will have to
ask themselves what kind of world they want to live in. That's
what prompted Gretchen
Adams, a former Wal-Mart manager, to join
the effort to unionize Wal-Mart. She's deeply troubled by the
company's effect on the economy as a whole and the example it
sets for other employers. "What about our working-class people?"
she asks. "I don't want to live in a Third World country."
Working people, she says, should be able to afford "a new
car, a house. You shouldn't have to leave the car on the lawn
because you can't afford that $45 part."
Nation contributing editor Liza Featherstone
is the author of Selling Women Short: The Landmark Battle for
Workers' Rights at Wal-Mart (Basic),from which this article is