Wal-Mart, Driving Workers and Supermarkets Crazy

NYTIMES ^ | 10-19-03 | STEVEN GREENHOUSE

[Pikamax]

October 19, 2003 Wal-Mart, Driving Workers and Supermarkets Crazy By STEVEN GREENHOUSE

n February Wal-Mart will open its first grocery supercenter in California, offering everything from tires to prime meats, and that could be a blessing for middle-class consumers. The reason is simple: Wal-Mart's prices are 14 percent lower than its competitors', according to a study by the investment bank UBS Warburg.

But not everyone is rejoicing about Wal-Mart's five-year plan to open 40 supercenters in California, stores combining general merchandise and groceries that are expected to gobble up $3.2 billion in sales. California's three largest supermarket chains, Ralphs, Vons and Albertsons, are scared, and so are tens of thousands of supermarket workers whose union contracts have put them solidly in the middle class. The three grocers' fears of fierce competition from Wal-Mart and their related drive to cut costs are widely seen as the main reason behind the week-old strike by 70,000 workers at 859 supermarkets in Southern California.

Wal-Mart has already helped push more than two dozen national supermarket chains into bankruptcy over the past decade. That list includes names like Grand Union; Bruno's, once Alabama's largest supermarket chain; and Homeland Stores, formerly Oklahoma's largest. And unionized supermarket workers fear that Wal-Mart's invasion will oust them from the middle class by pulling down their wages and benefits, which, taken together, are more than 50 percent higher than those of Wal-Mart workers. At Wal-Mart, the average wage is about $8.50 an hour, compared with $13 at unionized supermarkets.

"Wal-Mart's superstores are going to have a devastating impact on California's supermarkets," said Burt Flickinger III, a retailing consultant, noting that union wages and prices are higher in California than in most of the country.

[ambrose]

When comparing the union vs non-union hourly wages, do they take into account the amount of cash taken out for the union slush fund?

[Iowa Granny]

So the Union is demanding higher wages,, is that why they're on strike? And when Wally World opens these new Super Centers and business slacks of at the Unionized Supermarkets and there are layoffs, are we suppose to cry bitter tears for the people who went on strike to demand an increase of business expenses for their employer?

[Uracan]

Sounds to me that workers will lose if the average wage drops from $13 to $8.50.

[Prince Caspian]

Lots of fear being trumped up. Sounds great. When the marketplace is rearranging the landscape, the consumer wins. Let the competition begin. And if the unionized chains are able to best serve the consumer, then they have nothing to worry about.

[balrog666]

Sounds to me that workers will lose if the average wage drops from $13 to $8.50.

Unions lose. Consumers gain. How do you argue with that?

[Prince Caspian]

Not so. If the work from these $13/hr employees is really worth $13, and someone can deliver quality grocery service to customers at $8.50/hr, then their skills are currently underemployed. Time for them to get out of the grocery business and find a new niche in which to serve the consumer marketplace which will fully utilitize and benefit from these workers' $13/hr skills. We all win!

[Who dat?]

At Wal-Mart, the average wage is about $8.50 an hour, compared with $13 at unionized supermarkets.

That’s “average wage.” It doesn’t include pension contributions or health & welfare contributions or vacation time, sick days, or anything else.

You have to ask yourself if you really think a courtesy clerk, checker, dairy stocker, or anyone else in a similar job really *deserves* $26+/hr compensation (when you add it all up). Those were all jobs done in my day by entry-level people at minimum wage.

Nobody died in the process. Most of us are still around. Being a bagger (etc) is not something that was ever envisioned as a "career."

[Prince Caspian]

The marketplace... I love it! You can't fool it for long. And its efficiencies grind exceedingly fine. It demands from each individual their best effort and rewards it accordingly. Money follows value. Want more money? Then recreate and improve yourself to deliver more value to the marketplace. Everyone wins. No arbitrary political agendas. It's astonishingly fair. But, those not-so-attractive human traits of jealousy and laziness will be aroused in the midst of all this fairness and efficiency.

[Cobra64]

The unions are destroying their own industries. I've seen it in the rust belt of the NE and MW. Steel production jobs( I was in that industry for 25 years) have migrated to the South. Ala Nucor steel in Darlington, TX about 28 years ago. Beth and US Steel sneered at the mini-mills. Now they're cranking out large cross sections that Beth could never have realized. Of course a lot of that had to do with poor management. Today, the once world's largest steel producer in Beth, PA during WWII is a seven mile long of decaying oxidation of ferrous material. My daughter went to Lehigh, just across the river of Beth steel . It's a shame to see this HUGE production facility in decay. I could go on but I can't since I used to give plant tours....

[oceanview]

at $8.50/hr is southern california, those people are likely on some form of public assistance, or using the emergency room as their medical plan. so we are paying for that, and all the other services they want/need/get.

[semiarticulate]

When comparing the union vs non-union hourly wages, do they take into account the amount of cash taken out for the union slush fund?


The union slush fund dissappears, the employees lose 50% in pay\benefits , the customer gets a 14% discount and gets to waste gas and time driving to the lowest prices anywhere!

[Hank Kerchief]

"What this means is, if I'm a Wal-Mart employee and I hurt my hand and go to the emergency room, who's going to pay for it? The taxpayer is," said Mr. Brown, the supermarket executive. "Wal-Mart's fringe benefits are being paid by taxpayers."

Heaven forbid that anybody should pay for their own medical expenses!

The collecivist (unionists) are going to discover that earning more is not accomplished by belonging to a gang.

Hank

[A CA Guy]

Even that doesn't matter, this Wal Mart issue is the killer for the union and the grocery stores.

The total percentage of profit a company like Vons made to value of holdings was 1% and if it is true that Wal Mart is slashing sales cost to the buyer by 14%, kiss the union, Vons, Ralphs, Albertsons and Stater Bros. bye bye.

Survival of the fittest.

I better look into Wal Mart stock.

[kaboom]

Being a bagger (etc) is not something that was ever envisioned as a "career."

AAARGHHH! My dreams, my future...crushed in a single sentence. I should have seen it coming back when they switched from paper to plastic.

[oceanview]

right, on $8.50/hr, they've got plenty of cash for cat scans, surgery, whatever they might need. sure.

[oceanview]

except that alot of people won't buy any type of fresh food at a walmart (I wouldn't).

[ambrose]

Ironically, Gelsons may be the big winner from a big Wal-Mart move. Upper income people will still want to have a decent place to shop, and will pay a premium to do so.

[republicangel]

the wal-mart supercenterhas the best produce department around, here in virginia.

[A CA Guy]

Why not? Super K Mart was clean?