Paul at Stronger Unions has a good round-up post on this week’s news from Canada, that Wal-Mart have (again) closed a branch after it unionised. The company claimed that if they had to give the 5 staff working at a Quebec Tire and Lube store a pay raise, they’d need to increase prices by 30%, so it was cheaper to close the whole store. Poor things, those 5 raises could very nearly have been the straw that broke the back of their $378 billion turnover camel.
First things first – It’s simply not the case that Wal-Mart can’t afford to pay better, it’s that they’re *choosing* not to pay better. Wal-Mart work by squashing down earnings (though not those of the $31.6million salaried CEO H Lee Scott), and by using their immense purchasing power to bully suppliers on cost. All of this undercuts local competitors, who were doing fine paying the higher wages before Wal-Mart moved into their area. Tires were being changed and lube being whatever-it-is-you-do-with-lube’d (is it something like motor oil, or are American cars inherently kinkier than ours?) for slightly higher costs quite happily before Wal-Mart, and they hopefully may again now that Wal-Mart have pulled out.
Wal-Mart’s business model is a cancer on the American and Canadian economies and societies. It starts off a race to the bottom if the only way others can compete is to screw down costs (and hence staff). Wal-Mart pay so little, the US Government has to pick up the tab on many of their staff’s social security for them, again letting them cut costs even more. Wal-Mart’s own harassed suppliers also have to squeeze costs along with their competitors, and everyone’s staff lose out thanks to a Wal-Mart tactic that never had to happen in the first place.
But hey, I shop at Wal-Mart (ADSA) occasionally in the UK, and they have unions, and seem to play the game in a similar way to their competitors, so they can do it if they try. Whilst Wal-Mart is a pretty extreme case, Paul points out that the reason employers often do this kind of thing in one country whilst behaving much more reasonably elsewhere (Tesco is also a scrooge in America, whilst having the UK’s largest private sector unionised workforce, and T-Mobile don’t let their UK staff have representation like they do in Germany) is simply because they can.
This is where unions linking up internationally could have a role in bringing unionbusting multinationals to book – Paul has some suggestions. I think there’s also a good case for the kind of grassroots linking that EMF have tried with the GM Workers’ Blog – showing workers suffering inconsistent management that their is another way, even inside their own company. This needn’t require large costs for or even the involvement of international bodies – RSS aggregators for existing sources are cheap & easy for unions or grassw00ts activists to throw up wherever they like. Web 2.0 transparency could be a good antidote for multinationals’ plans to divide and conquer.