Friday, August 18, 2006

Corporate Culture of Fear

I thought I'd share some information I came across this week concerning two of my favorite (cough-cough) companies. I'll start with Wal-Mart first. Jonathan Tasini at Working Life posted this earlier in the week:
You almost want to say "duh" after reading the front-page story in today's New York Times about the Democrats catching the anti-Wal-Mart wave. Here are the two key paragraphs:
The focus on Wal-Mart is part of a broader strategy of addressing what Democrats say is general economic anxiety and a growing sense that economic gains of recent years have not benefited the middle class or the working poor.

Their alliance with the anti-Wal-Mart campaign dovetails with their emphasis in Washington on raising the minimum wage and doing more to make health insurance affordable. It also suggests they will go into the midterm Congressional elections this fall and the 2008 presidential race striking a populist tone.
Don't you love the weak-knees of the Times reporters who can only say "a growing sense" that working people have been screwed by the economy. Those are simply facts, which should have been laid out in the article.
If the NY Times needs help finding those facts, Tasini's blog is a good place to start. Here's a bit of information he recently posted that bolsters why working people have a growing sense of concern:
[...]Last year, the Economic Policy Institute showed that productivity has grown almost three times faster than wages since 2001. During that time, 70 percent of the nation's income growth has gone straight into corporate coffers as profits -— presumably to continue to finance staggering pay and benefits for executives - a complete reversal from the previous seven business cycles when 77 percent of the overall income growth went to wages.

My friend Joel Rogers, director of the Center on Wisconsin Strategy, made a stunning calculation: Had wages tracked productivity as they have over the past 30 years, "median family income in the U.S. would be about $20,000 higher today than it is." Check this out: Taking into account productivity, the minimum wage should be $19.12 -— which would make it almost 50 percent above today'’s median wage (not to mention the pathetic $5.15 current minimum wage). Rogers concludes: "“It'’s fair to say that most American workers today are making substantially less than the (historically, productivity-normed) wage of the economy's worst-off workers of a generation ago."
Wal-Mart is the perfect example of corporate excess at the expense of their employees, although they make it sound like they're doing Americans a favor by providing them jobs. How about Wal-Mart (and every other corporation out there) thanking Americans for their efforts and hard work with decent wages and benefits? Instead, Wal-Mart (and other corporations) have succeeded in keeping profits up and wages down through a "culture of fear" as Steven @ Gracious Rants puts it:
...Wal-mart has gotten out of control. Maybe it was always that way, it has been since I've been inside. Something tells me though, that it all started going downhill when Sam died.

I could tell you stories of how some people who do exactly what I do, get paid 1/2 my hourly wage, simply because of the store that they are in. Or how they have created a culture of fear within their facilities while at the same time telling the rest of America how great of a company Wal-mart is to work for. [...]

The fact of the matter is that if you are a wal-mart employee, wal-mart and wal-mart alone is in control of your career. I could go in tomorrow to find that I've been fired for a watermelon that I busted 3 weeks ago, even if it was documented and done by the book (especially if my profit-sharing was near 100% vestation), I've seen it happen to others DOZENS of times. The "book" was written by the company, and they did a damn good job at writing it. Wal-mart needs union representation and I honestly doubt that, without governmental help, there will be enough "associates" step up to the plate. Not for the "fear" but "knowing" that they will lose their jobs.
For Steven's sake, I hope he hasn't jeopardized his job by speaking up because he speaks the truth. Corporations have used "fear" to justify cutting wages and benefits for quite a while now, and they've done a darn good job. They have us so traumatized and worried that we might lose our jobs that we keep giving up more and more. Meanwhile, profits continue to climb along with executive compensation.

That brings me to my second favorite corporation - Northwest Airlines. I find their management just as offensive as Wal-Mart's. What kind of help do they offer the 60 ground workers who face layoffs next week, and the 1,000+ ramp workers, customer service agents and baggage handlers at nearly 70 airports who will lose their jobs this fall? A booklet with a section called 101 Ways to Save Money (.pdf file) that offered tips such as "Don't be shy about pulling something you like out of the trash," and "Move to a less expensive place to live." I'm sure those compassionate and thoughtful suggestions helped them feel better about losing their jobs.

On the flip side, one local journalist, Brian Dickerson, had similar money-saving suggestions for salaried NWA executives, most of whom also are contending with smaller paychecks. These were my favorites:
Have you recently reduced the hours of your housekeeper or gardener? Hiring an unemployed baggage handler or bankrupt flight attendant to perform household tasks for a fraction of the minimum wage can be a win-win for you and less fortunate members of the NWA family.

Energy-smart appliances pay. Over the course of a year, a cappuccino or espresso maker equipped with automatic shutoff can save savvy homeowners enough money to pay for another premium cable channel.

Forgot about that half-drunk bottle of pinot noir you put in the refrigerator last week? Consider donating it to an hourly colleague celebrating a wedding anniversary -- and take a charitable write-off for the whole bottle!
Now that's what I call real sacrifice.


Lew Scannon said...

I've notice that everything is always adjusted for inflation except the federal poverty level. I'd bet if it was, you'd find a lot of people aren't doing as well as they think they are.

Kathy said...

Lew, I haven't come across poverty numbers adjusted for inflation either, but this source (.pdf file) has some good information. It comes pretty close to what you're talking about (keep in mind the information is from December 2005):

A full-time, full-year, minimum-wage worker earns $10,300 annually, putting her below the poverty threshold of $13,020 for a one-parent, one-child family. They are also far below a basic family budget, which is an estimate of how much it costs to purchase basics, such as housing, groceries (no meals out), health care, child care, and other necessities within a community. Basic family budgets for a one-parent, two-child family ranges from $22,329 in rural Nebraska to $58,320 in Boston, Massachusetts, with a national median of $34,920. However, a full-time, full-year, minimum-wage worker only earns about one-third of the median family budget for a one-parent, two-child family.

Based on those figures, you're absolutely right...a lot of people are struggling. The national median family budget of $34,920 works out to about $16.75 per hour - and that's just to be surviving with the basics. Raising the minimum wage will help, but people will be still be struggling.

In my opinion, the U.S. could win the war on terrorism, colonize the moon, and find a cure for cancer, but as long as we continue to turn a blind eye to poverty and inequality we will never truly be great. It's all a matter of priorities, and average, working people and their families are at the bottom of that list.

GraemeAnfinson said...

I agree. we need more people bringing stuff like this to the forefront. I suck at economics and I always find myself struggling to express what i mean to people when i argue with them. you do a great job.

Libby said...

This administration should be prosecuted for it criminal explotation of the working class. Every step they take to make their lives even better, is taken directly on the back of a working man.

abi said...

Great minds think alike, Kathy - yours and Robert Kuttner's. In his column in today's Boston Globe, he also teed off on Wal Mart and the economy in general:

"The system is now essentially rigged so that workers' productivity can rise, but workers' incomes can't...[S]ince 2002 annual productivity growth has averaged more than 3 percent, while real wage increases have been under half of 1 percent. Corporate profits, meanwhile, have risen from 8.5 percent to 14.4 percent of national income."

I agree with you, GraemeAnfinson, Kathy does a great job on this topic.

Kathy said...
This comment has been removed by a blog administrator.
Kathy said...

Thanks for the compliment Graeme and Abi, and thanks for the tip about the Boston Globe article Abi. That article is definitely worth blogging about (as soon as I find an extra 10 minutes!).

Libby, the Boston Globe article Abi mentioned points out that workers have suffered under several administrations, including some apathetic Democrats, but I have to agree that the past decade of Republican control has definitely driven the nail in the middle class coffin.