Wal-Mart & Steven Greenhouse's The Big Squeeze

I read several more chapters of Steven Greenhouse's The Big Squeeze: Tough Times for the American Worker last night (click here to view all my posts about this book). It is a good book. But it is so sad to read about how average working class Americans are treated, particularly those working at Wal-Mart.

The first half of chapter six, Leaner and Meaner, focuses on the yelling, screaming, cursing, bullying tactics used by managers at Wal-Mart and other companies to decrease costs and thus increase net profits. But the most interesting part of this chapter was learning how computers, which increase productivity by allowing routine tasks to get completed more quickly, decrease costs because of the ease in which they allow for monitoring of employees, cheating workers on payroll, and other shrewd tactics.

Chapter seven, Here Today, Gone Tomorrow, discusses corporations' increasing reliance on temporary workers, consultants / independent contractors, and permatemps (click here to read about Jean Capobianco's story as a FedEx driver, or here to read my previous post about that NYTimes article) while chapter eight, Wal-Mart, the Low-Wage Colossus, is all about the evil ways of the world's largest retailer and the world's largest company:

It is three times as large as the world's second-largest retailer, Carrefour of France. Its sales are greater than the combined sales of Target, Sears, JCPenny, Kohl's Safeway, Albertsons, and Kroger. ... It is the nation's largest grocer, and will have 35 percent of the nation's food market and 25 percent of the pharmacy market by the end of this decade, according to Retail Forward, a consulting firm. Wal-Mart already sells one-third of the nation's disposable dipers, toothpaste, shampoo, laundry detergent, paper towels, and nonprescription drugs, and some say it could soon caputre a 50 percent share for those products. It is the biggest customer of Walt Disney and Procter & Gamble and accounts for 28 percent of Dial's sales, 24 percent of Del Monte's, and 23 percent of Revlon's. Wal-Mart also accounts for 15 percent of the nation's single-copy magazine sales and nearly 20 percent of all sales of CDs, videos, and DVDs.

The tactics listed by Greenhouse include: end-of-shift lock-in, internal banishment, child labor, slashing schedules, overnight lock-ins, missed breaks, shaving time, hiring illegal immigrants, and sex discrimination (read David Cay Johnston's Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) to learn more about how Wal-Mart uses tax-financing and other tactics to increase profits).

Thankfully, it looks like the next chapter of this book, Taking the High Road, is about Costco and how it treats its workers better than Wal-Mart. More on this depressing and eye-opening book later...

The Big Squeeze: Tough Times for the American Worker by Steven Greenhouse

Just read this NYTimes.com article adapted from Steven Greenhouse's new book The Big Squeeze: Tough Times for the American Worker. Chapter One is available here on the NYTimes.com website or here on the author's website.

Greenhouse, a labor and workplace reporter for The New York Times, examines the stresses and strains faced by workers at companies like FedEx and Wal-Mart (as wages have stagnated, health and pension benefits have grown stingier, and job security has become virtually nonexistent), and points to Patagonia and Costco and even the casino-hotels of Las Vegas as models for corporate America.

Patagonia sounds like an awesome company to work for! Isn't that everyone's dream to be able to go to work wearing whatever you want, take long lunch breaks or leave early to enjoy life, and to get paid to do volunteer work? Okay, probably not, but it certainly is part of my dream.

On the other hand, FedEx has hired most of its drivers as "independent contractors" to increase the company's earnings. If the same people were employees, they'd have to pay benefits, social security, and would not be able to fire people simply for missing work due to illness.

Reading about this book makes me think of Barbara Ehrenreich's Nickel and Dimed: On (Not) Getting By in America (2001). The author left her usual journalist job and spent 1999 and 2000 working jobs paying $7/hour (less than half of a living wage and what millions of low-skilled Americans make). She worked as a waitress in Key West, FL, as a cleaning woman and a nursing home aide in Portland, ME, and in a Wal-Mart in Minneapolis, MN and found that it is nearly impossible for such Americans to lift themselves to middle class.

It also makes me think of Small Giants: companies that choose to be great instead of big by Bo Burlingham, which describes several privately held businesses that have become "giants" in their field without becoming huge corporations. These companies all seemed to honestly care about their employees and the community. I think that many publicly traded companies are focused too much on growth and return -- rightfully so since they are obligated to do what is best to increase returns for shareholders -- and I think the world would be a better place if companies instead aimed to do what's best for the community (owners, employees, existing customers, and potential customers).

I highly recommend Small Giants and plan to add The Big Squeeze to my list of books to read.

Funny, even Wal-Mart sells The Big Squeeze.