Putting
WalMart Under the Microscope
Sociologists,
Anthrpologists and Historians gather to discuss
WalMart
We already know that Wal-Mart is the biggest retailer.
(If it were an independent nation, it would be China 's eighth-largest
trading partner.)
We also know that it is maniacal about low prices. (Some
economists say it has single-handedly cut inflation by one
percent in recent years, saving consumers billions of dollars
annually.)
We know that its labor practices have come under attack.
(It charges its workers so much for health insurance that
about one-third of them do not have it.)
But the more than 250 sociologists,
anthropologists, historians and other scholars who gathered
at the University of California here on Monday, April 12
for a conference on Wal-Mart came looking for more than the
company's vital statistics.
Like archaeologists who
pick over artifacts to understand an ancient society, the
scholars here were examining Wal-Mart for insights into the
very nature of American capitalist culture. As Susan Strasser,
a history professor at the University of Delaware , said, "Wal-Mart
has come to represent something that's even bigger than it
is."
With $256 billion in annual sales and 20 million shoppers
visiting its stores each day, Wal-Mart has greater reach
and influence than any retailer in history.
"In each historical epoch a prototypical enterprise
seems to embody a new and innovative set of economic structures
and social relationships," said Nelson Lichtenstein,
a history professor at the University of California and the
organizer of the conference. "These template businesses
are emulated because they have put in place, indeed perfected
for their era, the most efficient and profitable relationship
between the technology of production, the organization of
work and the new shape of the market."
In the 19th century, he said, the standard-setting company
was the Pennsylvania Railroad; in the mid-20th century, it
was General Motors; and in the late 20th century, it was
Microsoft. Today's prototypical company, he declared in opening
the conference, is Wal-Mart, which, he said, rezones American
cities, sets wage standards and even conducts diplomacy with
other nations.
"In short, the company's management legislates for
the rest of us key components of American social and industrial
policy," Lichtenstein said.
Wal-Mart has created a very different model from General
Motors, he added, noting that GM helped build the world's
most affluent middle class by paying wages far above the
average and by providing generous health and pension plans.
Lichtenstein said GM's wage pattern spurred other companies
to raise compensation levels, while Wal-Mart's relatively
low wages and benefits - its workers average less than $18,000
a year - were doing just the opposite.
The company's pay scale and hard-nosed labor practices,
said Simon Head, a fellow at the Century Foundation and author
of "The New Ruthless Economy: Work and Power in the
Digital Age," mean that "Wal-Mart is certainly
a template of 21st-century capitalism, but a capitalism that
increasingly resembles a capitalism of 100 years ago."
He added, "It combines the extremely dynamic use of
technology with a very authoritarian and ruthless managerial
culture."
Wal-Mart declined to send a representative to the conference. "We
were invited to attend, but we passed," said Sarah Clark,
a company spokeswoman. "The agenda looked pretty biased
against Wal-Mart."
If Wal-Mart is helping revolutionize labor relations, it
is also revolutionizing consumer patterns. Strasser said
it was the leading exemplar of a shift toward mass merchandising,
which in her view has transformed customers into consumers.
Many Americans, she said plaintively, no longer deal daily
with craftsmen and neighborhood shopkeepers who give them
advice on goods; advertising is the source of shoppers' information.
Wal-Mart has made a traditional sales force obsolete for
another reason, said James Hoopes, a historian at Babson
College , in Wellesley , Massachusetts . When retailing began
centuries ago, salesmen were needed to explain goods to customers.
But Wal-Mart follows a different model. Using technology,
the company collects detailed information on the billions
of purchases its customers make each year. Based on that
information, it orders products (at low prices), confident
that customers will like the merchandise and the prices,
thus eliminating some of the need for an informed sales force.
Everyone at the conference seemed to marvel at Wal-Mart's
sophisticated use of technology. The temperature of every
one of its more than 3,500 American stores is controlled
from its headquarters in Bentonville , Arkansas . Logistics
gurus keep track of hundreds of thousands of shipments at
home and abroad. Computers also keep close tabs on workers'
hours and productivity.
"One store manager told me, 'I could tell you last
year, July 12, how much in sales the store did and how much
was rung up by Sally Jo, the cashier, within a particular
hour,'" said Ellen Rosen, a professor of women's studies
at Brandeis University in Waltham, Massachusetts.
Wal-Mart's in-depth knowledge of what consumers want, coupled
with its immense size, has given the company huge power over
its suppliers, effectively changing the traditional relationship
between manufacturer and retailer. It usually knows more
than manufacturers do about what shoppers want this week
and will want next year. With some suppliers complaining
that the company has bullied them, Wal-Mart has caused factories
from South Texas to Shanghai to increase efficiencies continually
and to lower their costs and prices.
"It's changed the balance of global manufacturing," said
Gary Hamilton, a China expert and sociology professor at
the University of Washington .
And not just manufacturing.
"What do low-cost goods mean in light of the pressing
issues of the global environment, global human rights and
the global labor force?" Strasser asked. "And how
do we move beyond the single-minded self-interest of price?"
Low prices come at a cost, she and other speakers insisted,
arguing, for instance, that Wal-Mart encouraged overconsumption
and overdevelopment, which place strains on natural resources
and the environment.
"Everything is based on the consumer first," said
Edna Bonacich, a sociology professor at the University of
California-Riverside. "Is this the way we want to live?"
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