WalMart and the return of slavery

Not long ago I shocked a colleague by suggesting that, in a world of ever-growing income inequality, the big surprise was not how much crime there was, but how little. When the rich show no restraint and precious few morals in adding to their pile of loot, why should the poor? Two business news stories this week have done nothing to answer my question.

First is the $210-million payoff to Home Depot CEO Bob Nardelli for, well, failing. Even entrepreneurs who take risks and put up their own capital don't expect such rewards. Nardelli was a company employee who has walked off with a stupendous reward while making the people who employed him -- the shareholders -- no better off. This makes a total mockery of ths principles on which capitalism is supposedly based -- you are meant to be rewarded for success and risk taking, not for failure.

Second, and potentially more consequential, is the latest wage scheme from WalMart, the world's largest retailer and consistently one of its worst employers. The company is implementing a new rostering system that will allow it to keep employees on unpaid standby, to be brought in and paid only if there is an upturn in business during the course of any given day. The system will also allow store managers to identify those employees who are getting close to the number of hours worked in any given week that would qualify them as full-time staff. Those employees will not be called in, so that the company can avoid the added benefits that go with full-time status.

This is actually not the first time I have heard of such a scam. Many years ago, the Canada's Wonderland theme park in Ontario compelled some of its employees to remain on unpaid standby when bad weather cut attendance at the park. If it's any mitigation, most of those people were students on summer jobs. For the WalMart employees, it's different: this is their livelihood. As this scheme gets rolled out, the employees will lose whatever predictability they currently enjoy in regard not only to their incomes, but also their working hours. And given WalMart's dominant position in US retailing, it is inevitable that its competitors will have to consider similar cost-cutting schemes of their own, undermining working conditions even further in the US retail sector.

WalMart is a very odd company that only seems to be able to prosper in North America. A lot of the goods are of very poor quality, but Americans (and to some extent Canadians) seem quite happy to buy a t-shirt that falls apart in the washing machine as long as it's cheap enough, and they don't ask about the wages of either the person who made it or the one who sold it to them. WalMart recently beat an undignified retreat from Germany, and its ownership of Asda in the UK has not exactly been a stonking success. So there's at least some grounds for hope that these employment practices may not cross the Atlantic.

I've referred to WalMart's workforce as "employees", but the company many years ago opted to rebrand them as "associates". Time for another rebranding: if this rostering scheme is adopted, I think these people can safely be referred to as slaves.