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Wal-Mart critics, supporters speak at law school symposium

by Elizabeth Omara-Otunnu - October 30, 2006

Wal-Mart, the world's largest retailer, was both praised and criticized at a symposium held Oct. 20 and 21 at the Law School.

And one well-known advocate for the company surprised attendees by speaking out against recent wage caps at the retail giant.

Ron Galloway, a former member of the steering committee of Working Families for Wal-Mart, said he has left the advocacy group.

"If you've been [working at Wal-Mart] 15 years and you're making $15 per hour, you're capped out. That's wrong," said Galloway, one of two keynote speakers at the symposium, which was organized by the Connecticut Law Review and the Connecticut Journal of International Law.

"If you start at Wal-Mart today, and you know wage caps are in place, that's fair. But to foist this on long-term employees . I don't think you grow your business on the backs of your long-term employees."

Still, he insisted, he is not a "Wal-Mart hater" - as critics of the corporation are dubbed - and he also spoke in its defense.  

Galloway, the producer-director of the film Why Wal-Mart Works & Why That Makes Some People C-r-a-z-y, said that although "Wal-Mart is sometimes bashed for low wages . they pretty much pay what retail pays.

"People have choices," he added. "[Wal-Mart employees] don't make a lot of money, but a lot of the people who make $15 an hour at Wal-Mart are quite happy doing that."

Keynote speaker Bob Ortega, a journalist and assistant professor of journalism at Ryerson University School of Journalism in Toronto and author of In Sam We Trust: The Untold Story of Sam Walton and Wal-Mart, the World's Most Powerful Retailer, was critical of Wal-Mart's employment practices.

Although the company has changed for the better in the past few years, Ortega said, he is still skeptical.

He said recent changes were prompted by negative publicity, often have a hidden downside, and in many cases help or have a minimal impact on the bottom line.

Wal-Mart has, for example, hiked workers' starting pay by 6 percent, and introduced low-premium health insurance for employees.

However, the company did not call attention to the fact that the pay raise does not apply to existing employees, Ortega said.

Nor did it reveal that some job descriptions have been re-written in order to discourage potential employees with health problems; that the insurance deductibles are very high; and that employees must work at least a year before they are eligible for health insurance.

Wal-Mart has also adopted environmental goals, including cutting solid waste, improving the efficiency of its trucks, reducing packaging, and lowering energy use at its stores.

And it is selling more organic food and high-efficiency light bulbs.

Yet these initiatives are not driven by altruism, Ortega said. Instead, they represent a profitable business move.

"The divergence between image and substance is nothing new," he said, but has characterized the company since it was founded.

Ortega said Wal-Mart has been "relentless" in its efforts to squeeze the lowest prices from manufacturers, in many cases switching to suppliers in countries with lower pay and child labor.

"Wal-Mart forces suppliers and competitors to turn into shadow versions of Wal-Mart," he said, with low wages and poor working conditions.

Ron Galloway, producer/director of the film Why Wal-Mart Works, speaks at the Wal-Mart Matters symposium at the UConn School of Law on Oct. 20.
Ron Galloway, producer/director of the film Why Wal-Mart Works, speaks at the Wal-Mart Matters symposium at the UConn School of Law on Oct. 20.
Photo by Tina Covensky

Ortega criticized Wal-Mart's "excessive focus on low prices."

He said that as the company buys more from overseas, its profit margins have increased.

"They could significantly impact workers' conditions by accepting the same margins they were getting three to four years ago," he said.

Speaker after speaker painted a picture of Wal-Mart as a "behemoth," or "Modern Leviathan," that has become a law unto itself; often has devastating effects on economies and societies around the world; and affects everyone, even if they neither shop nor work at the store.

"Beyond just size," said Kurt Strasser, interim dean of the School of Law and Professor Phillip I. Blumberg Professor of Law, "Wal-Mart and everything it represents has become such a sprawling phenomenon," not just in the U.S., but worldwide.

ss compunction. Targeting Wal-Mart is fine, but this goes well beyond Wal-Mart."

"We know we're seeing something new and different," he added, "and we're trying to figure out what it is."

Panelist Larry Catá Backer, a professor of law at Penn State Dickenson School of Law, said Wal-Mart is side-stepping established legal systems.

"We are seeing the beginning of a global system of norm-making ... in which governments and governmental norm-making are largely irrelevant," he said.

Until now, legal systems have been developed by political communities based on democratic principles, he said.

In the emerging system of law-making, the principal actors are corporations, non-governmental organizations, the media, and customers, including the investment community and financial markets.

Another panelist, Chris Tilly, professor of regional economic and social development at the University of Massachusetts-Lowell, described Wal-Mart as "the new superpower."

But, he said, it should not be assumed that its impact is the same in other countries as in the U.S.

In Mexico, for example, said Tilly, who has made a special study of Wal-Mart in that country, for the average consumer "a trip to a Wal-Mart superstore is a high-end experience."

Low wages are found throughout the retail sector, he said, and all retailers have similar sourcing practices, such as importing goods from China.

Despite its aggressive expansion overseas, "Wal-Mart is not unstoppable," said Tilly.

He noted that the company is pulling out of South Korea and Germany.

Besides, he said, there can be "Wal-Martization" without Wal-Mart: "In Mexico, if you took Wal-Mart away, its competitors would be very happy to do what Wal-Mart is doing, perhaps with evenss competition. Targeting Wal-Mart is fine, bu tthis goes well beyond Wal-Mart."

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