Sunday, August 03, 2008

Walmartyrs

As if you needed another reason not to shop there:

In recent weeks, thousands of Wal-Mart managers and department heads have been summoned to mandatory meetings at which the retailer stresses the downside for workers if store workers unionize, the paper said.

....

The Wal-Mart human-resources managers who have run the meetings didn't tell those attending how to vote in the November elections, but made it clear that voting for the presumptive Democratic presidential nominee, Sen. Barack Obama, would be tantamount to inviting unions in, the Journal said.

Wal-Mart opposes proposed legislation called the Employee Free Choice Act, which would make it easier for workers to unionize by signing a card rather than holding a vote.

A Wal-Mart spokesman confirmed the meetings to the Journal.

"If anyone representing Wal-Mart gave the impression we were telling associates how to vote, they were wrong and acting without approval," David Tovar, the Wal-Mart spokesman, told the Journal.


This is pretty standard stuff, actually, as anyone who has worked for a shop that considers unionizing already knows. The first thing management does is tell you that you'll all be out of jobs, which is frequently not that far from the truth. In other words, take the crumbs we give you, which in Wal-Mart's case has meant everything from shorting employees' hours just enough so that they have to go on the dole to get health care and other luxuries, to locking employees in the store overnight.

It's not unique to Wal-Mart, of course; this sort of thing is what precipitated labor innovations such as a 40-hour work week and child labor laws a century ago. It's just that Wal-Mart, because of its sheer size and scale, has simply been able to refine the process in the "modern" era, which coincidentally is looking increasingly regressive. It is most likely that enormous scale which has so far insulated it from the effects of fuel price increases.

Anyone familiar with their supply chain model (hub-and-spoke FDC systems running "just-in-time" logistics; essentially, as Jim Kunstler puts it, a "warehouse on wheels") can reasonably figure out what consequences $5 or $6 gasoline will wreak on their pricing structure, and hence their customer base. Already shipping costs are rising, whether land, sea, or (obviously) air, which is impacting supply time (especially raw materials) as well as cost, and will continue to cascade down the chain. It's just a matter of finding that price-point equilibrium where the corporation can't take it out of the hides of floor personnel anymore, and you can bet they have that regression analysis spreadsheet in the CFO's locked folder on the shared drive.

It's amazing to hear the psychologically-motivated vents of seeming relief that gas is "down" to four bucks in the last couple weeks, as if it were suddenly cheap again. Most likely it's a blip caused by short-term drops in American consumption (call it the "staycation" effect, if you enjoy trotting out that dismal coinage) which will shortly be offset by China and India. The oil companies, now that they are getting a better clue as to what the market will bear, are surely calibrating their options for the next wave of post-peak price restructuring. This is not exactly a secret.

We are addicts who about to have an intervention. Having one we can have at least some control over is probably preferable to one that's imposed on us. Part of reducing consumption is breaking from the globalized JIT supply-chain model and going for a more localized approach, which will end up being a long tail model. That doesn't mean entirely discarding the vertically-integrated doxology of globalization, but rather finding a balance. Driving smaller and smarter certainly helps, but so does remembering that nothing is free, no matter how cheap it looks sitting on that shelf with all the other crap. How and what we eat and how and what we buy will, sooner rather than later, become as important as how and what we drive.

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