The only competition that exists among the corporate
players at the commanding heights of the American
economy is the race to determine who can squeeze the
workers first and hardest. Nothing illuminates this
reality more starkly than the southern California
supermarket strike and lockout, now in its fifth
month. Displaying a class solidarity that would make
Mao Tse-tung's Army blush a deep red, a united front
of grocery chains is determined to destroy the middle
class dreams of 70,000 union workers.
The Safeway, Kroger and Albertsons chains and their
subsidiaries claim underdog status, as they grind $10
an hour workers into the dirt. "Wal-Mart is coming,
Wal-Mart is coming!" they cry, moaning that the
non-union retail behemoth's labor costs are about 20
percent lower than industry norms. Yet, according to
the June, 2003 issue of Forbes Magazine:
The real problem the traditional grocery chains face
is weak demand and an inability to raise prices in a
deflationary environment not Wal-Mart pricing
pressure. Kroger and Safeway are gaining or
maintaining share in about half or more of the top 100
markets where they have a presence. The only two big
chains to suffer inroads from Wal-Mart in 2002 were
Albertson's and Winn-Dixie..."
The truth is, Wal-Mart does want to take over the
world but so do the managements of its
strike-provoking competitors, who swallowed schools of
smaller fish to control 70 percent of grocery sales in
the top 100 markets. Certainly, Wal-Mart is closing
fast, with $53 billion in grocery sales and 1400
"supercenters" in 42 states, but the "real problem" is
much deeper than the folks at Forbes can safely grasp
without losing their capitalist minds. In the world
they have created for themselves, in which corporate
death is avoided only through constant increases in
dividends, and having eaten nearly all of the smaller
prey, the mega-grocers have no one to feed on but
themselves or their employees. They began chewing on
the workers in the first week of October all the
while blaming it on Wal-Mart.
In reality, Wal-Mart was simply leading the way down a
road that Safeway and Kroger would soon be traveling
anyway. "Wal-Mart made us look at ourselves and
reinvent ourselves," said Dick Tillman, an executive
in charge of five southern states for the Kroger
chain, in an interview with the Wall Street Journal,
Let's make it plain: The problem is not that there is
too much competition in the retail food business, even
of the cutthroat, Wal-Mart kind. Rather, the chains
have loaded themselves down with debt to eliminate the
previously existing competition, and there are not
enough customers with enough income to buy enough
goods to pay off creditors and satisfy the ever more
ravenous demands of investors at the same time. So
they decided to cut labor costs by forcing a strike
and lockout of United Food and Commercial Workers
(UFCW) members throughout southern California.
Wal-Mart provided the excuse to do what comes
naturally to the corporate class in George Bush's
America. Wal-Mart is leader of the pack, but they are
It is correct to say that the UFCW strike is a
"Wal-Mart strike," in the sense that Safeway,
Albertsons and Kroger have chosen to "re-invent"
themselves as Wal-Marts and with the ferocity of the
newly converted. However, it would be unwise to treat
Wal-Mart as some uniquely villainous entity. The
Bentonville, Arkansas corporation is simply more
aggressive and self-consciously ideological than its
boardroom counterparts. But it is not another species.
Wal-Mart's corporate "personality" operates according
to the same imperatives as the rest of the pack, who
are far more admiring of their leader than resentful.
Class solidarity means the owners share a common war
chest. There is not even a pretense of corporate
competition when it comes to making war on workers.
From the moment the first UFCW picket lines went up at
Vons and Pavillion stores, in October, the companies
have shared revenues to compensate for strike losses.
The arrangement is legal, they claim, because the
chains all have contracts with the same union.
California Attorney General Bill Lockyer has filed an
antitrust suit charging revenue sharing hurts
consumers. "This action is about protecting shoppers
against unlawful, anticompetitive conduct that keeps
prices artificially high," said Lockyer. The companies
have, in effect, suspended competition to engage in
price-fixing, from which all of them benefit. The suit
contends the agreement "essentially freezes the
pre-strike market share."
Real money changes hands, according to equity analyst
Andrew Wolf. If pickets deter shoppers from Safeway
and Albertsons locations, but traffic is heavier at
Krogers-owned stores, then "Kroger would actually
write checks to the other two," said Wolf.
Safeway lost nearly $700 million in the last quarter,
but only $100 million due to the strike, say company
executives and some of that was covered by revenue
sharing. Yet Safeway's stock rose 70 cents last week.
How could that be Because Wall Street is rooting for
the home team, home being anyplace where corporate
diktat is challenged. When issues that really matter
to the corporate class are at stake, the rules of the
game are rigged by hype-masters in the money markets:
workers beat down, stock goes up hip-hip, hooray!
Business Week, like Forbes, speaks to the corporate
class. Lies are for outsiders; businessmen need to
know the real deal: "The industry's goal is to bring
its health-care costs more in line with those of
nonunion Wal-Mart Stores," said the February 12
Business Week. "The retail giant's medical plan covers
fewer than half its workers, and its sales clerks earn
less, on average, than the federal poverty level."
Of course, there is nothing intrinsically special
about the cost of health care for the company, it's
just another labor expense, albeit a fat and growing
one. If Wal-Mart is the model the leader of the pack then "the industry's goal" is to bring all labor
costs "more in line" with the viciously anti-union
trendsetter. The larger objective is to break the
union, as an organization or in spirit. From the
current corporate perspective, level playing fields
can only exist when the employees are flat on their
backs. Executives from purportedly competing companies
conspire and collude toward that end, all the while
pleading that "The Devil (Wal-Mart) made me do it."
The Devil and his disciples at Safeway, Kroger and
Albertsons have access to the same numbers, and move
inexorably in the same direction. It is their nature.
The supermarkets offer to the striking and locked out
UFCW workers amounts to a 65 percent cut in the
employers' health care contribution: from the current
$3.85 per hour worked to $1.35. The owners dispute
this figure, but in eagerly following Wal-Mart's model
they have telegraphed the fact that there is no limit
to how far they are willing to reduce labor costs. If
there is a bottom, Wal-Mart will find it first, and
the pack will eagerly follow.
Wal-Mart can also teach its acolytes how to profit
from poverty. Although the Walton family spends
millions on rightwing causes to undermine what's left
of the social safety net, their corporation urges
employees to apply for every available government
According to a report prepared by the House Committee
on Education and the Workforce, federal taxpayers
subsidize the typical, 200-employee Wal-Mart store at
the rate of $420,750 a year. Rep. George Miller
charges Wal-Mart is the source of "downward spirals in
Wal-Mart excuses its bare bones health care plan
which covers no one working less than 34 hours a week on the grounds that about 40 percent of their
"associates" get health coverage through their
otherwise employed spouse's plans. The rationale
appears to be: Employees whose spouses work at better
places have no need for health insurance.
The striking southern California grocery workers who
depended on the company plan no longer have health
benefits, and must get by on $100 dollars a week doled
out from the union strike fund. They don't want to be
the first line of defense against a highly mobile
corporate assault on living standards in America but
they have no choice.
They are in the way of a yelping wolf pack, led and
inspired by Wal-Mart.
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