US: Wal-Mart to Add More Part-Timers and Wage Caps

Publisher Name: 
The New York Times

Wal-Mart,
the nation's largest private employer, is pushing to create a cheaper,
more flexible work force by capping wages, using more part-time workers
and scheduling more workers on nights and weekends.

Wal-Mart executives say they have embraced new policies for a large
number of their 1.3 million workers to better serve their customers,
especially at busy shopping times - and point out that competitors like
Sears and Target have made some of these moves, too.

But some Wal-Mart workers say the changes are further reducing their
already modest incomes and putting a serious strain on their
child-rearing and personal lives. Current and former Wal-Mart workers
say some managers have insisted that they make themselves available
around the clock, and assert that the company is making changes with an
eye to forcing out longtime higher-wage workers to make way for
lower-wage part-time employees.

Investment analysts and store managers say Wal-Mart executives have
told them the company wants to transform its work force to 40 percent
part-time from 20 percent. Wal-Mart denies it has a goal of 40 percent
part-time workers, although company officials say that part-timers now
make up 25 percent to 30 percent of workers, up from 20 percent last
October.

To some extent, Wal-Mart is simply doing what business strategists
recommend: deploying workers more effectively to meet the peaks and
valleys of business in their stores. Wall Street, which has put
pressure on Wal-Mart to raise its stock price, has endorsed the
strategy, with analysts praising the new approach to managing its
workers. In the last three years, the stock price has fallen about 10
percent, closing at $49.32 a share on Friday.

"They need to be doing some of this," said Charles Grom, an analyst at J. P. Morgan Chase
who covers Wal-Mart. It lets the company schedule employees "when they
are generating most of their sales - at lunch, in the evening on the
weekends."

But Sally Wright, 67, an $11-an-hour greeter at the Wal-Mart in
Ponca City, Okla., said she quit in August after 22 years with the
company when managers pressed her to make herself available to work any
time, day or night. She requested staying on the day shift, but her
manager reduced her schedule from 32 hours a week to 8 and refused her
pleas for more hours, she said.

"They were trying to get rid of me," Ms. Wright said. "I think it was to save on health insurance and on the wages."

Wal-Mart vigorously denies it is pushing out longtime or full-time
employees and says its moves will ensure its competitiveness. The
company says it gives employees three weeks' notice of their schedules
and takes their preferences into account, but that description differs
from those of many workers interviewed. Workers said that their
preferences were often ignored and that they were often given only a
few days' notice of scheduling changes.

These moves have been unfolding in the year since Wal-Mart's top
human resources official sent the company's board a confidential memo
stating, with evident concern, that experienced employees were paid
considerably more than workers with just one year on the job, while
being no more productive. The memo, disclosed by The New York Times in
October 2005, also recommended hiring healthier workers and more
part-time workers because they were less likely to enroll in Wal-Mart's
health plan.

Other big retailers, with or without unions, have begun using more
part-time workers, adopted wage caps and instituted more demanding work
schedules in one form or another. But because Wal-Mart is such a giant
- its $312 billion in sales last year exceeded the sales of the next
five biggest retailers combined - its new labor practices may well
influence policies more broadly.

And Wal-Mart's tougher scheduling demands could be especially taxing
on workers because, unlike its competitors, the chain has many stores -
more than 1,900 out of 4,000 - that are open 24 hours.

Human resources experts have long said that companies benefit most
from having experienced workers. Yet Wal-Mart officials say the
efficiencies they gain will outweigh the effects of having what labor
experts say would be a less experienced, less stable, lower-paid work
force.

Sarah Clark, a Wal-Mart spokeswoman, said the company viewed the
changes as "a productivity improvement through which we will improve
the shopping experience for our customers and make Wal-Mart a better
place to work for our associates," as Wal-Mart refers to its employees.

But some workplace experts point to the downside of the policies. Susan J. Lambert, a professor of social sciences at the University of Chicago
who has written several research papers on retail workers, called it a
burden for employees to cope with constant schedule changes.

"You have to set up child care for every day just in case you have
to work," she said, "and this makes it hard to establish routines like
reading to your kids at night or having dinner together as a family."

The adoption of wage caps has also been difficult for many workers
to swallow. Workers will never receive annual raises if their pay is at
or above the cap, unless they move to a higher-paying job category.
Wal-Mart says the caps will encourage workers to seek higher-paying
jobs with more responsibility.

To compensate for lost future wages under the new system, Wal-Mart
made one-time payments of $200 to $400 to workers whose pay was near or
over the caps. Several workers described that as "hush money."

Ramiro Gonzalez, who works in the produce department of a Wal-Mart
in El Paso, said that many longtime workers were fuming about the caps.

No matter how hard people work, "we won't get anything else out of
it," said Mr. Gonzalez, who earns $11.18 an hour, or about $23,000 a
year, after six years with Wal-Mart. "The message is, if I don't like
it, there is the door. They are trying to hit people who have the most
experience so they can leave."

In the confidential memo sent to Wal-Mart's board last year, M.
Susan Chambers, who was recently promoted to be Wal-Mart's executive
vice president in charge of human resources, questioned whether it was
cost-efficient to employ longtime workers. "Given the impact of tenure
on wages and benefits," she wrote, "the cost of an associate with 7
years of tenure is almost 55 percent more than the cost of an associate
with 1 year of tenure, yet there is no difference in his or her
productivity."

The memo said, "the shift to more part-time associates will lower
Wal-Mart's health-care enrollment" even though Wal-Mart was reducing
the amount of time to one year, from two, that part-time workers would
have to wait to qualify for health insurance.

Workers say there is some evidence that the goals outlined in Ms.
Chambers' memo are being put into practice. At several stores in
Florida, employees said, managers have suddenly barred older employees
with back or leg problems from sitting on stools after using them for
years while working as cashiers, store greeters or fitting-room
attendants. Wal-Mart said it had no companywide policy on stool use and
did not have enough information to comment.

In August, Wal-Mart sent all store managers a confidential document
called "Facility Manager Toolkit." It instructed them to tell workers
that the new pay system helped "establish pay levels that are
competitive in the local job market, helping us to attain and retain
the talent we need."

If a worker asked whether the wage caps were "one more attempt to
get rid of long-service Wal-Mart workers," the manager was to respond
that this was "not an attempt to 'get rid' of long term associates,"
but was "consistent with our objective to maintain internally equitable
pay levels," according to the document. The memo was supplied to The
New York Times by WakeUpWalMart.com, a group funded by the United Food and Commercial Workers, which has tried to organize Wal-Mart workers in the past.

Though some workers have quit in response to the pay caps and
scheduling policies, Wal-Mart says it has received an average of seven
applications for every job opening at a new store in the last three
months.

Wal-Mart generally prohibits reporters from interviewing workers in
its stores. The Times contacted employees through union-backed groups,
Wal-Mart, employment lawyers and referrals from current and former
workers.

A big area of discrepancy between what Wal-Mart says and what the
workers say is whether the company has a policy of "open availability,"
requiring employees to make themselves available around the clock. Ms.
Clark, the Wal-Mart spokeswoman, said the company had no such a policy,
adding, "Our main goal is to match the ratio of associates to customers
shopping in our stores resulting in better customer service hour by
hour." Wal-Mart says it pays higher wages to night-shift workers.

But in March, workers from a Wal-Mart in Nitro, W.Va., held a small
protest rally in the center of town after Wal-Mart managers demanded
24-hour availability and cut the hours of workers who balked. And
workers from other stores around the country said in interviews that
similar demands had been made on them.

Houston Turcott, the former overnight stocking manager at the
Wal-Mart in Yakima, Wash., said that managers had told workers, "Either
they had full, open availability so we can schedule them when we would
like or we would cut their hours."

Tracie Sandin, who worked in the Yakima store's over-the-counter
drug department until last February, said, "They said, if you don't
have open availability, you're put on the bottom of the list for
hours."

Ms. Sandin said that many Wal-Mart employees disliked the tougher
scheduling demands, which typically did not take seniority into
account. "It makes it hard," she said. "If you have a function with
your child or you want to go to church on Sunday, you don't want to
miss those things."

Tim Hahn, who oversees three workers as manager of the housewares
department of a Wal-Mart in Lake St. Louis, Mo., said that two of his
subordinates had left their schedules open, but one did not for family
reasons. Mr. Hahn said "it helps a lot" to have two workers who have
agreed to work during the day or night.

"Sometimes they work two nights a week and two days a week," he
said. "If there is an issue with a schedule, they can approach me. It's
something we will work to solve. If they need this day off, I am happy
to give it to them."

AMP Section Name:Retail & Mega-Stores
  • 184 Labor