The Walmart Problem

Several weeks ago I found myself standing with other clergy in support of OUR Walmart, a national organization that is trying to unionize Walmart employees. We were protesting the dismissal of two employees who had participated in a rally to organize a union. The experienced organizers assured us that the workers would eventually be re-instated by the National Labor Relations Board, but that would take up to a year. Firing the employees was illegal but clearly an effective intimidation tactic. Few workers will risk termination over the long period of time it takes to form a union. Our action may not have led the workers to get their jobs back, but it did show that OUR Walmart’s efforts had community support.

This incident got me thinking about the difficulties facing our society with low income workers. As it stands, companies like Walmart often pay workers the federal minimum wage, currently $7.25/hour. Because that wage is nowhere near a living wage, the government then supplements their pay with the Earned Income Tax Credit. Especially if these workers have a family, they will likely qualify for other government programs like SNAP, aka Food Stamps, Medicaid, and housing assistance. In essence the government picks up the excess slack from Walmart and subsidizes their low wages. Walmart benefits from cheap labor while the taxpayer pays the rest of the labor costs.

This has never struck me as a particularly equitable or efficient system. As a wealthy, modern society, we guarantee a standard of living that includes basic needs like housing, healthcare, food, access to education, etc. The Universal Declaration of Human Rights, which the United States helped author back in 1948, asserts these as fundamental human rights. However, instead of having businesses and consumers pay for these basic rights through living wages, we rely on government bureaucracy and the so-called “welfare state” to provide for the working poor. Is this really the best way to go about things?

People have tried to tackle this problem in different ways. For roughly the past twenty years, the Living Wage movement has tried to get municipalities and institutions to set their own minimum wage that takes into account the cost of living and supporting a family. Washington, DC is currently considering passing a variant on this concept which applies only to large stores, i.e. those with over 75,000 square feet of floor space. This has the dual benefit of raising wages while increasing the competitiveness of local businesses. But perhaps it is my love of the free market that has led me to favor a different, market-based solution: organizing. If Walmart employees had an effective union, they could negotiate a fair share of the profits, thus balancing the need for competitiveness with higher wages. Unions provide an important counterweight to the influence of corporate power, something that our society desperately lacks today. Fortunately, it would only take one large union to boost the pay of other low wage workers in the same area. If Walmart suddenly paid $12/hour, other businesses would raise their wages to attract workers.

The beauty of the system is that workers would be their own advocates, as opposed to the government or other citizens. It promotes democratic values like community participation and advocacy, and it increases social capital. In the long run, unions for service sector employees would reduce the need for costly government programs, and they would likely make smaller businesses on Main Street more competitive. While it is certainly possible for unions to have too much power and to abuse that power as corporations do today, we are a long way from that reality. We need a better balance between capital and labor.

There is no simple or easy solution to the current problem of the working poor in Ames and in the country more broadly. Unions are one solution whose benefits in my mind far outweigh its potential costs. One thing is certain though, we cannot keep squeezing employees on the bottom of the income scale. Wages have not kept up with productivity increases and government programs are being reduced or cut altogether. Flex time makes it harder for employees to schedule their lives or budget for the month. We expect low-income workers to have multiple jobs, thus working more than forty-hours per week without the hard-fought right for overtime pay. At what point do we stop creating more programs, both public and private, and focus on the heart of the issue: unjustifiably low wages? Like most concerned citizens and people of faith, I am open to many options, but doing nothing is not one of them. Jesus’ call to help the poor is one we should all heed.