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Monday, September 22, 2008

"The high cost of low prices"

The Big Squeeze is a remarkable collection of anecdotes and data that leaves the reader almost overwhelmed by the circumstances faced daily by so many American workers.  Steven Greenhouse highlights the full range of problems workers today face -- long, undercompensated, and often uncompensated, work hours; dangerous work conditions; discrimination and other illegal mistreatment; lack of health care coverage or reasonable leave to attend to family responsibilities.

Particularly interesting to me what Greenhouse's discussion of how these conditions have changed over time and especially his focus on the post-World War II attitude of employers and the government and the social contract that benefitted workers in the middle part of the 20th century.  It is helpful to remember that today's workplace conditions are not inevitable, but are the consequences of shifting attitudes and priorities that could again shift.

In this regard, Wal-Mart is an interesting example because the story of Wal-Mart so closely mirrors the story Greenhouse tells about changes in the relationship between employee and employer over the past four or five decades.  Sam Walton, founder of Wal-Mart, was legendary for giving employees an impression that they were family, and that they were being heard.  Greenhouse tells and extraordinary story of current Wal-Mart  CEO Lee Scott's early days at the company.  He started as an assistant director of trucking, and when one employee violated a rule, he would send warnings to all employees.  The drivers ultimately complained directly to Sam Walton, who "told Scott to apologize and made he tell the drivers that he appreciated that they had used Wal-Mart's Open Door policy to go over his head to complain."  (138)  This is in such stark contrast wit hthe stories from earlier chapters in the book of workers disciplined and even fired for pointing out gross misconduct by their supervisors.  And it stands in stark contract to Wal-Mart's current policies.  While Wal-Mart still likes to tout itself as the natural outgrowth of its roots as an employee-first business, it is today the prototype of what is not working for workers.

So what changed? 

This is where I might disagree slightly with Noah Zatz's argument that The Big Squeeze to some extent lets "real people" off the hook for what is going on in the workplace.  While many elements of Greenhouse's argument, and the extraordinary stories he recounts, do take the form of exposing corporate mistreatment of workers, I think the question of who should pay for a better system is never far from the surface of the argument.  As Greenhouse says of Wal-Mart, "rock-bottom costs make its rock-bottom prices possible."  In other words, a business model that seeks to drive prices to their lowest possible point cannot sustain a culture that treats employees well.  The only way conditions for workers will change is if all of us, one way or another, pay more to make that happen. 

The pressure on retailers to keep prices at their lowest possible point, and even to continue to lower them, is in direct tension with any improvement in working conditions.  There may be government solutions to this tension, and certainly pressure from shareholders and CEO salaries is some part of the problem.  But one of the things a book like The Big Squeeze might ideally do is to force consumers to think about "the high cost of low prices."

Posted by Melissa Hart on September 22, 2008 at 12:27 PM in Books | Permalink


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u suck :)

Posted by: p bryan | Dec 9, 2008 5:45:05 AM

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