UCLA examines “˜Wal-Martization’

It’s the largest retailer in the world, with sales
climbing to over $250 billion in the last fiscal year, and it
attracts more than 138 million customers a week and employs more
than 1.5 million workers.

The superstore conglomerate is more than impressive financial
statistics and hefty sales numbers. It’s a trendsetter with a
name for the phenomenon it’s creating:
“Wal-Martization.”

Because of its size and influence, Wal-Mart is currently having
a profound impact on regional and global economies, and this year
UCLA students, professors and community members are getting the
chance to study the phenomenon and its far-reaching effects.

Urban planning Professor Goetz Wolff teaches the winter and
spring quarter classes about the supercenter giant, titled
“The Southern California Regional Economy,” to both
undergraduate and graduate students.

An endeavor on behalf of the UCLA Labor Center, the class is
part of the Community Scholars Program, which brings students
together with local community and labor leaders, said Kent Wong,
director of the center.

“It’s actually a great cross section of
participants. … The community is concerned and is participating
in the program. They’re learning together about each
other’s issues,” Wong said.

The class for next quarter was posted by the registrar on Monday
and the curriculum will focus on the various ways to address the
issues posed by Wal-Martization, such as Wal-Mart’s largely
anti-union stance.

“Wal-Mart sets many trends on human resources and
industrial relations policy in America. So it’s important to
understand what their model is and the impacts the model
has,” said Ken Jacobs, deputy chair of UC Berkeley’s
Center for Labor Research and Education and author of a recent
study on Wal-Mart.

For labor and industry experts, Wal-Mart has always been an
interesting case study. In October 2003, BusinessWeek magazine
undertook a massive report on the company and estimated that by the
decade’s end Wal-Mart may hold 50 percent of the market share
on such household staples as toothpaste, shampoo and paper
towels.

With such statistics in hand, a handful of researchers have been
spending more time on the store’s business model, strategy
and day-to-day operations.

Jacobs’ paper, which he co-authored with a fellow
researcher, Arindrajit Dube, looked at the ways in which public
safety net programs were affected by Wal-Mart’s employee
policies.

The paper, titled “The Hidden Costs of Wal-Mart Jobs: Use
of Safety Net Programs by Wal-Mart Workers in California,”
ruffled feathers and elicited controversy when it was released in
August 2004.

It found that reliance by Wal-Mart employees on public
assistance programs such as state-sponsored health programs cost
California taxpayers an estimated $86 million.

In addition, Jacobs and Dube found that, compared to other large
retailers, the supercenter chain pays its employees 31 percent less
and that 23 percent fewer employees are covered by health
insurance, Jacobs said.

“This is significantly below the average, and it’s
just a comparison with other large retailers. With the unionized
grocers it’s much greater,” Jacobs added.

Various studies had come out about the conglomerate, but no one
had ever quantified Wal-Mart’s policies in terms of the costs
to the government, Jacobs said. So the two researchers from the UC
Berkeley Center for Labor Research and Education decided they would
do so.

“Things really surprised me when looking at the general
payroll data and the wage and benefit data. (That was) how out of
step Wal-Mart is with the rest of the retail industry,”
Jacobs said.

The crux of the Berkeley researchers’ work lay in the
finding that if other large retailers in the state adopted
Wal-Mart’s standards, taxpayers would bear the brunt of the
cost ““ to the tune of $410 million.

“Wal-Mart workers’ reliance on public assistance due
to substandard wages and benefits has become a form of indirect
public subsidy to the company. In effect, Wal-Mart is shifting part
of its labor costs onto the public,” according to the
researchers’ paper.

Jacobs and Dube’s paper is currently part of the assigned
reading for Wolff’s class on Wal-Mart. The class calls on
students to examine numerous case studies for their own research
papers. Together with Wolff, the students also work on preparing
materials that they will distribute at a conference on
Wal-Martization hosted by the UCLA Labor Center in June.

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