From ILCA When Wal-Mart comes to town, profits soar, but workers and communities suffer.

Always low prices' coupled with acres of merchandise and shopping-center convenience. Who can resist that combination? Not many of us, and as a result, Wal-Mart has become an international business phenomenon, the world's biggest retailer. Sounds like an American success story, right? Actually, it's more like a nightmare, an economic horror story that public employees — who comprise a major part of America's growing service economy — should be especially aware of.

As the nation's largest private employer, Wal-Mart sets the standard for wages, benefits and prices wherever it goes, and it has gone nearly everywhere. Founded in 1962, it now generates a quarter-trillion dollars in annual sales, attracts 20 million shoppers daily and is expanding at the furious rate of a new superstore every two days.

But Wal-Mart's driving ambition to become the biggest retailer in the world has had dire consequences. Not only has it driven down wages and benefits for its own workers, it's also doing the same — or threatening to — in other segments of the economy. That means you — public employees whose service to their states and communities represent a major component of the economic success of this country in recent years. How? By holding down the wages and benefits of its workers, Wal-Mart is forcing its competitors to do the same to survive. That, in turn, creates downward pressure on the economy in general.

As a growing economic juggernaut, Wal-Mart also is forcing local governments to subsidize the company in several ways, including tax breaks and other economic incentives to lure the megastores and their jobs. Where does that leave you, the public employee? Working for a state or local government or public agency that is less able to improve pay and benefits while its resources are being drained as Wal-Mart's are bolstered.

More broadly, Wal-Mart's ruthless competitive practices have proved worthy of 19th-Century robber barons. The company uses its high volume to batter competitors and squeeze suppliers. It pushes prices so low that 'regular' stores in the area have difficulty staying in business. And it exerts terrific pressure on suppliers to cut their prices to the bone — or lose what may well be their biggest account; and companies that knuckle under have to reduce their own employees' pay and benefits.

'Wal-Mart's destructive corporate appetite doesn't end with the U.S workers,' says AFL-CIO Pres. John Sweeney. 'Wal-Mart pressures its suppliers to seek the lowest wages and standards, and it imports nearly $15 billion a year of goods from China.'

The cost of Wal-Mart's success is too high for grocery workers, suppliers and everyone else struggling to keep their heads above water in this tough economy. 'Rather than raising the standards, they're leading the race to the bottom,' says Ken Jacobs, deputy chairman of the University of California/Berkeley Center for Labor Research and Education.

SPIRALING DOWNWARD. Few people know the destructive power of Wal-Mart better than Joe Hansen, international president of the United Food and Commercial Workers union. Starting in October 2003, UFCW members employed by Southern California grocery stores took to the streets for four months in a strike that affected up to 70,000 workers. The strike's motivating force: the threat of Wal-Mart bringing as many as 40 grocery selling 'superstores' into the area.

To compete with Wal-Mart's colossal market share and lower prices, the companies that own the Vons, Safeway, Ralphs and Albertsons chains collaborated to slash their workers' wages and benefits. The resulting strike hurt the workers and their families, and inconvenienced the communities the stores serve, with the pain continuing to this day: Analysts say drastic changes made in the grocery chains' contract language will reduce the percentage of newly hired workers who will be covered by health insurance.

'Wal-Mart is an economic earthquake that is pulling the ground from beneath America,' Hansen told delegates to AFSCME's 36th International Convention last June. The retailer 'has driven U.S. manufacturers overseas in search of lower wages. ... [and] driven Main Street businesses out of business in every corner of America. It has lowered wages and destroyed benefits in the retail industry and in every industry that supplies and services Wal-Mart.'

The Southern California grocery strike is an example of that race to the bottom. Wal-Mart's chief competitors cited the superstore threat as justification for creating a two-tier system of health insurance that could reduce the portion of unionized grocery workers who have health coverage from 98 percent to as low as 47 percent. Wherever the company opens for business, the 'Wal-Martization' of wages and benefits sets a new and depressed base for collective bargaining for union members at other local grocery stores.

Wal-Mart pays workers 31 percent less than other large retailers, according to Jacobs. The company also provides far less adequate health benefits. 'Fewer than half of Wal-Mart workers are insured under the company health care plan — just 46 percent,' says the AFL-CIO's Sweeney. 'Wal-Mart actually steers many of its workers to state funding for family health care, thus profiting at the entire community's expense.'

'When workers do not earn enough to support themselves and their families through their jobs, they rely on public safety-net programs to make ends meet,' wrote Arindrajit Dube, of Berkeley's Institute for Industrial Relations, in a study of Wal-Mart's impact on society. In California alone, Dube and Jacobs found, Wal-Mart workers rely on the state for about $32 million annually in health-related services and $54 million a year in other assistance — such as subsidized school lunches, Food Stamps and housing. Forcing taxpayers to make up for Wal-Mart's greed is another reason why state and local governments have less money to spend to improve wages and benefits of public employees.

DARK INTERIOR. What goes on inside Wal-Mart is just as unsettling. Lawsuits and complaints to the National Labor Relations Board (NLRB) show a corporation steeped in policies and practices that demonstrate its commitment to profit rather than to its 'associates' (the image-building term it uses for employees).

Wal-Mart has been the subject of more than 24 complaints to the NLRB since November 2001. The accusations involve such anti-union activities as firings, interrogations and disciplinary actions in response to workers' efforts to organize. In most cases, the board merely required the company to post information on employees' rights and to promise not to violate the law again.

In June 2001, six current and former female workers filed a sex discrimination lawsuit against Wal-Mart. Last June, a federal judge certified the case as a class-action suit — the largest civil-rights case ever filed in this country. If successful, it could benefit up to 1.6 million current and former female employees. The case now awaits appellate review, but the substance of the women's claims is clear: As a district court judge noted, the plaintiffs presented mostly uncon-tested statistics revealing that 'women are paid less than men in every region' and that pay disparities exist in most job categories. The company has other legal problems. In Pennsylvania, at this writing, Wal-Mart was trying to settle a federal probe into allegations that it knowingly hired contractors who used illegal immigrants to perform cleaning duties at 61 stores in 21 states. 'The use of illegal workers appeared to benefit Wal-Mart, its shareholders and managers by minimizing the company's costs,' reported The New York Times, 'and it benefited consumers by helping hold down Wal-Mart's prices.' The company could be fined $10,000 per employee if the court finds that it knew about his or her illegal immigration status.

Another flagrant example of how Wal-Mart abuses its workers came to light in a civil suit filed last February by some of those same illegal immigrants, who accused the retailer of locking night janitors inside stores during their shifts. Why a lock-in? To keep the employees safe and the merchandise secure, the company says.

Wal-Mart claims it has abandoned its practice of systematically locking in night-shift workers in some stores. In at least one case, in 1988, that practice proved fatal for an overnight stocker at a store in Savannah, Ga. The worker collapsed and died when paramedics were unable to get to him quickly enough because other workers inside couldn't open the fire door or front door, and there was no manager with a key.

UNION BUSTER. Publicly, Wal-Mart insists it is not anti-union, just opposed to 'third-party representation.' As an employee handbook puts it, 'We are pro-Associate.' What that means, the handbook explains, is that 'every Associate can speak for him/herself without having to pay his/her hard earned money to a union to be listened to and have issues resolved.'

Hearing these lines, the UFCW's Hansen laughs aloud. 'That puts the richest, largest company in the history of the world against each individual worker,' he says, 'and expects the person to be able to protect him or herself against all the depredations Wal-Mart puts on its people.'

Wal-Mart's opposition to unions is so implacable, in fact, that only one attempt to organize has even gotten off the ground in the company's 3,500-plus American stores. Ten meat cutters employed at a superstore in Jacksonville, Texas, voted in 2002 to join the UFCW. In retaliation, the company not only closed that butcher department, it also shut down other meat-cutting operations.

'They will do anything to avoid giving their employees any type of rights,' says Hansen. '[Osama] bin Laden might have learned from some of the Wal-Mart people: They absolutely terrorize their workers.'

Following the failed effort in Jacksonville, the union launched organizing campaigns at several other Wal-Mart stores. 'It never built up to a point where we were comfortable we were going to win an election,' Hansen says. 'We still have efforts in a few stores, but we have shifted our emphasis away from that.'

Canada is now UFCW's new organizing battleground, where it achieved its first success in Quebec (see related story). Meanwhile, the UFCW, AFSCME and others are trying to improve their prospects here at home. One possible means is passage in Congress of the Employee Free Choice Act, sponsored by Sen. Edward M. Kennedy (D-Mass.) and Rep. George Miller (D-Calif.). The measure would, in Kennedy's words, 'ensure that workers are free to choose their own representatives and that they can negotiate new contracts quickly and fairly.'

REAL 'WHITE COLLAR' CRIME. The legislation, supported by more than 240 members of Congress, calls for imposing triple damages for unlawful firings of pro-union workers during organizing drives and civil fines against employers committing serious or repeated violations of the right to organize. It would also require companies to recognize union representation if a majority of workers sign union cards requesting that, as well as third-party binding arbitration of contracts if the employers stall negotiations.

Legislation aside, the UFCW is continuing its campaign to win respect and dignity for Wal-Mart workers. For instance, it is working with community groups to block Wal-Mart's expansion into localities, and trying to hold the company to minimum-wage standards when it does open new stores. UFCW, AFSCME and other unions are also pressing state and local governments to require Wal-Mart and other large retail companies that wish to establish new stores to provide a living wage and decent benefits to their employees — thereby preventing the standard of living in an area from deteriorating.

But UFCW is not calling for a boycott of Wal-Mart stores. 'There have been too many calls for boycotts that have failed,' says Hansen. 'I just want people to understand that any time they go into Wal-Mart, they're helping to create world-wide poverty — poverty-level wages for people in China and Bangladesh and other Third World countries. We have to educate people that shopping at Wal-Mart is not a good thing. People might save a little money, but it's putting them on a long-term road to lower wages.'

For more information on the negative impact of Wal-Mart, click on this AFL-CIO link: