The Costs Of
WalMartization Of America

By Silvia Ribeiro
For the first time in history, demarcating the beginning of the 21st century, the biggest company in the world was not an oil concern or an automobile manufacturer, but Wal-Mart, a supermarket chain. The symbolic value of this fact weighs as much as its crushing implications: it is the "triumph" of the anonymous, the substitution of the traditional way of acquiring what we need to feed ourselves, take care of our houses, tools and even medicine, traditionally involving interpersonal relationships, for a new one which is standardized, "mercantilized", and where we know progressively less about who, where and how or under which conditions what we buy is produced. Now, we can theoretically buy everything under the same roof, and even though goods seem cheaper, which actually is an illusion, the whole paradigm can end up being very expensive. To buy today at Wal-Mart may mean losing one's own job or contributing to the loss of somebody else's in your family or community sometime down the line.
Wal-Mart's policy of low prices is maintained while there are other places to shop in the same community. When the other shops go under, not able to compete, nothing prevents Wal-Mart from raising their prices, which the company invariably ends up doing. Wal-Mart has had a devastating influence in those communities where it showed up, and according to Wal-Mart Watch, an organization of citizens affected by the company's policies, for every two jobs that are created when it moves into a community, three are lost.
Wal-Mart is 19th among the 100 most powerful economies in the world - only 49 of which are now countries. Sam Walton's widow and their four sons control 38 percent of its shares. In 2004 they were sixth among the richest people in the world, with about 20 billion dollars each. If Sam Walton was alive he would be twice as rich as Bill Gates, who is number one on the list with 46 billion. Both are a clear expression of the modern megamonopoly and the control that they exert over consumers. These monopolies are of course intent on increasing their control. Wal-Mart, it could be argued, has the biggest impact, as it sells such a wide range of products and it wields tremendous power over suppliers - and politicians.
It is the biggest chain of direct sales to the consumer in North America. In the US it has over three thousand Wal-Mart stores and 550 Sam's Club outfits. In Mexico it already possesses 54 percent of the market, with 687 stores in 71 cities, including Wal-Mart, Sam's Club, Bodegas Aurrera, Superama and Suburbia, aside from the restaurant chains Vips, El Porton and Ragazzi. It already controls very large sectors of the market in Canada, Great Britain, Brazil, Germany and Puerto Rico, and its influence is on the rise in many others, Japan, for example.
It is the biggest private employer in the United States and Mexico. In the few decades it has been in existence it has accumulated an amazing history of being sued for many reasons, including illegally preventing the unionizing of its workers, and just about every other imaginable violation of workers' rights: discrimination against the disabled, sexual discrimination, child labor, lack of health care coverage, and unpaid overtime. In the US 38 percent of its workers are without health care, and the salaries it pays are, on average, 26 percent lower than the industry norm. In December 2003 there were 39 class action lawsuits pending against the company in 30 different states in the US for violations of overtime laws. In a round up in October, 2003 the government found 250 undocumented foreign workers, who of course were operating in even worse conditions. In June 2004 Wal-Mart lost the largest class action lawsuit in history, where 1,600,000 women proved that they suffered gender discrimination as employees of the company since 1998.
But the company's low prices are not based only in the exploitation of its workers in the countries where it operates directly. The prices are the direct result of the systematic use of "maquiladoras" in conditions of extreme exploitation. A worker in one of these, located in Bangladesh, told the Los Angeles Times in 2003 that her normal workday was from 8 am to 3 am, 10 or 15 days in a row. This is what it took to be able to survive given the wages she was getting paid. But in the same article, the manager of the plant complained that they had to become even more efficient, as Wal-Mart was threatening to move the production to China, where it could obtain lower prices.
Though absolutely terrible, labor exploitation is not the only "Wal-Mart" effect. There are many others, including the use of new technologies to track people's purchases even after leaving the supermarket. Control seems to be the name of the game in the "Walmartization" of the world.
Feeding Big Brother.
Supermarkets are the segment of the food chain that moves the most capital. According to certain analysts their influence towers over and could devour every other previous link in the chain, such as food and beverage producers, distributors, and agricultural suppliers.and producers. Whether they end up getting involved in these parts of the chain will depend on the economics of the game, so that if it is cheaper to allow other companies to compete amongst themselves, they will not get involved. The effect, nevertheless, is the same: the concentration of control and power in fewer and fewer hands. This is not limited to Wal-Mart but also includes other giants such as Carrefour, Ahold, Costco or Tesco.
But Wal-Mart stands out particularly because, besides being the biggest company in the world, its income is four times that of its largest competitor, and larger than the next four combined. Because it is the biggest seller of food products on a global level it has tremendous influence over what and how food gets produced. It's already dabbling, for example, in agriculture by contract directly with the agricultural producers. It also is third in sales in medicines.
As if it was not enough to be such an economic power, largely due to its growing monopoly, Wal-Mart is beginning, as mentioned earlier, to utilize new technologies to obtain information over people's buying patterns. It is already testing, in three cities in the US, the substitution of bar codes for identification systems through radio frequency. This is a "labeling" system utilizing an electronic chip, no bigger than a grain of rice and potentially much smaller, containing information about the product, which is transmitted wirelessly to a computer. This chip is capable of storing much more information than the bar code. The problem is that its signal follows the purchaser outside of the supermarket doors. According to Wal-Mart, the consumer would have the choice of asking at the checkout that the chip be turned off, except it has no plans to advertise this possibility.
It has already experimented using products from Gillete and Procter & Gamble, and others such as Coca Cola, Kodak, Nestle and many others.
At the beginning of 2004 Wal-Mart told its 100 principal suppliers that they would have to be ready to provide this technology in January, 2005,
The system would start, at the beginning, only as a means to track wholesale shipments, that is to say, not necessarily directly related to the packaging that the consumer takes home. In November it announced that the majority of suppliers, plus an extra 37 added to the original list would be ready. It is now only a matter of time until the cost of the chips goes down sufficiently before it is included in everything a consumer buys.
In practice, this means, for example, that consumers who register their credit cards on entering the store could conceivably pay for their purchase without having to go through a cashier, as the products would automatically register when exiting. But Wal-Mart and the others using the technology would have exact information regarding who, what, when, how much and where the products are used.
Though Wal-Mart is not the only one testing the technology - there's Tesco in Great Britain, and Metro, Carrefour and Home Depot in other places, it is the biggest force behind its development. It is important to know that the technology was first developed and implemented by the US Defense Department.
Orwell must be spinning in his grave. These tiny systems of control, "little brothers", if you will, will go much further than the Big Brother he envisioned.
The paradigm of Walmartization towards a "happy world" trumpeted by the transnational companies needs our ignorance and passive indifference to succeed. Paradoxically, those remaining without access to credit or debit cards - in other words, the majority of the planet's inhabitants - will remain out of the reach of this control system. With all its power, Wal-Mart and the transnational needs us to survive. We don't need them.
Silvia Ribeiro is an investigator with Grupo ETC.
Translated from Spanish by Daniel Morduchowicz




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