Centuries of Indian life could be extinguished by the arrival of FDI in retail – Guardian UK
Centuries of Indian life could be extinguished by the arrival of Walmart
The country’s street sellers will almost certainly vanish once foreign supermarkets are allowed into the big cities
Certain habits in Indian life once gave an illusion of permanence. On hot afternoons 30 years ago, for example, you could lie on your bed under a slow-turning fan and hear noises from the street that had been the same for at least a century. The lonely wife in Satyajit Ray’s film Charulata heard them in the film’s celebrated opening sequence as she flitted about her Victorian mansion in 1870’s Calcutta like a trapped butterfly, and in 1982 you could hear them still: some rhythmic chanting, the hollow patter of a little drum. And if, like Charulata, you went to the window and looked down, there in the dusty lane you would see a gang of coolies shouting something like a work-song as they pushed a wooden-wheeled cart with a heavy load, or a street entertainer drumming up business with his tabla. The most common sounds, however, were the singsong calls of peddlers selling fish or vegetables, or milky sweets and ancient biscuits from a portable glass case. Some salesmen rode bicycles; that transport apart, these were scenes that looked as if they had existed for centuries and would never be expunged by modernity.
Their extinction is coming – not immediately and not everywhere, but probably inexorably in the middle-class districts of the big Indian cities, now India‘s governing coalition has said it will open up the retail market to foreign supermarket chains. The coalition put the plan on hold last year after some of its smaller parties, notably West Bengal’s Trinamool Congress, branded it as against the interests of “the common man”. The postponement suggested a weak and muddled government. Economic growth was faltering, the prime minister, Manmohan Singh, looked particularly ineffectual, and the administration’s reputation suffered the lash of critics at home and abroad (not least in the USA). Last week it decided to face down opponents and show its free-market muscles by reviving planned reforms that will allow familiar European and American names – Walmart, Tesco, Carrefour — to build stores in cities of more than a million people, providing the local state government agrees.
Western supermarkets arrived in China several years ago and there is now hardly a country in the world without them. India’s resistance came out of what Louise Tillen, an academic at the India Institute in King’s College London, describes as a “compound of opportunism and ideology” in a democracy that tolerates dissent and political fixes, but that resistance looks to have collapsed. The government says the marketing, technical and managerial expertise of the big supermarkets will transform food production and consumption by cutting out middlemen and building the system known as “the cold chain” that delivers fresh food swiftly from the field to the shelves. The farmer gets higher prices, the consumer pays lower ones and less food is wasted: the supermarkets hire staff in their thousands, no food rots in the warehouses.
Perfection! Unless you are a middleman, or one of India’s 12 million small retailers, or a peasant farmer with a crop yield too insignificant to interest Walmart, or a street vegetable peddler. The process is known as “retail Darwinism”. In Vietnam, to quote a recent survey, a supermarket needs 1.2 people to sell a tonne of tomatoes rather than 2.9 people for every tonne in more traditional distribution channels. In several large Indian cities, fruit and vegetable sellers have already seen their incomes cut by up to 30% since the advent of smaller Indian-owned supermarkets; the powerful giants from abroad could bring far larger changes.
How does India’s cultural elite – with apologies for that clumsy phrase – feel about this revolution? To judge from my friends there, some feel anxious, hopeless and sentimental: emotions familiar to the supermarket’s enemies everywhere. One of them writes from Delhi that the vendors who come to her door selling vegetables, milk, flowers and fish are “one of life’s greatest pleasures”.
They do their rounds on environmentally sound bikes, while supermarket shopping needs cars and car parks. “We fear all this will go,” she writes of the old pattern of vendors and neighbourhood shops and bazaars, adding that in India’s hierarchical society to shop at a supermarket has an exclusive appeal, a generalised version of the Waitrose cachet, because until now they have specialised in prepared rather than fresh food and have prices (and security guards) to keep out the poor. “In my view,” she says, “they are urban, classist, expensive, sell packaged stuff and restrict the right of entry. It could hardly be worse.”
Or, of course, better – if you are a time-poor but cash-rich consumer and want to feed easily from the global cornucopia that you feel India has kept at bay out of the state’s fear of upsetting the small-farmer and small-trader vote, and its residual antagonism towards foreign corporations that goes back to its foundation.
Shopping in India’s pre-cornucopian times could be taxing. Say you lived in Kolkata with a generous family and wanted to treat them, to partly compensate for all the treats they had given you. This was my case. The family were my then in-laws, and sometimes for Sunday lunch, as a break from fish, rice and dal, I’d prepare a bastardised waldorf salad.
The city’s old covered market sold most, though not all, the ingredients. I would take a taxi to the market, where a porter carrying a straw basket on his head would attach himself to me as a guide and adviser. His basket would fill with apples from Himachal, limes from Bihar, walnuts from Kabul and cheese from Kalimpong. The really difficult item was the olive oil for the dressing, which could never be found in the market but sometimes at the Great Eastern Stores, a dark and usually empty shop whose trade had foundered when the last of Kolkata’s once-large British population decamped in the 1960s, leaving its assistants with memories of tinned prunes, Worcester sauce and other delicacies whose supply lines had dried up.
All this would take a morning. It made an interesting quest for someone like me with an outsider’s curiosity and time on their hands. Few Kolkatans, unless they were rich in domestic servants, would have gone to such trouble to prepare something so foreign. The lunch felt like a triumph, and yet Kolkata was one of the world’s largest cities, a metropolis by its own account, and had once been the capital of the Raj.
Then, under the fan, we would nap. Sounds from the streets drifted indoors: snatches of Hindi film music, the slap of wet clothes on a laundry slab, a taxi honking, the calls of itinerant food vendors. A whole world waiting, though we didn’t know it, for luxury and variety to arrive in the form of the shopping mall, Walmart and Tesco.
Walmart may be the place where you “save money” on all sorts of products, but the idea that its employees can “live better” just doesn’t add up. And those concerns over how the world’s largest company treats the employees that have built its ubiquitous brand is beginning to hit Walmart’s bottom line.
Questions over labor practices have dogged Walmart for decades, with activists and company employees seeking major changes in how the retail giant treats its workers in categories from low pay to anti-union activities. Corporate spin and an effort to rehabilitate the store’s public image notwithstanding, Walmart has done very little to make wholesale changes because very little has ever been on the line for the corporation when it comes to questions over labor conditions.
Things may be beginning to change, however, as investment capital begins flowing out of the company specifically because of its treatment of employees.
Last week, the largest pension fund in the Netherlands and a major Walmart investor announced that it would pull out its $121 million investment in the company due to Walmart failing to rectify concerns the fund’s managers had over labor practices. Recent attempts at conciliation with critics of its business model were “not enough” to satisfy the Dutch fund.
A major pension fund and longtime investor in Walmart has blacklisted the retailing behemoth, citing poor labor practices and the company’s anti-union stance as the driving force behind its rejection.
Walmart typically shrugs off criticism of its labor practices as union-driven propaganda and insists that its employees are happy and well-managed, but investing experts say that when one of the largest pension funds in the world divests, the company would be wise to listen to the message. It’s the same message the American labor movement has been pushing for decades.
On Tuesday, the Netherlands’ biggest pension fund, Algemeen Burgerlijk Pensioenfonds, with more than $300 billion in assets, announced that it was blacklisting the largest retailer in the world for noncompliance with the United Nations’ Global Compact principles. The Global Compact presents a set of core values relating to human rights, labor standards, the environment and anti-corruption efforts. Sixteen other companies were blacklisted along with Walmart, nearly all of them excluded for producing chemical or nuclear weapons that violate the Nuclear Non-Proliferation Treaty.
ABP said on Wednesday that the decision to pull its investment from Walmart was not hasty. The fund declined to say how much money is involved, but according to ABP records, it had invested some 95 million euros, worth $121 million today, in U.S. Walmart stores as of June 30, 2011. The fund first sent a letter to Walmart executives in 2008, a year after ABP formalized its responsible-investing policy. Four years later, after many meetings with employees and all levels of management, ABP concluded the retail giant was still falling short.
Back in 2007, as ABP began to comb through its investments with an eye toward corporate responsibility, the fund was struck by the staggering number of lawsuits and National Labor Relations Board complaints against Walmart, explained Anna Pot, a senior sustainability specialist involved in the decision.
“There has been a change, but in the end we had to conclude that it was not enough,” said Pot. “We felt that if the workers are not happy, then what does it mean for the company?”
Anger over Walmart’s perceived social irresponsibility has migrated from what some would derisively call “tree huggers” to some of the leading investment firms in the world. Divesting from Walmart has grown in recent years, with Norway’s government investment fund dropping its $400 million stake in the company in 2006.
Walmart has faced criticism over everything from its lack of environmental awareness to its lack of compassion for local businesses failure of community outreach in planning new stores. Critics have noted that the company has made strides in many facets of its business, taking into account the criticism and changing its operations to at least deflect the voices of opponents.
But one area that Walmart has been unquestionably blind to growing disgust with the company is in terms of labor practices and how it treats the more than 1 million Americans that work at Walmart, from its stores to its mass of distribution centers. As Walmart remains under fire for its behavior, more financial consequences could be looming.
Bitter and intractable opposition to widespread attempts to organize various sectors of Walmart’s massive employee base has led to escalating conflicts with labor activists and increasingly disgruntled workers. The heart of the corporation’s reputation for unfair labor practices lies with its refusal to compromise with employees seeking to organize in order to secure the basic rights they say are being denied to them as Walmart employees.
Agitation for employee rights have been brought straight to Walmart’s corporate doorstep in Arkansas, where current and former employees recently held a protest asking for the right to unionize. The company refused, and threats of arrest quickly followed.
In October two shabby buses filled with Walmart employees stopped unannounced outside the company’s headquarters in Bentonville, Arkansas. As the employees filed into the building’s expansive parking lot, plainclothes private security personnel sporting sleek sunglasses and Walmart emergency response badges rushed in and swiftly corralled the employees onto a public sidewalk. Members of a new union-backed campaign to organize Walmart, the workers had come from around the country to ask Walmart’s CEO, Mike Duke, for better wages and better treatment.
The hoped-for meeting was not granted. Within minutes, a dozen Bentonville police officers rushed in to reinforce the security guards in forming a barricade between the employees and their headquarters’ front door. A labor relations representative emerged from the mostly windowless building. She announced that she would meet only with workers who carried Walmart employee discount cards in addition to their company badges and state IDs. Without discount cards, the protesting employees would be arrested.
“I didn’t come here today to go shopping, so why do I need my discount card?” said Girshriela Green, a young mother who until recently worked at Walmart in Southern California. “I feel totally disrespected. Shame on them for not having the common decency to sit down and talk to their own associates.”
Even as Walmart retains its intransigence on the issue of employee treatment and union labor, loose organizations of company employees and labor allies have been popping up across the country. Pressure on Walmart from its employees and from outside the company has never been more intense in regards to questionable labor practices the the retailer.
New stories of Walmart’s mistreatment of employees and the lack of accountability at the company have kept alive the hopes for eventual victory by labor activists. Contractors used by Walmart for shipping operations are facing a class-action lawsuit from workers at Walmart warehouses in Illinois and California alleging a litany of abuses ranging from skimming their paychecks to being forced to work overtime without pay.
Meanwhile workers in Walmart’s warehouses in Chicago and southern California charge that the logistics companies contracted by the mega-retailer are nickel-and-diming them, shaving dollars off their hourly wages as temporary workers and obscuring the practice by failing to give them accurate pay stubs.
This lawsuit charges that at least 18 workers at a warehouse in suburban Elwood realized once they were paid that they got less than promised and in fact less than minimum wage from the company Eclipse Advantage. This week workers marched to Eclipse offices demanding its billing and payment records so they can figure out exactly how much they are owed.
Walmart executives repeatedly defend their practice of not recognizing the right to unionize for its employees or other demands from its million-plus workforce in the United States. But this rhetoric fails to match the company’s labor record outside of this country.
Walmart has fought every attempt by its employees to organize inside the US and Canada, but most of its stores and operations abroad are staffed by union workers with labor-friendly contracts.
Walmart operations in the United Kingdom, China, South Africa and South America arecovered by organized labor groups in those countries. Recognition of the right to unionize is required by law in China, where Walmart is expanding at a rapid pace.
Walmart executives fail to acknowledge the difference in labor practices, but union leaders that are working with the company are starting to make a push for Walmart to adopt universal labor practices that cover all of its employees — even those in the United States.
Its employees are not unionized in the United States, where the retailer has become infamous for its staunch opposition to labor groups. Even in Canada, it closed a store after workers there organized. But in the United Kingdom, Wal-Mart touts a growing roster of union employees and has negotiated contracts with entrenched labor groups in Brazil and Argentina for decades.
“We recognize those rights,” said John Peter “J.P.” Suarez , senior vice president of international business development at Wal-Mart. “In that market, that’s what the associates want, and that’s the prevailing practice.”
Union organizers are pushing for a unified approach to the retailer’s 2 million workers around the world. Labor leaders from disparate groups in Central America have begun talks, and unions in the United States, Argentina and Chile bolstered South African organizations during their negotiations. Last week, the international trade union coalition UNI sent a letter to Wal-Mart executives to discuss the possibility of a global agreement similar to those signed by competitors such as France’s Carrefour and retailers Ikea and H&M.
“Our message to Wal-Mart is that they should realize that this is the new reality of dealing with unions in a global economy, that we are so connected,” UNI General Secretary Philip Jennings said.
As Walmart fights efforts to improve conditions for its own employees, company leaders are simultaneously lobbying for massive tax breaks that would boost the company’s already staggering profits while also “broadening” the tax base to impose taxes on those Americans currently not earning enough to pay them.
Walmart CEO Mike Duke joined other corporate executives this summer in endorsing proposals for various legislation to ease the federal tax burden on American corporations. Duke urged lawmakers to “lower the corporate tax rate as much as you can” while making the “tax base as broad as you can.”
As the spotlight continues to shine brightly on the company’s relationship with its employees and organized labor, Walmart has dramatically ramped up its political spending activity.
Traditionally a minimal player in politics, money spent on political campaigns by its Wal-Mart Stores PAC have shot up from only $226,000 in 1998 to $3.2 million in 2010. And the company is on pace to match or exceed that in 2012, with Wal-Mart Stores having already spent well over $1 million on the 2012 election cycle. Though leaning to the right, PAC spending by Walmart is generally bipartisan, with candidates from both parties as well as national Democratic and Republican campaign committees receiving considerable contributions.
4 Responses to “Walmart Faces Blowback Over Anti-Labor Agenda”
Don R says:
Like to put my two cents in and remind ALL Americans that they have a Constitutional right of collective bargaining.to deny any American the right to choose a union is unconstitutional.I might remind Texas and other anti union states that Federal law overrides State law.They can bitch all they want but that doesn’t erase the language of the Constitution of the United States of America.I say, if all you corporations want to threaten employees, you need to read the document that shapes the foundation of America.After reading it, if you still want to harrass and intimidate your workers, do business somewhere else.
Jimmie in Alabama says:
All Wal-Mart wants is profits at the price of it’s workers non-union wages and threats to keep them at that rate or else. Now, Wal-Mart will not have full time employees anymore in order to not have to pay benefits like heallth care.
Thanks for bring this to our attention. I see them as damaging working people, their customers. Cheap goods made in china are not cheap for our society. Walmart has proven that. I cheer when ever I hear people standing up to them. Thanks to the Dutch pension fund for their responsible act.
Ms. Sail says:
What do you expect? We live in an oligarchy now. The United States of America we used to know was dissolved thirty years ago when Reaganomics was instituted.