Wal-Mart’s Manufacturing Recovery?

Wal-Mart’s Manufacturing Recovery?

President Barack Obama, in his State of the Union address, told Americans that manufacturing in the United States is back. The president is right to applaud job creation in manufacturing. But both elected leaders and the public should be wary of one company, in particular, falsely taking credit for this “manufacturing renaissance”: Wal-Mart.

Two years ago, Wal-Mart launched the U.S. Manufacturing Initiative, a pledge to create 1 million new jobs over the next 10 years through buying “U.S.-made goods.” But Wal-Mart has done very little to improve America’s jobs. In fact, it continues to harm our nation’s job market.

Wal-Mart is the largest buyer of consumer goods in the world and is the nation’s largest importer of goods. Wal-Mart’s public relations campaign about U.S. manufacturing aims to distract Americans from two core aspects of Wal-Mart’s business model.

First, as the country’s largest private-sector employer, the company has played a leading role in driving down service-sector wages for millions of working families. The majority of workers in Wal-Mart stores are paid less than $25,000 a year.

Second, the company is hoping Americans will forget that Wal-Mart has played a leading role in the offshoring of America’s jobs.

Let’s take a closer look at the numbers: Obama says more than 780,000 manufacturing jobs have been created since February 2010. Yet, America’s workers have lost an estimated 3.2 million jobs, most of which were in manufacturing, since 2001 due to trade imbalances with China alone. Between 2011 and 2013, 500,000 jobs alone were eliminated or displaced, according to a recent report by the Economic Policy Institute. This job loss—mostly in advanced technology manufacturing, meaning parts for electronics—created a gap in job creation in the manufacturing sector. Manufacturers need to hire at a much higher rate to even approach closing the gap.

Wal-Mart has not made public any real numbers regarding its impact on U.S. manufacturing job creation. The suppliers that are part of the Wal-Mart initiative have created only about 2,000 U.S. jobs in the past two years, according to anecdotal evidence on Wal-Mart’s website.

Sadly, even Wal-Mart’s poster child for its U.S. manufacturing initiative, Element Electronics, seems to be little more than window dressing. Wal-Mart sells Element televisions marketed as “American-assembled” at Wal-Mart stores nationwide, yet as The Wall Street Journal reported last year, the TVs arrive in the United States nearly completely assembled from China in boxes labeled “Assembled in the U.S.A.” Workers in South Carolina check for defects, install a memory card and put the TVs back in the boxes, to be shipped to Wal-Mart. This is not the kind of high-skill, high-investment manufacturing that will help rebuild America’s middle class.

Wal-Mart says it wants to be part of the solution of rebuilding our manufacturing sector. But to walk the walk, Wal-Mart needs to sell a much higher percentage of goods in its stores that are actually manufactured in the United States, thus helping to stop the offshoring of jobs and creating real, quality manufacturing jobs in America. And if Wal-Mart wants to really make a difference for America’s families, the company should listen to its 1.3 million associates when they speak out for “$15 and full-time”—an income a person can actually live on.

Wal-Mart is right about one thing. The company is so big that its choices move our economy. When it outsources, manufacturing jobs disappear. When it pays poverty-level wages, other employers follow suit. If it chooses to really support raising wages and rebuilding America’s manufacturing, it could make a real difference.

As President Obama moves forward in his efforts to rebuild America’s manufacturing and create good jobs, he and our country need something more than PR gestures and poverty wages from our nation’s largest importer and largest employer.

Damon Silvers is the AFL-CIO policy director and special counsel. This article originally appeared on The Hill.

Reposted from AFL-CIO NOW

Tags: , , , , ,

Five Reasons Walmart’s New ‘Commitment’ to American Manufacturing is Nonsense

Walmart is hosting a manufacturing summit in Denver this week as part of its new program to supposedly invest in products made in America for its stores across the country. The retailer is claiming its new plan will invest $250 billion over the next decade and create 1 million jobs. We’re not buying it.

AFL-CIO President Richard Trumka addressed Walmart’s summit and announcement:

But workers will not benefit from a Walmart-ification of our manufacturing sector. Jobs in the Walmart model won’t restore America’s middle class or build shared prosperity given the company’s obsession with low labor costs and undermining American labor standards. And the company’s ‘commitment’ to American manufacturing is meaningless unless it actually increases the proportion of its products that are American-made.

Here are five reasons why Walmart’s plan is nonsense:

1. The whole thing is misleading. When you dig deeper, you find that all Walmart is doing is counting the company’s natural growth as “new” investment. If the company maintains its current percentages of U.S.-sourced goods and continues to grow at the same rate as it has the last three years, $262 billion will be spent on U.S.-made goods anyway without Walmart making any changes or doing anything new. Doing a little less than what you’ve been doing and calling it “progress” isn’t exactly admirable.

2. As Scott Paul of the Alliance for American Manufacturing notes, Walmart’s altruism doesn’t quite stand up to scrutiny:

…in some cases—the economics now favor “reshoring” of work back to the U.S., due to an emerging domestic energy cost advantage, rising wages in Asia, and wage stagnation in the U.S. (which Walmart might know something about). And don’t forget to consider the challenges that come from outsourcing: supply chain disruption, quality and inventory control issues, intellectual property theft, and high shipping costs.

3. Walmart is the biggest importer in the United States and it has been increasing how much it imports every year. The company now imports 2.5 times as much as it did in 2002. Walmart should make a solid commitment to cut back on its growth in  imports, after decades of massive increases, to create a real net gain for American workers.

4. Walmart is off to a rocky start helping create U.S. manufacturing jobs. In the first year of the new plan, Walmart created only 2,000 new jobs, putting it way behind schedule toward reaching that goal of 1 million new jobs.

5. As the largest private employer in the nation, Walmart should start with itself to create real change for America. At the rate Walmart workers are paid, they won’t be buying many U.S.-made products or imports. Walmart must invest more in its own workforce if it wants a “buy American” strategy to succeed.

Walmart cashiers make, on average, less than $25,000 a year. An April 2014 study by Americans for Tax Fairness estimated that subsidies and tax breaks for Walmart and the Walton family cost taxpayers approximately $7.8 billion per year, including about $6.2 billion in assistance to Walmart workers due to low wages and inadequate benefits.

Trumka concluded:

This initiative seems like an attempt to change the conversation from the need for Walmart to improve jobs for its 1.4 million retail workers in the United States. If Walmart is truly committed to rebuilding the American middle class, it can start with its own workers, most of whom make less than $25,000/year and struggle to make ends meet.

Walmart should use its two-day summit to prove the company is committed to real and substantive change and an end to corporate whitewashing.

Reposted from AFL-CIO NOW

Tags: , , , , ,

Union-Made in America Back to School Supplies

First, my apologies to any students in the middle of their summer reverie who stumble across this blog. But like Christmas ads, back-to-school messages start earlier and earlier. Here’s ours, courtesy of the Union Label and Services Trades Department (UL&STD) and Labor 411, from the Los Angeles County Federation of Labor.

The products below are made by union workers, including members of the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM), United Steelworkers (USW), Printing, Publishing and Media Workers Sector-CWA (PPMWS-CWA), UAW and the United Food and Commercial Workers (UFCW).

Paper Products:

International Paper Co.; Mead Lined Paper; Roaring Springs Wirebound Notebooks (including these sub-brands: Environotes, Imagine, Genesis, Enviroshades, Emoticon, Lifenotes and Maxim); Roaring Spring Environotes Index cards; and Roaring Spring Legal Pads (including these sub-brands: Boardroom, Enviroshades, WIDE, Enviropads and Envirogold).

Notebooks and Binders:

Acco/Mead; Day-Timer Organizers; Roaring Spring Pocket Folders; Roaring Spring Composition Books.

Pens:

Sharp; Sheaffer; and Parker.

Student and Teacher Supplies:

Martin Weber Art Supplies; Roaring Spring Art Supplies; Scotch Tape; Master Lock; Kleenex and Puff Tissues; and Claus Scissors.

Shops Staffed by Union Employees:

Office Max; Safeway; Giant; Albertson’s; Supervalu; Ralph’s; and Vons.

Back to School Clothes:

All USA Clothing; Ben Davis; Hugo Boss; Oshkosh B’Gosh; Russell Athletic; Union Line; and Windjammer.

Lunchbox items:

Jif peanut butter; Oroweat bread; Farmer John lunch meat; Mott’s apple sauce; Wheat Thins; Slim Jim; Minute Maid juice; and  V8-Splash.

Reposted from AFL-CIO NOW

Image by theogeo on Flickr

Tags: , , , ,

Obama, Romney and the Auto Rescue: What Is the Economy For?

Today in Michigan and Arizona, Republicans go to the polls to register their choice for the Republican presidential nominee. Meanwhile, President Barack Obama spoke at a gathering of United Auto Workers members in Washington. Although the election is still months away, of course these events aren’t happening isolated from one another.

There’s a bigger question at play here than who wins the prettier headline on a Beltway paper tomorrow, and it’s a question we’re sure to keep fighting about all year. It’s “what is the economy for, anyway?”

It’s a good question, because how you measure the answer says a lot about what you think we need to do to fix it. Do we measure the economy purely by whether a line on a chart is pointing up or down? Do we measure it by whether the very wealthiest people are able to make themselves endlessly wealthier? Or is the health of “the economy” measured by something a little more tangible, a little broader?

You don’t have to pretend President Obama has been perfect on every issue facing working people to notice that there’s a difference in how he and Republican candidate Mitt Romney talk about the auto rescue program—a program that, largely, has worked to keep the industry alive and make it profitable again. While Romney used his time in Michigan to bash the auto rescue as a “bailout” for unions and push an economic agenda that would shift money away from Medicaid into upper-class tax cuts, Obama defended the auto rescue as part of an economy where we all have a stake in each other’s success.

You know why the “bailout for unions” storyline completely collapses under examination? Because union members—the people who, after all, built these companies—gave up a lot to save them. They made concessions on wages, benefits and retiree pensions. They offered to lose things that they had fought and bargained for because they wanted to protect the industry not just for them but for workers after them. It will not be easy to win back the things that were promised them, things they let go at personal cost. As the president said, that’s actual sacrifice. That’s not the action of a greedy special interest looking to loot the taxpayer, that’s the action of a group of people who understand what “the economy” really means.

If you think “the economy” is purely about the bank accounts of the 1%, maybe a program like the auto rescue doesn’t make a lot of sense. But if—like our members do—you think of the “the economy” as meaning how we’re all doing, then saving those jobs, for the past three years and for the future, is vital.

When the people we talk to talk about the economy, they mean something simple. Can I get a job? Can I stay out of debt, feed my family, and not go bankrupt if I get sick? Will I and my neighbors be able to stay in our homes? Will my kids be able to get a decent education and build a life for themselves? After a lifetime of hard work, will I be able to retire? Candidates of both parties need to look at what they’re saying about “the economy” and figure out how it answers those questions.

Tags: , , , , , , , ,