mykeystrokes.com

"Do or Do not. There is no try."

“Hold Your Applause”: Walmart’s Wage Hike Still About Greed

With much fanfare and platitudes like “Our people make the difference,” WalMart has achieved a public relations coup by granting quite meager raises to its employees. The headlines make the $277 billion (market cap) company look quite generous as it has raised its starting hourly wage immediately to $9 an hour, which is 19 percent higher than the prevailing federal minimum wage.

It sounds like great news from the world’s largest private employer, but the news is nowhere near as good as headlines suggest.

The New York Times estimates that there are only about 6,000 retail workers among WalMart’s 1.4 million employees that are paid the federal minimum wage. This shouldn’t be too surprising, since 28 states already mandate higher minimum wages than the federal standard and, says the law, the highest required wage wins. Only seven states have minimum wages set at $9 or higher. So WalMart workers in 43 states are getting some sort of raise.

But in the vast majority of cases, it’s nothing like the 19 percent number you’re seeing thrown around.

For those getting the largest bump from the federal minimum wage to $9, it’s important to put this all in perspective. The federal minimum wage has not been raised since 2009. It would take a wage of $8.55 an hour to equal the purchasing power of $7.25 six years ago.

So, in a real sense, WalMart’s lowest paid employees are getting a 45-cent-per-hour raise—a 6.2 percent increase. Meanwhile, workers in California, Massachusetts and Rhode Island will see no increase (the state hourly minimum is already $9) while minimum wage workers in Washington, Oregon, Connecticut and Washington, D.C., already make more than $9 an hour.

In its release to workers and the public, WalMart says that the wage increase scheduled to go into effect in April will raise the average part-time worker’s wage to $10 an hour across the company. Back in 2010, IBISWorld, a market research firm, estimated that WalMart cashiers made about $8.81 an hour. That 2010 wage inflations adjusts to a $9.56 wage in today’s dollars. According to WalMart’s release, part-time workers will see their wages rise from $9.48.

That means, until now, WalMart’s part-time workers were losing ground against inflation. While nice, this isn’t the saintly endeavor WalMart is making it out to be. The current bumps gets those employees just a few coins ahead of the rise in the cost of living since the end of the Financial Crisis.

For its full-time workers, WalMart says that the average wage is rising from $12.85 an hour to $13. In 2013, WalMart said that its average full-time wage was $12.83. So WalMart’s full-time associates got a 2-cent raise between 2013 and 2014 and now get a 17-cent bump. Adjusted for inflation, you’d need $13.04 cents today to buy what you could with $12.83 in 2013. WalMart’s full-time employees are coming out of this 4 cents short of inflation.

WalMart’s workforce is split about evenly between full- and part-timers. Part-timers will make $17,500 a year if they work 35 hours a week for 50 weeks a year. Full-timers will make $26,000 working 40 hours a week for 50 weeks.

For a two-person household, the federal poverty line is $15,930. For a four-person household it is $24,250.

Even after the raises, WalMart will continue to employ people who will be living below, at or barely above our various, imperfect measures of poverty.

These workers will continue to depend on public subsidies to get by, whether they need help with health care, buying food, or lunches for their school-aged children. It’s hard to see, even, how these wage increases will do enough so that WalMart employees don’t have to hold holiday food drives for each other.

WalMart has wanted to open a store in New York City for years and has been rebuffed at every turn by coalitions of labor and local retailers. The chain most recently failed to infiltrate East Brooklyn. It faces community opposition in cities and towns around the country.

The retailer is clearly tired of being seen as an unwelcome neighbor—and that’s likely a big consideration for why they’re upping their wages just enough.

The company would also like to buy itself a new labor history. For years, WalMart used contractors to clean and maintain its stores, putting a buffer between the companies and the often abused workers—especially when those workers were very often not authorized to work in the U.S. Since the middle of the last decade the company has also been hit with scores of class action lawsuits, some relating to the treatment of women workers and some alleging wage theft through various means.

In 1914, Henry Ford paid his workers $5 a day. It was a move that truly helped create the middle class.  Five dollars in 1914 is $118 today, although that would only add up to a $35,000-a-year salary for a six-day workweek, which is well below our current medium income.

What some forget about Ford is that he had ulterior motives: He wanted to mold his workers into what he considered model Americans. WalMart has ulterior motives as well: It wants to mold your perception of it until you see a model American corporation.

If WalMart is a model corporation, the model is broken.

 

By: Michael Maiello, The Daily Beast, February 20, 2015

February 21, 2015 Posted by | Poverty, Wage Theft, Walmart | , , , , , , | 2 Comments

“The Real Deadbeats”: You’re Not The Deadbeat. The Waltons Are The Deadbeats

If you are tired of your taxpayer dollars being used to pay Wal-Mart employees the money that the Waltons refuse to pay them, then you might be interested in the large Black Friday protests that are occurring at 1,600 Wal-Mart stores in 49 states throughout the nation right now.

“I have to depend on the government mostly,” says Fatmata Jabbie, a 21-year-old single mother of two who earns $8.40 an hour working at a Walmart in Alexandria, Virginia. She makes ends meet with food stamps, subsidized housing, and Medicaid. “Walmart should pay us $15 an hour and let us work full-time hours,” she says. “That would change our lives. That would change our whole path. I wouldn’t be dependent on government too much. I could buy clothes for my kids to wear.”

The nation’s largest employer, Walmart employs 1.4 million people, or 10 percent of all retail workers, and pulls in $16 billion in annual profits. Its largest stockholders—Christy, Jim, Alice, and S. Robson Walton—are the nation’s wealthiest family, collectively worth $145 billion. Yet the company is notorious for paying poverty wages and using part-time schedules to avoid offering workers benefits. Last year, a report commissioned by Congressional Democrats found that each Walmart store costs taxpayers between 900,000 and $1.75 million per year because so many employees are forced to turn to government aid.

This isn’t complicated. If you have a job at Wal-Mart and you still need Medicaid, food stamps and subsidized housing, then you aren’t just getting shafted by the Waltons. You’re also being paid your missing wages by the federal government. You’re not the deadbeat. The Waltons are the deadbeats.

 

By: Martin Longman, Political Animal, The Washington Ponthly, November 28, 2014

November 29, 2014 Posted by | Minimum Wage, Walmart, Workers | , , , , , , , | 2 Comments

“Walmart On Welfare”: The First 39 Minutes You Are On The Job Each Week Goes To Provide Welfare For Walmart And The Waltons

Next time you drive past a Walmart, think about how much in taxes you pay to subsidize the nation’s largest private employer, owned by the nation’s richest family.

Your cost this year:  $247 if you are single, $494 if you are a couple, and $987 if you are a couple with two kids.

And you pay whether or not you shop at Walmart or its Sam’s Clubs.

Put another way, if you are single and a minimum-wage earner, the first 39 minutes you are on the job each week just goes to provide welfare for Walmart and the Waltons.

For a family of four, the cost of welfare for Walmart and the Waltons probably comes to more than your weekly take-home pay, based on government data on incomes.

American taxpayer money explains almost a third of Walmart’s worldwide pretax profits last year. But that understates the scale of taxpayer assistance to the retailer, which made 29 percent of its sales overseas last year.

Figure about 44 percent of Walmart’s domestic pretax profits were contributed by local, state and federal taxpayers directly and indirectly, based on company disclosure statements.

These figures on welfare for Walmart and the Waltons were calculated from a report released today by Americans for Tax Fairness, part of a broad coalition of union, civil rights and other organizations trying to shame the Walton family into paying wages that if not good, are at least enough to make sure Walmart employees do not qualify for food stamps.

So far the Waltons have shown themselves to be shameless and utterly unapologetic for foisting any of their costs onto taxpayers instead of earning their way in the marketplace.

This is in a way not surprising. The best-known heir of the retailing innovator Sam Walton, his daughter Alice, 64, has a long history of drunk-driving accidents, including killing a woman hit by her vehicle.

While repeat drunk drivers are routinely prosecuted in most jurisdictions, often as a matter of policy, and upon conviction get the time behind bars their conduct deserves, to date no law enforcement agency has seen fit to prosecute Alice Walton. Instead she basks in the glow of encomiums for the philanthropy enabled by the fortune her father built and boosted by the steady flow of money taxpayers are forced to give her, her relatives and other Walmart investors.

Compared to this taxpayer largesse, Walton philanthropy is small change.

The Walton Family Foundation ranks 22nd in America with $2.2 billion in assets, which may seem large. But Walmart and the Waltons have already extracted that much from the taxpayers this year. In fact they hit about $2.2 billion of taxpayer subsidies on Saturday, April 12, based on the Americans for Tax Fairness report.

The $7.8 billion a year annual cost estimate in the new report is based on a study last year by the House Education and the Workforce Committee Democratic staff. It showed that each Walmart in Wisconsin costs taxpayers between $905,000 and $1.75 million in welfare costs.

Americans for Tax Fairness extrapolated to all the Walmarts in America based on that study and then took into account other costs taxpayers are forced to bear to subsidize the company and, thus, its controlling owners, the Waltons.

The study estimates that if the subsidy costs were divided equally among the company’s 1.4 million American workers, the cost would be $4,415 per Walmart employee.

Welfare for Walmart workers, the Americans for Tax Fairness report says, costs $6.2 billion, making it by far the bulk of the costs taxpayers must bear.

The study estimates that only $70 million is for the use of tax dollars to build Walmart stores, distribution centers and other property provided by the largesse of the taxpayers. That number is small because Walmart has pretty much built out across America.

To date Walmart has probably received $1.5 billion from taxpayers to build and equip stores, distribution centers and other buildings, according to Phil Mattera, research director at Good Jobs First, which on a budget of about $1 million annually has for years dragged out of local, state and federal officials details of how much welfare Walmart gets.

The discounted rates at which dividends are taxed, a policy first put forth by then-President George W. Bush in 2003, save the Walton heirs $607 million in taxes annually, the Americans for Tax Fairness report calculated from company disclosure reports.

One aspect of the report should be regarded with caution.

Americans for Tax Fairness says Walmart saves $1 billion each year by taking advantage of an almost universally used method to deduct the value of new equipment quickly rather than slowly. It is called accelerated depreciation.

That lowers taxes in the early years after an investment is made, but it means higher taxes in later years.  The proper way to measure this is how much less the future taxes are worth because they are delayed between one and 20-plus years. A more realistic figure is probably $100 million, a tenth of what the report says.

Despite this, I used the report’s estimate of accelerated depreciation costing $1 billion annually in calculating how much it costs you to subsidize Walmart and the Waltons.

That caveat presented, the core issue here is why does Walmart need welfare? Indeed, why has welfare become almost universal among large American companies, some of which derive all of their profits from stealth subsidies?

Walmart is far from alone among big corporations that do not depend on what they can earn in the marketplace, but instead extract your tax dollars to juice their profits.

Every big company I know of (except one) not only takes from the taxpayers, but has its hands out for all the welfare it can collect in the form of tax dollars paying for new buildings, exemptions from taxes, discounted electricity, free job training and all sorts of regulatory rules that thwart competition and artificially inflate prices. From Alcoa and Boeing on through the alphabet, America’s big companies – and a lot of foreign-owned companies – are on the dole.

The one exception is Gander Mountain, a chain of retail stores that sells sporting goods, especially for hunting and fishing. It refuses all welfare and once sent a check for $1 million to a municipal agency after being alerted to a hidden subsidy.

Imagine how much more money you would have in your pocket if the Waltons stood on their own proverbial two feet, pulled themselves up by their own bootstraps, and gave back all the welfare they have taken year after year after year.

Then ask yourself why you voted for any politician in either party who has not introduced legislation and regulations to stop this and recover that money – with interest.

 

By: David Cay Johnson, The National Memo, April 14, 2014

April 15, 2014 Posted by | Corporate Welfare, Walmart | , , , , , , , | 1 Comment

Corporate Dysmorphia: Why “Business Needs Certainty” Is Destructive

If you read the business and even the political press, you’ve doubtless encountered the claim that the economy is a mess because the threat to reregulate in the wake of a global-economy-wrecking financial crisis is creating “uncertainty.” That is touted as the reason why corporations are sitting on their hands and not doing much in the way of hiring and investing.

This is propaganda that needs to be laughed out of the room.

I approach this issue as as a business practitioner. I have spent decades advising major financial institutions, private equity and hedge funds, and very wealthy individuals (Forbes 400 level) on enterprises they own. I’ve run a profit center in a major financial firm and have have also operated a consulting business for over 20 years. So I’ve had extensive exposure to the dysfunction I am about to describe.

Commerce is all about making decisions and committing resources with the hope of earning profit when the managers cannot know the future. “Uncertainty” is used casually by the media, but when trying to confront the vagaries of what might happen, analysts distinguish risk from “uncertainty”, which for them has a very specific meaning. “Risk” is what Donald Rumsfeld characterized as a known unknown. You can still estimate the range of likely outcomes and make a good stab at estimating probabilities within that range. For instance, if you open an ice cream store in a resort area, you can make a very good estimate of what the fixed costs and the margins on sales will be. It is much harder to predict how much ice cream you will actually sell. That is turn depends largely on foot traffic which in turn is largely a function of the weather (and you can look at past weather patterns to get a rough idea) and how many people visit that town (which is likely a function of the economy and how that particular resort area does in a weak economy).

Uncertainty, by contrast, is unknown unknowns. It is the sort of risk you can’t estimate in advance. So businesses also have to be good at adapting when Shit Happens. Sometimes that Shit Happening can be favorable, but they still need to be able to exploit opportunities (like an exceptionally hot summer producing off the charts demand for ice cream) or disaster (like the Fukushima meltdown disrupting global supply chains). That implies having some slack or extra resources at your disposal, or being able to get ready access to them at not too catastrophic a cost.

So why aren’t businesses investing or hiring? “Uncertainty” as far as regulations are concerned is not a major driver. Surveys show that the “uncertainty” bandied about in the press really translates into “the economy stinks, I’m not in a business that benefits from a bad economy, and I’m not going to take a chance when I have no idea when things might turn around.”

The “certainty” they are looking for is concrete evidence that prevailing conditions have really turned. But with so many people unemployed, growth flagging in advanced economies, China and other emerging economies putting on the brake as their inflation rates become too high, and a very real risk of another financial crisis kicking off in the Eurozone, there isn’t any reason to hope for things to magically get better on their own any time soon. In fact, if you look at the discussion above, we actually have a very high degree of certainty, just of the wrong sort, namely that growth will low to negative for easily the next two years, and quite possibly for a Japan-style extended period.

So why this finger pointing at intrusive regulations, particularly since they are mysteriously absent? For instance, Dodd Frank is being water down in the process of detailed rulemaking, and the famed Obamacare actually enriches Big Pharma and the health insurers.

The problem with the “blame the government” canard is that it does not stand up to scrutiny. The pattern businesses are trying to blame on the authorities, that they aren’t hiring and investing due to intrusive interference, was in fact deeply entrenched before the crisis and was rampant during the corporate friendly Bush era. I wrote about it back in 2005 for the Conference Board’s magazine.

In simple form, this pattern resulted from the toxic combination of short-termism among investors and an irrational focus on unaudited corporate quarterly earnings announcements and stock-price-related executive pay, which became a fixture in the early 1990s. I called the pattern “corporate dysmorphia”, since like body builders preparing for contests, major corporations go to unnatural extremes to make themselves look good for their quarterly announcements.

An extract from the article:

Corporations deeply and sincerely embrace practices that, like the use of steroids, pump up their performance at the expense of their well-being…

Despite the cliché “employees are our most important asset,” many companies are doing everything in their power to live without them, and to pay the ones they have minimally. This practice may sound like prudent business, but in fact it is a reversal of the insight by Henry Ford that built the middle class and set the foundation for America’s prosperity in the twentieth century: that by paying workers well, companies created a virtuous circle, since better-paid staff would consume more goods, enabling companies to hire yet more worker/consumers.

Instead, the Wal-Mart logic increasingly prevails: Pay workers as little as they will accept, skimp on benefits, and wring as much production out of them as possible (sometimes illegally, such as having them clock out and work unpaid hours). The argument is that this pattern is good for the laboring classes, since Wal-Mart can sell goods at lower prices, providing savings to lower-income consumers like, for instance, its employees. The logic is specious: Wal-Mart’s workers spend most of their income on goods and services they can’t buy at Wal-Mart, such as housing, health care, transportation, and gas, so whatever gains they recoup from Wal-Mart’s low prices are more than offset by the rock-bottom pay.

Defenders may argue that in a global economy, Americans must accept competitive (read: lower) wages. But critics such as William Greider and Thomas Frank argue that America has become hostage to a free-trade ideology, while its trading partners have chosen to operate under systems of managed trade. There’s little question that other advanced economies do a better job of both protecting their labor markets and producing a better balance of trade—in most cases, a surplus.

The dangers of the U.S. approach are systemic. Real wages have been stagnant since the mid-1970s, but consumer spending keeps climbing. As of June, household savings were .02 percent of income (note the placement of the decimal point), and Americans are carrying historically high levels of debt. According to the Federal Reserve, consumer debt service is 13 percent of income. The Economist noted, “Household savings have dwindled to negligible levels as Americans have run down assets and taken on debt to keep the spending binge going.” As with their employers, consumers are keeping up the appearance of wealth while their personal financial health decays.

Part of the problem is that companies have not recycled the fruits of their growth back to their workers as they did in the past. In all previous postwar economic recoveries, the lion’s share of the increase in national income went to labor compensation (meaning increases in hiring, wages, and benefits) rather than corporate profits, according to the National Bureau of Economic Analysis. In the current upturn, not only is the proportion going to workers far lower than ever before—it is the first time that the share of GDP growth going to corporate coffers has exceeded the labor share.

And businesses weren’t using their high profits to invest either:

Companies typically invest in times like these, when profits are high and interest rates low. Yet a recent JP Morgan report notes that, since 2002, American companies have incurred an average net financial surplus of 1.7 percent of GDP, which contrasts with an average deficit of 1.2 percent of GDP for the preceding forty years. While firms in aggregate have occasionally run a surplus, “. . . the recent level of saving by corporates is unprecedented. . . .It is important to stress that the present situation is in some sense unnatural. A more normal situation would be for the global corporate sector—in both the G6 and emerging economies—to be borrowing, and for households in the G6 economies to be saving more, ahead of the deterioration in demographics.”

The problem is that the “certainty” language reveals what the real game is, which is certainty in top executive pay at the expense of the health of the enterprise, and ultimately, the economy as a whole. Cutting costs is as easy way to produce profits, since the certainty of a good return on your “investment” is high. By contrast, doing what capitalists of legend are supposed to do, find ways to serve customer better by producing better or novel products, is much harder and involves taking real chances and dealing with very real odds of disappointing results. Even though we like to celebrate Apple, all too many companies have shunned that path of finding other easier ways to burnish their bottom lines. and it has become even more extreme. Companies have managed to achieve record profits in a verging-on-recession setting.

Indeed, the bigger problem they face is that they have played their cost-focused business paradigm out. You can’t grow an economy on cost cutting unless you have offsetting factors in play, such as an export led growth strategy, or an ever rising fiscal deficit, or a falling household saving rate that has not yet reached zero, or some basis for an investment spending boom. But if you go down the list, and check off each item for the US, you will see they have exhausted the possibilities. The only one that could in theory operate is having consumers go back on a borrowing spree. But with unemployment as high as it is and many families desperately trying to recover from losses in the biggest item on their personal balance sheet, their home, that seems highly unlikely. Game over for the cost cutting strategy.

And contrary to their assertions, just as they’ve managed to pursue self-limiting, risk avoidant corporate strategies on a large scale, so too have they sought to use government and regulation to shield themselves from risk.

Businesses have had at least 25 to 30 years near complete certainty — certainty that they will pay lower and lower taxes, that they’ will face less and less regulation, that they can outsource to their hearts’ content (which when it does produce savings, comes at a loss of control, increased business system rigidity, and loss of critical know how). They have also been certain that unions will be weak to powerless, that states and municipalities will give them huge subsidies to relocate, that boards of directors will put top executives on the up escalator for more and more compensation because director pay benefits from this cozy collusion, that the financial markets will always look to short term earnings no matter how dodgy the accounting, that the accounting firms will provide plenty of cover, that the SEC will never investigate anything more serious than insider trading (Enron being the exception that proved the rule).

So this haranguing about certainty simply reveals how warped big commerce has become in the US. Top management of supposedly capitalist enterprises want a high degree of certainty in their own profits and pay. Rather than earn their returns the old fashioned way, by serving customers well, by innovating, by expanding into new markets, their ‘certainty’ amounts to being paid handsomely for doing things that carry no risk. But since risk and uncertainty are inherent to the human condition, what they instead have engaged in is a massive scheme of risk transfer, of increasing rewards to themselves to the long term detriment of their enterprises and ultimately society as a whole.

 

By: Yves Smith, Salon, August 14, 2011

August 15, 2011 Posted by | Big Business, Big Pharma, Businesses, Class Warfare, Congress, Conservatives, Consumers, Corporations, Economic Recovery, Economy, Financial Institutions, Financial Reform, GOP, Government, Health Reform, Ideologues, Ideology, Income Gap, Jobs, Labor, Lawmakers, Media, Middle Class, Minimum Wage, Politics, Press, Public, Pundits, Regulations, Republicans, Right Wing, Unemployed, Unemployment, Wall Street, Walmart, Wealthy | , , , , , , , , , , , , , | Leave a comment

Under The Supreme Court, Women May Get The Shaft In Walmart Suit

A class action suit that may include as many as 1.5 million women who claim sex discrimination on the job by Walmart is the biggest in U.S. history — though there are signs it won’t remain so for much longer.

The class action already has been approved by a federal judge and a federal appeals court, but it took a beating during argument at the U.S. Supreme Court last week.

Some analysts had said if the high court even accepted the case for review, instead of letting the lower-court verdict stand, it would be a sign that the 5-4 conservative majority wanted to strike the class certification.

Professor Deborah Hensler of Stanford Law School told the Chicago Tribune last year, “If the Supreme Court takes this case, it will signal this business-friendly court is hostile to class actions against corporate defendants.”

“This is the big one that will set the standards for all other class actions,” Robin S. Conrad, executive vice president of the National Chamber Litigation Center, an agency of the U.S. Chamber of Commerce, told The New York Times. The center filed several friend of the court briefs supporting Walmart at the Supreme Court.

The implication is that Walmart, headquartered in Bentonville, Ark., and one of the world’s largest corporations, is just too big to be the target of a class action.

The company tried to emphasize the massive nature of the class in its petition to the Supreme Court asking for review.

“This nationwide class includes every woman employed for any period of time over the past decade, in any of Walmart’s approximately 3,400 separately managed stores, 41 regions and 400 districts, and who held positions in any of approximately 53 departments and 170 different job classifications,” the company’s petition said. “The millions of class members collectively seek billions of dollars in monetary relief under Title VII of the Civil Rights Act of 1964, claiming that tens of thousands of Walmart managers inflicted monetary injury on each and every individual class member in the same manner by intentionally discriminating against them because of their sex, in violation of the company’s express anti-discrimination policy.”

The Supreme Court review does not involve the merits of the suit — whether Walmart is guilty of discrimination against women — but whether the enormous class action, driven by statistics, should be allowed to proceed or whether the women must sue individually or in small groups.

The case started in 2001 in San Francisco when six women filed suit claiming Walmart discrimination, in part because they were passed over for promotion in favor of men. One of the six says she was told, “It’s a man’s world.”

Washington attorney Joseph Sellers, who argued for the women before the Supreme Court last week, told United Press International last year, “There’s a substantial body of evidence that comes from Walmart’s own workforce data,” including “very sophisticated analysis” to show what company policy was. Despite the size of the class, Walmart can use that evidence in an attempt to show that there was no company-wide discrimination, just as plaintiffs can use the same evidence to show there was, he said.

“We have evidence that there is a culture at the company that condones or says women are second-class citizens,” Sellers said, some of it surfacing at managers’ meetings at strip clubs or at Hooters restaurants.

Sellers had to think fast on his feet last Tuesday — ironically during Women’s History Month — as justice after justice tried to shred his argument from the bench.

Four of the court’s five-member conservative majority — Chief Justice John Roberts and Justices Anthony Kennedy, Antonin Scalia and Samuel Alito — were expected to give Sellers a tough time, with Justice Clarence Thomas asking no questions, as is his custom.

The four-member liberal bloc was expected to give him help. The female members of the court, Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan did their best to steer the argument in favor of the class action. Ginsburg argued the concept of gender discrimination into law in a series of brilliant cases in the 1970s.

But the fourth member of the bloc, Justice Stephen Breyer, barely spoke Tuesday, and kept his cards close to his vest.

The time allotted for Walmart’s lawyer, Los Angeles attorney Theodore Boutrous Jr., was relatively calm except for pointed questions from the women, but Sellers got a grilling.

Roberts was the first to strike, asking Sellers, “Is it true that Walmart’s pay disparity across the company was less than the national average” for similar retailers?

“I don’t know that that’s a fair comparison,” Sellers replied, adding Walmart was making that comparison “with the general population, not with people in retail.”

Kennedy was more acerbic. “It’s not clear to me: What is the unlawful policy that Walmart has adopted,” he asked Sellers, “under your theory of the case?”

“Justice Kennedy, our theory is that Walmart provided to its managers unchecked discretion,” Sellers said, with women getting fewer opportunities and less pay even with more seniority and higher performance reviews.

“Your complaint faces in two directions,” Kennedy said from the bench. “No. 1, you said this is a culture where … the headquarters knows everything that’s going on. Then in the next breath, you say, well, now these supervisors have too much discretion. It seems to me there’s an inconsistency there, and I’m just not sure what the (alleged) unlawful policy is.”

“There is no inconsistency any more than it’s inconsistent within Walmart’s own personnel procedures,” Sellers replied. A federal judge “found specific features of the pay and promotion process that are totally discretionary. There’s no guidance whatsoever about how to make those decisions. … But the company also has a very strong corporate culture … what they call the ‘Walmart way,’ and the purpose of that is to ensure that in these various stores that, contrary to what Walmart argues, that these are wholly independent facilities, that the decisions of the managers will be informed by the values the company provides to these managers in training.”

“Well, is that disparate treatment?,” Kennedy asked. “Disparate” or unequal treatment is a necessary element for discrimination.

“It is disparate treatment,” Sellers insisted. “It is a form of disparate treatment because they are making these decisions because of sex.”

Scalia echoed Kennedy.

“I’m getting whipsawed here,” he said. “On the one hand, you say the problem is that (local managers) were utterly subjective, and on the other hand you say there is … a strong corporate culture that guides all of this. Well, which is it? It’s either the individual supervisors are left on their own, or else there is a strong corporate culture that tells them what to do.”

Sellers replied that managers have broad discretion, but don’t make their decisions in a vacuum.

Scalia kept charging ahead.

“What do you know about … the unchallenged fact that the central company had a policy, an announced policy, against sex discrimination,” he asked, “so that it wasn’t totally subjective at the managerial level? It was, ‘You make these hiring decisions, but you do not make them on the basis of sex.’ Wasn’t that the central policy of the company?”

“That was a written policy,” Sellers said. “That was not the policy that was effectively communicated to the managers.”

Post-mortem evaluations of the argument were almost uniformly pessimistic for the class’s survival.

Lyle Denniston, dean emeritus of the Supreme Court press corps, wrote on SCOTUSBLOG.com that it took only a few minutes of argument “for a potentially fatal flaw … to stand out boldly.”

The basic claim in the suit is that Walmart maintains a common culture — “the Walmart Way” — to ensure uniformity in its 3,400 stores, Denniston wrote, but the corporate headquarters gives local store managers unlimited discretion to decide pay and promotions — resulting in lower pay and fewer promotions for women.

Kennedy’s point was those factors may seem contradictory.

But for a class action to survive under the Federal Rules of Civil Procedure, “the legal and factual issues must share commonality” at a minimum, Denniston wrote. Much of last week’s argument focused on that key requirement.

In the Los Angeles Times, an article partly written by veteran Supreme Court correspondent David Savage said the statistics may support the women. Lawyers say two-thirds of Walmart’s employees were women though men made up 86 percent of store managers when the stats were gathered five years ago.

But the article said “the tenor of Tuesday’s argument suggested that the massive, decade-old suit may run aground before it can move toward a trial.”

The Times said even though the male conservative justices were more aggressively negative, all of the justices expressed at least some reservations.

The justices should rule before the summer recess.

Bottom line from UPI: Justices could certainly change their minds, but based on their behavior during argument, look for the class to be struck down by at least a 5-4 vote, and a larger margin, 6-3 or 7-2 or more, is certainly within the realm of possibility.

By: Michael Kirkland, UPI.com, April 3, 2011

April 3, 2011 Posted by | Class Warfare, Conservatives, Corporations, Employment Descrimination, Equal Rights, Income Gap, Jobs, Labor, Republicans, Supreme Court, Walmart, Women, Womens Rights | , , , , , , , , , , , | Leave a comment

   

%d bloggers like this: