It All Depends on Who You Rob
This article is from the November/December 2002 issue of Dollars and Sense: The Magazine of Economic Justice available at http://www.dollarsandsense.org
This article is from the November/December 2002 issue of Dollars & Sense magazine.
at a discount.
Considering all the stories of corporate treachery that have made headlines over the last year, you would think that accusations of massive and systematic theft at the United States' largest corporation would inspire exposés, set off investigations, perhaps even lead to arrests. So why aren't the mainstream media and the government up in arms about the "Wal-Mart scandal"?
Lawsuits filed by current and former Wal-Mart workers in 28 states have accused the company of forcing them to work "off the clock" for no pay—robbing them of wages to which they are entitled by law and by right. The recent suits—which allege that Wal-Mart supervisors make employees work, sometimes for hours, before clocking in, work through scheduled breaks, and continue working after punching out at night—are by no means small potatoes. In 2000, the company settled a class-action suit, covering nearly 70,000 Colorado workers who had been forced to work off the clock, for $50 million. A current suit, covering 200,000 Texas workers, alleges that Wal-Mart robbed them of over $150 million in wages by forcing them to work, unpaid, through their breaks.
So why haven't cops hauled Wal-Mart executives away in handcuffs? Why haven't the accusations of massive theft warranted the "scandal" treatment the press and politicians have given Enron, Halliburton, Adelphia, Tyco, WorldCom, etc.? At Enron and companies like it, the discovery of fraudulent corporate profit reports (which had inflated stock prices long enough for the executives to cash in) set off stock-price meltdowns. Stock holders were among the prominent "victims," and each new revelation made for a juicy "corrupt executives vs. deceived investors" morality play. The Wal-Mart lawsuits, which tell a story of everyday (though criminal) exploitation, just do not fit the script.
Carried away by the "irrational exuberance" of the late 1990s, the capitalist media virtually declared that a booming economy was synonymous with a booming stock market. As often as they crowed that nearly half of all U.S. households now owned stock, they apparently missed the converse—that more than half owned no stock at all. The triumphal story of the stock boom ignored this "silent majority." So do media scandals that focus on imploding stocks and investors left holding worthless paper.
As economist James K. Galbraith wrote in the Texas Observer, it was "not only small fry [investors], but modest millionaires in some cases, who lost their 401(k)s" in the Enron meltdown. "And there is nothing a hardworking middle manager fears more, than to end up on Social Security like ordinary folk." The power of companies over even relatively privileged employees—many of whom were barred from selling their stock holdings while company executives cashed in—is clear in the Enron scandal and others like it. By focusing on the "modest millionaires," however, the scandal coverage implicitly tells the "ordinary folk" that it's not such a big deal when they get robbed.
The "profits" at Enron may have been phony, but Wal-Mart's are very real—over $6 billion last year. The New York Times reports how the company has built its empire: "Many analysts say Wal-Mart's push to minimize costs is the fiercest in the industry, and holding down labor costs—including fighting off unionization at its stores—is at the heart of Wal-Mart's effort to be the nation's low-cost retailer." Low wages, meager benefits, and union busting for Wal-Mart's U.S. employees, not to mention sweatshop work and poverty pay for the Third World workers that produce the company's wares—all boost company profits and "shareholder value."
Every once in a while investors fall victim to fraud. But they are among the main beneficiaries of this daily exploitation. According to the official U.S. government National Income and Product Accounts, income from capital—including rent, dividends, interest, and realized capital gains—accounts for about one fifth of the U.S. money economy. Nearly half of that goes to the richest 1% of the U.S. population. Over seven tenths, well over $1 trillion in annual income, enrich the top 10%—just for owning property.
Fast Company founding editor Alan M. Weber writes, "Most CEOs aren't crooks —but they are incredibly competitive, financially motivated individuals … that's exactly what investors pay CEOs to be. So the real remedy is not to arrest them and send them to jail. It's to reward them for creating wealth for the company and for the shareholders … ." That, of course, is just what Wal-Mart executives have done. And if they have "created" that wealth by plundering workers, where's the scandal? That's just capitalism as usual.