Thursday, January 19, 2006

Wal-Mart vs Worker Owned Cooperatives and Companies

While a megacorporation such as Wal-Mart can justify their economic policies of paying low wages as a social benefit "cost tradeoff" for low prices the fact remains that worker owned coooperatives and employee owned companies can match Wal-Mart for prices and offer excellent benefits to the employees.

Winco foods is a good example of a employee owned company that offers excellent prices on food comparable to Wal-Mart. One brand of cat food sells for 79 cents a can at some stores, sells for two for 79 cents at Kroger Corporation owned Fred Meyer stores, but comes in at only 25 cents a can at employee owned Winco. On all other comparable items, Winco is able to consistently offer huge Wal-Mart style discounts to customers, yet to offer very good employee ownership benefits to the WinCo workers.

In 1967, two private entrepreneurs, Bud Williams and Ralph Ward formed a warehouse style discount store in Boise, Idaho. But in 1985, the WinCo Foods Employee Stock Ownership Trust bought out the company and the company has both undergone a healthy expansion with the opening of new stores such as a new 900,000 square foot store in Woodburn, Oregon and expansion into California.

While Wal-Mart continues to operate primarily for the benefit of the top executives, such as regional managers who often earn $400,000 of more a year. And Alice Walton, daughter of Wal-Mart founder pours hundreds of thousands into political activity such as Progress For America which funds the right wing attack ads against those who oppose putting John Roberts and Sam Alito on the Supreme Court. And to pour millions into corporate lobby efforts by running the single largest single corporate entity PAC, after some urging to do so by Mississippi Senator Trent Lott which has heavily benefitted Republican officeholders and office seekers. Wal-Mart workers are forced into low minimum wage jobs in many cases, without any health insurance in many cases, and to seeking public health social welfare programs and food stamps to supplement their low wages which keep many Wal-Mart employee families stuck below the poverty line. Wal-Mart posts $10 billion a year in corporate profits, can spend money on high executive salaries and political activity and can hand politicians lobby money, but often shortchanges their employees to do so.

WinCo foods is able to match low Wal-Mart prices on groceries, yet offers far better average employee wages, although these sometime do not quite match union wages at some other large stores such as Safeway. But there are huge benefits in the employee stock ownership(pension plan) in the company which has a 21.2% annual compound growth rate. Employees can self-negotiate their own wages through employee committees. There are excellent health insurance with vision and dental benefits. There are paid vacations. There is an excellent retirement plan when employees are able to cash out their stock ownership in the company. Compared to Wal-Mart this company is able to match low prices and rapid growth in opening new large stores, yet offers many benefits to the workers who share in the company and set up the wages and other policies.

There are over 2500 employee owned companies currently in the U.S. employing 1.5 million American workers. This helps to insulate the workers against job layoffs and job exports to low wage countries such as China where wages often average only 24-40 cents an hour. In Pennsylvannia where privately owned sttel companies have been closing, some employees have been able to buy their companies and run profitable companies.

In this climate of job layoffs, job exports, low wages, pension givebacks, wage givebacks, and other problems that privately owned companies force on their workers, the successful model of employee owned companies should be given serious consideration by workers to improve wages, working conditions, benefits and other vital goals. Worker owned coooperatives and employee owned companies through pension plan stock ownership are worthy alternatives to the current gross failures of privately owned companies so of which offer few social benefits to many of the workers and often almost solely just benefit the management.

24 Comments:

At 10:24 AM, Blogger Jamison said...

Great post! It's amazing to me how companies allow themselves to held hostage by shareholders and give up on perfectly profitable businesses to get double digit growth at the expense of their employees.

 
At 12:35 AM, Blogger jimmyz said...

your comment about winco workers negotiating with wages is false we elect a group of people to represent us. a big wig comes from the head office takes them to dinner and tells them what if anything they will give to us.that is winco negotiating.
(worker owned my ass)

 
At 1:30 PM, Blogger Adrian said...

I was curious about WinCo Foods politics, and so stumbled on this and other items on the Internet. While the original post attempts to paint a favorable picture of compared to Wallmart (why not satin? Come on guys, where's the challenge in that?), the author neglects to mention that WinCo Foods CEO Steve Goddard and Board Chairman William Long have supported Republican candidates for national office every election cycle. Not one board member (and few workers) have ever supported Democrats.

 
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At 10:35 AM, Blogger Sistah said...

This comment has been removed by the author.

 
At 10:37 AM, Blogger Sistah said...

"In 1985, the WinCo Foods Employee Stock Ownership Trust (Employee Pension Plan), headed by then president Bill Long and with full support of store personnel and management, purchased from the Ward family a majority interest of WinCo, giving WinCo employees a real ownership stake in the company." If the employees own the majority interest in the company, it's up to them to stand up for their rights. It's called taking ownership and being proactive. If they don't, it's their own fault.

 
At 6:45 AM, Blogger Stephanie said...

I love many of your comments about employee owned companies. I am a strong supporter of free markets and although i don't like Wal-Mart, I feel it is important to allow them to operate how they feel best. This gives opportunity for the market to eventually find a "better" way of doing it. Imagine if you had a "winco" style company enter in direct competition with Wal-Mart. Now, that would be cool.

 
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