This week, Abby talks with business writer Rick Wartzman about what he learned while reporting his latest book: Still Broke: Walmart's Remarkable Transformation and the Limits of Socially Conscious Capitalism. Rick spent nearly three years documenting how Walmart’s directors worked to significantly improve wages and conditions for employees — and how it wasn’t nearly enough. The book is a fascinating look at how good intentions, even from a behemoth like Walmart, are ultimately not enough to overcome the demands of Wall Street, where keeping shareholders happy, even at the expense of workers and their communities, is the name of the game.
Rick takes Abby back to 1962, when Sam Walton, affectionately called “Mr. Sam” by his employees, opened his first store. As he grew an empire over the next several years and decades, he paid workers poorly and used cut-throat techniques, including hiring union-busting firms—the likes of which are still operating today. What was different back then, Rick explains, was that Mr. Sam not only made his workers feel like they were an important part of the enterprise, he also offered them profit sharing, which offset low wages for many.
Sam Walton died in 1992. Rick explains how, and why, in the years that followed, the company became a hellscape for workers and one of the most vilified companies in the world, a veritable symbol of American capitalism gone wrong. Yet by the time Rick finds himself inside Walmart in 2018, he meets executives who genuinely want to pay workers a living wage, clean up Walmart’s sustainability record, and generally improve Walmart’s public and moral standing. While Walmart has seen some success, and taken great strides, at the end of the day, Rick tells Abby, the market will not allow a company to be socially responsible. “Voluntary efforts will only take corporate America so far,” Wartzman declares, saying that his research has led him to believe that the private market can’t address these challenges on its own. “It’s not fast enough,” he says. “We need a government solution to this.”
Rick’s consulting company is Bendable Labs and his book is Still Broke: Walmart's Remarkable Transformation and the Limits of Socially Conscious Capitalism.
EPISODE LINKS:
Wal-Mart Memo Suggests Ways to Cut Employee Benefit Costs (NY Times)
Clinton Global Initiative Panel Discussion
Interfaith Center on Corporate Responsibility
Top CEO group Business Roundtable drops shareholder primacy (Fast Company)
Walmart raises minimum wage as retail labor market remains tight (CNBC)
Rick’s Recommendations:
For great data, head to the Economic Policy Institute
To understand how living wages are calculated in your region, check out Living Wage for US and MIT’s Living Wage Calculator
To learn more about frontline workers, visit United for Respect
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