Monday, February 20, 2012

Walmart Tries to Pay Workers in Walmart Vouchers

Posted by on Mon, Feb 20, 2012 at 3:15 PM

In Mexico (via Reddit):

The Mexican Supreme Court of Justice on Thursday ruled that Wal-Mart de Mexico may not pay employees in part with vouchers redeemable only at its stores. The court nullified the employment contract of a worker who challenged the voucher payments, finding that they violated Article 123 of the Mexican Constitution, which guarantees the right to "dignified and socially useful work."

The sad part is, I could totally see conservatives justifying this kind of practice in the United States if they could get away with it. This is why regulations and "activist judges" are important.

 

Comments (42) RSS

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1
st peter don't call me 'cause I can't go...
Posted by drivel on February 20, 2012 at 3:31 PM · Report this
2
in other news, exactly this practice DID exist in the united states, in coal mining company towns. they were paid in "scrip" good only at the company store. it was one of the big things abolished by collective bargaining for workers' rights.
Posted by drivel on February 20, 2012 at 3:34 PM · Report this
Urgutha Forka 3
To add to what @2 said, there were 'company towns' in all sorts of industries. Besides paying workers in company scrip, they also set the prices at the company store too high for workers to afford. However, the company would offer high interest loans to the workers in order for them to buy even everyday staples like bread. The idea was to put the workers into indentured servitude - owing so much in company loans that they could never leave. That way the company could pay them whatever pittance it wanted, knowing the workers would have no choice but to accept it.

Oh, and that is EXACTLY what conservatives and corporations (as if there's any difference) want. Their ultimate dream would be an entire country of obedient, unquestioning, broken serfs, while they lounged in their gilded, gated mansions, sipping brandy and counting their wealth.

Conservatives are the elite snobs. They always have been. They are convinced of their own superiority. Superiority over women, superiority over blacks, superiority over the poor, superiority over immigrants. They are the elitists, latte-drinking snobs who think they know what's best for everyone.

/gets off soapbox... wanders away.
Posted by Urgutha Forka on February 20, 2012 at 3:47 PM · Report this
laterite 4
They should hold out to be paid in Trident Layers.
Posted by laterite on February 20, 2012 at 4:05 PM · Report this
5
Just so I'm clear, the party line is that employee discounts amount to exploitation? Got it.
Posted by minderbender on February 20, 2012 at 4:25 PM · Report this
Kariglitter 6
I work in Mexico (not for Wal-Mart) and part of my pay is vouchers I can use at Wal-Mart, Costco and other chain grocery stores. It's a pretty normal practice in Latin countries that your pay includes some groceries or food stamps but it's alright because I can buy alcohol with my food stamps. I mean, it's bad they could only use their vouchers at Wal-Mart, but this practice is not without precedent.
Posted by Kariglitter on February 20, 2012 at 4:27 PM · Report this
7
@5: Yes, if said discount is received in lieu of actual pay. That is, if rather than paying you $100, I pay you $70 and give you a $30 voucher that you can only use at my store... that's exploitation.
Posted by also on February 20, 2012 at 4:28 PM · Report this
8
@7, don't worry, I have fallen into line. I just wanted to make sure I had the logic straight. I feel sorry for all those CEOs who get non-cash compensation (use of the corporate jet, for instance - I was always bothered by that, but it turns out I was bothered for the wrong reason).

I know a guy who works for a tech company, part of his pay is stock options. I'll make sure to let him know that this kind of bullshit wouldn't fly in Mexico.
Posted by minderbender on February 20, 2012 at 4:35 PM · Report this
seandr 9
I believe this practice was used fairly recently (maybe still) with immigrant agricultural workers - the farms got most of their payroll back in rent and food costs that the workers had no choice but to pay for.

Similar thing happens when bars pay their bands with drinks for which they are expected to leave a tip.
Posted by seandr on February 20, 2012 at 4:43 PM · Report this
10
@8: Cool. Walmart workers will be thrilled to know that they are in the same boat as CEOs and tech guys who barely get buy and are forced to accept $10m/year and use of the corporate jet instead of $11m/year. It's totally the same thing. Thanks for being perceptive.
Posted by also on February 20, 2012 at 4:47 PM · Report this
McGee 11
Your stock option statement is a false equivalency. Stock options can be turned into cash which can be spent everywhere. If his options turned into coupons he could only redeem at work/company store then he would indeed be getting fucked.

If you think company stores are a thing of the past look deeply into the North Dakota oil boom.
Posted by McGee on February 20, 2012 at 4:48 PM · Report this
12
@10, so what is the difference? Is it just that CEOs and tech guys (who, by the way, generally don't make $10M/year) are better-compensated that Mexican Wal-Mart workers? If that's the case, what is the legal principle on which you would have activist judges throw out non-cash compensation? Can unionized auto-workers keep their healthcare, or should the courts throw that out because the workers are more like Mexican workers than they are like CEOs? Can retail workers keep their discounts?

@11, you can't necessarily turn stock options into cash as soon as you receive them. But fine. Health insurance. You can't turn that into cash. It is an in-kind subsidy for a particular kind of product. Shall we get some activist judges to strip health insurance from compensation?
Posted by minderbender on February 20, 2012 at 5:01 PM · Report this
undead ayn rand 13
@5: "the party line is that employee discounts amount to exploitation? Got it."

Can you read?
Posted by undead ayn rand on February 20, 2012 at 5:07 PM · Report this
14
My first thought was AGAIN! Wal-Mart will never give up trying to screw their employees. The article is from September 5 2008! 3 ½ years ago so it’s not déjà vu. They may not have been caught doing this crap lately but they are trying.
Posted by litespeed2001 on February 20, 2012 at 5:14 PM · Report this
15
@13, right, so what is the problem here? If vouchers are a means to evade the minimum wage laws, then they should be disallowed on those grounds. (Or, more precisely, the vouchers should not be counted when determining whether Wal-Mart has met its minimum-wage obligations.) But if Wal-Mart is paying at or above minimum wage in cash, then who is hurt when it also pays a portion of the workers' wages in vouchers? Is there something inherently unfair about non-cash compensation? Seemingly not. So what is the problem? And more importantly, what is the principle at stake?
Posted by minderbender on February 20, 2012 at 5:14 PM · Report this
16
@13 and, by the way, how do you distinguish an employee discount from a voucher? It seems as though they are different words for the same thing. So we have Amy and Ben. Amy is paid $10/hour and gets to buy up to $100 in merchandise at half price every month. Ben is paid $10/hour, plus every month he gets a voucher for $50 in free merchandise.

Now, I suppose you will say that Amy is doing great, whereas Ben is being exploited. But why? Is there something I'm missing because I'm functionally illiterate?
Posted by minderbender on February 20, 2012 at 5:21 PM · Report this
17
The story is A) old and B) more complicated than it looks. The program was voluntary: http://digitaljournal.com/article/259532…

Walmex typically pays well above the tiny Mexican minimum wages, but going to a Walmex is still a luxury shopping trip for most of its workers. It could be that the program was designed to help Walmex workers afford the items at the stores, but I'm disinclined to give the benefit of the doubt to anything Walmart does.

From 2006: http://messageboards.aol.com/aol/en_us/a…
"A Wal-Mart de Mexico cashier would have to work eight hours to be able to buy a loaf of bread, a gallon of milk and toilet paper on a starting salary of $ 7. 45 per day. A Walmex security guard would have to work longer to buy the same products, since he earns just $ 6. 63 per day. The Minneapolis-based Resource Center of the Americas gathered the prices of ordinary items such as bread, toilet paper, milk and deodorant in Nuevo Laredo, Mexico. The prices of those products were about the same as prices in Minneapolis. A dozen eggs, beef, potatoes and cornflakes were more expensive in Mexico."
Posted by dirge on February 20, 2012 at 5:30 PM · Report this
18
They don't need no stinkin' vouchers. Just let 'em graze in the produce section.
Posted by Anastasia Beaverhausen on February 20, 2012 at 5:33 PM · Report this
20
I'm sure Santorum would be fine with it. After all, if it was good enough for his grandfather in the coal mines, it's good enough for today's workers. Don't you libs want us to be competitive with china?
Posted by Joe Glibmoron on February 20, 2012 at 5:46 PM · Report this
21
This would not be illegal in the US, as far as I can see. Sure, if your employer promised to pay you $12/hour, and then come payday delivered $10/hour and $2/hour in vouchers, that would be breach of contract. But if the original agreement was for $10/hour in cash plus $2/hour in vouchers, US labor law would have no problem with that contract. Anyone who believes otherwise please point to the law that forbids it.
Posted by David Wright on February 20, 2012 at 5:56 PM · Report this
22
Why you gotta be knockin walmart? What; you expect all the poor folk and immigrants to show up at farmers markets? or get a costco membership? Do you think that all of the shuttered up small businesses and mom and pops would've hired or preferred catering to people of color and immigrants? Hillary Clinton sat on the board of walmart; she knows whats up.
Posted by markay on February 20, 2012 at 6:21 PM · Report this
McGee 23
@12 No you can't turn them into cash right away. You have to wait for them to vest. Don't fuck with me on stock options. I've had plenty. At any rate stock options and health insurance are fringe benefits and part of both is that you have a stake in them. I pay via payroll deduction for insurance and for stock options they're only profitable to any additional value beyond strike price, you're on the hook for the principle cost. This article says the vouchers are part of salary, not in addition to the salary. If you get paid 10 bucks and hour for an 8 hour day you should make 800 bucks for two weeks pre-tax. Not 640 cash and 160 in Wal-Script. Any articles about this say nothing about the script being in addition to salary.

Are you being dense on purpose?
Posted by McGee on February 20, 2012 at 6:39 PM · Report this
COMTE 24
@16:

Simple: an employee discount is almost always offered in addition to wages, and is discretionary; that is, the employee is not obligated to take advantage of the discount and is at no significant economic disadvantage if they don't (because, you know, maybe they work for a tire company and don't NEED a new set of tires every month). Very different from paying an employee a part of their actual wages in vouchers that can ONLY be redeemed at the place of employment. Even in the case of Wal-Mart, which sells just about everything, it takes away the employee's CHOICE of where to spend their income, in effect creating a "closed system" where part of the employee's compensation goes right back into the company's revenue-stream, whether the employee wants it to or not. This not only hurts them economically, but has the additional result of removing that equivalent amount of liquid asset from the general economic pool, unless of course, the local barber shop, or laundry mat, or diner, or movie theatre suddenly begin to accept W-M script as legal tender.

And your CEO/stock options/jet privileges is yet another false equivalency, since these are offered in addition to income (unless you want to argue that $250,000 or more a year represents subsistence wages), and are, as a general rule ONLY available to employees at a certain level. If EVERY employee had the option to use the company jet whenever they wanted, you might have a case, but that's just not the way things work in most corporations.

And Health Care, really? Most collective bargaining units have to fight like Hell to get that kind of benefit, even if it means paying premiums out-of-pocket. It may be considered part of the overall wage-and-benefit package an employee receives, but the wages themselves are still at a level that ensures a decent standard-of-living.
More...
Posted by COMTE on February 20, 2012 at 6:52 PM · Report this
25
@24: So here is what I take to be your position: Amy works for $10/hour in "wages," although she understands that $2 of it can be paid in vouchers. Bob works for $8 in "wages," but he is also entitled to $2 in vouchers. Amy is being exploited, Bob is not. In your world, labels reign supreme. (Remember, Amy knew that $2 would be paid in vouchers - this is not a case where she is promised $10 in wages and only later comes to understand that only $8 of it is paid in cash.) Amy is exploited because the word "wages" is magical.
Posted by minderbender on February 20, 2012 at 7:08 PM · Report this
26
And I see @23 is making the same argument, except to him the magical word is "salary." If the vouchers are in addition to "salary," they are a good thing. If they are part of "salary," they are raw exploitation. I guess these Mexicans attach a huge amount of importance to the way their compensation is characterized, linguistically speaking.
Posted by minderbender on February 20, 2012 at 7:18 PM · Report this
27
(Note, by the way, that the program was apparently voluntary. You could always just take your pay in cash. These devious exploiters, they are very clever, no?)
Posted by minderbender on February 20, 2012 at 7:20 PM · Report this
Free Lunch 28
Mindbender:

CEOs are not getting use of the private jet in lieu of pay. When they sign up, they are not told, "We'll either pay you $X, or if you use the private jet we'll pay you $Y." It's a benefit, sure, but not one they are getting in lieu of money; they'd be paid the same if they never use it once. And, more important to this conversation, it's not currency.

Also, healthcare is not currency - it's a benefit. You may have to subsidize with part of your income, but you can completely opt out if a) you are an idiot or b) you have insurance from another source, like a spouse. But this is something you are deciding to pay FOR - it is not pay itself.

Likewise, the employee discount is not currency, nor is it offered in lieu of currency. Now if they told you they'd pay you more if you don't use it, that would be parallel. Without that element, your example is kind of dumb.

Myself, I don't view this Walmart situation as exploitation, assuming:

1) That it was something the employee agreed to when hired.

2) The cash part of the salary is a legal amount - e.g., not lower than minimum wage.

3) That the voucher portion does not exceed the bare minimum of what one would spend on consumer goods.

4) The employee is not being charged more than other customers for the redeemed goods.
Posted by Free Lunch on February 20, 2012 at 7:44 PM · Report this
COMTE 29
@25:

Clearly, you're being willfully obtuse here. BOTH Amy AND Bob are being exploited in the examples you posit. There is no "understanding" that a portion of an employee's wages will be paid out in company-script; that's simply an example of the "company store" concept alluded to by the first three commentors, and one that's been illegal for more than 50 years. Any discount a company offers is considered above-and-beyond salary for the simple reason that the employee is under no obligation to make use of it, and the employer cannot count it as part of the overall compensation package; they offer it at their own discretion, and their employees are free to take advantage of it or not at THEIR own discretion. But either way, it has no bearing, impact or relevance to the amount that appears on their paycheck.

As 28 says: vouchers that can ONLY be redeemed for employer-owned goods or services in lieu of universally accepted currency is NOT, by any legal definition nor accepted practice, considered "wages". If that concept is too difficult for you to grasp, I would suggest you enroll in the nearest Community College and take a course in Economics 101.
Posted by COMTE on February 20, 2012 at 9:31 PM · Report this
30
@29: I don't follow you. Why is Bob exploited in my example? So here's another example that I think will make my point. Charlie is paid $8/hour. David is paid $8/hour, but he also gets $2 in vouchers. I understand you to be saying that David is being exploited, Charlie is not. (If David is not being exploited, then why do you say Bob is being exploited?)

People seem to have in their minds workers who show up, expecting to get paid $50, but end up with vouchers in the face amount of $50. That would be, you know, illegal. Instead what we have are people who get to choose whether to take x% of their paycheck in the form of vouchers, or to take the entire paycheck in cash. It is, in fact, very hard to see the exploitation when people can always just take cash.

But the interesting scenario is one in which, counterfactually, people's only choice is to take the job or not. If you take the job, you get $x in cash and $y in vouchers for every hour you work, where $x is well above the minimum wage. Other comments think this is exploitation if and only if it is called "wages" or "salary." If it is called "an employee discount" or "benefits," then it is of course fine. (@29 takes the more consistent but rather implausible position that pretty much any non-cash compensation is exploitation, whatever it is called.)

Now look, one can draw this distinction as a literal matter. It's just unclear to me why you would do so. What is so offensive about in-kind remuneration, so long as the cash component of remuneration is above the minimum wage? Again, this is not hidden or sprung upon these people. It is simply non-cash compensation for services performed, on top of the cash compensation.

So again I ask: is David ($8 + $2 in vouchers) being exploited while Charlie ($8) is not? If not, why not? Can you draw a distinction that makes sense?
More...
Posted by minderbender on February 20, 2012 at 9:54 PM · Report this
Urgutha Forka 31
@30,
What if the only job available to you is Walmart? And they pay part of your wages in Walmart credit? Sure, maybe you even make above minimum U.S. wages, but some of those wages are in company scrip, and company scrip doesn't go too far.

Are you arguing that the workers can simply take another, better paying job elsewhere?

Many of them cannot. That's the failure of conservative argument.... that the free market lets them choose where to work. However, in Real Life, they don't alway have such a magnitude of choices. Sometimes it's either: 1) Work for The Company, or 2) Die.

When the company knows this fact, they exploit it. And they know it and exploit it a lot.

Monopolies exist all over the place. Open your eyes and take a look around.
Posted by Urgutha Forka on February 20, 2012 at 11:11 PM · Report this
32
minderbender, the Mexican supreme court did not rule that the vouchers were exploitative— it ruled that they were unconstitutional.

I don't know if it will speak to your argument, but consider the following hypothetical situation:

A Walmex worker is paid partly in Walmex-only vouchers. The worker needs almost all of her cash pay for essential living expenses (rent, bills) but she still wants to save— so she saves the vouchers. Then one day, something happens at work that upsets her on a moral level. Since she can no longer work at Walmex in good conscience, she quits. She would like to also refrain from any further economic activity with Walmex, but she can't satisfy this moral imperative without significant financial harm to herself, due to her by now substantial savings in vouchers redeemable only at Walmex.

Whether or not that's "exploitative" for an outside observer like yourself will be a subjective matter, of course, but I for one think it's pretty fucked up, and it would seem the court has decided it's not "dignified and meaningful," whatever that might mean in Mexican constitutional law.
Posted by robotslave on February 21, 2012 at 1:16 AM · Report this
33
Just the other week I made a sarcastic remark about Walmart being able to pay their workers in Walmart Vouchers to keep its employees from shopping at Target in response to someone who felt that the Catholic Church should be able to not provide comprehensive healthcare to its employees so that said employees couldn't get contraceptives.

Ho ho ho.

That being said, I don't understand how this law is supposed to work. I'm reading that people can voluntarily choose to get some of their pay in the form of coupons, but that can't be right. If I was earning $10 an hour, I would not choose to be paid $8 cash and $2 in coupons; I would always choose the $10 in cash because there would be no reason for me to opt for money with limitations over money without limitations. If this was a thing where the people were receiving a wage of $8 plus a bonus of $2 in coupons, then it wouldn't be an issue of a person voluntarily opting to give up some of their salaries in exchange for getting coupons.* Or is it a thing where a person who is earning $10 per hour can choose to give up $2 of their salary in exchange for $4 in Walmart coupons? I don't understand.

*From one of the articles: Employees could elect, or choose, to be paid by the voucher for a portion of their salaries and the retail giant would give them a store credit on Wal-Mart gift cards.
Posted by Lorran on February 21, 2012 at 5:42 AM · Report this
34
To everyone saying the program is voluntary - I'm sure it is but even here in America my boss have given me the stink eye for not participating in "voluntary" programs, so officially it was voluntary but I felt like I would lose my job if I didn't/did participate in what ever program was being offered. Because of "right to work" I had no grounds to stand on if I had been fired.
Posted by tigntink on February 21, 2012 at 6:51 AM · Report this
undead ayn rand 35
@15: " If vouchers are a means to evade the minimum wage laws, then they should be disallowed on those grounds."

They are. So why are you otherwise thrashing so hard to avoid coming to this conclusion?
Posted by undead ayn rand on February 21, 2012 at 7:19 AM · Report this
Theodore Gorath 36
@30:

Wow minderbender, if you can't see why this is exploitation, you truly are just a real fucking idiot.
Posted by Theodore Gorath on February 22, 2012 at 10:25 AM · Report this
37
like @32, my concern is the level of entanglement between the corporate employer and employees. It's difficult enough standing up for oneself when it means risking your job/safety/comfort, especially if you have family depending on you. It takes a frequently impossible-to-sustain level of courage to do so when that also means you lose any $ or benefits you've already earned but haven't cashed in on. So from Walmart's perspective, these vouchers don't just mean they're controlling all of their employees discretionary income, it means they're ensuring that A) nobody's going to unionize, B) nobody's going to protest, and C) their employees are COMPLETELY dependent on their jobs, which means that systematic abuses can occur and even become de rigeur, and they won't have to deal with lawsuits or complaints.
And if it weren't for the bravery of this anonymous employee, that would have been true.
I know I've struggled more than once with leaving abusive employment situations because it meant putting myself at even more risk.
The violation of human dignity comes when a person is financially, emotionally, or physically forced or pressured into returning to or participating in a degrading situation because they believe themselves to have no options or recourse. THAT is why this scenario was judged unethical. And when a power dynamic is judged unconscionable by the Mexican legal system, that alone speaks more powerfully than I can.
Posted by pretty basic stuff on February 22, 2012 at 1:44 PM · Report this
38
Working at the arcade, I usually get paid every other week in whack-a-mole tickets.

In 2011, I reported ten novelty combs as income on my 1040
Posted by bgolds on February 22, 2012 at 4:37 PM · Report this
McGee 39
@26 You are such a full-of-shit punk to attempt to reduce this to an issue of semantics.

and...

@27 Source?
Posted by McGee on February 22, 2012 at 5:36 PM · Report this
40
they gonna shop at wal mart anyway !
Posted by whatsbeckgottadowithit on February 23, 2012 at 5:57 PM · Report this
41
Perhaps the need to regulate the use of vouchers should be considered. Vouchers in Australia is fairly common and the last thing we want is for employees' wages to be affected. I do hope there aren't those who choose to cheat people if they can get away with it.

Posted by VouchersIn on March 30, 2012 at 11:14 PM · Report this
42
Perhaps the need to regulate the use of vouchers should be considered. Vouchers in Australia is fairly common and the last thing we want is for employees' wages to be affected. I do hope there aren't those who choose to cheat people if they can get away with it.
Posted by VouchersIn on March 30, 2012 at 11:18 PM · Report this

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