Welcome to 'Whole-Mart': Rotten Apples in the Social Responsibility Industry
Harris, Mark T.
ON A TRIP TO Portland, Oregon, in 2004, I wandered into the Whole Foods Market, where shoppers are greeted with soft-hued lighting, high ceilings, and carefully groomed displays of choice...
...When negotiations finally began, management rejected all union proposals while refusing to bring any of its own to the table...
...In a 1996 piece for Fast Company, Fishman went so far as to declare the company "one of the business world's most radical experiments in democratic capitalism...
...In August 2004, Whole Foods accepted an NLRB ruling that allowed for continued formal recognition of the union, as well as resolution of some back pay grievances...
...Such retrograde thinking under the environmental banner is a disgrace...
...If "sustainability" as a social vision is to be more than a marketing banner for liberal corporations, it will have to find its way into activism and confrontation with the concentrated corporate power that now acts as the greatest brake on society's democratic future...
...These are the values that say crossing a union picket line or scabbing on social justice for the sake of a dollar is a shameful act...
...The months of delayed negotiations by the company eventually segued, according to union supporters, into an effort by a small group of new employees, tacitly encouraged by managers and the lure of quick promotions, to organize a union decertification petition...
...Where is the public discussion of these issues...
...These are the millions of so-called cultural creatives who apparently want some personal development and social justice with their blue-corn tortilla chips and echinacea...
...A closer look at the company's business practices and Mackey's ideas about business and society reveals a vision not that different from a McDonald's or a Wal-Mart...
...Everybody wants to sell out to somebody who's publicly traded and wants to consolidate earnings and sales and show 14 percent growth rates...
...Mackey's dream of a natural foods empire became possible in the late 1980s with venture 62 DISSENT / Winter 2006 capital provided by financiers Oak Investment Partners, Criterion Venture Capital Partners, and First Interstate Capital Corp., all firms with track records as profiteers in weapons manufacturing, as a Texas Observer investigation first reported in 1991...
...In fact, this is a world where irony frequently reigns over integrity, as solid "guilt-free" returns on the dollar often matter more than whether a company pays genuine living wages or, for that matter, even produces anything socially worthwhile...
...But more than the aesthetics or products of the "authentic food artisans" on display, what's being sold here is Whole Foods itself...
...There were good reasons for the organizing drive...
...Workers are not recognized or appreciated for their contributions...
...Whole Foods earns wide praise for selling a higher percentage of organic foods in its stores than most supermarkets...
...Conveniently, the dismissals came in the midst of the war of attrition that Whole Foods management was waging to undermine unionization...
...The fresh air also cleared my head of the disquieting thought my stroll through Whole Foods had stirred, of how once lively values of environmental activism, protest, and vision have been gradually transformed for commercial gain into so much shallow "shop your values" hucksterism...
...For Mackey, every shopping experience at Wal-Mart was supposedly like casting a vote, a democratic choice...
...The conversation was pleasant until the subject of Wal-Mart came up...
...What's wrong with Wal-Mart...
...Hawken's critique took aim at the Domini Social Equities Fund's holdings in McDonald's stock...
...After all, a slogan like "Whole Foods, Whole Planet, Whole People" conjures up more ennobling vistas of planetary progress than, "We Sell for Less...
...Yet marketing for socially responsible business can create the impression that there is such a thing as a clearly demarcated progressive business sector, reforming capitalism one sustainable mission statement at a time...
...The minimum wage would be closer to $19 an hour, not $5.15 an hour...
...After the union vote, company lawyers stalled for months on contract negotiations, claiming they were "too busy" to pencil in a meeting...
...Instead of being a side issue, union-busting should be a cut-in-stone marker of which side of the social responsibility equation a company has chosen...
...What such "green" corporate capitalism represents is old-fashioned avarice neatly repackaged now for a post-consumer world of "shop your values" sensitivities...
...66 DISSENT / Winter 2006...
...or that new hires require a two-thirds vote from co-workers before being permanently hired...
...The company responded to the UFCW charges by announcing its decision to cease recognition of the union, based on the petitioners' signatures, thus sidestepping the decertification election...
...But the $5.49 price tag for one serving quickly left my soul crying something other than thank you...
...The union had now legally ceased to exist at Whole Foods...
...Who could object to such charmingly "holistic thinking in a conventional world...
...I left the store to explore the city's hilly, unfamiliar streets...
...Whether or not it's truly inspiring to the $8 to $13 per hour worker to know that the CEO and other top executives at Whole Foods limit their pay to fourteen rather than forty times their own pay (excluding bonuses and stock options, of course) remains to be determined...
...ACTUALLY, THERE iS a lot to object to...
...Today, in Midwest region stores they are in the $9 per hour range...
...Still, Whole Foods is one of the stars of the socially responsible business community, listed among the top twenty sustainable stocks in 2004 by SustainableBusiness.com , a leading Internet site for progressive investors...
...The business press loves the classic tale of the modest entrepreneur who turns the once humble storefront into a reigning corporate giant, and it's not inclined to debunk inspirational folklore with impolite examinations of such issues as labor exploitation...
...I was also resigned to the reality that I was not part of the store's targeted demographic of consumers who never let a price tag stop them from a date with the cash register...
...I've put forward a model that is cooperative," he declared to a class of Columbia University business students, while unions advocate an "adversarial" relationship out of place in the Whole Foods culture...
...Nothing," said Hawken...
...The emergence of such mega-chain retailing is simply the retail component of the larger story of corporate consolidation in the natural foods economy...
...And that they are...
...Consider what that free market has produced...
...It's also supposed to be delightfully innovative that DISSENT / Winter 2006 61 Whole Foods believes in "empowered" work teams, links wages to department productivity, and limits executive pay to fourteen times the average pay of store "team members" (the group once known as workers...
...Yet it is a paradox of our age that many so-called socially responsible corporations can celebrate record sales growth and profits, boast about how they're making the world "a better place," and there is barely a murmur of the fact that they're paying the bulk of their floor-level "team members" salaries in the roughly $20,000 a year range...
...The latter observation was brought home in October 2004 when environmentalist Paul Hawken and his colleagues at the Natural Capital Institute (NCI) released a less-thanflattering study of a socially responsible investment (SRI) industry apparently as savvy in its marketing as it is lacking in general accountability...
...There have been buyouts of single-site neighborhood stores, such as the once thriving Oak Street Market in Evanston, Illinois...
...Other "news" included reporting that the Bellevue store, in its first weeks of operation, was already drawing "rave" reviews not only from customers, but even from corporate headquarters...
...Reynolds Tobacco, Enron, and even Wal-Mart among the great work cultures...
...It might be a simple step toward progress if those who support the organic foods movement or the concept of socially responsible business returned to values some of their grandparents once held...
...It is also a vision in which concerns about social responsibility do not necessarily apply where less publicly visible company suppliers are concerned...
...The goal is to have as few people working as possible, doing as much work as possible," says Debbie Rasmussen, a former juice and coffee bar staffer and one of the leaders of the organizing campaign...
...Similarly, Whole Foods founder John Mackey dismisses those who criticize the advent of mega-chain retailing in the natural foods business with the rote response that his company is in the whole foods, not "holy" foods, business...
...Gooch's Natural Foods Markets, and U.K.based Fresh & Wild...
...The best anyone can say is that such wages are "competitive...
...In fact, the labor environment has devolved to such an extent that Fortune magazine's annual list of the "100 Best Companies to Work For" routinely includes firms with yearly turnover rates among full-time staff that are close to a quarter or more of the work force...
...Were it not for the gloss of green marketing, the false vision of sustainability associated with the Whole Foods business model would be seen for what it is: the metamorphosis of the organic foods movement into another seized property of concentrated corporate power...
...It's unknown whether anyone has personally asked Mackey the same question, but likely his answer would evoke vistas of a libertarian fantasyland in which both the hourly-wage single parent and the multibillion dollar corporation stand as equal units on the great, leveling stage of the free market...
...Union•Busting I will admit that as I strolled the Portland Whole Foods store that winter morning, my thoughts were on more mundane things...
...It's a viewpoint that considers, as Mackey does, privatizing Social Security and deregulating health care as pressing ideological goals, while the fate of a miserly minimum wage is best left to whatever results from the supposedly wondrous interplay of free-market forces...
...And Hawken has also come to object to characterizations of Whole Foods as a "socially responsible" company, criticizing its mega-chain drive to monopolize the natural foods market as disastrous to "local food webs" of small farmers and retailers...
...In fact, the Whole Foods business model is more or less the standard stuff of Fortune 500 ambition...
...The single union local in the Whole Foods chain (in a university town with a young, transitory part-time student work force) was barely recognizable as a union...
...In 1998, when the United Farm Workers (UFW), an early campaigner against the dangers of pesticides in food production, asked grocery retailers to endorse a pledge to support humane work conditions for California's strawberry workers, Whole Foods notoriously refused, making clear it was a matter of principle that the company would not cooperate with the UFW or any union...
...Indeed, the organizing drive was an object lesson in the uphill battle workers face in today's economy...
...work force now earns less than $9.04 an hour, Business Week reports (May 31, 2004...
...Kraft, Unilever, Kellogg's, General Mills, Nestle, Dean Foods, Heinz, Dole, and Tyson are among multinational corporations that have entered the organic-natural foods market through acquisitions and other routes...
...But while the partisans of "conscious commerce" marvel at how the "lifestyles of health and sustainability" market is evolving from a "hippie granola" thing to a "sexy cool" thing in the eyes of the buying public, the more happening reality for millions of working, largely stock-market-free Americans is job insecurity, long work hours, debt, and fears for the future...
...Instead, Whole Foods relies on worker apathy and lack of investment in their jobs to keep turnover high, and for the most part, wages, benefits, and other working conditions poor...
...In fact, not only Hawken but entire communities have objected to the specter of Wal-Mart's arrival...
...After a morning of book browsing, I was mildly hungry and couldn't help but be tempted by the single slice of angel food cake that caught my attention on a nearby display table...
...This perhaps had something to do with the fact that Mackey wears hiking shorts to business meetings while charting record-breaking growth and dreams of globalization...
...Although most SRI firms claim to bar investments in tobacco, alcohol, gambling, or weapons manufacturing, they ignore the one issue that ought to be a defining one for anyone who claims to stand for social and economic justice—union-busting...
...The real story of the company's rise to prominence trades not only on the high prices Whole Foods garners for the growing organics market but, like WalMart, on an economic climate defined for more than twenty years by deteriorating work conditions for the service sector economy...
...Several weeks later, the NLRB issued another ruling regarding the petition's misconduct charges, ruling in the company's favor...
...In this, Whole Foods matches Wal-Mart in its reputation for corporate anti-unionism...
...The company's management also travels comfortably in a kind of vaguely sixties-era "counterculture" vernacular, packaging its predatory takeover of the natural foods retail market in eco-friendly jargon that emphasizes support for a "sustainable future," the integrity of the planet's ecosystems, and other homages to environmental awareness...
...THE CONSEQUENCES are measurable in the steady consolidation of the natural foods economy...
...It could be applied equally to Whole Foods, substituting only the reference to high priced (natural) food for cheap (junk) food...
...Indeed, in his July 2004 article, "The Anarchist's Cookbook" (that would be Mackey, the "anarchist"), Fast Company's Charles Fishman described Mackey's approach to running Whole Foods as "equal parts Star Trek and 1970's flashback...
...This environment should be unacceptable for any workplace...
...But the UFCW soon charged that store managers were illegally involved in the petition drive, causing the National Labor Relations Board to delay a new vote on unionization...
...Mackey's argument against the Madison workers was based on his assertion that because Whole Foods emphasizes a "we're all in this together" philosophy, there was no need for unionization...
...Paradoxically, although Mackey boasts that the disparity between executive pay and the pay of floor-level workers is comparatively less at Whole Foods than elsewhere, the Madison organizing campaign brought into relief the erratic wage differentials that tend to result in a "team system" that ties a portion of each department team's monthly income to fluctuations in sales and productivity...
...It's a hostility rooted in a management whose "core values" are intrinsically patrician and antidemocratic...
...This is a vision of mega-chain retailing that involves strategic swallowing up (or driving out of business) of smaller retail competitors...
...The executive replied that such a notion had a certain "romantic" appeal, but for business reasons was clearly impractical...
...Mackey responded...
...New Age" Business "Values" The yearlong effort to defeat Madison's first organizing drive revealed Mackey as a "socially enlightened" poseur, a New Age business type who talks about love and ecological footprints and other enlightened things, but who turns to the hard boot of corporate scare tactics and disinformation when confronted with a group 64 DISSENT / Winter 2006 of employees who dare to assert their democratic right to self-representation...
...Seattle's progressive Evergreen Monthly, for example, offered in its August 2004 "news" section a report on the opening of a new Whole Foods store in suburban Bellevue...
...The company also owns Allegro Coffee, regional fish processing plants, and several private-label brands...
...Sustaining' McDonald's requires a simple DISSENT / Winter 2006 65 unsustainable formula," wrote Hawken in an earlier exchange on socially responsible investing in Green Money Journal (March-April 2003...
...Inside the store, managers portrayed the arrival of the union as a "tragedy" manipulated by "outside organizers" from the UFCW...
...None of this should be that surprising...
...Mackey wasn't interested in discussing any specific concerns about WalMart, but instead recited what Hawken describes as a "pat neo-conservative libertarian argument" about how the Arkansas company's success simply reflects the inherent wisdom of the market...
...Combined with lack of a structured seniority system, such work cultures easily become breeding grounds for favoritism and wage inequities within and from store to store...
...Subsidiaries of cigarette manufacturers (for example, Altria, owner of Kraft's organic products) or low-wage exploiters of minority workers (such as California Bottling Co., Inc., makers of Whole Foods's private-label water) are apparently welcome partners in this particular ecocorporate version of "the sustainable future...
...Hawken mentioned that he'd been working recently to help some small towns in Vermont keep Wal-Mart out of their communities...
...What should we expect from a list in which companies can nominate themselves or that has at times included such rogues of social irresponsibility as R.J...
...Approximately a quarter of the U.S...
...Hawken said that since their time was limited, maybe it would be better to ask, "What's right about Wal-Mart...
...In Madison, union activist Rasmussen and her co-worker Julie Thayer (also an organizing committee member) learned firsthand what the company's "we're all in this together" philosophy really meant when, several months after the pro-union vote, they were both fired for a specious "violation" of store policy...
...But what such an employee might think is often beside the point in the eternally cheery public-relations (that is, management-oriented) world of most "socially responsible" businesses...
...The industry has become one dominated by people who are trying to create large businesses...
...In response, some supporters of the Social Investment Forum, an SRI industry trade group, such as board member Joe Keefe, have accused Hawken of being a purist who prefers "grand philosophical determination[s]" to the realpolitik of compromise that is at the heart of the SRI industry...
...Indeed, as you walk through the store, you can see that a lot of care goes into the Whole Foods ambience...
...The NCI report, "Socially Responsible Investing: How the SRI Industry Has Failed to Respond to People Who Want to Invest with Conscience and What Can Be Done to Change It," shows that under the SRI banner can be found portfolio after portfolio of corporate polluters, lobbyists for business subsidies and tax breaks, labor exploiters, junk food producers, and other members of the what's-good-forbusinessis-not-necessarily-good-for-the-restofus-crowd...
...Cheap food plus cheap non-unionized labor plus deceptive advertising equals high profits...
...For the record, Mackey has not hesitated to defend McDonald's as a contributor to the public good...
...The latter qualities were revealed in all their disDISSENT / Winter 2006 63 mal hypocrisy most forcefully in 2002 when employees of the chain's Madison, Wisconsin, store voted to unionize and join the United Food and Commercial Workers (UFCW...
...Okay, what's right about Wal-Mart...
...MARK T. HARRIS, www.Mark-T-Harris.com , has written cover stories and features for Utne, Organica: A Magazine of Arts and Activism, Z , and other magazines...
...This is shopping as experience, food merchandising as a gallery show...
...They also just tend to pay less than their unionized industry counterparts...
...When I spoke to Hawken, he described the natural foods business today as dominated by a "scale-up-and-sell-out" crowd of entrepreneurs...
...Casually dressed clerks add to the sense of Whole Foods as business as unusual...
...It's a bleak commentary on the current social climate when a management team that spews some of the most backward anti-union rhetoric this side of the last 150 years is still considered socially responsible by liberal investors and others spellbound by any company that combines talk of all things sustainable with record profits...
...This is shopping for those market-branded Americans known in the "socially responsible" business community as the Lifestyles of Health and Sustainability (LOHAS) crowd...
...The magazine's editor informed readers who like to use reusable canvas grocery bags that they could now "follow their bliss" to Bellevue for all things natural...
...Mackey's views on Wal-Mart became known to Hawken, author of The Ecology of Commerce, in the mid 1990s, when the Whole Foods CEO approached him about joining the Whole Foods board...
...The overall effect is more like entering some modern cathedral to upscale consumption, one in which the creed is not suffering, but celebration (although with plenty of tithing at the cash register...
...The union was now a closed chapter in Madison, declared Whole Foods management...
...But where Wal-Mart has come under deserved scrutiny from labor, community, and feminist activists for its exploitive "big-box" business model and miserly wages, Whole Foods, the world's largest natural foods retailer, enjoys a reputation as a progressive trendsetter at the forefront of a "green lifestyle revolution" in American life...
...It also translates for many workers with families to support into life on the edge of officially defined poverty...
...Our economy needs more employee power...
...The rain clouds had cleared, and some sun was now shining on this too-gray town...
...If wages had kept pace with productivity increases since 1968, most working Americans today would be earning close to $30 an hour...
...The Green in "Green Capitalism" In her book No Logo, Naomi Klein reports the explanation of a Borders executive who was asked why the book chain didn't just pay its employees higher wages...
...In 2002, when the Madison workers voted to join the UFCW, starting hourly wages at the store were in the $7.50 per hour range...
...But it was now nearly a year later, and the company's steadfast refusal to negotiate seriously with the UFCW had paid off...
...If the public wants Wal-Mart's big-box discount stores, who was Hawken or anyone else to object...
...Fishman seemed really, really impressed by such "unique" management innovations as making everyone's pay public information (is he not familiar with union work environments...
...In fact, charges Hawken, many SRI mutual funds are barely distinguishable from conventional funds...
...That translates into a bountiful full-time salary of about $18,000 a year...
...In a story that caught the attention of the New York Times and other media, Mackey had what might be described as a New Age temper tantrum, treating the specter of collective bargaining at one of his stores as a disaster of almost unspeakable proportions...
...As the Whole Foods Workers Organizing Committee stated in an open letter in May 2002, rebutting the company's claims of worker "empowerment" and explaining their reasons for mounting the organizing effort: The ridiculously high turnover rate, wages that are lower than the industry standard, pervasive lack of respect, constant understaffing, absence of a legally-binding grievance procedure, and other poor and unfair labor practices—all of which have led to widespread low morale— highlight the simple fact that workers ultimately have no say in the terms and conditions of their employment at any Whole Foods Market —not just Madison...
...Since the early 1990s, Whole Foods has bought out such competitors as Bread & Circus, Fresh Fields, Bread of Life, Merchant of Vino, Nature's Heartland, Food for Thought, Harry's Farmers Market, Mrs...
...Whole Foods has been aided in its marketing by supporters of "green living" in the media and elsewhere who, at times, treat the company as more of a movement cause than the newly arrived Fortune 500 corporation it is...
...Both the New York Times Magazine and the business magazine Fast Company have offered flattering portrayals of Whole Foods CEO and founder John Mackey, who was described as something akin to a world-changing prophet of organica, a corporate "hippie" subverting the business paradigm, one heirloom tomato and chocolate enrobing station at a time...
...I decided my hunger was manageable...
...asked a surprised Mackey...
...Companies such as Whole Foods or other non-union chain competitors are paying many of their hourly employees what in late 1960s dollars would be equivalent to the minimum wage or below...
...The mostly young employees convey a kind of "alternative" aura that says, "You'll never catch me working at WalMart...
...It was like a pall was cast over the table," Hawken recalls...
...A 2002 University of California-Davis study found that, in California, just twentyseven growers accounted for more than half of the state's organic sales, reported CorpWatch writer Carmelo Ruiz-Marrero...
...ON A TRIP TO Portland, Oregon, in 2004, I wandered into the Whole Foods Market, where shoppers are greeted with soft-hued lighting, high ceilings, and carefully groomed displays of choice desserts and organic foods...
...Nor does he have any problem with Wal-Mart, despite its atrocious labor record or the way it drives competitors out of business and pushes suppliers overseas to pursue rock-bottom costs...
...Rather than throw it out, Rasmussen had given an incorrectly made latte drink a customer didn't want to Thayer...
...Our economy needs fewer millionaire and mega-chain "success" stories and more economic democracy...
...The old dream of socialists and early union pioneers remains a good one: Society should be guided in its essentials by human needs, not corporate profits...
...It is a business model that objectively complements the long-term industrialization of organics (that is, large-scale corporate farms) over small family farms...
Vol. 53 • January 2006 • No. 1
