Walmart's Hunger for Growth May Be Good News for Workers -- in India
It's no secret Walmart (WMT) has been trying for years to gain permission to open retail stores in India. Less well-known are the chain's primary promotional tools for softening India's stance on outside retailers gaining entree to its enormous market: Plugging job creation and providing free worker training.
While Walmart has been systematically stripping perks from U.S. workers -- most recently ending profit-sharing payouts -- and scheming to reduce staff at its Sam's Club division, it's recently opened its third free training center in India with local partner Bharti. Walmart CEO Mike Duke is on the stump, telling the Federation of Indian Chambers of Commerce and Industry in a speech earlier this week that letting organized retail into India will create 3 million jobs. No mention, of course, of the untold numbers of jobs that will likely vaporize from India's current complex retail ecosystem of small merchants, middlemen and wholesalers if Walmart gets the green light.
The Indian job-training centers are utterly self-interested -- they aim to cultivate a trained work force so that Walmart can staff up the moment it gets the go-ahead, which some observers predict could happen before the end of the year. For now, the centers train workers for the Walmart-Bharti joint venture wholesale cash-and-carry stores, of which there are currently four. The training centers also do double duty as a civic good, as many Indian youth lack job skills.
Why so magnanimous? Because Walmart's running out of places in the U.S. for its giant stores and desperately needs new, large-population markets such as India in which to expand to keep growing its sales, profits, and most importantly, stock price. In many ways, India could be Walmart's dream market -- open territory, no major big-box competitors, and a huge unskilled labor force that's unaccustomed to being paid a decent wage. No more pesky protests like in Chicago! And cheap goods are closer at hand, so transportation costs should be less than for shipping goods over to the States.
Maybe before India says "yes," American unions could send some of the small shop owners put out of business by Walmart over to India for a little tour. Might be a fascinating exchange -- maybe share statistics about what happens to other jobs and businesses when Walmart comes in nearby. Or relate how Walmart promised a living wage for Chicago store workers, only to immediately disavow the claim after winning permission to build a store.
Duke says he senses a thaw in India's anti-outsider attitude. The Indian government has been playing it cagey, though -- it's put out a discussion paper and not made any official statements as yet about changing its policy. One thing's for sure: If India lets Walmart and other big retailers including French chain Carrefour (CA) in, the country's retail landscape will change drastically. Whether Indian Walmart workers would get a better deal (relative to their living standards) than American workers have remains to be seen.
Photo via Flickr user Brave New Films
Related: