Chilean Workers Take On Walmart

Eric Blair

June 12, 2018

Building Power From Below: Chilean Workers Take on Wamart. By Carolina Bank Munoz. (Cornell University Press, 2017)

It is encouraging to read about the creativity and militancy of workers and unions in other countries. Even better is to read about workers and unions who are taking on and defeating the very same corporations that are undermining the labor movement in the U.S. Perhaps, those workers and their unions are demonstrating strategies and tactics that could be implemented here to help reinvigorate the labor movement. That’s the inspiring proposition of Carolina Bank Muñoz’s latest book, which tells the story of how Walmart workers in Chile have built workplace power to win improvements on the job.


Building Workplace Power in Different Contexts

Bank Muñoz’s story is actually two stories: one about Walmart Chile warehouse workers and one about Walmart Chile retail store workers. Both sets of workers have built workplace power, but not in the same way. Both have developed strong, independent, and democratic organizations, with rich internal cultures that sustain collective action. It is this “associational power” that gives the workers strength on the job that leads to workplace improvements. The warehouse workers exercise this strength by leveraging their structural power, their ability to disrupt the work process given their strategic location at two (and later three) warehouses that constitute the Walmart distribution system. Spread out among dozens of stores and lacking this structural power, the retail workers rely instead on symbolic power to cajole and shame their employer. Not surprisingly, the warehouse workers have won greater economic improvements than their retail counterparts, but both groups have had exciting victories.

Walmart is the largest private employer in the world, with more than 2.2 million employees. In the U.S., where it has 1.2 million employees, Walmart has been the epitome of an anti-union employer, having developed, at great expense, a vast array of union-busting strategies that have crushed dozens of organizing attempts over the 50 years of its existence.

Outside the U.S., including in Chile, Walmart has had to deal with unions, almost always because it has purchased companies that have already had some level of worker organization. In the case of Chile, Walmart in 2009 bought a majority stake in the third-largest grocery chain, D&S (Distribución y Servicios). At the time, a slim majority of D&S workers were in unions, but even more have joined since the Walmart purchase. Militant, rank-and-file, and democratic unions are responsible for this growth.

In comparison to the U.S., it is tempting to attribute the success of Chilean Walmart workers to the political and working-class cultures of Chile. In this analysis, despite the Pinochet dictatorship (1973-1989), which saw hundreds of leftists and worker militants jailed or assassinated, elements of social democratic political culture and militant workplace organization, especially in the key metals sector, survived as Chile returned to bourgeois democracy. This political culture, left over from the Salvador Allende period, provided the raw materials with which Walmart workers in Chile have been able to build their workplace power.

This analysis contains grains of truth, but it is far too simple. As Bank Muñoz illustrates, Chile under Pinochet “served as the testing ground for the neoliberal state.” Guided by economists trained under Milton Friedman at the University of Chicago, Pinochet replaced social democracy, protectionism, and import-substitution with dictatorship, deregulation, export-promotion, and labor market flexibility. Labor unions remained, but greatly weakened. Key “reforms” included the elimination of industry-wide unions and their replacement with enterprise (single workplace) unions; the elimination of closed or union shops; the allowance of multiple unions at a single workplace; the legalization of lockouts and replacement workers; and the restriction of collective bargaining to wages only. The end of the dictatorship in the late 1980s led to few changes, since the leading political parties accepted the basic tenets of neo-liberalism.

Union density numbers illustrate the devastation. From 34% in 1973, union density fell to 11% in 1987, rose to 19% in 1991, fell to 13% in 1999 and was 14% in 2009. About 50% of workers in large firms are in unions, but these firms account for only 30% of the workforce. Among the other 70% in small firms, only 4.5% belong to unions.

Thus, in many ways, Chile’s labor market structures and political environment since the late 1980s have mirrored those in the U.S. Making the situation of Chilean Walmart workers even more analogous to their counterparts in the U.S. is the fact that D&S modeled itself on Walmart. The owners, the Ibáñez family, are right-wing fundamentalists, members of the conservative Catholic organization Opus Dei, and were active supporters of Pinochet. They took advantage of the regime’s neo-liberal deregulation, particularly in the areas of labor market flexibility (more subcontracted and part-time work), consumer credit with predatory interest rates, and weak anti-trust laws, to grow their retail empire.

Challenging Walmart

This history made D&S a natural fit for Walmart, which nonetheless soon sought to implement some of its own workplace culture in Chile, including calling its employees colaboradores (similar to, but not the same as, “associates” in the U.S.) and implementing its “open door” policy to get workers to negotiate individually with managers. Walmart both continued and expanded D&S’s anti-union tactics, even those that violate Chilean labor law, such as disciplining and firing union supporters, withholding back wages of strikers, and offering benefits in exchange for agreement not to bargain collectively.

Among the 38,000 Walmart retail workers, there are 80 unions, because no union can represent more than one “employer,” and Walmart stores are each set up as different employers. Bank Muñoz focuses on the most militant unions and union federations at Walmart Chile. Formed in opposition to the established unions within the CUT (Central Unitaria de Trabajadores), Chile’s main union federation, these militant unions include Logística, Transportación, y Servicios (LTS), which has virtually all the warehouse workers, and three groups of retail workers, the Federación Autónoma, FENATRALID (Federación Nacional de Trabajadores Líder), and Ekono union. Together, the militant unions have about 5,000 of the 38,000 retail workers. The rest of the retail workers are split, with 3,000 in one older federation and two very recently formed federations, 14,000 in a company union, and 16,000 not in a union.

The militant unions consciously organize separately from the CUT. As they see it, the mainstream federation has failed to build a mass base with which to make workplace demands. It focuses on male workers in heavy industry, ignoring the burgeoning female labor force facing subcontracting, flexible work arrangements, and low pay. Additionally, CUT is too closely aligned with the ruling political parties. The militant unions prefer to remain independent.

LTS formed first and established itself through a strike in November 2006. A militant minority slowly and covertly organized, teaching new members throughout the facility to map the production process and thereby reveal the sources of workers’ power on the job. The union made decisions democratically, and the decision to strike was made by consensus among the 200 or so members, about a sixth of the total workforce.

The strike started with picketing, and workers chained themselves around the facility to block the movement of trucks. When police attacked and the company brought in scabs, the workers fought back physically, but eventually had to move to other tactics, including sabotage. Within three weeks, the workers forced the company to the table and negotiated a modest contract, which led to an explosion of membership.

Since the strike, the union has focused on one-on-one internal organizing, building a rigorous and democratic steward structure, a health and safety committee, and constant political education through its escuela syndical (union school). One focus of education: how to control production to maximize productivity bonuses without providing free labor to the company. Regular mass membership meetings draw 80% of the members and include cultural performances, discussion of workplace activity, and votes on policies, such as how to distribute a newly earned productivity bonus.

LTS’s democratic, rank-and-file unionism has led to significant gains, including much higher wages, greater workplace control, and respect and dignity on the job. Virtually all 2,000 workers at the company’s two older warehouses are members, and LTS has helped establish a new union at a third, recently built warehouse.

Walmart Chile retail workers organized differently from their warehouse counterparts. Approximately 80% of retail workers are women, whereas 90% of warehouse workers are men, reflecting a gendered division of labor consciously pursued by retail employers globally. Retailers have positioned women (and men) to attract customers and require them to act out gender norms in providing them services. Bank Muñoz gives several examples of how these gender norms stimulated workplace conflict and motivated worker organizing.

To form their unions, retail workers used a variety of tactics. Workers across Walmart Chile’s Ekono convenience store chain used a strike by 300 workers at 20 stores to get a first contract that included a small wage increase. More important, like the warehouse workers, the strike was a springboard to build the union, which now has more than 1,000 members across dozens of stores.

At the bigger Lider stores, workers threatened strikes, but mostly stuck to various forms of protest in front of stores and at corporate headquarters that built workers’ solidarity, attracted public support, shamed the company, and, in some cases, disrupted store operations. Street meetings were a key organizational tactic that, while focused on building solidarity and trust among workers, also carried an effective public message.

Legal strategies, taking advantage of Chile’s labor code, are another building block for militant retail unions at Walmart. Since Pinochet, the Chilean labor movement and its allies have been able to win a few changes to the code, such as the restoration of “just cause” protections against unfair dismissal, fundamental rights such as privacy, free speech, and freedom from sexual harassment, and the right of unions to hold meetings in their workplaces.

Building Working Class Political Culture

With the help of sympathetic labor lawyers, union leaders educate workers about their rights and train them to spot labor law violations. Then the unions combine protests, including marches on the boss, with legal action to pressure Walmart into concessions. This combination of direct and legal action forced Walmart to stop using the term colaboradores, which reminded workers of people who colluded with the Pinochet dictatorship. The Ministry of Labor ruled the term violated the labor code and forced the company to switch to trajabadores, which undermined Walmart’s culture and reinforced the union’s.

A significant portion of the leaders in the militant warehouse and retail unions brought to their organizing activity a history of political activity, something that differentiates Chilean Walmart workers from their US counterparts. During Bank Muñoz’s first visit to a warehouse, she met a group of workers in “a vigorous conversation about Marx’s notion of surplus value.” Several of the founding leaders of the Ekono union were young men who had gained union experience in other workplaces, including agriculture and movie theaters. “They had a clear understanding that the conditions for Ekono workers would not improve without a union.”

This political sophistication reflects not just the personal histories of those involved, but the Chilean labor movement’s trajectory as well as the country’s political history. As Bank Muñoz points out, workers in the copper industry played “an instrumental role in fueling the social movement that toppled Pinochet and pushed forward democratization despite severe repression.” Similarly, the labor code improvements since Pinochet were the result of labor’s political mobilization.

U.S. Unions Fail International Solidarity

Bank Muñoz ends her book by briefly examining the failed attempts at international solidarity between the militant Chilean Walmart unions, the United Food and Commercial Workers union in the US, and UNI Global (the global federation of service sector unions). UFCW and UNI did help Chilean (and other) union leaders get to South Africa to testify against Walmart’s purchase of MassMart, which contributed to the imposition of South African government restrictions on Walmart’s operations in the country.

But the Chilean and US unions could not agree on how to work together. The Chileans wanted direct worker-to-worker exchanges to educate workers in both countries about workplace organizing. The US and Europeans wanted the Chileans to work on a Global Framework Agreement that they hoped to get Walmart to sign and to support a Walmart Watch website in Chile that would help build the international critique of the company. The fact that UNI and the UFCW would not repudiate the company unions at Walmart Chile did not help matters.

For those of us on the labor left in the US, Bank Muñoz’s story of a militant minority of workers at Walmart Chile building rank-and-file led unions that focus on workplace organizing, political education, union democracy, and independence from established unions and political parties is an inspiring one. It is also familiar. Organizations in the US, such as Teamsters for a Democratic Union, Labor Notes, New York State Nurses Association, and Chicago Teachers Union, are doing the same thing. Together, these groups, like their Chilean counterparts LTS, Ekono Union, Federación Autónoma, and FENATRALID, are demonstrating how to revive the labor movement – at home and abroad.

Eric Blair is a labor researcher and organizer.