Something Stinks at Whole Foods
…something sinister lurks beneath the surface of Whole Foods’ progressive image. Somehow, [founder and CEO John] Mackey has managed to achieve multimillionaire status while his employees’ hourly wages have remained in the $8 to $13 range for two decades.
By Sharon Smith / May 9, 2009
Whole Foods Market is a highly profitable corporation that far outperforms its competitors, while maintaining an aura of commitment to social justice and environmental responsibility. Its clientele is attracted not only to its brightly lit array of pristine fruits and vegetables, organically farmed meats, and delectable (yet healthy) recipes, but also to the notion that the mere act of shopping at Whole Foods is helping to change the world.
In 2007, Whole Foods launched its “Whole Trade Guarantee,” stating its aim as advancing the Fair Trade movement — encouraging higher wages and prices paid to farmers in poor countries while promoting environmentally safe practices. In addition, Whole Foods announced that one percent of proceeds will be turned over to its own Whole Planet Foundation, which supports micro-loans to entrepreneurs in developing countries.
Meanwhile, the company’s Animal Compassion Foundation seeks to improve living conditions for farm animals, while stores periodically hold “5 Percent Days,” when they donate five percent of sales for that day to an area non-profit or educational organization.
Whole Foods also has a distinctive reputation for rejecting traditional corporate management models in favor of decentralized decision-making, described as an experiment in workplace democracy. There are no departments at Whole Foods stores, only “Teams” of employees. And Whole Foods has no managerial job titles, just Team Leaders and Assistant Team Leaders.
Nor does the company admit to having any workers, only Team Members who meet regularly to decide everything from local suppliers to who should get hired onto the Team. Generally, the company strives to achieve consensus at Team meetings, where workers brainstorm about new ways to raise productivity. And new hires need to win the votes of at least two-thirds of Team Members in order to make the cut.
The liberal dress code at Whole Foods allows nose rings, Mohawks, visible tattoos and other expressions of individuality to help promote its stated goal of “Team Member Happiness” for its relatively young workforce. Each Team takes regular expeditions, known as “Team Builds,” to local farms or other enterprises to educate themselves on how to better serve their customers.
When Team Members show extra effort on the job, Team Leaders award them with “High Fives” that can be used to enter an onsite raffle to win a gift card. When a Team Member gets fired, it is sadly announced as a “separation.”
For all its decentralization, the “unique culture” so beholden to Whole Foods’ supporters bears the distinct stamp of its cofounder and CEO, John Mackey, who declared in 1992, a year after Whole Foods went public, “We’re creating an organization based on love instead of fear.
The former hippie is known for shunning suits and ties and wearing shorts and hiking boots to meetings — and for insisting that before the end of every business meeting, everyone says something nice about everyone else in a round of “appreciations.” In a 2004 Fast Company article, business writer Charles Fishman favorably quoted a former Whole Foods executive calling Mackey an “anarchist” for his eccentric executive style.
But something sinister lurks beneath the surface of Whole Foods’ progressive image. Somehow, Mackey has managed to achieve multimillionaire status while his employees’ hourly wages have remained in the $8 to $13 range for two decades. With an annual turnover rate of 25 percent, the vast majority of workers last no more than four years and thus rarely manage to achieve anything approaching seniority and the higher wages that would accompany it. If Whole Foods’ workers are younger than the competitions’, that is the intention.
But another secret to Whole Foods’ success is its shockingly high prices. When Wal-Mart began promoting its own organic products last year, Whole Foods’ Southwest regional president Michael Besancon scoffed at the notion that Wal-Mart could present serious competition. “There’s no way in the world that we’d win a price battle with Wal-Mart,” he told the Rocky Mountain News. “I’m relatively smarter than that.”
On the contrary, Whole Foods orients to a higher income clientele willing to pay significantly more for somewhat higher quality foods. Whereas the average supermarket chain’s profits traditionally hover at around one percent, Whole Foods was able to sustain a profit margin of three percent for 14 years after it went public in 1992. After hitting a low of one percent in the economic downturn in late 2008, “now the margins are expanding again,” according to the Cabot Report’s investment adviser Mike Cintolo on April 26th.
Indeed, Mackey is no progressive, but rather a self-described libertarian in the tradition of the Cato Institute. He combines this with a strong dose of paternalism toward the company’s employees. Mackey complained about his unique dilemma at the helm of Whole Foods to fellow executives in an October 2004 speech: “I cofounded the company, so I’m like this father figure at Whole Foods. I’m this rich father figure and everybody’s pulling at me saying, ‘Daddy, daddy can we have this, can we have that, can we have this, can we have that?’ And I’m either like the kind, generous daddy or the mean, scrooge daddy who says ‘No.'”
Using a carrot and very large stick, Mackey managed to “convince” Whole Foods workers across the country to vote in 2004 to dramatically downgrade their own healthcare benefits by switching to a so-called “consumer-driven” health plan –- corporate double-speak for the high deductible/low coverage savings account plans preferred by profit-driven enterprises. As Mackey advised other executives in the same 2004 speech, “[I]f you want to set up a consumer-driven health plan, I strongly urge you not to put it as one option in a cafeteria plan, but to make it the only option.”
There have been setbacks for Mackey, to be sure. He suffered public humiliation in 2007 when he was exposed as having blogged under the false user name “rahodeb” — his wife’s name spelled in reverse — between 1999 and 2006 at online financial chat boards hosted by Yahoo.
For seven years, he backstabbed his rivals — including the Wild Oats franchise that Mackey later purchased as an addition to the Whole Foods Empire. The Wall Street Journal reported a typical post: “’Would Whole Foods buy (Wild Oats)? Almost surely not at current prices,’ rahodeb wrote. ‘What would they gain? (Their) locations are too small.’” At one point, rahodeb even admired Mackey’s latest haircut, gushing, “I think he looks cute!”
Preventing Whole Foods workers from unionizing has always been at the top of Mackey’s agenda, and the company has been successful thus far at crushing every attempt. Perhaps the company’s most notorious attack on workers’ right to unionize occurred in Madison, Wisconsin in 2002. Even after a majority of workers voted for the union, Whole Foods spent the next year canceling and stalling negotiation sessions — knowing that after a year, they could legally engineer a vote to decertify the union. Mission accomplished.
At the mere mention of the word “union,” Whole Foods still turns ferocious. Even when United Farm Workers activists turned up outside a Whole Foods store in Austin, Texas, where Mackey is based, the company called the police and had them arrested for the “crime” of passing out informational literature on their current grape boycott. And as Mother Jones recently reported, “An internal Whole Foods document listing ‘six strategic goals for Whole Foods Market to achieve by 201… includes a goal to remain ‘100% union-free.’”
Mackey launched a national anti-union offensive in January, in preparation for the (remote) possibility that President Barack Obama, upon his inauguration, would make it a legislative priority to pass the Employee Free Choice Act (EFCA), allowing workers to win unionization when a majority of a company’s workforce signs a union card. Although union card check is standard procedure in many countries, Mackey claimed to the Washington Post that it “violates a bedrock principle of American democracy” and has vowed to fight to prevent its passage here.
“Armed with those weapons,” Mackey argued, “you will see unionization sweep across the United States and set workplaces at war with each other. I do not think it would be a good thing.” Workers don’t want to join unions anymore, Mackey declared, contradicting every recent opinion poll: “That so few companies are unionized is not for a lack of trying but because [unions] are losing elections — workers aren’t choosing to have labor representation. I don’t feel things are worse off for labor today.”
In January, Whole Foods launched a nationwide campaign, requiring workers to attend “Union Awareness Training” complete with Power Point presentations. At the meetings, store leaders asserted, “Unions are deceptive, money hungry organizations who will say and do almost anything to ‘infiltrate’ and coerce employees into joining their ranks,” according to Whole Foods workers who attended one such meeting.
“According to store leadership,” the workers continued, “since the mid 1980’s unions have been on decline because according to Whole Foods ‘theory’, federal and state legislation enacted to protect workers rights has eliminated the need in most industries (and especially Whole Foods stores) for union organization… No need to disrupt the great ‘culture’ that would shrivel up and die if the company become unionized.”
When rumors recently began circulating that a union drive might be brewing in San Francisco, the response from the company was immediate — including mandatory “Morale Meetings” to dissuade employees. But company leaders failed to address workers’ complaints that they have gone without any pay raises sometimes for more than two years because Team Leaders have neglected to hold “Job Dialogue” meetings (known as “annual performance reviews” in traditional corporate-speak).
There was a time in decades past when liberalism was defined in part by its principled defense of the right to collective bargaining. That liberal tradition was buried by the market-driven neoliberal agenda over the last three decades, allowing companies like Whole Foods to posture as progressive organizations when their corporate policies are based upon violating one of the most basic of civil rights: the right of workers to organize and bargain collectively. Indeed, Whole Foods has ridden its progressive image to absorb its smaller competitors and emerge as a corporate giant.
As the Texas Observer argued recently, “People shop at Whole Foods not just because it offers organic produce and natural foods, but because it claims to run its business in a way that demonstrates a genuine concern for the community, the environment, and the ‘whole planet,’ in the words of its motto. In reality, Whole Foods has gone on a corporate feeding frenzy in recent years, swallowing rival retailers across the country… The expansion is driven by a simple and lucrative business strategy: high prices and low wages.”
Indeed, Whole Foods now stands as the second largest anti-union retailer in the U.S., beaten only by Wal-Mart. Most of Whole Foods’ loyal clientele certainly would –- and should — shudder at the comparison.
[Sharon Smith is the author of Women and Socialism and Subterranean Fire: a History of Working-Class Radicalism in the United States. She can be reached at: email@example.com.]
Source / Counter Punch
Back in the stoneage, I once heard John Mackey say “Ronald Reagan is the greatest president since Lincoln”. His political philosophy is far from mine and I certainly disagree with his anti-union practices but then I could say the same for most of corporate America (including some of my clients, who help me buy the food that John sells). Nevertheless, as pointed out in this article, Holy Foods is
An interesting article, that also speaks to the Old Left’s objections to “hippiedom”. What they saw many years earlier. Btw, I live in an apartment, so do not grow any vegetables. A point of premise that I see often completely ignored by the natural foods discussants, who are, I presume, all homeowners with garden plots. (Or can afford to rent an entire house and garden.) Whole Foods is not
Ric – join Wheatsville, Austin’s customer-owned food co-op and the true leader in natural and organic foods here for over 40 years!
Wheatsville is in the midst of a tremendous remodeling project on Guadalupe St., but the store is open, functional, and there are even kewl maps of the construction and its various phases so shoppers don’t get lost.
I a proud Life Member of Wheatsville, and even though I wish they had a store in South Austin, it’s not that big a deal to get there for most of my organic shopping needs!
And there are MANY other alternatives; Austin has seen the entry of a couple of new corporate natural food chains recently, with more to come. I also enjoy the Mexican groceries such as La Michoacana, La Hacienda, and others. Herbs and spices, fresh local eggs (those from TomGro on Montopolis Dr. are amazing!, cheese, and other nice items are available among the corporate Mexican groceries — and some of those, while perhaps not totally natural or organic, are also not stuffed with preservatives, and very cost-competitive and tasty.
Oh and don’t forget the local farmer’s markets — beautiful produce presented with pride by actual farmers, the freshest, most natural vegetables not from your own garden!
So hey, get out of the Yuppie ghetto, guys! There’s more to food shopping than a store with an escalator and a seasonal ice rink!
Anonymous presumes natural foods discussants are all homeowners with garden plots — I am NOT; I live in a condo and have enough “garden” of my own for a couple of rose bushes. However, when shrubs on the property die, we’ve begun replacing them with herbs such as rosemary, purple sage, basil and others; attractive to bees and butterflies as well as cooking herbs for the community. And as I pointed out above, there are MANY alternatives to Whole Foods for less-unnatural foods that won’t break the budget!
You’re sure not the only one who came out on the short end when baby-daddy went on to greener pastures — women do not, in general, gain financially from divorce. Screw ’em, Mama; I don’t buy a lot of the “certified organic” stuff either because I can’t afford it, but there are things WE CAN ALL DO to eat more naturally and still have money for other necessities — buying at local stores in a farming area is one of the BEST, imho — just make sure the folks you’re buying from know YOU want the most natural foods possible, and that YOU are, in fact, an important person in the natural foods “discussion” — if natural foods were only for the elite, it would NOT be a valid goal for progressives! But WE DESERVE THE BEST, Mom, and so do OUR kids and grandkids, and that’s what it’s about!
Excuse me, I left out the condo renters/owners with rose plots. Thank you, but I know what I need to do on my next shopping trip. And I’ll say all I like about dad drinking organic milk, while kids don’t. Mind your own divorce.
Btw, don’t tell what’s “it’s all about,” either, or call me “Mom” or “Mama”, or lecture me on child-rearing or statistics about women.
Go on a television show or something. Do your “wind me up and let me run on automatic” number there.
You sound like a natural foods manikin.
I’ll retain my status as a thinking individual.
The stuff about Whole Foods’ crappy attitude towards workers and worker rights brought back memories of standing out in a howling storm in front of the Austin Hilton where WF shareholders were holding their 2008 annual meeting. This was part of the Coalition of Immokalee Workers campaign to get higher pay for tomato pickers in Florida. (Big tomato buyers agree to pay one penny more per pound of tomatoes, to be passed on by the growers to the workers. A small amount for the companies, a large pay raise for the workers.)
At this time the CIW had already gotten agreements from Taco Bell (March, 2005) and McDonald’s (April, 2007), and was working on a big national campaign against Burger King (which signed in May, 2008). The Student-Farmworker Alliance was leading marches from the UT campus to the BK on Guadalupe.
Meanwhile, the CIW had sent a polite and clear letter to Whole Foods in 2006 asking WF to join the program. After the CIW got no response and continued to try to talk to Whole Foods, the company denied it had ever received the letter. The CIW was having trouble getting any meeting with the company. The action at the shareholders’ meeting was part of the effort to get the company’s attention.
Local SFA activists such as Sean Sellers at UT (who is also a member of the Texas State Employees Union) and Kate (last name?)–then a high school student–could give more details of the Whole Foods Campaign. My own impression is that Whole Foods was more or less dragged kicking and screaming to the table, with its only concern being bad public PR.
In September, 2008, WF signed an agreement with the CIW. Great! But Whole Foods’ statement:
“We commend the CIW for their advocacy on behalf of these workers,” said Karen Christensen, Global Produce Coordinator for Whole Foods Market. “After carefully evaluating the situation in Florida, we felt that an agreement of this nature was in line with our core values and was in the best interest of the workers.”
“Core values”? It made me want to puke.
Well sor-ree; I was feeling all sororal and empathetic on Mother’s Day, and responded to your post because you seemed to feel so left out of the natural foods discussion, and to blame that on the presumed elitists of the Left. If you enjoy feeling that you’re the only one who sees the issues you raised, that is surely your right as a “thinking individual”!
Fortunately, others may gain something even from remarks unappreciated by the intended recipient, such as remembering to say how much one likes the local yard eggs to small store owners and clerks. Our overall purpose at this site is to share information and experience, for what it’s worth; comments like yours require a mental adjustment, e.g., “Oh, she was just venting; wasn’t really interested in seeing things change.” Again, your right, Ma’am!
Thanks for the career advice, btw!
Hey Leslie — obviously, I hope, my post that appears right after yours is in response to the Anonymous woman who got mad at me for being, I guess, garrulous…
I wondered after reading your comment if you’d ever heard anything about Whole Foods supposedly having a non-fraternization rule for its employees; that is, no intramural dating or relationships?
All you did, by extrapolating on your uninvited assumptions about me when you initially posted, was confirm my immediate pointed observation that you’re a phony, presumptuous vicious misogynist bitch.
I would be interested in knowing from a website owner, if this is your website or you are one of the welcomed participants. Since you make a statement indicating that you deem who is o.k. or not.
And I will certainly pass the word to my left friends (and I can assure you, I know more of them than you do), after someone lets me know, upfront, if YOU are where THEY are coming from.
My “favorite” John Mackey quote, “Unions are like herpes. Once you have them you can never get rid of them.” Very funny guy, very friendly, very social conscious? Not at all.
In 2007 John Mackey anonymously spread false rumors about Wild Oats on the internet so as to drive their stock prices down before Whole Foods sought to buy Wild Oats. Mackey’s false postings were uncovered as his. Read about that on the web if you like.
So much for “free market” competition. Mackey is just another Hippie-Calvinist, blue jeans wearing, eat pure, jog a bit, Capitalist. The woods around here are full of these people.
When the UFW boycotted Whole Foods I certainly joined with them but since there is no boycott I buy a thing or two there, not much. Individuals boycotting has no impact.
John Calvin’s full predestination religion is the basis for American Christian evangelicalism but that is another long story. The short version is: Wealth is the sign that God loves you and that you are going to Heaven. How you obtain that wealth does not matter but you must also keep up a false face of caring about others even when you don’t. There is no social gospel in Calvinism.
To the Anonymous Angry Person Perhaps Wrongly Assumed to be Female:
Please, get help today from a qualified mental health professional! Services are free to those who cannot afford payment — you can call your county health department for information.
Anonymous angry blogging is a sign of vitamin D deficiency — sunshine is one good cure!
A prayer candle has been lit for you at The Blessing Way.