Running Against The Wal-Mart Tide
August 10, 2006 on 4:13 pm | In Main, National, Wal-Mart |
I admit it. I have long been fascinated by Wal-Mart. Business success stories always interest me, but the chain founded in 1962 by Arkansas entrepreneur Sam Walton grew steadily into the largest retailer in the world and the second largest revenue-producing corporation as of this year.
Such a meteoric rise would in itself be enough to hold my frequent attention. But Wal-Mart has in the last couple of years become the object of strong criticism (some of it justified) for its labor practices, environmental record and the effect its hulking stores can have on host communities.
As this excellent piece by the AP’s Ron Fournier makes clear, the campaign against Wal-Mart has evolved from a test case for organized labor’s ability to unionize, to a nascent political movement that could significantly impact this year’s midterm elections and even the presidential race in 2008.
To be fair, the discord doesn’t always break down neatly into pro-corporate Republicans and pro-labor Democrats. There are Republicans who think Wal-Mart gives capitalism a bad name and Democrats who think the company’s low prices benefit consumers. But in general, people on the left don’t like the company and those on the right defend it.
What will be interesting to watch is how the politicians play the issue as the elections come near. I, too, share concerns about Wal-Mart’s treatment of its employees and especially the need for state goverments to supply healthcare for those Wal-Mart employees whom the company will not cover or who are are not yet elegible for Wal-Mart’s healthcare plan.
But I think running against Wal-Mart in a general election is fraught with peril. Slamming the company for its labor practices will excite the Democratic base and energize the ever-shrinking unions. But after the primary is over, what effect will it have on the political center whose votes both parties covet? Is the strategy to make Wal-Mart’s 127 million weekly customers feel guilty about shopping there? Oh, that’ll go over really well …
There was a very interesting column last week by The Hartford Courant’s Rick Green in which he asked some of the state’s most prominent public figures what they thought about the company and whether they had ever shopped at one of its stores. The responses were remarkably revealing, particularly the one from U.S. Rep. Rosa DeLauro, a Democrat who represents the New Haven area in Washington:
DeLauro, who likened Wal-Mart to a “19th-century garment factory,” said she’d never been inside.
“I don’t shop there. I never shop there.”
All this hand wringing and these folks haven’t even been to Wal-Mart, seen the low prices? This doesn’t matter, though, because it’s election time and Wal-Mart energizes the left and labor, even though they all shop there anyway.
Ned Lamont, whom Green dubbed “the people’s millionaire,” claimed he didn’t even know if he had ever been in a Wal-Mart. But then again, someone with his money wouldn’t be caught dead trolling around Nordstrom’s, to say nothing of Patco.
Green has captured the essence of the problem for the anti-Wal-Mart crowd. A few years ago, I had a spirited exchange with a friend in the Northwest Corner who slammed the company at every turn. Two weeks later, I went to the Wal-Mart in Torrington and there he was pushing out a cart full of cheap merchandize. He obviously remembered our conversation and was deeply embarassed. He muttered something about needing to buy a diverse list of items and not having the time to go to several different stores.
This incident illustrates perfectly the dilemma of those who are inclined to use Wal-Mart as a weapon. The company and its 3,400 US stores, such as the supercenter I photographed in Queensbury, N.Y., at the top of this post, fill a need not only for cheap goods but for harried consumers who demand one-stop shopping. A couple of generations ago, stay-at-home moms had time to go to the butcher, the baker and the candlestick maker, but not in this era of two-income families.
And there is the matter of Wal-Mart’s 1.6 million employees. I wonder if Rosa DeLauro has ever talked to anyone who works at one of the stores. If Wal-Mart is such an awful place to work, why do thousands of people show up at job fairs whenever a new store opens up? Economic times aren’t that bad, are they?
And there is the matter of Sen. Hillary Clinton, about whom Fournier writes:
The potential 2008 presidential candidate served on Wal-Mart’s board for six years when her husband was governor of Arkansas. Just two years ago, the New York senator called her time on the board “a great experience in every respect.”
But now she does not want anything to do with the company. Her re-election campaign returned a $5,000 contribution from Wal-Mart, citing “serious differences with current company practices.”
Earth to politicians and labor activists: there may be some merit in your criticisms, but bashing Wal-Mart will cost you more votes than you gain. Middle America will see through the hypocrisy. Find another issue and check out the sale on toilet paper. You can’t beat it anywhere.
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Terry, shame on you.
Does the Lakeville Journal provide 100% healthcare to all its employees? Does any employer? I work for a multinational corportation, Sodexho. I am a cook. I have their health plan because it is very good for the money. My wife does not have health insurance via the LJ, LLC. Does that mean she does not have health insurance? How many employees in our neck of the woods use HUSKY, the “state plan” that provides healthcare? How many LJ employees avail themselves of the company plan v.the state plan or a spousal plan? Why shouldn’t EVERY business be required to provide health care to every employee and their dependents?
Wal-Mart does NOTHING that will increase its cost of goods. IF the hypocrites, such as your friend, and the other bashers get their wish, who will pay the price? If the LJ, LLC was REQUIRED to provide healthcare, which implies no cost to the employee and dependents, what would it cost to buy a Journal? What would gasoline cost? Electricity? ad nauseum.
The domestic auto industry is in financial trouble. Part of the problem is the zero dollar healthcare: UAW members pay zero dollars for healthcare. It is estimated that this benefit currently adds $3000 to the cost of a new car.
Politicians are trough feeders. Their only job is to keep feeding from the trough. Their career goal is to move up the trough. Wal-Mart is a convenient target for them. The sheeple that hang on their every pronouncement nod in agreement, like well trained animals.
There is a simple solution to the animosity towards Wal-Mart. This is America; start your own business. Offer whatever benefits and perks you want to your employees. Then you can answer the question: does socialism really work?
Comment by Paul Bartomioli — August 14, 2006 #
You both make valid statements.
What made me take my stance on wal-mart was when they pay their workers poverty wages, and charge their employees large amounts for their pitiful health care plan, and then Alice Walton turns around and pays $35 Million for a painting to hang in her home.
How many employees could recieve health care for that $35 million dollars?
Another intresting article, albeit old, is an outline of labor practices of Costco vs. Wal-Mart. It definatley sheds some light.
Comment by fred — August 16, 2006 #
Fred, how do you know the plan is pitiful? What is your definition of a pitiful plan? What is “large amounts?” I pay about $150 per week. Is that a large amount? Why should Alice Walton not spend her money as she wishes?
Since Wal-Mart employees make more than the minimum wage, what do you call poverty wages? IF you owned Wal-Mart, what would you do? How would you respond to your investors and employees when they questioned your course of action and its effect on sales?
In my previous post, I asked what would happen to the cost of gasoline if healthcare were a mandated expense? Think of the supply chain: Exxon/Mobil has to provide healthcare for its employees. That cost is added to the price. The next company in the system adds its cost into the system. Right on down to Patco adding its cost into the gasoline. So, how much will gasoline cost?
If the people at WalMart are as unhappy as you belive them to be, why don’t they go elsewhere for a job? Maybe, just maybe, all is not sour grapes at WalMart.
Regarding Costco v WalMart: Unionization of some employees makes the difference. WalMart employees have voted for no union at their stores, when such votes have been held. Ever wonder why?
Comment by Paul Bartomioli — August 16, 2006 #
Taken from The Federalist, an online newsletter:
The Chicago City Council voted 35-14 to impose a hyper-minimum wage on “big-box” retail stores with more than $1 billion of sales. The new law will require the likes of Wal-Mart, Target, Costco and Home Depot to pay every worker—regardless of experience, education or skill—a minimum wage of $13 an hour by 2010 ($10 in salary and $3 in health benefits). At least another dozen cities, including Washington, DC, are considering copy-cat laws. The national minimum wage remains $5.15 an hour.
The effect of this law is job loss. Left-wing activist groups are crowing that this hyper-minimum wage is so prohibitive it could keep out such corporate villains as Wal-Mart. As a result, the poor will pay higher prices. A study by the economics firm Global Insight calculates that the presence of Wal-Mart and other low-price retailers saves working families on average more than $2,000 a year. MIT professor Jerry Hausman has found that, although Wal-Mart does slightly reduce wage rates in nearby areas, its lower prices swamp that effect. The biggest beneficiaries are families with incomes of less than $10,000 for whom “a super center makes a 30 percent difference in what they can buy.”
When activists kept Wal-Mart out of Chicago’s South side last year, the company opened the store in nearby Evergreen Park instead. Now that store collects some $530 million a year in sales from Chicago residents without a penny of sales tax going to Chicago. The location where Wal-Mart was going to build remains an empty lot. Partly as a result of such anti-business policies, Chicagoans spend $5 billion a year shopping in the suburbs.
Presumably, this type of economic trade-off makes sense to Chicago politicians. What was gained in exchange for the loss of jobs, tax revenues and buying power? Ask a Chicago alderman.
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Comment by Paul Bartomioli — August 16, 2006 #
Paul,
My mother was a Wal-Mart employee for over 7 years. Her wage was pitiful, no dobut in my mind that she was descriminated agianst because of her sex, age, and that she has genetic disorder called Neurofibromatosis which was severly disfiguring. Sure, she had a college education and good orginizational skills… but her physical apperance left her with the with a wal-mart job and seriously hindered any chance of Advancement.
And the “pitiful” plan left her paying large sums of money for much needed procedures stemming from the NF.
150.00 a week is a hell of alot of money when you only make 9.75 an hour.
Comment by fred — August 17, 2006 #
Fred, sorry that WalMart is the cause of your mother’s problems.
Comment by Paul Bartomioli — August 19, 2006 #