T Nation

Unions Hunting Wal-Mart


#1

Thought this was interesting also.

Campaign veterans run anti-Wal-Mart effort
Union seeks 'a broad social movement to change this company'

By Tom Curry
National affairs writer
MSNBC
Updated: 1:24 p.m. ET July 5, 2005

WASHINGTON - A union crusade against America's largest retailer, Wal-Mart, has the potential to not only hurt the company?s balance sheet and alter Americans? shopping habits, but also to change the course of the 2006 and 2008 campaigns.

Americans cast their votes not just on Election Day but every day, by deciding where to spend their money. And the United Food and Commercial Workers Union is urging Americans to not spend their money at Wal-Mart.

Wal-Mart has successfully fought the union's efforts to organize its workforce.

Now the union has recruited strategists from the 2004 Howard Dean and Wesley Clark campaigns, and they are mounting a crusade that goes beyond the usual union tactics, such as the boycott or shareholder resolution expressing disapproval of a company?s policies.

Paul Blank, who served as political director for the Dean campaign, is running the "Wake-Up Wal-Mart? campaign, and Chris Kofinis, a strategist for the Clark campaign, is the effort's communications adviser.

Blank and Kofinis are deploying election campaign-tested tactics to assail Wal-Mart: running petition drives and holding house parties, canvassing at farmers? markets, stockpiling an e-mail list and conducting conference calls to marshal the efforts of local anti-Wal-Mart activists.

?We need a broad social movement to change this company,? said Blank. ?This is a moral question about what kind of America we want to live in. Do we want to live in Wal-Mart?s version of America, where you drive down wages, don?t provide health insurance, provide no retirement security, ship jobs overseas and have complete abandonment of your values in the relentless pursuit of profit??

?This is going to become a very important wedge issue that political leaders on Capitol Hill and across the country are going to have to face,? said Kofinis.

Focus on health insurance
At the moment, the union?s indictment of Wal-Mart is focused on the charge that the company does not provide adequate medical insurance for its employees, some of whom must turn to Medicaid, the federal-state insurance program for low-income people.

The company?s response: It offers health insurance plans to both full-time and part-time workers. The full-time worker must wait six months before being eligible and the part-timer must wait two years. The Arkansas-based Wal-Mart has 1.2 million employees, of which 568,000, or 47 percent, are covered by the plan.

Blank offers a longer bill of anti-Wal-Mart particulars:

* "Poverty-level wages, which have a huge negative impact not only on the workers but also in terms of driving down wages for the entire industry."
* A retirement plan that is "an empty promise which leaves more than 550,000 Wal-Mart employees ineligible for any retirement benefits at all."
* "Exploitation of sweatshop labor and foreign?sourced labor."
* "The destruction of small businesses in communities and downtowns."
* "Sprawl" caused by the company?s proliferating stories.

One possibility is that the Americans who shop at Wal-Mart ? about 112 million of them every week ? have digested these charges and nonetheless still like the store's low prices.

But Kofinis said the company will have no choice but to change its practices to keep customers. ?If consumers say, ?You do not reflect our values right now, the way you treat you employees, the effect you have on the country; if you don?t change your behavior, we?re not going to do business with you.? Wal-Mart is going to respond to that," he said.

Blank added, "This is not about destroying Wal-Mart. This is about making a better America and that starts by making Wal-Mart be a more responsible company."

If consumers sour on Wal-Mart, grocery store chains such as Kroger and Giant and discounters such as Costco stand to gain. All three have workforces that are at least partly unionized.

Creating jobs
Wal-Mart?s response to the United Food and Commercial Workers Union is that it offers people a way out of poverty, with an average wage of $9.68 per hour. (One Wal-Mart competitor, Costco, says its average wage is $16.72 per hour.)

?Wal-Mart often provides the mechanism for associates to remove themselves from public assistance and build a better life,? said Wal-Mart spokesman Nate Hurst. ?Seventy-six percent of our store management began in hourly jobs at our stores, often their first jobs.

Another company spokesman, Dan Fogleman, responded to the "destroying neighborhood business" charges by saying, "Look outside almost every Wal-Mart store. You'll find business cropping up. Businesses want to locate near Wal-Mart locations to take advantage of the customer flow we create.

Last year, he said, Wal-Mart purchased $150 billion in goods and services from more than 61,000 suppliers in the United States .

As for "sprawl," Fogleman said, "Look at a Wal-Mart super center. You can do your shopping, get an oil change for your car, get prescriptions filled, get a hair cut. It is the truly the convenience of a one-stop shopping experience."

Rebutting Blank?s charge of ?no retirement security,? Fogleman said Wal-Mart offers a combined profit sharing/401(k) plan and contributes up to 4 percent of an employee's wages, whether the employee contributes his own money or not.

So for a worker making $30,000 a year, Wal-Mart will contribute $1,200 a year.

Both full- and part-time workers are eligible to participate in the plan after completing 13 months of service and 1,000 hours.

The company also offers a stock purchase plan and matches 15 percent of a worker?s purchases. More than half of the employees own Wal-Mart stock obtained through the purchase plan.

In Congress and in some state legislatures, the union is getting support from its Democratic allies. This year, the Democratic-controlled Maryland Legislature passed a law requiring firms with more than 10,000 employees to spend an amount equal to at least 8 percent of its payroll costs on health care benefits. The only employer to fall into this category was Wal-Mart.

Governor vetoes bill on health insurance
Gov. Robert Ehrlich, a Republican who is running for re-election next year, vetoed the measure, saying it jeopardized Wal-Mart's plans to build a distribution center in Somerset County, Md., that would provide up to 750 jobs at an average of $12 an hour, $2.50 more than the county's current average wage.

The law, Ehrlich said, is ?bad policy because it imposes an arbitrary number on employers and health care and further establishes that a state will dictate to businesses the type and level of health insurance they must provide for their employees.?

Blank predicted that Ehrlich would "pay a political price for standing with Wal-Mart.?

Meanwhile, Sen. Edward Kennedy, D-Mass. has been touting his bill to require states to identify which companies with 50 or more employees have workers receiving Medicaid or other taxpayer-funded health insurance. The bill would also require states to estimate the cost to taxpayers of providing health insurance to employees of large firms who are enrolled in Medicaid.

Every American worker across this country is contributing a part of their taxes to pay for health care for those families in need who work at Wal- Mart,? Kennedy said at a recent Capitol Hill rally . ?And at the same time we see record profits, which they (Wal-Mart executives) are distributing to themselves and to their shareholders.?

The bill?s purpose, according to its House sponsor, Rep. Anthony Weiner, D-N.Y., is to ?find out how much that dollar that we?re saving on a pair of jeans is costing us in other ways.?

Kennedy said his bill ?is the first step, but it certainly will not be the last,? hinting at a federal law along the lines of the Maryland legislation that Ehrlich vetoed.

Arguing that Wal-Mart?s low wages undercut its competitors, whose workers are represented by labor unions, Sen. Jon Corzine, D- N.J. said, ?Our friends who work in the labor movement struggle every day in collective bargaining to try to provide health care to their workers? It is absolutely essential that we level the playing field, that we make sure that workers are treated equally everywhere.?

Contributor to Clinton, Bayh campaigns
If one believes that campaign contributions give a donor political clout, then Kennedy, Corzine, and Weiner face an uphill battle in Congress.

The Wal-Mart political action committee, which ranked 20th among all PACs in the amount of its donations in the 2004 campaign, gave 78 percent of its contributions to Republican candidates and 22 percent to Democrats.

Among the prominent Democrats receiving Wal-Mart PAC money for the 2004 and 2006 campaigns are Sen. Hillary Clinton of New York, Senate Minority Leader Harry Reid of Nevada, Sen. Evan Bayh of Indiana, and House Democratic Whip Steny Hoyer of Maryland. In the early 1990s, while living in Arkansas, Hillary Clinton served on Wal-Mart's board of directors.

If the Wal-Mart issue grows in prominence, then Clinton and Bayh, potential contenders for the 2008 Democratic presidential nomination, may find themselves facing tough questioning from anti-Wal-Mart activists on the campaign trail.

? 2006 MSNBC Interactive

http://msnbc.msn.com/id/8333653/page/2/


#2

I don't shop at Wal-Mart. I couldn't stand the place before their business practices came to light. Now that they are, it is even more reason for me to stay away from there. I have been saying for years that this place was evil and now I am seeing how right I was about it.


#3

I've had a boycott on them for a while. I went there once, and was not impressed with the quality of the stuff they had. Being as there were never any where I am in Jersey, it wasn't really optional either way though.

As soon as I began hearing about their labor practices, I stopped going there altogether.


#4

The most telling quote in the piece:


"We need a broad social movement to change this company," said Blank. "This is a moral question about what kind of America we want to live in. Do we want to live in Wal-Mart's version of America, where you drive down wages, don't provide health insurance, provide no retirement security, ship jobs overseas and have complete abandonment of your values in the relentless pursuit of profit?"

Does this guy really think that the way to incentivize companies not to move jobs offshore is to raise labor costs?

As for "retirement security," does the phrase 401(k) mean anything to this guy? Fixed-benefit pensions don't work unless you have pyramid-scheme demographics.


#5

Very convenient for someone who can avoid Wal-Mart fiscally (I grew up on Wal-Mart and Big Lots.). But you're right, the Union labor costs should be forced onto those who can't afford better than Wal-Mart, especially so their retirement is secure.

It'll be interesting when America wakes up and realizes that $2.50/gal. gas is nothing compared to $32.40/gal. coffee. Hopefully, sooner rather than later.


#6

Now the people need to "incentivize" Wal-Mart? What does Wal-Mart do to incentivize their employees?


#7

If they were thinking of offshoring jobs, and "people" didn't want them to do so, then yes, they should figure out how to incentivize them to keep the jobs in the U.S. Raising labor cost is not a good way to do that.

As for Wal-Mart and its employees, I'm sure that they figure out how they need to incentivize employees based on the value of the job any particular cadre of employees is performing.


#8

Hey brother its not my fault Jersey has a billion stores besides Wal-Mart (smaller places are even around still, as opposed to the box stores).

Wal Mart is slowly creeping in, as they built one a couple of towns over (maybe 10 minutes away), and they were supposed to be trying get one closer. They'll get none of my money.


#9

WSJ editorial board on the subject today:

HillaryCare Returns
January 16, 2006; Page A14

Readers with long memories will recall that one of the reasons HillaryCare was defeated in 1994 was because of its unpopular employer mandate. Well, its diktat that all businesses provide health insurance is making a comeback, albeit at the state level and at first only for the largest companies. But all employers are on Big Labor's target list here.

That's the larger meaning of last week's events in Maryland, where the state legislature overturned the veto of GOP Governor Robert Ehrlich and passed a bill forcing any employer in the state with more than 10,000 employees to spend at least 8% of its payroll on health care or pay the state the difference. There are only a handful of companies that large in Maryland -- Johns Hopkins University and Giant Food, a grocery chain competing with Wal-Mart, among them. Only one meets all the criteria, however, so the legislation was dubbed "The Wal-Mart Bill," which in part it is.

But no one should think this will be an isolated political event. The state AFL-CIO threw everything it had into the bill, including a vow to withdraw support from any lawmaker who didn't vote to override the veto. Democrats who dominate both houses of the Maryland legislature went along. The national AFL-CIO now plans to use the Maryland law as a model for legislation in other states. Union chief John Sweeney has announced a campaign to enact "Fair Share Health Care Legislation" in more than 30 states. Washington and New Hampshire will be early targets.

The details vary by state, but already it's clear the new tax would eventually hit companies a lot smaller than Wal-Mart. In Rhode Island, proposed legislation takes aim at businesses with only 1,000 employees. In other states proposals would mandate payouts of 9% or more. Once the principle is established that employers must allocate a certain share of their payroll to health care, it becomes easier to gradually extend the mandate to all businesses.

Unions and Democrats argue that companies must be commanded to do this because employees without health insurance often turn up on Medicaid, which is busting state budgets. But rather than reform Medicaid to control its costs or stop its rampant fraud, the politicians find it easier to sock it to private business. One result will be that companies will create fewer new jobs, as in Old Europe.

As for Wal-Mart, it is hardly an ogre as an employer for 1.3 million Americans. It now offers an array of health plans to all full and part-time employees with monthly premiums as low as $23 for an individual and $65 for a family anywhere in the country (less in some areas). Employees can also choose to set up health savings accounts with Wal-Mart matching contributions up to $1,000.

The company doesn't disclose its health care spending. But last year officials told Maryland's legislature that Wal-Mart typically spends between 7% and 8% of its payroll on health care. In the fiscal year ending this month, the company expects to have spent $4.7 billion on all benefits (including health, dental, retirement and more) while turning a profit of about $10 billion. One perverse aspect of the Maryland bill is that Wal-Mart won't be able to count any savings from negotiating lower prices with doctors and hospitals toward the 8% threshold. So the bill works against the oft-invoked liberal goal of reducing the nation's overall health-care costs.

Wal-Mart hasn't said how it will respond to the new Maryland law, but we'd suggest at a minimum that it cancel its plans for a new regional distribution center in the state that would create about 800 jobs. Maryland's politicians need to understand that policies punishing business have bad economic consequences. Let a more enlightened state benefit from Wal-Mart's prosperity.

What's really going on here is an attempt to pass the runaway burdens of the welfare state on to private American employers. As we're learning from Old Europe and General Motors, this is bad news for both business and workers in the long run. The U.S. doesn't need a revival of HillaryCare on the installment plan.


#10

I love how it's the Democrats trying to show the companies who's employee's are using medicaid, thus costing other American's money.

Maybe they should look at welfare?


#11

Anyone with an interest in this topic....check out Thomas Friedman's "The World is Flat." Really well written!


#12

IMO, this is the issue, not your dollars, but the fact that it will be your fault that local people of the lower income brackets are legislatively forced to live with the prices and the standards of Middle America while people offshore are elevated above their local standards.

And it's always great when the state decides the best way to do business and ensure the peoples' providence in their twilight years. All because of "equal pay for equal work".

I enjoy spending my $ freely as well, I think everyone from the local market patron up to Wal-Mart should be able too.


#13

Individuals have a right to form a union for the purpose of negotiating with ownership/management. I will not shop at Wal-mart because they truly are anti-union.

This may sound odd coming from a 'conservative' but freedom extends to all, not just those for whom we find it to be convenient. I personally despise any one/company that seeks to prevent employees from forming a union.


#14

Great thread, Irish!


#15

I didn't realize people were forced at gunpoint to work in Wal-Marts. That's horrible. These poor victims were sitting in college classrooms trying to better themselves when suddenly armed Wal-Mart managers kicked in the doors, rounded them up and chained them behind the registers forcing them to work 40 hours a week for minimum wage. The horror!!!


#16

Ha. Now that they have to put more money into healthcare, the bourgeois will run around like their wallets are on fire screaming, "But what about MORE JOBS! Wal Mart is going to be poorer than Africa because of this!"

Same old bullshit that they spew. They have plenty of revenue, and there is no reason that they can't provide for their workers. Here's a different view of poor Wal-Mart and the attacks:

Spin Control at Wal-Mart

Liza Featherstone

Today marks the premiere of Robert Greenwald's documentary Wal-Mart: The High Cost of Low Price, and Wal-Mart is ready with a "war room" led by Robert McAdam, who is, charmingly, the former strategist for the tobacco industry.

Wal-Mart's spin machine is being sorely tested. Just last week, a secret internal memo recommending that the company curb healthcare costs by "dissuad[ing] unhealthy people from coming to work at Wal-Mart" was leaked to the advocacy group Wal-Mart Watch. The memo's suggestions included designing "all jobs to include some physical activity (e.g., all cashiers do some cart-gathering)."

This amounts to nothing less than a plan to discriminate against the disabled, sick and elderly. It's contemptible, of course, but it also has serious legal implications; Wal-Mart has been forced to settle lawsuits from disabled workers in the past, and this memo will almost definitely strengthen the case of any who wish to sue the company in the future.

In the memo, whose contents were first revealed in the New York Times, Wal-Mart admits that criticism of its meager, unaffordable healthcare plan is contributing to the decline of Wal-Mart's overall reputation and that "our critics are correct in some of their observations...our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of Associates and their children on public assistance." The memo acknowledges that 46 percent of Wal-Mart workers' children are either on Medicaid or uninsured.

It's very clear that criticism and public pressure are bothering Wal-Mart's leaders. So far, they are mostly investing in spin and devising harebrained--and inhumane--schemes like those outlined in the memo.

But the same memo does contain a glimmer of hope that the company could respond to pressure by doing something good--in particular, a suggestion that the company "refram[e] the debate" on healthcare, emphasizing that "this is everybody's problem, not just Wal-Mart's" and "establishing Wal-Mart as a leader on this critical issue." We couldn't agree more. The best way for Wal-Mart to curb its healthcare costs--and improve its image--would be to lobby for single-payer national health insurance; for its activist critics, all this pressure on the company to improve its health benefits should be a means to that end.

As unrealistic as that might sound--after all, Wal-Mart is a right-wing company, whose campaign contributions tend to favor antigovernment Republicans, not European-style social democracy--there is no telling what people might do when under enough political and economic pressure.

A recent study commissioned by Wal-Mart showed that from 2 percent to 8 percent of its customers had stopped shopping there because of "negative press." All of this is having some surprising effects, including unpredictable policy recommendations from the company's leadership.

Last week, CEO Lee Scott called for increasing the minimum wage, a suggestion that drew howls of wounded betrayal from the company's usual defenders on the Wall Street Journal editorial page, but which Scott rightly pointed out would help the company's customers, many of whom are low-wage workers. National health insurance would do the same, while allowing the company to save money on benefits--and on spin. Paying former tobacco lobbyists to convince the public that Wal-Mart is a good corporate citizen is going to get expensive. "

This just brings a tear to my eye, all this unjust criticism of a good ole' American company who really helps the working class.

Ha. Yea, sure.


#17

Wasn't expecting that one.

I thought you were very anti-union. How does that fit in with indivdualism or objectivism?


#18

The people working at Wal-Mart aren't usually the college type.

If I do not have a college education and I need a job, I can work at any of the grocery stores, convenience stores, clothing stores, auto parts stores, oil change and tune up garages, or electronic stores. And I have a choice to work at the one that will give me the best pay and benefits.

Then Wal-Mart moves in the neighborhood, with their one-stop shopping convenience, and drives most or all of the other businesses out. I no longer have a choice where to work. I have to work at Wal-Mart and accept whatever shitty wage and benefit package they give me.


#19

My thoughts exactly. And who is forcing people to shop at the stores? It seems to me that the fat, lazy unions see a huge payday if they can start collecting union dues from all of the Wal Mart employees that are currently immune to their theivery.

Someone tell me how my life will be improved if some guido-looking union fuck gets his way and gets to fill his sack up at the expense of Wal Mart employees?


#20

The funny part is, it's not that they're being forced to work in Wal-marts, they're not being forced to work at minimum wage, they're being forced to work at Wal-Mart at nearly twice minimum wage without mandatory retirement and health benefits!

Everyday, farmers in this country farm without being forced to have health benefits, Taco Bell employees go without profit sharing, and gas station attendants can't get retirement benefits handed to them from their employers. I can't believe the abysmal state of our nation. Wal-mart's gunpoint/benefits practices are especially bad business practice when both here and abroad there are people willing to take those jobs at lower than minimum wage without benefits (at least partly because they don't pay taxes and insurance).

Clearly the average taxpayer should be burdened so someone, somewhere, can do something about this. Riding Wal-mart for not paying out for OT, I get, but this is just ridiculous.