Wal-Mart is the world’s largest private employer with 1.6 million employees world-wide. It is the largest retailer in North and South America. It has steady supply contracts with over 5,000 firms in China that employ many hundreds of thousands of workers. It is the largest corporate trading partner with China; if it were a country it would be one of China’s top 10 trading partners. Wal-Mart, which currently does business in 14 countries, has launched an aggressive global expansion which has caused concern and provoked a response from workers and others in countries around the world. Wal-Mart currently does about 20% of its sales outside the US.
For legions of activists in many countries, Wal-Mart. is emblematic of what’s wrong with today’s economy. The company is widely viewed as having rationalized its business practices in ways that harm its workers, its suppliers, and the communities in which it operates.
In the US, Wal-Mart’s business practices have prompted labor and community campaigns on such diverse issues as health care, gender and race discrimination, labor rights, outsourcing, local economic impacts, environment, and unchecked growth. SEIU has launched Wal-Mart Watch and the UFCW has launched Wake-Up Wal-Mart to provide institutional support to the anti-Wal-Mart movement.
The campaigns seem to be having an affect. Aggressive local campaigns have forced Wal-Mart to alter or abandon expansion plans in many communities. Legislation requiring Wal-Mart to provide health insurance to its employees has been introduced in many state legislatures and enacted in Maryland (only to be over-turned in Federal Court.) And in July, the Chicago City Council approved a new city-wide minimum wage ordinance that raises wages in big box retailers like Wal-Mart.
Now, according to a front page article in The New York Times, the Democrats have picked up the cudgel and are using Wal-Mart as a key part of their electoral strategy. All the major candidates for the Presidential nomination have appeared at ant-Wal-Mart rallies around the country—many sponsored by unions with deep pockets—to denounce Wal-Mart’s predatory business practices.
The focus on Wal-Mart is part of a broader strategy of addressing what Democrats say is general economic anxiety and a growing sense that economic gains of recent years have not benefited the middle class or working poor.
Wal-Mart has been forced to respond. In the latest Corporate Research E-letter, Phil Mattera outlines what the company is doing to buff up its battered image. It has, for instance, recently begun offering a somewhat better health plan to its employees; it’s raised the new hire wage rate by 6%; and its adopted new “green policies” for its products and stores to improve its environmental record. Mattera writes,
The past two years have been a remarkable period of transformation for a company at which change long consisted only of finding more efficient ways to carry out a static business model. A corporation that used to think it could ignore the wider context in which it operated now feels a need to pay attention to issues such as environmental quality, workplace fairness, and community vitality. That, in itself, can be considered a coup for Wal-Mart Watch, Wake-Up Wal-Mart and the company’s many other critics
But, as Phil Mattera shows, while Wal-Mart has been forced to confront issues it previously ignored, the response so far has been mostly spin.
Wal-Mart is also making noises about health care reform. New York Times business columnist Floyd Norris writes:
Despite the opponents’ success in Chicago, it seems unlikely that governments will force Wal-Mart to greatly increase its health insurance benefits…..
But it is conceivable that some of Wal-Mart’s harshest critics could find an ally in changing the way health care is paid for in the United States, particularly if more companies come to agree with what Mr. Scott told the National Governors Association after he defended the health care benefits the company did offer.
The soaring cost of health care in America cannot be sustained over the long term by any business that offers health benefits to its employees, he said. “And every day that we that we do not work together to solve this challenge is a day that our country becomes less competitive in the global economy.
Could Wal-Mart become an ally in the fight for health care reform as the Times article suggests? Don’t hold your breath. While Wal-Mart has recently shown some interest in national health care reform, don’t expect it to take a pro-worker form. Rather, it seems to be more interested in driving down health care costs in the global “race to the bottom.”
Companies like Wal-Mart may have a long term economic interest in genuine health care reform, but, at least for now, short term advantage and enormous ideological resistance to any kind of progressive government intervention in the economy are likely to block cooperation on genuine reforms. But as the health care crisis deepens and popular pressure increases, who knows?
Besides its charm offensive, Wal-Mart is fighting back politically. It has formed a campaign style organization of its own called Working Families for Wal-Mart to mobilize political support among its employees and customers. According to the Financial Times,
Under Lee Scott, chief executive, the company has in the past year expanded beyond the usual realm of corporate lobbying to wage a full-fledged campaign in the mainstream of American politics. “When a company is as large as ours, we’re certainly going to have a lot of interaction with both politics and government, says Bob McAdam, vice president of corporate affairs.
[Wal-Mart] sent out 18,000 “voter education” letters to its employees in Iowa, pointing out what it said were factual errors made by politicians who had attacked the company...
We can expect Wal-Mart to counter-attack in the next election if Democrats continue to use the company as stand-in for the country’s economic woes.
The campaigns against Wal-Mart currently form the most widespread and significant efforts to address the problems posed by global corporations through grassroots mobilizations. They therefore have great potential to develop and experiment with approaches that may be applicable to broader questions of corporate accountability and reform.
What may be the most interesting aspect of the anti-Wal-Mart campaigns is that they do not involve any attempts at union organizing. The labor movement has abandoned any hopes of organizing Wal-Mart in the near term. But it hasn’t backed off from confronting Wal-Mart. Instead, the Wal-Mart campaigns are employing a broad range of social movement and political tactics aimed at improving the lives of all workers rather than just boosting union membership.
This is good news. Many have argued that labor is far too focused on recruitment of new members—a strategy that has so far yielded very few significant gains—and not focused enough on broader class based organizing. If the anti-Wal-Mart campaigns yield some concrete results, labor may be convinced to invest more time and energy in initiatives aimed at improving the working lives of all workers and not simply dues payers. In the long run, advocating for all workers and boosting their social power may be an important way to win more workers union recognition as well.
In July, Wal-Mart announced its first drop in quarterly earnings in 10 years. While profits are down in the US, its Wal-Mart’s overseas operations that are the prime reason for the loss. Wall-Mart’s predatory business model may not work everywhere. We will look at Wal-Mart’s problems overseas, later this week.
M.O.
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