Wal-Mart posse: Why the unions are on the attack

Monday, October 23, 2006

The Wall Street Journal

Wal-Mart may be expanding in the People's Republic of China, but here in capitalist America the low-price retailer has become the Democratic Party's favorite pinata. The media like to portray this as a populist uprising against heartless big business. But what they don't bother to disclose is that this entire get-Wal-Mart campaign is a political operation led and funded by organized labor.

We've done a little digging into the two most prominent anti-Wal-Mart groups, and they might as well operate out of AFL-CIO headquarters. An outfit called Wal-Mart Watch was created by the Service Employees International Union (SEIU), probably the most powerful union in America after the National Education Association. Wal-Mart Watch is backed by Five Stones, a 501(c)3 organization that received $2,775,000 in 2005 from the SEIU, or 56 percent of its $5 million budget. According to financial records, SEIU also gave Five Stones $1 million in 2004 to launch the anti-Wal-Mart group, and SEIU president Andy Stern is the Wal-Mart Watch chairman.

A second group, Wake Up Wal-Mart, is more or less a subsidiary of the United Food and Commercial Workers Union (UFCW). Wake Up Wal-Mart refuses to divulge its funding sources, but here is what we do know: The group was founded by the UFCW, is housed at UFCW headquarters, and its campaign director's $135,000 salary is paid by the UFCW.

Wake Up Wal-Mart also has close ties to the Democratic Party. Its union-funded campaign director is Paul Blank, who was political director of Howard Dean's failed Presidential campaign. The group sponsored a 19 state, 35-day bus tour across the U.S. earlier this year, staging anti-Wal-Mart rallies. Nearly every major Democratic Presidential hopeful has joined in the Wal-Mart-bashing, including Sens. Joe Biden and Evan Bayh, New Mexico Gov. Bill Richardson, and trial lawyer-turned-man-of-the-people John Edwards. They all seem to believe they have to take this line to pass union muster for 2008.

Even Hillary Rodham Clinton has joined in the political fun. Never mind that she served six years on the Wal-Mart board during her time in Beltway exile as an Arkansas lawyer and, according to the Arkansas Democrat-Gazette, was paid $18,000 per year plus $1,500 for every meeting near the end of her tenure. Most recently, Mrs. Clinton returned a $5,000 campaign contribution from Wal-Mart to protest its allegedly inadequate health care benefits. Maybe someone should ask her if she's returned her director's pay, with interest.

Most of the local protests against Wal-Mart are organized through the left-wing activist group ACORN, an acronym for the Association of Community Organizations for Reform Now. ACORN is the group that put the squeeze on the Chicago City Council to pass an ordinance this summer to require Wal-Mart, Target and other big-box stores to pay a minimum $10 an hour wage and $3 an hour in benefits by 2010. (Democratic Mayor Richard Daley vetoed the bill.) ACORN also pretends it is a locally organized and funded voice of the downtrodden masses. But guess where ACORN gets much of its money? Last year the SEIU chipped in $2,125,229 and the UFCW $165,692.

Then there are the anti-Wal-Mart "think tanks," if that's the right word for these political shops - notably, the Economic Policy Institute (EPI) and the University of California at Berkeley Labor Center. The job of these two outfits is to publish papers backing the economic claims of Wal-Mart critics. The UC Berkeley group recently asserted that Wal-Mart "reduces total take-home pay for retail workers." The UC Berkeley Labor Center has received at least $43,550 from SEIU. The Economic Policy Institute received $100,000 from the SEIU and $40,000 from the UFCW in 2005 and has published several anti-Wal-Mart studies, particularly on the benefits of the Chicago ordinance. By the way, Andy Stern also sits on the EPI board. He's a busy guy.

Now, we're not predisposed to be pro- or anti-Wal-Mart. We've criticized Wal-Mart lobbying on policy grounds -- for example, when the company supported a minimum wage increase to court some nice publicity while also knowing this would harm any lower-priced competitors. However, it is simply fallacious to argue that Wal-Mart has harmed low-income families.

More than one study has shown that the real "Wal-Mart effect" has been to increase the purchasing power of working families by lowering prices for groceries, prescription drugs, electronic equipment and many other products that have become modern household necessities. One study, by the economic consulting firm Global Insight, calculates that Wal-Mart saves American households an average of $2,300 a year through lower prices, or a $263 billion reduction in the cost of living. That compares with $33 billion savings for low-income families from the federal food stamp program.

Alas, what's good for working families isn't always good news for unions and their bosses. They hate Wal-Mart because its blue-coated workforce is strictly non-union -- a policy that dates back to the day founder Sam Walton opened his first store. Today the company employs 1.3 million American workers, and its recent push into groceries has made life miserable for Safeway and other grocery chains organized by the service workers or the UFCW.

Wal-Mart pays an average of $10 an hour, which is more than many of its unionized competitors offer. And typically when a new Wal-Mart store opens in a poor area, it receives thousands of job applications for a few hundred openings. So Wal-Mart's retail jobs of $7 to $12 an hour, which the unions deride as "poverty wages," are actually in high demand.

But as we say, this campaign isn't about "working families," or any of the other rhapsody-for-the-common-man union slogans. If Wal-Mart were suddenly unionized, Big Labor's membership would double overnight and union leaders would collect an estimated $300 million in additional dues each year to sway more politicians. Short of that, their goal is to keep Wal-Mart out of cities so their union shops have less competition. That's what the war against Wal-Mart is truly about.

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