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Wal-Mart's Weakness: Is the Behemoth in Trouble?

Tough economic times, frugal shoppers and angry employees are making the giant chain flail.
 
 
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"Be very careful who you let into your neighborhood," Sandra Carpenter, a former Wal-Mart grocery manager from Maryland, warned New Yorkers considering whether to bring Wal-Mart to their town. "They will promise you everything under the sun," she said at a recent anti-Wal-Mart rally outside New York City Hall, "but at the end of the day, they will take it all back."

Wal-Mart's high-profile effort to expand into some major urban markets has suddenly cast a spotlight on the experiences of Wal-Mart workers like Carpenter and launched a battle that both Wal-Mart and the United Food and Commercial Workers (UFCW), the union that represents grocery workers, badly need to win.

We've seen this fight before. Six years ago, Wal-Mart tried hard to break ground in Chicago, New York, Washington, D.C., and other cities. Opposition was fierce, and the battles were bruising for both Wal-Mart and its opponents -- revealing institutional and political weaknesses on both sides. This round promises to do the same.

The last wave of expansion battles, particularly in Chicago, where Wal-Mart won approval to build several stores, revealed ineffectiveness and division in the labor movement. Once Wal-Mart agreed to build those stores using union construction crews, the Chicago building trades unions supported Wal-Mart's entry into the city -- a deal that struck much of the local labor movement as a tremendous betrayal. The deal also revealed how little influence labor has over Democratic-elected officials in some nominally Democratic cities. Mayor Richard Daley vetoed a bill that would have forced Wal-Mart to pay $13 per hour as a condition of operating in Chicago -- the sole veto of his epic, Mubarak-esque mayoralty.

Worse, Wal-Mart was able to focus public attention on one of labor's imperfections: At a time of declining membership, union contracts are not always that good. Wages for some UFCW workers in Chicago, contends Wal-Mart's director of community affairs, Steve Restivo, were no better than those for Wal-Mart workers. UFCW officials and academics who have studied Wal-Mart acknowledge that wages for new workers and part-timers in unionized stores may not be very high but note that unionized supermarket workers see their wages and benefits increase as they accumulate seniority on the job, which is not the case for longtime Wal-Mart workers. The company has consistently declined an invitation from New York UFCW locals to have the state controller audit its records to ascertain its actual wage levels. Nonetheless, Restivo says that Wal-Mart scored a public-relations success by publicizing the low wages paid to new hires in some unionized stores. "We were aggressive in telling that story in Chicago, Restivo says.

Understandably, this is a strategy of last resort for Wal-Mart, since the company would presumably not prefer to be dragged into a discussion of its everyday low wages. Even now, Restivo does not want to speak of "minimum" or "living" wages; he prefers words like "prevailing" or "competitive." But to fight Wal-Mart, the UFCW is going to have to become a more aggressive and strategic union, one in which nobody has a contract with Wal-Mart-level wages and everyone knows the value of a union card. Some locals are more effective than others, and the one in Chicago wasn't one of them. Another, related lesson of Chicago was that a union has to be able to mobilize its members. Dorian Warren, a political science professor at Columbia who was involved in the 2005 Chicago site battles and is now working with Jobs With Justice to keep Wal-Mart out of New York, says the local's attitude in Chicago was "definitely don't organize the members, or they could organize against you." That kind of thinking has to change.

 
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