Some 23,000 people applied for 600 jobs at two Wal-Mart stores that opened in Washington DC last week. That’s right-- at Wal-Mart, the company that doesn’t pay enough.
Wal-Mart has emerged as Public Enemy Number One for liberals across the country, even as tens of thousands compete for jobs with the giant chain, and millions of Americans visit the stores every week. Why this disconnect?
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The truth is that the campaign against America's biggest retailer has more to do with union politics than with worker exploitation. Former SEIU head Andy Stern painted a bullseye on Wal-Mart’s shopping carts when he needed to mollify those upset by his splintering of the country’s largest labor federation, the AFL-CIO.
Stern, upset at the decline in U.S. union ranks, took the SEIU, the country’s largest and fastest-growing union, out of the national federation in 2005. Stern partnered with the Teamsters and a few other groups to form a new association, supposedly dedicated to downplaying organized labor’s political activities and instead focusing on expanding their ranks. Stern’s defection was risky and controversial; he had much to prove to his members. To squash any revolt within the ranks, Stern set out to slay the biggest non-union dragon, and that was Wal-Mart.
Big Labor then, and now, is in trouble. Among its greatest challenges in recent years has been our country’s shift to a service economy. By definition, service employees are harder to organize than factory workers concentrated in one locale. That tilt partly explains the dramatic shrinkage of union membership from 21 percent of all workers in 1983 to 11 percent last year.
Only 6.6 percent of private sector workers belong to unions, down from 7.8 percent in 2005. By comparison, nearly 36 percent of public employees are union members, which is why efforts to roll back public employee benefits in states like Wisconsin are fought with such fury. The public sector is the only place where organized labor is succeeding.
The biggest private sector worker categories include: manufacturing, accounting for 14 million people (9.6 percent belong to unions), education and health services, 20 million laborers (8.1 percent union) and retail, where only 4.6 percent of 14.8 million employees carry a union card. Get the picture? Andy Stern sure did.
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Stern went after Wal-Mart with tenacity and cunning, and caught the company – which in 2006 was celebrating abundant awards for diversity and good citizenship -- completely flatfooted. The anti-Wal-Mart campaign began with Wal-Mart Watch, which was backed by the SEIU and Wake-Up Wal-Mart, fielded by the Food & Commercial Workers Union. The smear tactics gained traction – threatening the giant firm’s reputation.
Stern did not bring Wal-Mart to heel, however. Wal-Mart figured out that it had to not only win the fiercely competitive retail battle, but also the PR wars. The company regrouped, after some early (and boneheaded) miscues, and decided to stem criticism by, among other tactics, engaging in a popular “green” campaign -- complete with energy-savings light bulbs, environment-friendly packaging and the like. It’s hard to hate the guys saving the planet.
More recently, the firm made a commitment to offer a job to any “honorably discharged veteran within his or her first 12 months off active duty," a popular pledge that has led Wal-Mart to hire 20,000 vets. Mainly, though, Wal-Mart continued to serve the needs of recession-crippled shoppers. Their customers are more worried about making ends meet than the company’s pay scale.
That doesn’t mean that the labor movement has given up on Wal-Mart. They have ramped up a pointed campaign calling for a higher minimum wage, targeted especially at Wal-Mart and enlisting (among others) President Obama. As a candidate in 2008, Obama received $60 million from the SEIU. Not surprisingly, he joined the anti-Wal-Mart ranks, saying, "I don't mind standing up for workers and letting Wal-Mart know they need to pay a decent wage and let folks organize….”
Related: Why Raising the Minimum Wage is a Fantasy
Going after one of our country’s largest employers when millions remain out of work seems counter-productive. Wal-Mart is not the best employer on the planet, but it’s not the worst either. In fact, a survey by Glassdoor.com of highest-paying retailers put Wal-Mart 16th from the top, ahead of Target, for instance.
Meanwhile, Wal-Mart’s workers are not pushing to organize. More than 300,000 associates have been with the company for 10 years or more. In 2012 Wal-Mart hired 477,000 associates; 20 percent were re-hires who had left for various reasons and came back. Last year the company received more than five million applications from those wanting work.
Arguably, the criticism over Wal-Mart’s employment practices has pushed the company to raise its game. The company reports that less than one half of one percent of its workforce is actually paid the state or federal minimum wage.
The firm offers advancement opportunities for associates – they claim that three-quarters of their store managers started out as associates – and health-care coverage “with no lifetime maximum.” Walmart’s press releases note that they also give “eligible associates matching 401(k) contributions of up to 6 percent of pay… an Associate Stock Purchase Program and company-paid life insurance. Additionally, eligible associates receive a quarterly incentive based on store performance.”
So, perhaps Andy Stern accomplished some improvement in Wal-Mart’s employment practices. Ironically, that gain will likely deter union inroads into the massive company.
Stern, meanwhile, left his post in 2010 and went to work for, of all people, private equity billionaire Ron Perelman. Before he quit as head of the SEIU, Stern spent much of his time pushing labor’s agenda at the White House; he was the most frequent visitor to the White House in Obama’s first nine months in office. He worked tirelessly to push through Obamacare, a great gift to the health and hospital workers at SEIU.
To the rest of us? Not so much.
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