Growing Opposition Frowns on Wal-Mart
by Stephanie Armour, USA Today

The following article is in yesterday's issue of USA Today and includes a couple comments from yours truly, Caroline Vernon.

When you finish reading this article, "Guess Who's Not Shopping at Wal-Mart This Christmas?"... Guess right and qualify to win! Get clues and details at: wakeupwalmart.com.


WASHINGTON - In a nondescript office blocks from the White House, Paul Blank chats with staffers near the start of another 12-hour workday. The beige walls are plastered with hand-lettered, cardboard signs bearing slogans "Always High Costs. Always" and "Buffy the Wal-Mart Slayer."

The Ragin' Grannies sing their protests against Wal-Mart at a Tucson store on Nov. 13.
By Wal-Mart Watch

Despite his 80-hour workweeks, Blank settles into a chair looking energized.

This is more than a job to him, he explains. It's a crusade.

Blank is the campaign manager for the labor-union-backed
WakeUpWalMart.com. Behind the scenes at the headquarters office, staffers work at a dizzying pace. Their goal: to reform Wal-Mart, the biggest retailer in the world.

"There is a drumbeat every day that's building," says Blank, who previously worked as political director for Howard Dean's presidential campaign. "The question of whether Wal-Mart is good for America is being pushed to the forefront of a national debate."

As the holiday shopping season goes into full swing, Wal-Mart is facing the most formidable opposition to a retailer since the 1930s, when a campaign was waged against Great Atlantic & Pacific Tea (better known as A&P), which subsequently lost its domination of the retail market.

In just the past year, two union-backed groups have formed with the shared mission of challenging the megaretailer's business, labor, environmental and social standards.

Another labor-supported group, Wal-Mart Watch, is housed in a corporate-looking downtown Washington office with plush leather chairs and curving stalks of pale green lucky bamboo in the waiting room. The mostly young staff is dressed in jeans and khakis. The organization has 36 employees, including 14 who work in the field.

Both organizations have gotten or now get funding from labor unions, which have tried unsuccessfully for years to unionize workers at the retailer. Wal-Mart Watch was launched in April by Andrew Stern, a union leader whose Service Employees International Union left the AFL-CIO last summer.

The board includes Sierra Club Executive Director Carl Pope and a Republican, Ed Goeas of the Tarrance Group, an Alexandria, Va.-based polling group. Partners include such national groups as Sojourners, American Independent Business Association, National Council of Women's Organizations, Sierra Club, Teamsters and the United Food and Commercial Workers International union.

WakeUpWalMart.com is a project of the United Food and Commercial Workers International union and gets its funding from the labor organization.

Praise and pressure

They're facing a giant foe - if Wal-Mart were a country, its economic output would be the 20th largest in the world, according to a recent speech by its CEO, Lee Scott. And as the anti-Wal-Mart publicity machine intensifies, Wal-Mart is working to get its own message out that the retail giant is good to its more than 1.2 million workers, and also good for America.


Jae C. Hong, AP
A demonstrator dressed as a Wal-Mart smiley face protests with a partner called "Maiden Overseas."

"For us, there is virtually no distinction between being a
responsible citizen and a successful business," Scott said in a recent presentation. "They are one and the same for Wal-Mart today."

Now that Wal-Mart is facing stiff competition from the likes of Target and Costco, the assault on its image could have an impact on the retailer's bottom line.

"Is this campaign hurtful to Wal-Mart? Of course. It's costing them megabucks. The financial impact on Wal-Mart is enormous," says Howard Davidowitz, chairman of Davidowitz & Associates, a New York-based national retail consulting and investment banking firm. "They're spending on public relations, getting their story out, spending more time to get certain stores."

But Wal-Mart, which refutes the claim that the opposition is hurting it financially, has also gotten praise from others. Wal-Mart this year was named one of the 30 Best Companies for Diversity by Black Enterprise magazine.

An independent study by Global Insight found that Wal-Mart saved each American household, on average, $2,329 in 2004. It found Wal-Mart also had a net positive economic impact in the form of a 0.9% increase in real wages and the creation of 210,000 jobs nationwide. Global Insight is a privately held economic analysis, forecasting and financial information company.

"There are positive impacts," says Chris Holling, executive managing director at Global Insight. "Overall, there did seem to be the impact of overall retail employment being higher. They stimulate the retail industry."

Still, pressure is coming from other areas. Some states are trying to pressure employers such as Wal-Mart into improving health benefits by publicizing the names of companies that have the most employees in public health programs. The efforts are known as "Wal-Mart bills," and they're being championed largely by unions and Democratic state legislators.

Among the retailer's woes:

Last month, a new $1.8 million documentary, Wal-Mart: The High Cost of Low Price, by filmmaker Robert Greenwald, takes a blistering look at Wal-Mart.

Movie trailer: Wal-Mart: The High Cost of Low Price
Wal-Mart responds:Calls on filmmaker to fix errors in trailer

The documentary will be seen at more than 7,000 screenings in churches, private homes, union halls and other locations, and it claims in part that Wal-Mart doesn't pay workers enough and that many must rely on public assistance.

Wal-Mart officials have said the documentary contains inaccuracies, and they're also promoting another more upbeat, independently made movie, Why Wal-Mart Works & Why That Makes Some People Crazy.

"Our aim was to create a theme of dueling movies, to create a dialogue of issues," Wal-Mart spokeswoman Mona Williams says.

In October, a memo from a Wal-Mart benefits executive leaked to Wal-Mart Watch suggested the retailer could lower its health care costs by dissuading unhealthy people from working at its stores.

Wal-Mart countered by saying the memo was a snapshot in time of the debate going on at Wal-Mart, and all around the USA, as companies cope with rising health costs.

The company also says it insures more than 568,000 associates and more than 948,000 people in total, who, as of January, will pay as little as $25 a month for individual coverage and $65 for family coverage. And 160,000 associates now covered by insurance had none before joining the discount retailer.

Mounting challenges

Other criticisms against Wal-Mart are long-standing. The
anti-Wal-Mart groups say employees don't qualify for health care or can't afford it. Wages are too low, they say, and the retailer discriminates against women. (Wal-Mart is facing the largest class-action lawsuit in history from 1.6 million current and former female employees who are suing for discrimination.)

Anti-Wal-Mart organizers also say the company hurts communities, small businesses and the environment.

But Wal-Mart officials say such criticism is coming from union groups whose real goal is to shore up their own membership.

"The groups are watching out for their own interest," Wal-Mart's Williams says. "They wake up every morning thinking, 'How can we hurt Wal-Mart?' Why are they doing this? To what end? Organized labor is so splintered. This is that one thing that seems to unify members: a war on Wal-Mart."

Counters WakeUpWalMart.com spokesman Chris Kofinis: "What's uniting us is Wal-Mart's own negative effect."

Meanwhile, Wal-Mart says it pays an average wage of $9.68 an hour, which is almost twice the minimum wage of $5.15. And Wal-Mart says the proof is in how many people want to work at Wal-Mart: A store opening in August in Oakland had 12,000 applicants for 400 jobs.

Cindy Galati, 45, is a district manager in St. Louis who has worked at Wal-Mart for 24 years, starting as a cashier. She bristles at the anti-Wal-Mart publicity.

"You have a small group of special interests who want to portray to the world what we are not," Galati says. "We are a good company and want to do the right thing. How do I feel? I take personal offense at it."

Both of the labor-backed groups challenging Wal-Mart are trying to drum up support in local communities where Wal-Mart stores are located. Over the past four decades, Wal-Mart has grown from a small chain to a global enterprise with 5,000 stores in 10 countries.

Wal-Mart critics include former shoppers such as Caroline Vernon, 44, of Davenport, Iowa, a stay-at-home mother of four who this year became a community activist at WakeUpWalMart.com.

"I used to shop at Wal-Mart all the time," Vernon says. "Wal-Mart has just been exposed. There has been a snowball effect. It's really about what vision of America do you have, big-box retailers as the only way to shop or mom-and-pop stores? Mom-and-pop is what America is all about."

And that's just how the Wal-Mart activists hope to apply pressure, by relying on local community members. This fall, Vernon and others went to their local Wal-Mart and handed out fliers criticizing the retailer's health care coverage.

Wal-Mart's counteroffensive

The retailer is launching a counteroffensive, an approach summed up by CEO Scott in a presentation this year. "After a year of listening, the time has come to speak, to better define who we are in the world," he said.

Analysts such as Mark Husson of HSBC Securities says the company has typically not responded because it hadn't felt as threatened.

In January, the company launched a website, www.walmartfacts.com, that touts statistics to counter critics' claims. Among the statements: "Wal-Mart offers affordable health care benefits to our associates."

The company is doing more to muster political support. Wal-Mart has doubled its number of Washington lobbyists to eight and ratcheted up political spending.

Wal-Mart gave $1.5 million in 2002 through its political action committee, making it No. 82 on the list of top donors. In 2003-04, Wal-Mart gave $2.2 million. That boosted it to No. 22 in the ranking of top donors, according to the Center for Responsive Politics, a non-partisan research group in Washington. The bulk of the money has gone to Republicans.

This fall, Wal-Mart hired public relations firm Edelman to help
devise its strategy and create an instant-response team at company headquarters in Bentonville, Ark. They've also hired Michael Deaver, who helped shape former president Ronald Reagan's image.

Says analyst Husson: "They do feel unfairly maligned."

But he also says the attacks are not unexpected as the company expands from its stronghold in the so-called red states to the blue states - urban, mostly Democratic states largely on the East and West coasts, where Wal-Mart stores are not as plentiful.

"They have to open and get coverage in states that are more urban, blue states," he says.

Still, organizers also say their struggle is larger than changing Wal-Mart. For some, the goal is also to force a debate on larger social issues - issues such as advancement for women, affordable health care for workers and better pay for all.

"Wal-Mart is facing a perfect storm of negativity," says Kofinis of WakeUpWalMart.com. "People are rallying around this movement. It's not just workers. It's rippling out and becoming a real debate about values."

But Wal-Mart officials say the critics overlook all the good that Wal-Mart does.

"We help give struggling families a sense of pride, because our prices enable their children to start school with fresh supplies and new basketball sneakers, so they are no different from other kids," Williams says. "Wal-Mart is good for America, because we are the great equalizer for the people of this country, and no one else has stepped up to that role."