Miss Laura Clawson's front page story today notes the Republicans that have been signing up to work against the Employee Free Choice Act, which has just been introduced in both houses of Congress. Laura ends with this paragraph:
The Employee Free Choice Act will be a step forward for workplace democracy. That's the last thing the likes of Wal-Mart and the Chamber of Commerce want to see happen.
This paragraph provided me with a sudden insight as to how we might be able to win this battle. The interests of Wal-Mart and the Chamber of Commerce (the larger community of, mostly, small business) are not aligned. What hurts Wal-Mart arguably helps its competitors. In other words, it doesn't matter if EFCA hurts some business competitors of Wal-Mart so long as it hurts Wal-Mart more.
It may do just that.
Some of you may need a review on Wal-Mart's labor practices. You can start here and then move to this follow up dealing specifically with what the EFCA would mean for Wal-Mart:
The EFCA would help restore workplace democracy by requiring employers to recognize a union if a majority of workers signs cards demonstrating their desire to organize, rather than relying on an election process that can only be truly fair if an employer wants it to be. This "card check" recognition would eliminate the period leading up to union elections when companies like Wal-Mart mount hard-hitting, unbalanced campaigns to derail union formation and undermine workers' rights. The EFCA would also increase penalties for illegal activity, which should make employers think twice before breaking US labor laws.
The US Senate should pass the EFCA. And if President Bush truly believes in giving the hardworking poor a fair shake, he should sign it into law to help stop Wal-Mart's assault on rights and stop other companies from following its lead.
Not surprisingly, Wal-Mart opposes the EFCA. Wal-Mart also claims that it already respects its workers' right to "a free and fair unionization vote." But current and former Wal-Mart workers and managers, and reams of legal documents, tell a very different story.
Now that ECFA has been introduced, what has the impact been on Wal-Mart? Take a look:
Today Citigroup lowered its rating on Wal-Mart from a buy to a hold because of the Employee Free Choice Act, "citing concern that legislation intended to make it easier for employees to unionize would raise the retail giant's labor costs and hurt its competitiveness."
This is startling for a lot of reasons, not the least of which is that they're downgrading the stock based on an assumption that a piece of legislation will pass that hasn't even been introduced yet.
The Citigroup analyst, Debora Weinswig, said Employee Free Choice (EFCA) "could be a significant drag to earnings."
Jane Hamsher, in the linked article, decries Citigroup's action as politically motivated. Perhaps it is. It certainly is likely to turn the heat up even higher on Blache Lincoln (the "Senator from Wal-Mart") and, to a lesser extent, David Pryor. And perhaps the conclusion is wrong, given that, as Jane notes, ECFA would mean that more working class people would have more money to buy things, and they buy at places like Wal-Mart. But they would also buy at other competitors, and I think it's safe to say that Wal-Mart would be among the biggest targets for unionization after EFCA passed.
This is not, as Jane thinks, a reason for businesses to oppose EFCA. In fact, it's among the best reasons for them to support it. If Wal-Mart, which gains its competitive advantage in large part through its unfair labor practices, is taken down a peg, its competitors have a better chance to thrive.
We cannot lose sight of how much small retailers hate Wal-Mart.
Here's a nice web page from "WalMart Watch" that serves as one-stop shopping, so to speak, for information on Wal-Mart's negative impact on the small retailer community. Here's another nice white paper on what Wal-Mart does to the competition. The indefatigable Robert Greenwald of Brave New Films even made a pretty damn good movie about it.
Now I am not one of those who wants to see Wal-Mart put out of business. (I know that you're out there and probably already arching and eyebrow and readying a comment.) My feeling is that if they improve their own labor practices and sell merchandise that isn't made in violation of labor, environmental, and human rights standards, they surely have a place under the sun -- maybe a large place. But simply unionizing Wal-Mart, which will not destroy them, but merely even the playing field a bit -- would give other retailers a bit more breathing space to compete. Furthermore, a unionized Wal-Mart might well become a force for good, as its efforts would be aimed at seeing its own large competitors unionized.
So, while someone might be able to talk me out of this position, it seems to me that the small business community -- the foundations of the nations' Chambers of Commerce -- is Labor's natural ally in promoting the EFCA, because it is Wal-Mart's natural enemy. Wal-Mart's "efficiency" derives from some legitimate business practices and some illegitimate ones, like their labor practices. Forcing Wal-Mart to improve its labor conditions by passing the EFCA, thus leading them to compete on a slightly more even playing field, is worth whatever imagined cost the business community places on the EFCA.
I hope that our Democratic and Labor leaders are considering making this alliance. Properly played, this approach might even put some heat on Republicans who think that they're in for smooth sailing with their business base. EFCA may be the friend that is the enemy of their enemy.