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The Truth about Wal–Mart You've heard it a thousand times. Your employers repeat it like a mantra. It's a big focus of your company newsletters and store meetings. Wal–Mart, your employers tell you, is the reason the company has to cut your health care, your wages, and your other benefits. |
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But it's simply not true. While Wal–Mart is a major competitor of some of your employers, they don't need to follow Wal–Mart's irresponsible business model to compete. Wal–Mart can save so much in costs because they skimp on their workers. They encourage workers to turn to taxpayer–supported public health care programs, rather than provide affordable benefits. Wal–Mart passes on savings at the cost of the worker, but your employers don't have to do the same. The Wal–Mart Way isn't Good Economic Policy Policy experts E. Richard Brown and Richard Kronick state it best in their article on supermarkets and health care: "We are sympathetic to the grocers' concerns about their ability to compete with nonunion competitors such as Wal–Mart. However, making health care unaffordable for workers at unionized grocers is the wrong answer to the problem. The right answer is to make health care affordable for workers in all workplaces by requiring reasonable contributions toward health insurance from all employers and their employees." And a new study by Jared Bernstein and L. Josh Bivens of the Economic Policy Institute makes it clear that major retailers, even Wal–Mart, don't have to make the choice: decent wages and health care coverage vs. solid profits. Their report states that "the debate over Wal-Mart's economic impact is plagued by false dichotomies." Their findings show that Wal–Mart "could raise wages and benefits significantly without raising prices, yet still earn a healthy profit." And that means your employers could, too. As the authors of the study point out, the Wal-Mart method of passing the buck to taxpayers when it comes to worker health care is a choice Wal–Mart makes, not a financial necessity. As they point out, "We cannot ask American workers to depend exclusively on taxpayers and politicians continually ratcheting up their willingness to offset the degradation of the wage structure induced by Wal–Mart." And when workers are forced to rely on programs like Medicaid to pick up the check for their healthcare, they can only hope that the projected budget cut of $5 million that President Bush has proposed for Medicaid do not come to pass. When your companies excuse themselves from paying fair wages and providing adequate health care for workers because of Wal–Mart, they're getting off too easy. As many economists, including those above, have shown, the Wal–Mart way isn't the only way. Your Companies ARE Competing Well with Wal–Mart Besides, Wal–Mart isn't necessarily the threat that your employers make it out to be. These chains are national companies, and they are doing very well on a national scale and in local markets as well. Take a look at how well your employers are competing in many areas:  Kroger has a #1 market share in Southern California, Puget Sound, Cincinnati, Oregon, Memphis, and Indianapolis; Safeway has a #1 market share in Northern California and Alaska; Supervalu has a very strong #1 position in Minneapolis–St. Paul, with almost 50% market share; And Ahold has a commanding #1 market share across the entire New England region, and in all the major New England markets: Boston; Providence, RI; Bridgeport, CT; and Hartford, CT.Even the CEOs of your companies admit they can compete against Wal–Mart. Kroger CEO David B. Dillon told analysts in March that Kroger has done very well in competition against Wal–Mart. He pointed out that last year Kroger increased their market share in 20 of 28 major markets in which it faced significant Wal–Mart competition. And as the Wall Street Journal recently noted, Kroger Co. has held its own and even made strong gains while competing with Wal–Mart, doing things like renovating stores with an eye on improving areas where Wal–Mart doesn't have its greatest strengths–areas like deli, fresh produce, and seafood. Kroger is also expanding its Fred Meyer chain in the Northwest, and its Marketplace stores in the Southwest. Analysts have found that these stores have stronger profits margins as well. One Wall Street research firm believes that SuperValu's "strong #1 and #2 market shares are largely immune to Wal–Mart," while another says, "Given Wal–Mart's ongoing encroachment, SuperValu has been able to maintain its market share by further penetrating established markets." And Royal Ahold NV recently reported first-quarter profit that rose 76 percent on stronger retail margins, while Kroger Co. reported a rise in profits for the last quarter. "The sales growth we achieved was solidly across all store departments and across geography," Kroger CEO David B. Dillon said in a conference call with analysts and investors. Meanwhile, California is Safeway's most important market, where more than one–third of their U.S. stores are located. According to Wall Street analysis, "Safeway holds strong market positions in key California metro areas, which we believe Wal–Mart will continue to struggle to penetrate." Wal–Mart isn't IN Some of Your Markets In addition, Wal–Mart isn't even IN all of these markets. The last time your contracts were up for negotiation, many of your employers used Wal–Mart as an excuse to cut wages and benefits, when Wal–Mart wasn't even in your market at all! Ultimately, Wal–Mart has become a handy excuse for other companies to skimp on employee wages and benefits in order to increase profits for the executives at the top. We are Changing Wal–Mart It's also important to remember that while Wal–Mart is a threat for some of your stores, we are changing Wal–Mart. We're on the front lines, fighting Wal–Mart's attempts to phase out health care and short change working Americans. Click here to see what UFCW members and other Americans have been doing to change Wal–Mart. And America is waking up. More than 240,806 people have joined the WakeUpWal–Mart.com campaign so far. And the more people hear about Wal–Mart, the less they like the company–and the more they stand up with workers like you. In the last year, almost 30 percent of Americans have heard, seen, or read something about Wal–Mart that makes them think less favorably of the company. Nearly 4 in 10 Americans hold an unfavorable opinion of Wal–Mart, and 46% believe Wal–Mart's public image is worse than it was a year ago. Besides, Wal–Mart's days of milking the taxpayer for employee health coverage may soon be over. The company will now be forced to pay its fair share in states like Maryland, and at least 30 other states have joined the fight to push for some type of Fair Share Health Care legislation. This type of legislation says that by law, large companies must spend a certain minimum for health care. And recent polls show that people support Fair Share Health Care legislation by a two to one margin. It's no wonder the movement is gaining so much momentum. Don't Buy Their Excuses on Wal–Mart! So when your employer tells you that they just don't have any choice in cutting benefits or wages because of Wal–Mart, you can tell them that you know the truth: that your company can and should do better for its workers. |
