November 9, 2005

ADDITIONAL REASONS TO HATE WAL-MART


Andrew Grossman was in his office at Wal-Mart Watch, opening the mail one day in September, when he came across a plain manila envelope with no return address. Inside he found a memo labeled "Memorandum to the Board of Directors From Susan Chambers." Hmmm. Grossman, the former executive director of the Democratic Senatorial Campaign Committee who's now an anti-Wal-Mart activist, Googled the name to learn that Chambers is the retailer's executive vice president for benefits.


The draft memo described how 46 percent of the children of Wal-Mart workers are uninsured or on Medicaid. It detailed how Wal-Mart's health plan requires such high out-of-pocket payments that the small number of employees hit by a very costly illness "almost certainly end up declaring personal bankruptcy."

It also proposed that Wal-Mart rewrite job descriptions to involve more physical activity, in part to "dissuade unhealthy people from coming to work at Wal-Mart."


Last week filmmaker Robert Greenwald premiered a scathing new documentary titled "Wal-Mart: The High Cost of Low Price." Thanks to heavy promotion by a growing band of anti-Wal-Mart activists, it will be viewed by thousands of Americans in coming weeks.

Wal-Mart is also facing dozens of lawsuits, and its stock price has declined sharply in recent years. Lately the company has begun defending itself more aggressively. But its PR problems could become a sort of Nightmare Before Christmas: as the crucial holiday selling season gets underway, the activists hope shoppers will ask themselves hard questions. Is Wal-Mart a force for good because it lets Santa's dollars stretch further? Or is it a corporate Scrooge—and a store to be avoided as a matter of conscience?

The new documentary probably wouldn't be getting so much attention if it weren't for the activists. One group, Wake Up Wal-Mart, was launched by the United Food and Commercial Workers union in April and has since gained 115,000 members. Last week it began airing TV ads to tout the new movie.

Wal-Mart Watch, which leaked the benefits memo, also launched last spring, with funding from the Service Employees International Union. The movie, filled with ex-employees who trash the company:
  • that Wal-Mart destroys small-town businesses
  • pays so poorly that many employees rely on public assistance
  • mistreats workers, who've filed a number of lawsuits alleging gender discrimination and being forced to work off-the-clock.
"The company believes its customers aren't paying much attention to the headlines. Its research shows only 8 percent of adults are openly hostile toward Wal-Mart, so it's wise to largely ignore opponents and instead focus on getting its 100 million-plus weekly shoppers to buy more. Outside PR experts agree that fighting back too hard can backfire, by drawing more attention to critics.

Rising health-care costs and the declining earning power of low-skilled workers are national problems, and not unique to Wal-Mart. CEO Scott has tried making this argument, without finding much traction. But he's right. General Motors, which offers the kind of benefits that union activists wish Wal-Mart gave its cashiers, is losing billions as a result; it's in such peril its union workers have agreed to shoulder more of their health costs.

A telling moment in Greenwald's Wal-Mart documentary comes when an elderly grocery-store owner laments the closure of his family business, which he attributes to Wal-Mart. "Where will our families and where will our children be? What will they have to do to work and be competitive?"

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