It Makes a Difference to the Sheep

WAL-MART VS. THE TEAMSTERS. Heard an interesting story on "To the Point" a day or two ago. Wal-Mart, the business behemoth that has single-handedly accounted for huge increases in productivity in the U.S., is moving into California. The fact that the expansion plan includes introducing Super Wal-Mart stores has threatened the viability of local supermarket chains such as Safeway and Krogers. And with good reason: Super Wal-Mart's grocery prices are anything from 15-35% cheaper than its competitors. The reason for the discrepancy? Wal-Mart's relentless pursuit of the cheapest prices from its suppliers and its consistent efforts to keep the wages and benefits of its own employees as low as possible. Contrast this lean and mean business model with the union-dominated local grocery chains and it is clear that there will be no contest between the two. The unionized grocery workers have gone on strike, in part because of concerns that their employers will cut wages in order to try to compete with Wal-Mart. Unions, spearheaded by the Teamsters, have also tried to stop the construction of Super Wal-Marts in California. "To the Point's' Warren Olney interviewed someone who writes for Barron's who made the argument that even if Super Wal-Mart brought about the loss of every grocery job in the region and even if every worker were forced to work at a Super Wal-Mart (taking a pay cut from $19 @ hour to $9 @ hour), the net savings to the people of the region (think of every family saving $10 @ week on their grocery bills, a not improbable possibility) would far outweigh the wages lost in the transition. Olney then interviewed the head of the local Teamster's union who proclambast lambaste Wal-Mart for mistreating its employees and essentially ruining the world. When he criticized Wal-Mart for selling shoddy goods, Olney noted that an extensive LA Times series on Wal-Mart points to the conclusion that Wal-Mart has used its clout to press for both low prices and reasonable quality, but it was in one ear and out the other of the Teamsters' rep. Olney then asked him whether his union members shop at Wal-Mart. The answer? "Of course." Union leadership has tried to educate their members about feeding the hand that bites you but to little or no avail. I feel for unions. They played an invaluable role in the fight for better working conditions and wages for large numbers of workers. They did so in the face of determined and often brutal and violent opposition. But this is a fight they're going to lose. And as long as Wal-Mart continues to provide reasonable quality at significantly lower prices, Wal-Mart is going to win nearly everywhere it goes.