Wal-Mart Strikes Back

Last week, Wal-Mart’s Canadian division said it would close its first unionized store in North America, making Quebec the latest battleground in the retailer’s struggle against unions.

Wal-Mart’s decision triggered vicious rebukes from leftist Canadian politicians. David Christopherson, a Canadian Member of Parliament, even called Wal-Mart’s decision to close the store “economic terrorism.”

It is difficult to understand how workers are exercising their free choice by banding together to negotiate with their employer, but Wal-Mart is the corporate equivalent of Bin Laden because it is choosing not to stay in business under the union’s terms.

Putting that aside, there is a greater irony here. The United Food and Commercial Workers union has spent years blasting Wal-Mart for violating human rights, putting local stores out of business, exploiting workers and being an all around evil corporate citizen. The union has a large presence in Canada, but it is based in Washington, D.C. and has campaigned to unionize Wal-Mart in both countries.

“Quite simply the benefits of having a Wal-Mart in your neighborhood are outweighed by the cost in store closures, lost jobs and other adverse effects Wal-Mart has on a community,” the union’s Website reads.

Based on these statements, one would expect the union to be celebrating the closing of a Wal-Mart in the parking lot like a conquering army. The union has liberated one town from the clutches of the Wal-Mart empire. It should be declared VWM day!

But the union is singing a different tune.

“Fair-minded people who respect the rights of workers call on Wal-Mart to abandon plans to close its Jonqueiere, Quebec, store,” the union urges Wal-Mart’s chief executive, Lee Scott, in an electronic petition. It says the store’s closing would “displace an entire community.”

The union has gone further than the petition, also filing a complaint with the Quebec Labor Relations Commission in an attempt to force Wal-Mart to return to the bargaining table and remain open. The store plans to close in May.

While the union’s efforts are likely to fail even in the labor-friendly Canada, the mere fact that they are protesting the closing exposes myths about Wal-Mart’s corporate hegemony that have become all too familiar in the United States. If all of the scare stories circulated about Wal-Mart were true, the store’s closing would mean a renaissance for the community. It would trigger a surge of new mom-and-pop shops, which would create more jobs that pay better wages. But this is not the case.

The Jonqueiere Wal-Mart employs 190 people, none of whom were forced to work there. If they had better job opportunities somewhere else, they probably would be working elsewhere.

Wal-Mart said that the union’s position on scheduling would have required adding 30 workers to the store, which was financially infeasible. The union disputes that this store was under any financial pressure. Michael Fraser, president of the union’s Canadian division, demonstrated his ignorance of economics when he said he knows this because “the parking lot was full.”

A full-parking lot only means that plenty of people shop there, but it has nothing to do with whether the store was successful. Though Wal-Mart is the world’s largest retailer, with annual sales of about $285 billion, the company operates on razor-thin margins to keep prices low. For every dollar of goods Wal-Mart sells, it only makes about three cents of profit, which means controlling costs is crucial to its business model.

Unions complaining about Wal-Mart’s stinginess might have a better case if Wal-Mart’s top brass were living lavishly. But the retailer’s commitment to controlling costs can be seen from the top down. Wal-Mart CEO Lee Scott has a tiny office in the company’s corporate headquarters in Bentonville, Arkansas. Along with other executives, Scott flies coach and shares budget hotel rooms when traveling.

The union is attempting to force Wal-Mart to work under their terms, even if it means maintaining an unsuccessful store that can’t deliver the lowest prices to its customers. Labor leaders should realize that Wal-Mart is giving the union a taste of its own medicine. It is going on strike.