Wal-Mart May Talk with Unions
Wal-Mart has been blocked at almost every turn in its attempt to try and get new stores built in Chicago. It’s gotten to the point, according to a Chicago Sun-Times report, that the company may be ready to do the almost unthinkable and sit down and talk with unions.
According to the report, Wal-Mart is scheduled to meet at an upcoming meeting with Dennis Gannon, president of the Chicago Federation of Labor, as well as Jorge Ramirez, secretary-treasurer, and Ron Powell, president of the United Food and Commercial Workers Union, Local 881. The company has not yet confirmed such a meeting will take place.
Ald. Anthony Beale (9th) told the Sun-Times, “Even if nothing comes out of it — even if we agree to disagree — we should sit down and air our differences. It shows good faith on both parts.
Wal-Mart has opposed so-called “living wage” measures that it believes single it and other large retailers out. The company, which has consistently argued that it pays above market rates in many cases, believes it would be put at a disadvantage if forced to pay even higher wages while smaller competitors were exempt from the measure.
The retailer, however, may be willing to support a so-called “community benefits agreement” that would mean all its new stores would be built entirely by union members.
Discussion Questions: Do you see Wal-Mart agreeing to talk with labor representatives as making a major difference in whether the company will get the go-ahead to build stores in Chicago? Does the chain’s experience in Chicago have implications in other parts of the country?
This just sounds like hopeful headlines. I’ve never seen anywhere where Wal-Mart has announced they will be talking to unions. Wal-Mart is non-union so they would be wasting their time. The market should determine wages and not some silly living wage ordinance. If Wal-Mart doesn’t pay enough then people will simply not work for them and opt to work for someone else.
When an ever-growing public company, WM, has conquered almost all areas except urban locations, it is practical to investigate what the going cost would be to enter new growth areas such as urban Chicago–at least as a test and with a withdrawal clause to permit an escape if needed later.
Inner cities are where WM’s potential future geographical growth lies. If the price of such a test move can be made acceptable and also protected for a long period of time, plus an escape clause can be contracted, then a new paradigm for WM might arise in Chicago. Would that lead to further urban expansion? Don’t bet on it but stay tuned.
Not at all. I had a conversation with my neighbor who just got hired back into construction. He said he has a government “living or prevailing” wage job and it is the HIGHEST paid position he has ever had by almost 40%. Another example of why the government should stay out of running anything. A business would never pay 40% for comparable employees in similar positions. Unions and the expansion of the federal, state, and local government contribute to our rapid descent.
I agree with Gene with one — sadly for Walmart — not so small caveat. There aren’t too many escape clauses in most union agreements. The publicity associated with negotiations alone could galvanize union efforts in all Walmart operating units.
That said — Gene is dead on the money. In order for Walmart to expand they have to develop a new go-to-market strategy. A cynic might claim the same is true of the UFCW and other trade unions.
The idea of using 19th Century negotiating tactics in the 21st Century makes no sense for either side. So…the door is open to a new model, one which would benefit everyone at the table.
Is either side smart and/or bold enough to recognize this? Only time will tell.
I confess to being a little vague on the need for a “living wage” when we already have a minimum wage.
Having said that, I do think large corporations have a responsibility to their communities. It’s unfortunate that unions have to get into the mix, but it’s also unfortunate that our industry has based its business model on an army of part-time workers who are ineligible for fringe benefits. This model has to change.
Opposing parties should always talk when there are substantial differences that lie between them. If compromise is cost effective then they should do it. I am, however, concerned that the management team could set a very bad precedent that could unravel decades of firm positioning. We have to remember the current team caved on support for healthcare. That certainly had unintended consequence.
Which Walmart are we discussing here? Are we talking about the Walmart Super Store, the Walmart Food Store or the traditional Walmart that we have come to recognize as the lower wage paying retailer that tends to do better in blue collar or inner city neighborhoods?
My guess is we are talking about the traditional Walmart prototype. If appearance is the judge, the employees are not being paid higher than the prevailing wages for the locale. And the prices are the major draw. So going in to the Chicago market and sitting down with the unions is no more than a beginning, test the waters step to see what can be done to make it possible to enter the market and retain the wage rate level they are sadly known for. How can this happen in a union environment? I assume this would also hold true for the San Francisco market.
Walmart will have to bite the bullet if entering these markets is important for them. If not, they will continue to grow in the second or even third tier areas outside the union control.
In a past life my company was a third party maintenance provider. We would assign a service provider such as an electrician, plumber or HVAC firm to go to a retail location we had under contract and repair a problem. In areas such as Chicago and San Francisco we would find a non-union service provider from closely outside the union area and assign the job to them. Yes, we would have to pay a travel charge. But the final cost was always lower than using a union member.
I am sorry to have to say it but the heavy hands of the unions in Chicago (protected by city government) have been slow-motion job killers, convention killers, and manufacturing killers for decades now in our once vibrant city. Yes, Chicago’s inner city residents desperately need access to Walmart. And Walmart wants to expand their footprint into cities. But if Walmart is even thinking about negotiating with unions to achieve an urban presence, Chicago is most definitely NOT the place for them to start.
1. Talking never hurts.
2. Wal-Mart would be foolish to make any concessions which could possibly spread to other areas.
That being said, Wal-Mart today does not have the same attitude towards employees that they did when the Chicago law was enacted. Chicago is not the same either. Today its unemployment rate is approaching 12%. Surely, Wal-Mart is aware of that.
Those two facts could make the basis for reasonable dialogue. And, perhaps Wal-Mart finally has the upper PR hand. What politician would fight an announcement that Wal-Mart will create many new jobs in Chicago, if, just if, this silly law were repealed?
There is a grave in Bentonville, Arkansas with an old, skinny, bald man inside it. It currently spinning AND rolling.
The discussion around a living wage is a good topic. Yes we have a minimum wage but it varies significantly by state.
For those that think minimum wages as defined by the Federal Government is satisfactory, I would challenge them to try to live at the standard for 90 days and see if they do not change their minds.
What I think is so myopic is that we have jobs that move into non union labor markets for some short term profits. This practice erodes the standard of living for all Americans.
I do not buy free market philosophy of voting with your feet and moving to greener pastures. The problem with free markets economics is it has no humanity in it. When free markets economics are working for you life is good. When free market economics works against you you have big dis-allocations of resources within a country.
My point is we are one country and one market so unions in Walmart may make them a better corporate citizen while remaining profitable. Making profits off of your own labor and the cheap goods provided by Chinese suppliers weaken the American work force and undervalues the price of consumer goods in a marketplace.
It is time for Walmart to take a long-term view of their business practices and be the patriotic company they say they are by defending their employees and customers.
If Walmart does this, they will have let TWO camel’s noses under the tent. One is the unions of course. The other is the Chicago political machine.
And with all due respect, I have to disagree with Gene Detroyer–Chicago doesn’t change. Only the names change. And sometimes even the names don’t.
Almost unthinkable…ALMOST?!? In this “who will blink first?” contest my vote goes to the Sphinx.
Hey, it’s Chicago…and, the political hacks are out….
I grew up in the Windy City, was the son of a Union Ironworker, and worked my way through college as an Ironworker walking beams several hundred feet up on a number of those skyscrapers and bridges there, so I like to at least think that I carry a balanced view of “union representation.” Not to date myself, but Chicago did have a balance of Business, Union, and Government working together on behalf of the consumer and community. And, that worked to make Chicago a roaring success throughout the past century.
Trade Unionism, the ‘Chicago way’ has LOST ITS WAY. These politicians have made a mockery of trying to help neighborhoods that need jobs, value for their retail purchases, and good food, clothing, and services. They are NOT representing the interests of the consumer, and they should be ashamed of themselves.
Walmart, Target, and other big-box retailers have made attempts to open stores in inner cities, in particular, Chicago. They have been blocked.
Richard J. Daley must be rolling over in his grave–he wasn’t inexperienced in how to run the city–but he took care of people, first and foremost. His son, Richard M. has to have the courage to get the ‘hacks’ back in line.
This forum raises an important retail point here, and I know that I am ranting about political points. That is, however, what this is all about–and the CONSUMER is the loser in the matter. I hope that Walmart does not accept being strong-armed by these low-lifes.
P.S.–please accept our apologies for letting too much of the cesspool of Chicago politics, hiding under the guise of Trade Unionism, to creep out of town, and infest Washington D.C.
Communication is always good and both sides are motivated to think differently in these times. Walmart has had success due in part to having tremendous vision. I think they will find a way to get more deals done.
The key urban regions – NYC, San Francisco, Seattle, Chicago and a few more – where Walmart has virtually no presence also happen to be the strongest union cities. Most of these big city Mayors are Democrats and support organized labor – and labor supports them. Therefore if Walmart wants to open numerous stores, like the smaller-formats, in these cities – whitch WMT must to grow in the U.S. – it will have to devise a strategy to deal with the union issue. Hence the talk about WMT “talking” with unions. But the bottom line is the unions want all of Walmart unionized. Walmart does not want this. So mere talk it will probably be, if it happens. That equals continued stalemate. And when the economy picks up in these cities, Walmart will no longer have the “jobs” leverage it does now. Not an easy issue for the retailer.