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Who’s afraid of Wal-Mart?

Lurking behind the 'populist' campaign against America's biggest retailer is elite disdain for the people who work and shop there.

Sean Collins
US correspondent

Topics Politics

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America’s Democratic Party is divided and unsure on many issues, but its leaders have found a foe they can unite against: Wal-Mart, the discount ‘big box’ retailer and, with 1.3million staff, the country’s largest private employer.

Across the US this month, Democratic president-wannabes John Edwards and Joe Biden, along with other party luminaries, have addressed rallies denouncing Wal-Mart for low wages and poor healthcare benefits. Hillary Clinton, ex-board member of the Arkansas-headquartered company, has returned a $5,000 campaign contribution as a protest against its policies. It’s very unusual for politicians to attack a chain store, but the Democrats think they are on to a winner for the mid-term Congressional elections in November and into the 2008 Presidential race.

The anti-Wal-Mart movement has really taken off. The publicity campaign has been spearheaded by two union-backed campaigning groups: ‘Wake Up Wal-Mart’, set up by the United Food and Commercial Workers (UFCW); and ‘Wal-Mart Watch’, backed by the Service Employees International Union (SEIU). Local governments have also sprung into action: the state of Maryland passed a law in January that would require Wal-Mart to increase its spending on health benefits (which was later dismissed by a federal government judge as discriminatory, as it would apply only to Wal-Mart); and the city of Chicago approved an ordinance in July requiring ‘big box’ stores like Wal-Mart to pay a minimum wage of $10 an hour – which is about twice the current national minimum of $5.15 – and at least $3 an hour worth of benefits by 2010. And a new anti-Wal-Mart documentary is gaining decent audiences around the country.

Democrats believe they can leverage attacks on Wal-Mart to send a wider ‘populist’ message that they care about living standards. ‘Wal-Mart has become emblematic of the anxiety around the country, and the middle-class squeeze’, says Evan Bayh, Democrat Senator of Indiana. Paul Krugman, economics columnist for the New York Times, writes: ‘If the growing movement to pressure Wal-Mart to treat its workers better is any indication, economic populism is making a comeback.’

But the anti-Wal-Mart crusade is a faux populism – as fake as the knock-offs Wal-Mart sells. It shares with other campaigns against politically incorrect retailers – such as McDonald’s and Starbucks – a disdain for mass marketers and, most importantly, the masses who shop with them. But what’s different, and potentially confusing, about the anti-Wal-Mart movement is that it is snobbery masquerading as a populist campaign for higher pay levels.

Rampant consumerism

Campaigners say they’ve concentrated on Wal-Mart because the company is highly symbolic – and they’re right, but not for the reasons they give. Antis claim that, as the country’s biggest retailer, Wal-Mart’s actions have ripple effects throughout the sector and the economy generally, and therefore it’s reasonable to focus attention on this one company’s lousy labour-relations record. But I would argue that the reason Wal-Mart is singled out has less to do with pay, and much more to do with the fact that Wal-Mart has become the emblem for supposedly rampant American consumerism and just about everything the liberal elites find distasteful about the middle-American, ‘red state’ masses.

The attacks on Wal-Mart are driven by snobbery. Wal-Mart is a ‘low end’ general merchandiser, selling a vast variety of goods at, as the company’s slogan says, ‘always low prices’. Many well-off people routinely dismiss the chain as a distributor of tacky, cheap-quality goods, and do not want to be seen entering its doors (although some do just to buy inexpensive toiletries or groceries). Most of Wal-Mart’s employees and regular customers are from the lower-income section of society. The company’s roots are in the rural South and Midwest, and it is still associated with these red-state heartlands – indeed, the recent resistance has been sparked by Wal-Mart’s decision to expand to the more liberal coastal areas and urban centres.

Campaigners cite that about 80 per cent of Wal-Mart’s political contributions go to Republicans, and when a recent Zogby poll reported that 76 per cent of regular Wal-Mart shoppers voted for George W Bush, liberals had the evidence they needed that they had zeroed-in on the enemy. As John Zogby himself says: ‘You walk into a Wal-Mart and you’re walking into the moral equivalent of a spiritual revival tent for born-again Christians.’

The contrast with the treatment of Target, one of Wal-Mart’s key competitors, shows how the anti-Wal-Mart campaign is really more about defining social status than fighting low pay. Target sells similar stuff at discount prices, but packages everything in trendy design and markets it with playful advertisements. Slapping an Isaac Mirzahi label on its wares, along with donations to cultural causes, makes ‘Tar-jhay’ the socially acceptable low-cost alternative for the comfortable class. Never mind that its pay levels and work practices are not that different to Wal-Mart’s – Target generally gets a free pass thanks to the near-exclusive focus on redneck Wal-Mart.

Hyper-focus on consumption

Wal-Mart is painted as wicked and evil: typically campaigners turn its trademark smiley face into a snarl. By association, those who shop there are found guilty, too. Worst of all, for some, is that Wal-Mart’s low prices encourage the masses to buy more, to indulge in the sin of greedy materialism. The company is a symbol of ‘mindless consumerism’, says author Bob Ortega. A 6am stampede in a Florida Wal-Mart for newly-released X-Boxes in 2003 is often cited to prove how the store’s shoppers are crazed zombies. Campaigners known as ‘Whirl-Mart’ go around the store with empty carts, as a type of performance protest against the hedonists snapping up the slashed-priced goods.

Wal-Mart finds itself at the sharp end of a wider attack on mass consumption patterns. Personal shopping decisions have now become invested with greater significance, as they are now considered as indicative of one’s identity (as opposed to, say, political or religious views). Items associated with the masses are considered taboo today: SUVs, McMansions, fast food. Such criticisms are the means by which to blame those who ‘mindlessly’ buy ‘offensive’ things. At the same time, the elite are able to buy their way out of this, through alternative, eco-friendly, ethical spending.

For instance, the environmental website Ideal Bite, self-described as ‘a sassier shade of green’, provides shoppers with sustainable-living products, so they can ‘easily align their environmentally and socially conscious values with their everyday decisions’. Of course, all of this comes at a premium price. At the same time, the purveyors of the environmentally-friendly products are praised – witness how organic supermarket Whole Foods is celebrated, even though it’s as fiercely anti-union as Wal-Mart.

To be fair, it’s not just ‘latte liberals’ who espouse politically-correct shopping. A consensus against mass consumption behaviour now spans erstwhile ideological divides. As journalist Rod Dreher points out, there is now a sizeable number of ‘crunchy conservatives’ who believe that the natural home of conservation is conservatism, and, when it comes to shopping, that right-wingers should care more about values than low prices and convenience.

You would have thought that a superstore that made huge quantities of affordable goods available to the masses would be hailed as a monument to the American dream. Instead, Wal-Mart is portrayed by both left and right today as the American nightmare – a nightmare exported to the 14 countries outside the US, including Asda in the UK, where Wal-Mart has to deal with the added factor of anti-Americanism.

Wrong on so many levels

Another reason why the campaigners’ claims should not be taken at face value is that low pay and bad conditions are clearly not the only, or most prominent, issues raised. The list of Wal-Mart’s sins is long: eliminating small ‘mom and pop’ shops, destroying downtown areas, imposing ugly architecture, squeezing suppliers, facilitating imports from China, ignoring unethical executive behaviour, and so on. The ‘Wake Up Wal-Mart’ website’s list even includes ‘desecrating sacred grounds’ in Hawaii and Tennessee. A motley coalition of campaigners espouses these different complaints, all supposedly held together by the united aim of slaying the ‘Beast of Bentonville’.

This results in the anti-Wal-Mart campaign being backward in multiple ways. Take the criticism about driving out ‘mom and pop’ shops. These fears have existed in the US since at least the 1930s, when the Great Atlantic & Pacific Tea Company established more modern grocery stores. Mistrust of big, modern establishments has traditionally been a feature of conservatism. Right-winger Pat Buchanan attacked Wal-Mart as long ago as 1996, accusing the company of ‘gigantism’ and devastating smaller businesses.

Wal-Mart’s opponents romanticise smaller shops, yet these establishments often have limited selection, high prices and unattractive environments. Whatever you think of its labour policies, Wal-Mart certainly marks an advance over most smaller retail outlets, especially the typical inner-city bodega. And come to think of it, when were small shopkeepers known for high pay? The Chicago council’s minimum wage measure excludes small businesses, as it applies to only companies with $1 billion or more in revenues – clearly, a serious campaign against low pay generally would see small business as part of the problem, rather than a key ally.

A further backward aspect to the anti-Wal-Mart protests is the way they play the nationalist card and blame Wal-Mart for importing cheap manufactures from China. Wal-Mart’s search for the cheapest products, as well as its centralised buying power and hi-tech logistics, certainly facilitate such imports. However, academic claims that retail now drives manufacturing go too far. Wal-Mart brings in 3.5 per cent of China’s manufactures, so it’s hard to credit it for any economic boom in the People’s Republic.

Just to be clear, all of this is not to defend Wal-Mart’s practices. It’s true that the company’s pay levels are low and benefits miserly. Workers, including women and minorities, have legitimate complaints about conditions. Indeed, exploitative pay and conditions are a major part of why Wal-Mart has been a profitable capitalist enterprise, although not the entire explanation – as noted, it has great economies of scale and its operations are technologically advanced. The argument that Wal-Mart workers should accept low pay in order that all of us can enjoy low prices is bogus. But it’s not helpful to single out Wal-Mart for these problems, since most of the retail sector, with its tight margins, pays poorly (and, beyond retail, workers’ real earnings have stagnated for three decades). Worst of all, it’s cynical and divisive for unions and other campaigners to piggy-back on these sentiments towards Wal-Mart’s workers and customers.

Wal-Mart’s defensive response

Wal-Mart is not taking all of these attacks lying down. The company has set up a ‘war room’ in Bentonville, ready to respond to criticisms on a daily basis. It has established the websites ‘Wal-Mart Facts’ and ‘Working Families for Wal-Mart’ to counter bashers’ charges, and it is reaching out to local community leaders. CEO Lee Scott has been on a charm offensive, appearing on various media, including the Reverend Al Sharpton’s radio show (Wal-Mart is the country’s biggest private employer of black Americans, too, and black politicos appear divided over how to respond to the anti-Wal-Mart campaign).

But the Wal-Mart response is more defensive than a counter-offensive. It has endorsed aims shared by its liberal opponents such as a higher minimum wage (read: it would hurt its competitors, not Wal-Mart, since it already pays, on average, nearly twice the minimum wage) and a national healthcare solution (read: it would lessen the direct burden on the company and shift it to taxpayers). Most prominently of all, Scott and Wal-Mart have embraced a green agenda, hoping to gain kudos from the crunchy left and right. Bill Clinton has praised the company’s measures, and Al Gore, following a showing of his movie An Inconvenient Truth to 800 employees in Bentonville, will be advising the company. Needless to say, all of these moves don’t go down well with Wal-Mart management’s traditional Republican friends.

But such concessions to its critics are unlikely to remove Wal-Mart from the spotlight. As recent criticisms of BP following accidents in Alaska and elsewhere show, the ‘if-you-can’t-beat-them-join-them’ approach usually just emboldens business bashers and validates them among society generally. Critics certainly felt vindicated when ‘Working Families for Wal-Mart’ spokesman and former UN ambassador Andrew Young was forced to resign following his statement that the Jews, Koreans and Arabs ‘ripped off’ black Americans in the inner cities.

With all the attention on Wal-Mart’s labour practices, people seemed to have overlooked that the company has not been performing well. In the second quarter of 2006 it reported its first loss in nearly a decade, taking a big hit from pulling out of the German market. US sales have been lacklustre, and its attempts to woo the higher-income types, a la Target, look desperate. At the lower end of the market it faces stiffer competition from really low price stores like Dollar General and Family Dollar.

So perhaps the campaigners against the bully of Bentonville will find that they are really fighting a weakling. But, here and now, their disdain for the folks who work and shop at Wal-Mart needs to be challenged.

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Topics Politics

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