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Written by rogead Sunday, 15 October 2006

I'm engaged in a constant personal struggle over the value of the UFCW organizing campaigns in regards to Wal-Mart workers. Taking a message of dignity and empowerment to those workers undoubtedly has an intangible psychological value. I've seen Wal-Mart employees grow into workplace activists as a result of our organizing efforts. If the end result of that activism were to be a group of workers who organize themselves on their own terms, I would consider it to be an undoubtedly worthwhile effort. The problem, of course, is that the theoretical objective is to organize those workers into the UFCW as it is currently structured. What would that look like, and who would it benefit?

If suddenly, every Wal-Mart employee in the United States and Canada were to become members of the UFCW, how would it affect the parties involved?

I would suggest that there are six groups with a stake in the retail landscape who would assumably feel the economic impact of such a transformation:

  • The consumer
  • Wal-Mart - the corporate entity
  • Wal-Mart employees
  • Wal-Mart's competitors in the retail marketplace
  • The employees of Wal-Mart's competitors
  • The UFCW

There are reasons why Wal-Mart has resisted a unionized workforce. At the top of the list is the effect on corporate profits. There can be no doubt that an organized Wal-Mart would cost the company some money. In that assessment, the effects on the Wal-Mart Corporation and on the consumer are interlaced. How much money is a point of contention, but; It's been suggested that if Wal-Mart were to pay each associate one dollar an hour more, that they could maintain their current gross profit margins by increasing prices to the consumer by about two percent. Therefore, if we were to argue that a collective bargaining agreement would result in a one dollar per hour increase in compensation to each worker (good luck on that one!), Wal-Mart and their customer base would need to jointly absorb that two percent increase. While it is, of course, highly unlikely that organization into the UFCW would lead to such an increase for workers; clearly, there would be some cost to both Wal-Mart and to the consumer. Neither one would benefit from the deal.

So how would it economically affect the Wal-Mart workers themselves? While there may be a small fraction of the Wal-Mart workforce that would see a net benefit, most Wal-Mart workers would likely see their net compensation actually go down. When we look at the UFCW - negotiated contracts in the retail industry, we see a history of steady declines in the compensation to unionized workers. Those declines are most pronounced in the language covering the wage, benefit, and working conditions of part time workers - the mainstay of Wal-Mart's operations. The slide has been so dramatic for those part timers that Wal-Mart workers would have absolutely no expectation of seeing an economic benefit in being a UFCW member. There would, in fact, be a net reduction in useable income for many given the requisite assessments of union dues. In the end, it would certainly be of no benefit to Wal-Mart's "associates".

In theory, an increase in the pay of Wal-Mart workers will transfer some market share to other retailers by virtue of Wal-Mart's need to increase retail prices. This should, in turn, drive up the pay of other retail employees - particularly, those that are already unionized. In reality, history has made it clear that once unions give away money and language within a series of collective bargaining agreements; they never get them back. The best that can be hoped for by the unionized employees of the companies that compete with Wal-Mart would be to stem the losses we've been incurring for the last two decades. No real benefit to this group.

That brings us to the two groups that WILL benefit from an organized Wal-Mart: The UFCW and the unionized employers with whom they interact. In the smaller UFCW locals, any increases in revenue from union dues would probably be negated by the costs of servicing the newly acquired Wal-Mart workers. However; the large locals and, above all, the international body; would see a massive infusion of income via the collection of union dues and per capita payments from over one million new members. The UFCW international, particularly, would have few associated costs since it would fall upon the various locals to ultimately service the workforce. The international would reap HUGE economic gains - not a problem if they were to use those funds to actually improve the circumstances of their workers, but we all know better. The other big winner in the organized Wal-Mart scenario would be the currently unionized employers. The increase in the labor costs of their largest competitor combined with the race-to-the-bottom contract language the UFCW has so graciously provided for them would be an economic panacea to the traditional organized grocers.

In the end, workers - both Wal-Mart and otherwise would see no real benefit. While Wal-Mart would remain nauseatingly successful, both they and the consumer would perceive some negative impact.

I ache to see the day when Wal-Mart workers organize into a worker-driven union, but the UFCW as currently constructed will do them no good. As things are right now, the only real winners would be the UFCW and the unionized employers. No wonder they're sleeping together!

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