Wal-Mart: Not a Teamster Player
World's largest employer fears unionization, urges employees to vote Republican.
As a school kid, it was hard not to root for the Molly Maguires.
The secret Irish organization was active in the Pennsylvania coal fields and almost certainly responsible for committing crimes as they attempted to unionize the mines. Several members were hanged for murder in 1877.
For many, the romance of bare-knuckle organizing lingers - even if the target is a newspaper, computer company or large retail operation. The counterpunch to unionization often receives little coverage.
The Wall Street Journal reports Wal-Mart (WMT) is mobilizing its U.S. store mangers to oppose the election of Barack Obama, the presumptive Democratic presidential nominee.
Wal-Mart says the Democrat's election would make it easier for unions to organize workers. Maybe. There has been some chatter of allowing union votes without a secret ballot. This, critics say, could lead to intimidation.
Wal-Mart's managers say unionized employees would be forced to pay hefty union dues and may get little or nothing in return. There's also the possibility of a strike, the Journal says.
Wal-Mart, according to press reports, is careful not to tell employees how to vote, saying only that a vote for Obama may not be in their best long-term interest. But even if you're lost on Aisle 14, the implication is clear: vote for the other guy, John McCain. Is this a defacto endorsement? If so, does it matter as long as the company doesn't link continued employment to voting a certain way? A good labor lawyer could send his kid to college litigating this one.
Wal-Mart's concerns aren't far fetched for anyone who has been a member of the Newspaper Guild. What do unions offer in the digital age? It's hard to imagine how the Teamsters organizing the technical staff at, say, Microsoft (MSFT) or Dell (DELL) would benefit consumers in price, quality or innovation. It's no accident that the nation's most innovative sectors – software, Internet technology and biotech – are also the least unionized.
Unions promise job security, but we know how that worked for members of the United Auto Workers at Ford (F) and General Motors (GM). Union membership hasn't prevented layoffs, buyouts and benefit cuts at newspapers or given publishers any ideas on how to compete against the Internet.
It's no secret that unions and trial lawyers are major contributors to the Democratic Party, a relationship that some might argue doesn't promote increased productivity.
The unions are active this election season and the National Right to Work Legal Defense Foundation is pushing back.
The Service Employees International Union, known as SEIU, plans to spend about $150 million in this year's election cycle.
It's a safe bet that most of it will go to Democrats. Fine. That's just part of the push-and-pull of democracy. But the union may be coercing members into contributing - and that's illegal.
Last month, SEIU amended its constitution to require every local to contribute an amount equal to $6 per member per year to union's political action committee in addition to regular union dues.
Unions that don't meet the new requirement will be required to pay an amount from the local union equal to the "deficiency" plus a 50% penalty.
Does that violate the law? As they say, that's why we have horse races and lawsuits.
The law requires union and corporate political action committees to rely on voluntary contributions. It's illegal to make threats or impose financial sanctions for failing to contribute.
The casual observer might ask: How is the SEIU mandate voluntary? It will be interesting to watch the attorneys slug this one out.
In many states, joining a union is a condition of employment. This may mean that a worker's union dues are used to support candidates he opposes. Use of dues for political purposes from people who refuse to join the union is prohibited by federal law. This creates endless wrangling.
Wal-Mart, like many companies, simply doesn't want to deal with a union.
No surprise there. Anyone who has worked as a manager at a union shop knows how difficult it can be when the union stands between you and running the operation efficiently. What if another union threw up a picket line around Wal-Mart's distribution centers and the company's newly unionized employees refused to cross it? That could mean empty shelves, silent cash registers and a huge hit to quarterly earnings.
Southwest (LUV) is the obvious counterpoint to Wal-Mart's concerns. The airline is heavily unionized and consistently profitable.
The Mollies' thuggish tactics were sometimes criminal. But unions clearly had a place in the coal fields of Pennsylvania in an industrial economy. But now?
Private sector unionization continues to shrink while unions sign up more public employees. That probably tells you all you need to know about the relevance of unions in today's economy.
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