[NV Greens] A possible action.. and BuyNothingDay target?

Sun Oct 23 00:10:55 PDT 2005

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Business Week Online 	
OCTOBER 20, 2005

NEWS ANALYSIS
By Aaron Bernstein

A Stepped-Up Assault on Wal-Mart

A scathing documentary and a coordinated campaign by labour, religious,
and environmental groups spell more trouble for the retailing giant It
seems as if everyone lays into Wal-Mart (WMT ) these days. Small business
types attack the world's largest retailer for killing local mom & pop
shops. Women's groups blast it for alleged discrimination against female
employees. Labor and community organizations accuse it of paying
poverty-level wages and dumping employee health-care costs onto taxpayers.
And environmental and community activists decry the traffic and sprawl its
big-box stores can bring to a neighborhood (see BW Online, 8/7/05,
"Wal-Mart's Giant Sucking Sound").

Now all these groups have joined forces to gang up on the Bentonville
(Ark.)-based giant. They intend to fire the first fusillade the week of
Nov. 13, when a coalition of 400-plus national and local groups will mount
hundreds of actions nationwide -- just as the key retailing holiday season
kicks into gear.

"GRASSROOTS ACTIONS."  The campaign, dubbed Higher Expectations Week, is
being coordinated by Wal-MartWatch, an umbrella group started early this
year by maverick union leader Andy Stern, head of the Service Employees
International Union (SEIU).

Wal-MartWatch is also in league with independent filmmaker Robert
Greenwald to publicize the Nov. 4 release of his bitingly satirical new
movie, Wal-Mart: The High Cost of Low Price. "Our goal is to use a wide
range of grassroots actions to raise awareness of the problems Wal-Mart
causes for our society," says Wal-MartWatch Executive Director Andy
Grossman.

Not that the giant retailer isn't fighting back. Wal-Mart has launched a
campaign of its own, billing the Greenwald movie as propaganda and arguing
that damaging Wal-Mart hurts American consumers, especially poor ones.

CHARM OFFENSIVE.  It's even sponsoring an academic conference to examine
its own impact on the U.S. economy. To anchor the Washington, D.C.,
meeting -- scheduled for the movie's opening date -- Wal-Mart commissioned
a yearlong study on the subject by respected economic consulting firm
Global Insight. "There are critics who have good information and
challenges for us that we're interested in hearing from, and then there
are those who don't want our company to succeed, like many of these
(anti-Wal-Mart) groups," says Robert McAdam, Wal-Mart's corporate affairs
vice-president.

Still, the concerted attack challenges Wal-Mart's recent efforts to reach
out to its critics (see BW, link to "Can Wal-Mart fit into a White Hat?".
Wal-Mart CEO H. Lee Scott Jr. began the charm offensive to counter the
mounting damage adversaries have inflicted on the company's reputation,
which has hindered its new-store openings and bitten into sales growth.

While it's too early to tell how well the outreach has been working,
Wal-Mart already has scored early successes by getting some environmental
and human rights groups to sit down and talk over problems. That progress
could be threatened if the Wal-MartWatch campaign catches on.

UNION? NOT JUST YET.  That's the strategy of Stern, Sierra Club Executive
Director Carl Pope, and other Wal-MartWatch board members. Dubbing
themselves The Hub, the group formally got underway in March when Stern's
union put up $1 million in seed money. Since then, it has hired a staff of
34 and pulled in donations from foundations, other unions, and
individuals.

Ironically, the one campaign it isn't pursuing is an effort to unionize
Wal-Mart workers. The United Food & Commercial Workers, which has tried to
organize the company for years, recently joined SEIU in breaking from the
AFL-CIO to mount more aggressive recruitment drives. But at least
temporarily, the unions have decided that Wal-Mart is too powerful to
tackle head-on.

Instead, the groups gearing up for the November actions are aiming at what
they see as the evils of Wal-Martization: A business model that puts top
priority on low prices -- and the low costs that underpin them. A
half-dozen town hall meetings in places such as Iowa City, Madison, Wis.,
and Tucson will push for local and state legislation requiring Wal-Mart to
pay a higher share of its employees' health insurance, which currently
covers just 44% of its 1.3 million U.S. workers.

IMMORALITY ON AISLE FIVE?  The meetings will be modeled after a Sept 19
Cleveland State University forum attended by a 100 or so, featuring local
business and union leaders as well as elected officials, led by Ohio
Congressional Democrats Sherrod Brown, Dennis Kucinich, and Stephanie
Tubbs-Jones.

For churches and synagogues that plan to participate in Higher
Expectations Week, there's even a sample sermon drafted by activist
religious leaders. Reverends and rabbis will be prompted to ask: "Should
we be calling upon Wal-Mart to be a good employer and a good neighbor?"
Says Reverend Ron Stief, the Washington, D.C. director of the Justice &
Witness Ministries of the United Church of Christ (see BW, 8/6/03, "Is
Wal-Mart Too Powerful?"). "Wal-Mart's strategy for economic development
doesn't meet our standards for a moral economy."

The anti-Wal-Mart film will get wide play, too. Greenwald directed a
similar exposé-type documentary last year called Outfoxed: Rupert
Murdoch's War on Journalism, which took aim at the conservative media
magnate's Fox News channel. The new feature has interviews with former
company managers who claim they directed employees to local government-run
health-care programs so the company wouldn't have to pay for their
insurance, along with other damning testimonials.

GRIM APPRAISALS.  McAdam rejects the accusation that his company has any
such corporate policy. And he says the retailer plans to continue to reach
out to critics who aren't bent on eliminating Wal-Mart's core business
model. The Nov. 4 conference is one innovative -- if risky -- way to do
so.

Planners had hoped that economists would point out the boon Wal-Mart's low
prices bring to consumers and the economy, says McAdam. But executives
knew that to have credibility, a conference would have to accept critics
as well as advocates. So Wal-Mart hired Global Insight to put out a call
for academic papers.

Being an unpredictable bunch, however, the academics submitted several
papers that conclude that the company's low prices derive not just from
being more efficient but also by lowering wages.

QUEST FOR CREDIBILITY.  Worse yet, some are by economists who might be
expected to be sympathetic. David Neumark, a senior fellow at the Public
Policy Institute of California, has written numerous studies criticizing
minimum-wage laws as misguided. Yet he co-authored a paper that found
"when Wal-Mart opens a new store, total payrolls per worker in the county
decline by 3% to 5% over the following years." McAdam says he won't
comment on any studies until he has read them.

Wal-Mart also paid Global Insight to conduct a yearlong examination of the
retailer's role in the U.S. economy. Wal-Mart even supplied what it says
are unprecedented amounts of data on its wages and workforce.

To lend it further credibility, Wal-Mart asked several prominent
economists to oversee Global Insight's study. One, Marvin Kosters of the
American Enterprise Institute, is a conservative, while another, Isabel
Sawhill of the Brookings Institution, is a liberal.

BIG TARGET.  The study won't be completed until a few days before the Nov.
4 meeting. Still, if it completely contradicts the independent economists'
findings on wages, the entire exercise might hurt Wal-Mart more than it
helps.

Wal-Mart officials frequently point out that its wages and benefits are no
worse than at other low-price companies such as Target (TGT ) or
McDonald's (MCD ). Some of the critics don't disagree. But to them,
Wal-Mart's status as the world's largest company makes it a target -- one
they intend to keep shooting at with all the firepower they can muster.

Bernstein is an editor in the BusinessWeek's Washington bureau