The Union Conspiracy Against Wal-Mart Workers

by Thomas DiLorenzo

[Posted on Monday, January 23, 2006]
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Most of the commentary on the ongoing propaganda campaign against Wal-Mart ignores what is probably the most important aspect of it: It is primarily a labor union-inspired campaign against Wal-Mart employees, as well as the company in general. This is the essential truth of all union organizing campaigns. Historically, all of the violence, libel, and intimidation that goes along with "organizing campaigns" has been directed at competing, non-union labor, not management. The Wal-Mart campaign is no different.

The propaganda campaign against Wal-Mart is what is known as a "corporate campaign" in the labor union literature. There are very few strikes these days in America; so-called "corporate campaigning" is the new form of organizing. Unions finally wised up to the fact that, while striking may be great fun, with all the name-calling antics, bashing in of car windows (of cars belonging to "scabs"), puncturing of tires, and destruction of company property, it rarely got them anywhere. In fact, if replacement workers are hired during a strike all union employees lose their jobs. Strikes increasingly became an all cost/no benefit proposition, which is why they are so rare these days.

There are several rationales for corporate campaigns. For one, they have been a way of unionizing a workplace without directly involving the employees in cases where unions know they do not have employee support. There have been many instances where unions have lost certification elections by very large margins, telling them that they have no hope of organizing a particular company's employees. Rather than giving up, however, they will frequently initiate a corporate campaign against the company. The idea is to use every means possible to impose costs on the company, forcing it to increase its prices; embarrass the company's management with a campaign of slander; and portray the company in the media as some kind of social outlaw. It is easy for unions to generate such publicity with the assistance of various economically ignorant, capitalist-hating "nonprofit" groups, from clergy to environmentalists. If the company gives up and signs a union contract, all the complaints disappear immediately.

One tactic is to issue thousands of complaints about the company to regulators, who must then investigate the complaints, forcing the company to spend huge sums on legal fees. In addition, the union will issue press releases about how many complaints there have been about the company, implying that all the complaints are somehow real and legitimate. This may cost the company some customers if the publicity is bad enough. In the 1990s the corporate campaign against the non-union grocery chain Food Lion caused the organization to shut down dozens of stores. (The company subsequently recovered as consumers discovered for themselves that the union's charges against Food Lion were bogus, but it still cost the company millions).

In Maryland recently, the state legislature — which is totally in the pocket of the state's unions — passed a law forcing Wal-Mart to provide its workers with expensive, governmentally-prescribed health insurance, something that will certainly drive up its costs and make it less competitive compared to unionized stores.

The ultimate goal is to get the company to sign a union contract without ever involving the employees, a process that labor scholars call "pushbutton unionism." So much for the fable of "union democracy."

The United Food and Commercial Workers Union (UFCW), the largest union in the grocery industry, has been at the forefront of many corporate campaigns and is the chief organizer of the campaign against Wal-Mart. It is no secret that Wal-Mart's grocery prices are very much lower than they are in your typical, unionized grocery store chain. The "problem" facing the UFCW is that unionized grocery store chains tend to be much more expensive than non-union grocery chains (and often much dirtier and less consumer-friendly in general). Thus, they have waged long campaigns against such companies as Food Lion in an attempt to drive up grocery prices — all in the "public interest," of course.

As long as there is competition by the superior, non-union grocery stores, the unionized stores cannot compete as well with their bloated costs and their low-quality goods and service. The unionized stores will lose business to their superior, non-union competitors and may even go bankrupt. The union will lose members and, more importantly, dues revenues. Thus, the role of the corporate campaign, if it is successful, is either to unionize the non-union stores so that they will become just as expensive and inefficient as the unionized ones, or at least impose costs on the non-union companies that will achieve essentially the same outcome.

In either case, it is a patently anti-consumer policy that can only harm the employees of the "targeted" company. Consequently, the whole idea of a corporate campaign is based on a Big Lie: That the union is somehow concerned about the well-being of non-union employees at places like Wal-Mart. In reality, the objective of the union is to force every one of those employees to either join its union (and pay its expensive dues) or become unemployed. This is true of all corporate campaigns, including the ones against Nike and other companies operating in Indonesia.

While the media may portray unions as collections of Mother Teresas, concerned only with the plight of poor Indonesians, the reality is that the real objectives of the unions is to throw every last Indonesian who is employed by Nike out of work, forcing many of them to resort to begging, stealing, prostitution, or worse. That way, competition for higher-priced/lower quality textile goods produced in unionized factories in America will be reduced or eliminated. And the unions pretend to take the moral high ground in this patently immoral crusade.

America's universities are filled with economically ignorant haters of the free market, so university campuses have become major forums for union denunciations of such companies as Nike, Wal-Mart, and others. Faculty and students claim to be concerned about "social justice," but they are simply being used as dupes by unions who are not at all concerned with justice of any sort. Rather, their main concern is increasing the coffers of union treasuries by driving non-union competitors from the market.

The great majority of today's college students may never learn the principles of supply and demand, or understand how many billions of dollars annually companies like Wal-Mart save American consumers (including their own families), but they are indoctrinated as freshmen that any "moral" person should hate Wal-Mart, Nike, and other "outlaw" corporations (as defined by the union movement).

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Economically ignorant clergy often lend a hand in this union crusade to throw thousands of people out of work, lending an aura of "God's work" to this immoral and anti-social crusade. And of course there are all the other usual suspects — environmentalists, "consumer activists," trial lawyers, and Wal-Mart's higher-cost competitors — who are happy to be a part of such smear campaigns because it satisfies their own self interests (or fattens their wallets) as well.

So far, millions and millions of Americans have expressed disagreement with the smears against Wal-Mart by the UFCW and its accomplices by shopping there in record numbers. As always, the public has nothing at all to do with such anti-corporate campaigns, which are always the work of small groups of union rabble rousers, intellectuals, and pundits desperate to portray themselves as being "on the side of the people." The danger is if these opinion makers succeed in convincing enough politicians to follow the actions of the Maryland legislature, which is arguably the most economically ignorant group of legislators in America (I speak from experience, having testified several times before committees of these jokers). If this happens then the grocery industry will become less competitive, costing American consumers billions and destroying even more billions of dollars in shareholder wealth along with it.

Thomas DiLorenzo is professor of economics at Loyola College in Maryland and the author of The Real Lincoln (Three Rivers Press/Random House, 2003). His latest book is How Capitalism Saved America (Crown Forum/Random House, 2004). . Comment on the blog.