Can Barack Wake Up Wal-Mart?

Democrats Obama and Edwards kick off the Wal-Mart watchdog's holiday campaign to pressure the mega-retailer for better wages

by Pallavi Gogoi

In a much-publicized and carefully executed event on Nov. 15, Senator Barack Obama (D-Ill.) and former Senator John Edwards (D.-N.C.) lent their voices and their political clout to the effort to pressure Wal-Mart Stores (WMT), the world's largest retailer, to change its workplace practices. The two participated in evening conference calls with Wal-Mart workers, organized by the union-funded group WakeUpWalMart.com. The conference calls officially launched a six-week campaign titled "Hope for the Holidays," during which the watchdog group plans to push for changes at Wal-Mart.

Obama, a possible Democratic presidential candidate for 2008, was the first to weigh in, in a call that started at 7 p.m. EST. "Unlike the manufacturers who are under enormous competitive pressure from global low-cost producers, Wal-Mart is making enormous profits and yet it has chosen to go with low wages and diminished benefits," he said. "The battle to engage Wal-Mart and force them to examine their corporate values and policies is absolutely vital to America today."

A Living Wage

Obama spoke for less than 10 minutes, and much of the call was taken up by members of WakeUpWalMart.com. The group was set up by the United Food & Commercial Workers International Union, which has tried to organize the company's workers—without success. The Hope for the Holidays campaign is designed to change what the group calls Wal-Mart's "anti-family business practices" and persuade the company to provide a "living wage and affordable health care" to employees. "With great wealth comes great responsibility," says Chris Kofinis, spokesman for WakeUpWalMart.com. "As one of the world's most powerful economic forces and one of the most profitable companies, Wal-Mart has the responsibility to improve the lives of its workers."

Wal-Mart, which has seen numerous attacks by politicians in the past, was restrained in its response to the event. "We are disappointed that Senators Obama and Edwards have chosen to participate in a politically motivated event," says David Tovar, spokesman at Wal-Mart. "Wal-Mart creates jobs for Americans, reduces costs of health care with its $4 generic drugs, and is a leader on environmental sustainability." The company says it is on the side of working Americans, providing more than 1 million with jobs and offering more products at affordable prices than any other retailer.

The calls come just as the holiday shopping season is kicking into high gear. Wal-Mart has vowed to lead its industry in cutting prices as it tries to boost sales. On Nov. 14, the company reported third-quarter sales that were shy of analysts' expectations, although profits were at the high end of Wall Street forecasts (see BusinessWeek.com, 11/14/06, "Wal-Mart: Back to Basics for the Holidays").

Democrats Appeal to Workers

The Obama-Edwards conference calls are a clear sign that, with the ascendancy of Democrats in Washington, political pressure on Wal-Mart is on the rise. Other Democrats have appeared in rallies that call for Wal-Mart to change. And in a column in The Wall Street Journal on Nov. 15, Democratic Senator-elect Jim Webb (D-Va.) laments that tax codes protect the rich and American corporations. "The average CEO of a sizeable corporation makes more than $10 million a year, while the minimum wage for workers amounts to about $10,000 a year, and has not been raised in nearly a decade," Webb wrote.

Labor unions, of course, have long been allied with Democrats, and they now believe that their voices will be heard by politicians with power. However, the Democrats appear to be appealing to a broader audience of workers, not just those in unions. They're appealing to the many employees who feel like they're being pinched between low pay and escalating costs for things like health care.