Wal-Mart's P.R. war
Activists against the behemoth think this is their year: Two new national campaigns, a critical upcoming documentary and more stores thwarted. But can they force America's largest private employer to change its ways?
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By Liza Featherstone
Aug. 2, 2005 | Firing whistleblowers. Discriminating against women (and, most recently, black truck drivers). Violating child labor laws. Locking workers into stores overnight. Mooching off taxpayers. Disregarding local zoning laws. Mistreating immigrant janitors. Abusing young Bangladeshi women. Paying poverty-level wages in the United States. Destroying small-town America. If you read any newspapers -- or even watch "The Daily Show" -- you can probably guess which company has been grabbing headlines for these and countless other charges and offenses.
It's Wal-Mart, of course. The largest and most profitable retailer in the world -- and in the United States, with 1.3 million workers, the largest private employer -- is becoming nearly as infamous as Enron or the Triangle Shirtwaist Factory. The bad publicity may be well deserved, but it's also the calculated result of a coordinated effort by company critics, what Wal-Mart CEO Lee Scott recently called "one of the most organized, most sophisticated, most expensive corporate campaigns ever launched against a single company."
Years of citizen outrage -- on a slow, under-the-radar boil -- has this year exploded in a highly visible public education effort, backed by a powerful and in many ways united set of forces: two new national efforts, hundreds of community groups, unions, women's rights groups, environmental activists and mad-as-hell individuals. What's more, this November will mark the launch of a documentary film about the company, directed by Robert Greenwald ("Outfoxed"). Greenwald says he expects his movie, which will be promoted in a grass-roots manner suited to its subject -- through screenings at house parties, union halls and churches -- to contribute to an anti-Wal-Mart "echo chamber."
The aim, the activists agree, is to change the company's entire business model. What Wal-Mart's abuses have in common, they say, is a disregard for the public interest in a single-minded pursuit of the bottom line. Low labor costs and a disregard for the law have been central to the company's way of doing business. A Wal-Mart that paid its employees generously, offered decent worker healthcare and was considerate of its community neighbors -- the critics' major demands -- would not be Wal-Mart: It would be, essentially, a bunch of stores. Other than unionized workers, it is possible that no one has ever put such concerted pressure on a single American company, let alone one so large, to so fundamentally change its operations.
This Wal-Mart moment has been decades in the making. In the retailer's early years, beginning with its 1961 founding in Arkansas, unions mostly ignored its expansion. After all, many of the stores were in the South, where restrictive laws -- and a tradition of labor exploitation as extreme sport, dating back, of course, to slavery -- have historically kept unions weak. (Sam Walton's original five-and-dime store, in Bentonville, Ark., sits on a town square overlooking a monument to fallen Confederates.)
Nationally, much of the retail industry, then as now, was not organized. But when Wal-Mart, in the late 1980s, began opening its Supercenters -- supersized supermarkets, open 24 hours, with a full line of groceries -- the unions took notice because these new entities competed with unionized supermarkets, threatening their own members' decent and hard-won standard of living. With its low-wage model, Wal-Mart began, through competitive pressure, to exert downward pressure on the entire grocery industry.
The union that represents grocery workers, the United Food and Commercial Workers International Union, did try to organize Wal-Mart workers. But because of a combination of factors -- the union's own ineptness, the weakness of the larger labor movement, the uselessness of the government bodies that are supposed to enforce labor laws, the effectiveness of Wal-Mart's union-busting, the company's willingness to deploy illegal tactics when legal ones fail, and the sheer difficulty of facing down an opponent as large and determined as Wal-Mart -- the effort did not work, and not a single Wal-Mart worker in the United States belongs to a union. This year, the UFCW, having decided to give up for now on organizing the workers, decided instead to try to pressure Wal-Mart from the outside by taking its case to the public. In April, the union launched a new public relations campaign called Wake Up Wal-Mart.
"Wal-Mart has to respond to the American people," says Wake Up Wal-Mart's campaign director, Paul Blank, "because the American people are the customers." Wake Up Wal-Mart's intent is to hurt the company's sales by persuading customers to stop shopping there. Recognizing that so many low-income Americans desperately need Wal-Mart's low prices, Wake Up Wal-Mart's message is not strident or purist: The group is simply urging people to reduce their Wal-Mart shopping as much as they can. Focus group and survey research suggests this is, for many Americans, a reasonable request, and one that they will be inclined to take seriously when they learn more about the company's practices.
Blank, along with two other Wake Up Wal-Mart activists, emerged from the youthful enthusiasm of the Howard Dean presidential campaign, which used the Internet creatively and made activists of people who'd never before believed in the political process. (Another member of the Wake Up Wal-Mart team comes from the Draft Wesley Clark campaign, the Internet-based group that raised large sums of money for Clark before he'd even agreed to run in the 2004 presidential campaign.)
Wake Up Wal-Mart uses similar approaches. People can sign up on the campaign's Web site to "adopt" a local Wal-Mart and join local activities focusing on that store. They are then, MoveOn.org style, called upon by e-mail to participate in person, by attending pickets, throwing informational house parties, pressuring legislators or whatever the local groups deem strategic.
In a similar spirit, also launched this year, Wal-Mart Watch, initiated by the Service Employees International Union, is funded by a combination of labor, foundations and individual donors. Probably because it is not run by one union but is meant to coordinate -- and provide information to -- a vast coalition of Wal-Mart foes, the company seems more alarmed by Wal-Mart Watch, devoting an entire Web site to refuting its criticisms and attacking the group by name. Like Wake Up Wal-Mart, Wal-Mart Watch's staff has its share of Democratic political pros. There are petty turf wars and rivalries between the two groups, but what's striking is how potentially complementary they are.
While Wake Up Wal-Mart will probably be most effective in mobilizing union members, Wal-Mart Watch -- which hired four new people in the past two weeks -- may, because it is not solely a union project, reach a public "far beyond the organized-labor world," says spokeswoman Tracy Sefl. "We're able to develop strange bedfellows -- more moderate and conservative politicians, evangelicals" and investors. The latter may prove increasingly important: Wal-Mart's stock has been underperforming for some time, a fact many analysts attribute to what they call "headline risk," which is Wall Street-speak for bad press. That lagging stock price may become a critical pressure point for activists pressuring Wal-Mart to change its ways.
Another important thread in recent anti-Wal-Mart history is that for years, communities all over the nation have been fighting to stop Wal-Mart from opening new stores. Their reasons include their likelihood of worsening sprawl and traffic, the company's tendency to destroy downtowns by shuttering local mom and pop stores, its threat to union jobs and research showing that a new Wal-Mart actually increases countywide poverty rates. Wal-Mart Watch was founded in part to coordinate these disparate community efforts, to connect people fighting Wal-Mart in Vermont with people doing the same in Montana. Local battles have increased recently, and company officials admit that they've become an obstacle to Wal-Mart's growth. In the past year, Wal-Mart Supercenters have been emphatically rejected by communities as diverse as Upland, Calif., and Biloxi, Miss.
Wal-Mart has nearly saturated rural America, to the point where many of its stores are, in the graphic parlance of the retail industry, "cannibalizing" one another. To continue to grow, Wal-Mart must move into urban America, where it has been meeting especially intense opposition; cities have stronger unions and less space for big stores.
City dwellers are also more likely to be offended by Wal-Mart, sometimes for social justice reasons, as in the massive sex discrimination lawsuit, Dukes vs. Wal-Mart, the largest civil rights class action in history, which charged the retailer with discrimination in pay, promotions and training. Urban residents also often oppose Wal-Mart out of concern over low wages, or for snobbish reasons: Wal-Mart sells ugly, cheap stuff, brings more poor folks to the neighborhood to shop and doesn't belong in a cosmopolitan environment. It's also, compared with the lonely exurbs, or rural America, relatively easy to organize and inform people who live in cities: They have plenty of civic institutions and consume media avidly. To win them over, Wal-Mart may have to make changes.
Madeline Janis-Aparicio is the head of Citizens for a Better Inglewood and the Los Angeles Alliance for a New Economy, groups that last year blocked Wal-Mart's entry into Inglewood, Calif., a small city outside Los Angeles, by voter referendum despite Wal-Mart's determination. The company spent $1.5 million on the campaign. Now, she is fighting a renewed effort by the company to come to Inglewood. To Janis-Aparicio, the battle against Wal-Mart is not just about Inglewood. Striking at the company's growth is part of a strategy to get Wal-Mart to change: "We're not going to stop Wal-Mart in its tracks."
There are several reasons anti-Wal-Mart sentiment has so much resonance now. One has to do with the state of the labor movement. Workers are losing their benefits at the negotiating table while unions spend heavily on candidates, like John Kerry, who lose elections. Labor is desperate to stop losing, but its leadership hasn't agreed on what sort of change is needed -- indeed, right now, the AFL-CIO is in the process of splitting up. In this context, the future is murky, but Wal-Mart is a clear common enemy, and one that can help labor find the allies among the general public that it badly needs. Another reason for the explosion in organized anti-Wal-Mart sentiment is that it is George W. Bush's second term, and some people clearly feel that corporate interests in this administration are running amok.
The anti-corporate campaign, like those being waged against Wal-Mart, is a particularly contemporary form of activism. At its best, it is a flashy, media-savvy effort to tarnish a particular company's reputation, in hopes of provoking it to change its ways. This method of activism began emerging in the 1980s, when activists worldwide boycotted Nestlé for marketing infant formula in third-world countries, where unsafe drinking water makes breast-feeding the better choice. It became more popular in the 1990s, including the ongoing campaign to hold Coca-Cola accountable for its alleged complicity in the assassination of Colombian trade union leaders, as well as alleged abuses in India. It reflects the increasing importance of corporate image-making -- and thus, for critics, image-tarnishing -- but also an increasingly common despair about the ability to control corporate behavior through government regulation.
It is no accident that the anti-corporate campaign emerged in the anti-government Reagan era. Perceiving the major political parties as thoroughly bought off by corporate interests, activists saw their only recourse as appealing directly to the corporations and to their consumers. In President Reagan himself, corporate interests found a true friend, but even more important, for the first time, business was successfully organized as a political force, one that could lobby more forcefully than ever for its own interests.
The anti-corporate campaign has had some successes: For example, many apparel companies targeted for abusing workers' rights overseas have had to modestly improve their suppliers' sweatshop factory conditions. Still, such small victories are a bit sad compared with the effectiveness of past strategies by Americans to curb harmful corporate behavior through strong unions, government regulation and vibrant social movements. In the history of the anti-corporate campaign, what's refreshing about the anti-Wal-Mart forces is their ambition in targeting not just one or two problems but a company's entire modus operandi.
What's also unusual about this campaign is that it's successfully engaging policy and politicians. At the state and local level, the anti-Wal-Mart forces are working to pass legislation obligating Wal-Mart to reimburse governments for the costs it inflicts on taxpayers -- in Medicaid, county programs for the poor, public emergency room costs -- by declining to provide its workers adequate healthcare. (Wal-Mart costs taxpayers an estimated $2.7 billion in welfare every year.)
Wake Up Wal-Mart worked with Sens. Ted Kennedy and Jon Corzine on a federal bill on this issue, which was introduced in June; unlike that one, however, several bills at the state and local level have attracted bipartisan support and have a prayer of becoming law. Republicans, after all, generally don't like to see tax dollars wasted. The Maryland Legislature passed one such healthcare bill recently, thanks to lobbying by both Wal-Mart Watch and Wake Up Wal-Mart, and is expected to override the governor's veto in January.
The ambitions of the anti-Wal-Mart forces may, in this era of modest, single-issue goals, inspire some eye rolling among the knowing, especially in Washington, where both Wake Up Wal-Mart and Wal-Mart Watch are based. Indeed, we live in an era of painfully small-scale do-good impulses, best characterized by Julie Delpy's winsome character in last year's Richard Linklater movie "Before Sunset." Sitting in a cafe with her long-lost lover (played by Ethan Hawke), she explains that she used to believe in changing the world through revolutions, politics and big ideas, but now she doesn't think any of those can work, so she works for a nongovernmental organization that distributes pencils to impoverished third-world schoolchildren (just pencils). I'd guess that every moviegoer familiar with the fragmented, microspecific world of nonprofit organizations cringed and nodded with recognition at this scene, but it was also a funny -- and sad -- reminder of a generation's dearth of politics.
It is precisely the willingness of the anti-Wal-Mart activists to rise above this nobly ineffective, pencil-sized universe and engage with a bigger picture, and with politics, that makes their campaign so promising. It is a campaign against greed itself, and the current direction of our economy, in which corporations can do as they please regardless of the human cost. It is this breadth of purpose that invites so many different kinds of alliances and activists. And since the last presidential election, plenty of socially conscious people are looking for something effective to do, something big, comparable to fighting President Bush. As Sefl points out, "So many of the same values" are at stake in the Wal-Mart fight. "And that is an element of our success right now." In the court of public opinion, the advocates may be making a dent: A poll conducted by Westhill Partners for Wal-Mart Watch and released on July 22 found that Wal-Mart's approval rating had, just since spring, plummeted from 59 percent to 50 percent.
Because they've rarely been tried, it's not clear that any of these strategies will work. Much stands in the way of the would-be Wal-Mart reformers -- including the company's formidable P.R. machine and its ability to buy off politicians. (These days, Wal-Mart's ads seem to showcase the company as a great employer and community partner even more than a shopping destination.)
What's more, Americans are desperate to catch a financial break somewhere. Since breaks are not forthcoming on the job, or from the government -- through, say, universal healthcare or free college tuition -- many will continue to look for relief in the aisles of Wal-Mart. When you're struggling to make ends meet, a $2.50 bra and a $30 microwave look pretty good. It may be that without more progressive people in government, and a more collective ethos in our society as a whole, activists may not be able to force Wal-Mart into fundamental changes.
Still, the momentum is unstoppable at present, and Wal-Mart's foes are hunkering down and building institutions that can sustain a long fight. Despite the political orientation of the troops and the "war room"-style strategizing, Sefl says, Wal-Mart Watch's headquarters is "not your typical campaign office. It has the feel of something that's going to be there for a while."
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About the writer
Liza Featherstone is the author of "Selling Women Short: The Landmark Battle for Workers' Rights at Wal-Mart," which will be available in paperback next month from Basic Books.