Wal-Mart and New York would never have worked

Suffice to say, Wal-Mart CEO Lee Scott will not be singing New York, New York with Andrew Cuomo at Madison Square Garden anytime soon, although I secretly am dying to see that. As I reported last week, Lee Scott doesn't like New York and New York doesn't like him.

In a column for Time.com, Bill Saporito argues that New York and its labor unions messed up by blocking Wal-Mart Stores, Inc. (NYSE: WMT) from entering the city:

The unions have got their walled-city approach wrong. Here's the UFCW, which has been losing membership at a steady pace, turning down a historic opportunity. You can't organize stores that don't exist, Stu. Supermarkets have been pulling out of the city, not moving in, given the high costs and the competition from retail banks for the store space. And Wal-Mart has kicked the UFCW's ass all over the country - there's not a single union Wal-Mart store anywhere. Whatsa matter, Stu, you don't got game for those hicks from Arkansas?

He goes on to urge unions to organize around Wal-Mart, and embrace it. The problem is that Wal-Mart's model of ruthless efficiency with sub-par wages and benefits just doesn't work in a union setting. This is not a knock on the unions. In the past, Wal-Mart has closed stores after the unions voted to get in. In the great book The Wal-Mart Effect, Charles Fishman discusses research showing that if Wal-Mart raised its average wage above $12 an hour (It's currently around $10), the stores would no longer be profitable.

Whether New York should have welcomed Wal-Mart with open arms is a legitimate question. But the idea that New York unions could have changed the face of the company is unrealistic.