The Wall Street Journal reports that Wal-Mart Stores (NYSE: WMT) is warning its store managers against an Obama victory in November. Why? because Wal-Mart executives worry that Obama will boost the power of unions and that unionized Wal-Mart stores will lead to higher worker pay -- and higher prices for Wal-Mart customers.
I can understand why Wal-Mart executives would want to keep President Bush's policies in place for another four years. After all, those low taxes on the top 1% help enrich Wal-Mart brass. I am not suggesting that all Wal-Mart customers are Republicans, not at all, but I do believe that most people who shop at Wal-Mart cannot afford to buy their shoes at Neiman Marcus. And these middle- and lower-income Wal-Mart shoppers are the natural beneficiaries of Democratic policies such as Obama's plan for a middle-class tax cut.
Wal-Mart is clearly trying to be on both sides of this election. The Journal reports that it's reduced its share of contributions to Republican candidates from 98% in 1996 to 52% in 2008 -- giving 48% of its $2.2 million in political contributions to Democrats this year. It also has directors who have been big Clinton supporters, including Hillary Clinton herself who served on its board from 1986 to 1992 and Aida Alvarez, who worked in Bill Clinton's cabinet from 1997 to 2001 and has been a Wal-Mart director since 2006.
Meanwhile, it's not clear why Wal-Mart thinks an Obama win automatically means unionized Wal-Mart workers. It clearly fears the Employee Free Choice Act (EFCA), which "companies say would enable unions to quickly add millions of new members," according to the Journal. If EFCA did pass under an Obama administration, would all Wal-Mart stores suddenly become unionized? And if some of them did, would that really be so bad for Wal-Mart's business? Its workers would then have higher incomes, meaning they could buy more at its stores.
I think Wal-Mart needs to sort out its political strategy. Its stock did much better under Clinton -- up 257% during his presidency -- than under Bush -- up 15% so far. And most of Wal-Mart's stock price gain has come in the last year as credit crunched consumers flocked to Wal-Mart's lower prices; since last August the stock has risen 27.6%. Thus it's the failure of Bush's weak dollar, high debt policies that have most benefited Wal-Mart's bottom line.
Wal-Mart's stock price prospered under Clinton and suffered under Bush. Its pattern of political contributions and board membership suggest an openness to Democrats. With its latest anti-Obama warnings, Wal-Mart's executives seem to be at war with its customers. And that's not good for its business or its shareholders.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter











Reader Comments (Page 1 of 3)
8-01-2008 @ 9:47AM
dave said...
i am a democrat and i love wal mart as a place to do my shoping...i save around 25 to 30 percent over the other super markets prices....shopping elsewhere is a waste of money....only my rich democrat friends in san francisco can afford to shop elsewhere...i even buy my gas at sams club where i save considerable...all poor or thrifty people should shop at walmart...you will have more money left in your pocket book....
8-01-2008 @ 10:01AM
daves07email said...
Wal-mart is the worst thing to happen to this country, ever! They need to unionize because no one can live on minimum wage. and thier benefits suck. I worked at a store with no union and no benefits ten years ago, a girl who worked with me had a baby and cost her $12,000.00 I had everyones approval to unionize when I was fired.
If you can not afford to pay a lving wage you should go out of business. And lets not talk about China!!!!!!
8-01-2008 @ 10:12AM
Bob Benson said...
I think this persons' comments are way off-base. If the Demo's get in we will all pay for it. Obama's middle-class tax thing is a rouse. Go back in history of taxes and you will that the general public (particularily the lower end of the scale) always do better under a Republican administration. The Demo create more inflation and want to pay for more programs - more than dollars coming in - then it takes a Republican administration to clear it up - - over and over and over. The American public is fickled and forgets way to easy. With this possible new administration we may not be able to crawl out of their mess. And am sure Ms Pelosi (what a jerk), will help drive us downward.
8-01-2008 @ 10:20AM
cyberma777 said...
What happens when a Wal-Mart employee or his/her family member gets sick? Taxpayers foot the bill. I do not think that we should be subsidizing the largest retailer in the World. McSame is not going to change anything. Maybe Obama will right this wrong.
8-01-2008 @ 10:29AM
barry said...
They just lost a good customer. My daddy always said never mix politic with business. Hopefully more people will feel the same as me. Why do I have to enrich the management of Walmat. It will be better served to enrich the worker with good paying jobs with good benefits.
8-01-2008 @ 10:52AM
RON HAMILTON said...
I WILL NEVER GO BACK TO THAT FASCIST HELL HOLE OR SAMS ASS HOLE EVER AGAIN never never never ,, GO TARGET ,
8-01-2008 @ 10:53AM
RON HAMILTON said...
THIS COUNTRYHAS A 9 TRILLION DOLLAR DEBT . BECAUSE OF THOSE MORON REPUBLICANS ,,WALMART CAN GO TO HELL WITH SAMS CLUB FOR COMPANY
8-01-2008 @ 10:52AM
RON HAMILTON said...
THAT WAS THE LAST STRAW ,,, WE WILL UNIONIZE WALMART ,,, LIKE THEY DID IN THE WALMART STORES IN CHINA R. D. H .
8-01-2008 @ 10:45AM
Ryan said...
Wrong, any kind of unionization clearly makes a difference, it binds WalMart's hands and doesn't allow them to make better business practice decisions. That's the whole idea of running an effective business. If a worker isn't producing then they need to be let go, if it's wrongly done then there are laws against it but with unions no good comes of it and WalMart will have to keep all workers. It's not fair to the business. Besides, if someone does't want to work there for the wages, go to school, learn a new vocation, do something different with your life. Long life economic liberalism. It's how you and I make money!
8-01-2008 @ 10:46AM
Arnold said...
All you people that work at walmart would be voting against yourself if you vote republican. They are telling you to vote republican because they want to keep you down, in a low paying job. Dont be stupid people , vote for a democrat that will at least try to help you,
8-01-2008 @ 11:42AM
Troy said...
This article lacks objectivity and common sense. There are many variables that affect Wal-mart's business outside of any administrations policy. Even more so, comparing administrations is nearly futile because there are so many outside influences around the globe that affect the focus and policies of any given administration, i.e. 9/11, wars, unethical behavoir of the banking and investment institutions that have ruined our current economy. But, I will say that the success of any administration is ultimately related to the Congress in our country. Clinton was successful in financial policies because for a short while we actually had a Congress that cut spending and debt. It is unfortunate that those same policies were not continued under the current Bush administration but, then again, everything changed on 9/11, didn't it?
8-01-2008 @ 10:56AM
RON HAMILTON said...
WHERES THE NEAREST TARGET STORE ?
8-01-2008 @ 10:56AM
RON HAMILTON said...
WONDER WHAT COSCO HAS TO SAY ABOUT THIS ? GO COSCO !!!!
8-01-2008 @ 10:59AM
Chilla said...
That's right. Obama is bad for everyone, except those on the government dole.
8-01-2008 @ 11:13AM
J said...
O.k., so now Walmart threatens higher prices for their customers if the unions come, all this means is that corporate walmart cuts their own throat, because now they can't call themselves the "cheapest",the customer will go where prices are competitive, so profits and sales go down. Hmm, the investors won't like to hear that logic.. In the meantime, the employees will actually be able to get a living wage, possibly better health care for the family (which they can now afford), and better working conditions. oh, and to ryans comment of binding Walmarts hands to make better business decisions, I ask this... Better business decisions for who??? For themselves, that's who... More profit for them, and not a damn thing for the helpless workers who got them there. What corporations forget over the years is that it's the people that gets them successful, not the money.
8-01-2008 @ 11:26AM
Rodney said...
Clearly Bob Benson is not looking at todays jobless numbers. They are the highest since 2004. Gas is high but will go down some before the election-hint hint.George Bush has left this country in a mess and those that vote for McCain(Bush's 3rd term) deserve what they get period.
8-01-2008 @ 4:32PM
Troy said...
Just one addition to my previous comments, worth noting was that the Congress under the Clinton Administration that cut and controlled spending thus reducing debt was Republican controlled and was a result of the adherence to the Republican's Contract with America that single-handedly was the reason voters gave Republicans control of the Congress in 1994 and more so in 1996.
8-01-2008 @ 11:58AM
Dan said...
I will never spend a single dime on that shitty hole.
I make sure all my friends and family will never shop at HOLEMART.
GO TARGET.
8-08-2008 @ 4:35PM
Sherry said...
Who needs Wal-Mart anyway?
I'm a proud union member and know that I would not be making this good money or have great med. dental etc if it were not for the union.
Wal-Mart pays low wages .
They personally have substandard quality products at their store.
I will shop there no more!!!!!!
8-01-2008 @ 12:57PM
Sandy Jones said...
Is a Democratic President good for Wal-Mart? The answer is yes.
Growth for Wal-Mart = During Clinton Administration = 16.281 share price on 1/93 when Clinton took office to a share price of $56.81 on 1/01 when Clinton left office = a share growth during the Democratic president of 248%. Wal-Mart stock when Bush took office = 56.81. Wal-Mart share today = 58.62. Growth during Republican President = 3.2%.. When Wal-Mart customers make more money, such as when there is a Democratic president, Wal-Mart customers spend more. That's good for Wal-Mart.