How Canada's example could lead to unions in Wal-Mart stores everywhere

UFCW Canada President Wayne Hanley told The Gazette that "There is a reason why we get calls in our office from Wal-Mart employees ... the delegates that I talk to are hoping it will be a springboard for other unionizing efforts across the country." That is a powerful statement. Any labor unions that succeed in any Wal-Mart location makes the labor movement stronger in the country where it originates.

In fact, the "springboard" Hanley refers to is the collective agreement in the auto shop within a Quebec-area Wal-Mart location that ceded a 30% wage hike for the garage workers there. That's a big number and is sure to gain attention from Wal-Mart workers across Canada.

Of course, Wal-Mart has volleyed back with the position that it may close the garage completely. It's a standard tactic to when collective agreements actually become implemented anywhere in Wal-Mart's ecosystem; shut the offending department of store down. Looking at Wal-Mart's global profit margin, an argument can be made that it simply can't afford to dole out hefty pay raises as the result of collective bargaining agreements. Or can it?

Worker reaction in the U.S.

A union delegate from Ohio, LaShon Smith-Campbell, was quoted by The Gazette as saying "Oh God, it was awesome," when notified of the Canadian shop collective agreement, adding, "when we heard the news, people were yelling and shouting and celebrating. It's keeping hope alive. Right now, the U.S. economy is in bad shape: low-wage jobs, mothers struggling to provide medical coverage for their children. This gives hope for people who just want to make an honest day's living."

The argument remains, for Wal-Mart and capitalism supporters, that a private company is not a socialistic entity that's required to pay anything over minimum wage to its workers, regardless of how it drives out competition and lowers wages in communities. Right?

The reality for tens of thousands of Wal-Mart workers is that the average wage paid by the giant retailer is barely enough to live on. In Canada, labor laws are much more strict than in the U.S., hence the harder push for unionization in Canadian Wal-Mart locations. From a UFCW perspective, you have to start somewhere, right? UFCW's Hanley said as much, stating "We have limited resources, so we decided we were going to put our resources in the places where we had the best chance of success."

What the future holds

Labor unionization has steadily dropped over the last few decades at the same time corporate corruption (Enron, WorldCom, subprime mortgages) has skyrocketed, hundreds of thousands of jobs outsourced overseas and wages have remained stagnant for many. Is the resurgence of the labor union headed back into the U.S. labor environment? From a historic perspective, there is certainly an argument for the word "yes" to that question.

The rise of Wal-Mart to become the largest retailer the world has ever seen after Sam Walton's death in the early 1990s was due in most part to trade with China and the incredibly low prices Wal-Mart gave its loyal customers, who are now addicted to low prices. The old marketing saying goes "you can lower prices, but you can never raise them after that' holds true. From my experience, Wal-Mart will do all it can to keep prices low.

For the consumer, this is a good thing. From a collective economic perspective, there are huge differences of opinion on this one. The fact remains that part of Wal-Mart's competitive advantage is making sure it pays the bare minimum to its employees (non-management) that it can. Of course, it's not the only retailer to do this. Wal-Mart just happens to be the biggest participant, and thus has the largest target on its back. In fact, the target on Wal-Mart's back is bigger than the collective targets on the backs of all other retailers combined.

Being the largest 800-lb. gorilla in the room means that Wal-Mart will increasingly see efforts to unionize its workers, however hard that may be. From a Wal-Mart Canada perspective, the small gain just recently won there by organized labor is indicative of the near future. In the U.S., the labor union potential is still unknown at this time. Organizing Wal-Mart's U.S. locations could take decades. The debate, of course, will continue raging as it pits the Wal-Mart shareholder against the Wal-Mart worker. Which are you?

Join me next week right here at BloggingStocks for another edition of The Wal-Mart Weekly.