June, 2006

WAL-MART

Despite multiple headlines in October 2005 which read “”Wal-Mart Urges Congress to Raise the Minimum Wage,”" Wal-Mart announced today it does not support raising the minimum wage to $7.25 an hour.

According to an article in this morning’s Roll Call, Lee Culpepper said Wal-Mart’s CEO Lee Scott’s statement was ‘misinterpreted,’ and that ‘Scott was not calling for Congress to raise the minimum wage.’

“”Wal-Mart’s flip flop on the minimum wage is a cynical about-face which hurts America’s working families,”" said Paul Blank, campaign director for WakeUpWalMart.com. “”This is hypocrisy at its worst and the American people are the ones that will pay the price,”" continued Blank.

In this morning’s article, Lee Culpepper insisted, “”I think what he (Mr. Scott) said was clear.”" Mr. Culpepper is right. Mr. Scott’s statement was clear. He said the minimum wage was ‘out of date with the times’ and therefore should be raised.

Here is what Mr. Scott said in October 2005, “”The U.S. minimum wage of $5.15 an hour has not been raised in nearly a decade and we believe it is out of date with the times…while it is unusual for us to take a public position on a public policy issue of this kind, we simply believe it is time for Congress to take a responsible look at the minimum wage and other legislation that may help working families.”"

Blank continued, “”Wal-Mart’s flip-flop proves the company’s publicity stunts are nothing more than a sham. Wal-Mart will say anything, even lie about its position on the minimum wage, in order to try and salvage its declining public image.”"

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Critics: Wal-Mart Flip-Flopped

Roll Call
June 28, 2006
By Tory Newmyer

Last October, Wal-Mart chief executive Lee Scott made waves by urging Congress to consider raising the federal minimum wage – something many retailers had long opposed.

He noted that the store’s own customers are “”struggling to get by,”" then added that “”while it is unusual for us to take a public position on a public policy issue of this kind, we simply believe it is time for Congress to take a responsible look at the minimum wage and other legislation that may help working families.”"

The declaration came as part of a broader push by the low-cost retailer to put a friendlier face on its often troubled corporate image.

But now, with both chambers of Congress mulling hikes to the federal pay standard, Wal-Mart’s critics are charging that the company has abandoned Scott’s pledge to support a higher wage. They say that after reaping good public relations from Scott’s statement last fall, Wal-Mart has cynically dumped the issue, even as major trade groups it belongs to, primarily the U.S. Chamber of Commerce and the Retail Industry Leaders Association, help lead the fight against a higher minimum wage.

“”They did this for PR reasons, and then the true colors come out when the talk no longer meets up with that action. In this case, it’s pretty obvious,”" said Chris Kofinis, spokesman for Wake Up Wal-Mart, a group that’s critical of the company’s practices.

Wal-Mart officials acknowledge, and several Congressional aides confirm, that the retail giant is sitting out the debate on the minimum wage increase. But the company disputes the notion that the move amounts to an about-face from the position Scott represented last fall.

Instead, Lee Culpepper, the company’s top lobbyist in Washington, D.C., said the chief executive’s statement was misinterpreted. Scott was not calling for Congress to raise the minimum wage, Culpepper said – he simply was asking lawmakers to consider the issue.

“”We haven’t said anything more or less,”" Culpepper said on Tuesday. “”I think what he said was clear. He said Congress should take a look at it. If reporters want to report differently from that, I can’t speak to that.”"

Culpepper said the company’s lobbyists have communicated Wal-Mart’s position on the issue to its trade groups.

“”We’ve just made them aware that we’ve encouraged Congress to take a look at an increase in the minimum wage,”" he said. But he said the company has not gone so far as to ask the trade groups not to lobby on the issue, leaving it up to them “”to determine their association position.”"

To Wal-Mart’s critics, the company’s inaction, combined with the robust opposition to a wage hike thrown up by trade groups it belongs to, add up to a backdoor push by the nation’s largest employer to stifle a higher pay standard.

Wake Up Wal-Mart, a group primarily funded by labor groups, last week challenged the company to endorse raising the minimum wage from $5.15 to $7.25 per hour, after plans put forward by Sen. Edward Kennedy (D-Mass.) and Rep. George Miller (D-Calif.), and then to lobby in support of the change.

With any such outcome facing long odds, the company’s detractors are trying to tell the story of what they call Wal-Mart’s “”Potomac two-step”" on Capitol Hill.

“”We want to hold Lee Scott to his word,”" said Nu Wexler, spokesman for Wal-Mart Watch, another labor-funded group targeting the company.

Tom Kiley, a spokesman for House Education and the Workforce ranking member Miller, said Democrats are disappointed with Wal-Mart’s absence from the debate.

“”At the time [of Scott's statement], we welcomed that,”" he said. “”Since then, we haven’t heard from them at all. That’s unfortunate, obviously.”"

This sparring comes as the company, expanding into urban areas dominated in Congress by Democrats, has stepped up its outreach to members of the minority party.

Wal-Mart in recent years has directed an increasing portion of its political donations to Democrats, giving them nearly 30 percent of their political action committee dollars so far this cycle. That’s still just a fraction of what the company gives to Republicans, but it’s up from the minuscule 2 percent a decade ago, according to figures available from PoliticalMoneyLine.com.

Scott, the chief executive, huddled with members of the Congressional Hispanic Caucus in February, and top Wal-Mart officials met with members of the Congressional Black Caucus last spring.

But Republicans have remained the company’s most stalwart defenders on tax, health care and labor issues, among other things. And this summer, debate over a minimum wage increase has taken on a highly partisan tone. While most GOPers argue bumping up the pay standard would hurt small businesses, Democrats counter that the current wage, untouched in a decade, traps millions below the poverty line.

The minority party is rallying around the issue as an antidote to flag-burning, gay marriage and estate tax debates stoked by Republicans to rile their own base for the upcoming elections.

Last week, eight Senate Republicans joined 43 Democrats and an Independent in supporting a wage hike, but the votes fell short of the 60 required to clear its passage. Senate Democrats are vowing to keep the issue front and center, with Minority Leader Harry Reid (Nev.) now tying the matter to a Congressional pay increase.

On the House side, Democrats are trying to attach a minimum wage increase to spending bills. After successfully adding it to the Labor-HHS appropriations bill, House Republican leaders pulled the bill from the floor schedule. House GOP leaders are signaling they will not allow a floor vote on the minimum wage this year, and it is unclear how that standoff will be resolved.

In addition, a flurry of minimum-wage initiatives may end up on ballots nationwide, designed both for their ability to improve Democratic voter turnout as well as for the goal of improving pay for low-income workers.

For his part, Wal-Mart lobbyist Culpepper said he remains available to explain Wal-Mart’s position on the wage issue.

“”One of our key missions is to meet with Members on Capitol Hill to correct the record about what our critics have said about us,”" he said.

ARKANSAS KROGER WORKERS STAND UP FOR HEALTH CARE

(Little Rock, Ark.) – Facing pressure from Kroger, Arkansas supermarket workers stood together to secure a new union contract that protects affordable health care for workers and their families.  A majority of United Food and Commercial Workers (UFCW) Local 2008 Kroger members voted to accept a new contract Sunday evening.   The agreement came after eleven straight hours of bargaining, through which members were able to avoid a potential strike.

UFCW Local 2008 members expressed their satisfaction with the new four-year contract, which locks in quality, affordable health care with minimal co-pays beginning in 2009.   The new agreement expands some additional health care benefits for workers and secures the financial health of the joint labor-management health care trust fund.  Workers will receive wage increases of $1.25 over the term of the contract and equalizes wage scales.  Members in the retail unit ratified the contract by 80 percent, and meat unit members by over 68 percent.

Charles Lee, UFCW Local 2008 President, said Sunday, “We achieved more at the table by coordinating our bargaining with other UFCW locals in our region, including Houston Local 455, Dallas Local 540 and Memphis Local 1529.  Our members stuck together and stayed involved in the process.  They deserve all the credit for making gains without a work stoppage.”

Approximately 2,500 UFCW Local 2008 members in and around Little Rock, Arkansas are affected by the new contract.

LARRY JOHNSTON TAKES MONEY AND RUNS, LEAVING WORKERS IN THE LURCH

(Washington, DC) – Albertsons Supermarket CEO Larry Johnston and his management team ran the national grocery chain into the ground and then sold off the remains–crippling communities and leaving workers’ lives in turmoil in the process.   They deserve to suffer the same fate as the workers they’ve put out of jobs.  So why are they receiving multimillion dollar compensation packages?

Apparently, it’s the American way.   After all, it’s not just Albertsons—CEO pay is skyrocketing across all industries. In 1960, the average CEO made 41 times more than the average worker.  By 2004, the average CEO was making 431 times that of the average worker! And much of this money goes to CEOs whose poor performance is driving their companies, and their workers, into financial ruin.

The $17.7 billion sale of Albertsons to Minnesota grocer SuperValu, drug store chain CVS Corp. and a group of private investors led by Cerberus Capital Management, is the latest example of corporate greed gone haywire.   The deal provides multimillion dollar “golden parachute” packages to the former Albertsons’ executives.  In addition to CEO Larry Johnston, four other former executives received eight-figure compensation packages.

A “golden parachute” is a term for the clause in executives’ contracts that provide special compensation packages in case they lose their employment through an acquisition or a merger.   The Albertsons board approved the compensation packages, and has repeatedly refused to discuss the details of executive compensation.

And while Albertsons’ former executives coast on their golden parachutes, their workers are being put out of work.   On Tuesday, Albertsons announced that it is closing 37 stores in Northern California — about one-fifth of its total Northern California stores.

Workers are being left out in the cold while Larry Johnston and his cohorts enjoy their multi-million dollar reward packages:

  • Johnston, Albertsons’ president, chairman and chief executive officer: $105.5 million.
  • Robert Dunst, executive vice president of technology and supply chain and the chief technology officer: $16.1 million.
  • Paul Gannon, executive vice president for marketing and food operations: $15.5 million.
  • John Sims, executive vice president and general counsel: $15.2 million.
  • Felicia Thornton, executive vice president and chief financial officer: $17.2 million.

Albertsons first agreed to sell the company to Supervalu, CVS, and the investor realty group in January.  Albertsons operates around 2500 stores in 37 states, and employs about 86,200 UFCW members in its various stores who will be affected by the sale.

“Is this the kind America we want – one that rewards CEOs for doing a bad job and leaving workers foot the bill? Albertsons workers deserve better.  We will continue to fight to protect supermarket workers from corporate greed run amok,” said UFCW International President Joe Hansen.

The UFCW is America’s neighborhood union, representing 1.4 million members in the supermarket, food processing, meatpacking and other industries.  UFCW is a member of the Change to Win Federation of unions.