Thursday, August 17, 2006

Is Wal-Mart a Potent Political Issue?

As the campaign heats up for Congressional seats in this November's election, the New York Times claims that "Democratic leaders have found a new rallying cry that many of them say could prove powerful in the midterm elections and into 2008: denouncing Wal-Mart for what they say are substandard wages and health care benefits."

The erstwhile popular shopping choice, with more stores in more places than its top competitors combined, may now be a symbol for the economic race to the bottom that is affecting its core market of middle class and lower income Americans.

It is getting harder for the non-wealthy to afford decent housing, health care and education because wages haven't kept up. But will attacking Wal-Mart resonate with the people who often shop there? According to this story, a broad segment of Democrats is betting that it will.

Still, what is striking about this campaign is the ideological breadth of the Democrats who have joined in, including some who in the past have warned the party against appearing hostile to business interests. Senator Hillary Rodham Clinton of New York, who was a member of Wal-Mart’s board when she lived in Arkansas, the corporation’s home state, returned a $5,000 campaign contribution from the company last year. Mrs. Clinton said she did so to protest Wal-Mart’s health care benefits, and she has continued to distance herself from the policies of a company she was close to when she was the first lady of Arkansas.

John Edwards, the former v-p candidate, spoke at an anti-Wal-Mart rally in Pittsburgh recently. “Wal-Mart as an example of the problems that exist in America today is a powerful political issue,” he said in an interview on Wednesday. “I think our party pretty much across the board agrees that people who work hard should be able to support their families. When a company like Wal-Mart fails to meet its corporate responsibility, it make it impossible for that to occur.”

Democrats say Wal-Mart is a potent symbol of corporate excess. The company earned $11 billion in profit last year, but fewer than half of its employees in the United States are covered by its health care plan, and the average worker earns less than $20,000 a year.

These attacks come at a weak moment for Wal-Mart. After abandoning Germany and South Korea (and encountering difficulties in England), the company posted its first quarterly loss in a decade. Higher gasoline prices in the U.S., which kept some shoppers home while increasing Wal-Mart costs, was also a factor. Also recently its former vice-chairman pled guilty to stealing from the company.

There is some statistical evidence that the Democrats may be onto something. From the latest Zogby poll on President Bush's job performance:

Just 62% of Republicans give him positive marks for his job performance, while 38% give him negative marks. Even among weekly WalMart shoppers – a demographic group identified by Pollster John Zogby as a critical support group for Bush – just 45% now give him positive job marks, though his numbers among those shoppers have improved 10 points since early June.
More than three out of four – 76% – of weekly WalMart shoppers voted for Bush over Democrat John Kerry in the 2004 presidential election, earlier Zogby polling showed.

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