Wal-Mart asserts itself
A well-documented article in the Wall Street Journal documents Wal-Mart's increasing efforts to get a seat at the table and a hand on the pen. The article by Jeanne Cummings ("Wal-Mart Opens for Business in Tough Market: Washington", 3/24/2004) shows how Wal-Mart has gone from consciously avoiding politics (based on the principles of founder Sam Walton), to becoming an increasingly important lobbyer and a source of campaign funds, mostly for Republican candidates.
Even a few years ago, Wal-Mart spent next to nothing on lobbying. But when parts of the US-China trade negotiation cut in to Wal-Mart's Asian expansion plans, the firm's management realized it had to use its vast economic power to get the ear of the Washington politicians who were drafting the treaties, regulations, and laws. In 1998, then, the company hired its first lobbyist.
In a few short years, as the article points out, Wal-Mart is starting to put its stamp on regulations.
[T]he retailer is beginning to notch significant wins on global-trade issues and shows signs it may emerge as a political powerhouse. Since the WTO deal was struck, Wal-Mart has negotiated with Chinese government officials to increase its store count there…It is also building up a state and local government lobbying shop in the U.S. assigned to clear any roadblocks to new domestic store openings.
Wal-Mart has also become a significant contributor, growing its corporate donations from $182,000 to $1 million each election cycle. 85% of Wal-Mart's Political Action Committee (PAC) checks go to Republicans, as Democrats tend to be on the other side on many issues, including unions, minimum wage, trade restrictions, antitrust, and others. In fact, Wal-Mart's employment and competition policies have become a focal point of the current presidential campaign.
Among the areas mentioned in the article where Wal-Mart is trying to influence government policy in its favor, it hopes to:
- Change the law to allow Wal-Mart to buy banks, so it can offer its own banking services to customers (that one was defeated by the banking lobby)
- Remove of all tariffs on manufactured goods brought into the US
- Restrict labor organizing at retail stores by banning union activities outside stores
- Set limits on class-action activist suits.
- Protect the company against Immigration Enforcement inspections which have found undocumented workers (also supporting changes in immigration policy in its favor)
- Slow down the adoption of mail order pharmaceuticals in Medicare, so as to limit competition with Wal-Mart's in-store pharmacies.
- Get a seat on Commerce Department advisory committee on world trade, allowing them to take part in the Cancun talks last September on the Central American Free Trade Agreement. (Central America is a major source of Wal-Mart clothing manufactures.)
Not all of these efforts have been successes for the company. After all, other major industry companies and trade groups are pushing on the other side of many of these issues. But Wal-Mart is just getting started. As it ups its stake and builds its IOUs from politicians, it will doubtless get more persuasiveness in the legislative chamber. For Wal-Mart has deeper pockets than any of its rivals.
There's nothing inherently wrong in interest groups and companies trying to gain favorable treatment. It's a fact of democracy. But Wal-Mart's unique, dominating position in a slew of industries gives it dangerous potential power, which it is just learning to use. That's a power that consumers, workers, and smaller businesses won't be able to come close to matching. It seems that Wal-Mart has hardly been trying so far. Result, the big will even more rapidly become bigger.
