Asymmetrical Information - Megan McArdle

11.23.12

Unions Organize Walmart Protests; Rest of the Nation Goes Shopping

Despite the hype, the planned protests were mostly a fizzle

For more than a week now, media outlets have been thrumming with the news of a major labor action planned against Wal-Mart for Black Friday.  OurWalmart, a union-backed group, planned walkouts and protests at stores around the country.  

Naturally, I was eager to see how this would turn out.  WalMart has 1.4 million employees in the United States, which is almost 1% of total employment.  Associates make an average of somewhere between $8.50 and $12.00 an hour, depending on which sources you believe.  If the protests actually represented a significant proportion of their workers, that would potentially signal a landmark change in the American labor landscape.  Even if they don't succeed in unionizing Walmart--and allegedly, that's not the point--forcing concessions from Walmart would mark a dramatic shift for a lot of workers, and not incidentally, reduce competitive wage pressure for members of the union behind the Black Friday events.

The group is putting up a valiant media effort, but the result is . . . underwhelming. USA Today called the protests "scattered".  "Walmart protests draw hundreds nationwide", said a CNN headline. According to the Hartford Courant, "Walmart Protests Send A Message But Fail To Deter Crowds".  Perhaps the saddest note came from an Alabama paper: "No Walmart workers in attendance at Mobile Walmart picketing". 

About 10 picketers stood outside a Mobile Walmart Thursday night to show support for all Walmart employees struggling for better pay and working conditions. . . . The protesters, almost all of which were with the Mobile Socialist Alternative, the local branch of the national Socialist Alternative group, said they were supposed to be joined by Walmart workers that had planned to walk out, but none had showed up. 

"The protest organizers have declined to say how many Wal- Mart associates they expect to be involved in the latest round of actions" says Bloomberg, and while the OurWalmart homepage feed contains lots of pictures of protest groups, there don't seem to be a lot of actual Walmart employees.  In fact, several rather wisful items champion single employees who have walked out of scattered stores.  The company estimates that fewer than 50 actual Walmart employees participated, and though of course they have an incentive to undercount, OurWalmart has not given any particular reason to disbelieve them.

In any sufficiently large group, you can find a few people who will do anything. And 1.4 million is a very large group.  OurWalmart does not need to prove that it can find fifty or even one hundred and fifty people in that group who are willing to walk off the job, nor that it can get members of the United Food and Commercial Workers to protest in Walmart parking lots.  Organizing Walmart--or even extracting labor concessions in the face of threatened unionization--means getting a significant number of employees to join them in a labor action.  This was not that labor action.  It was not even the labor action that could eventually snowball into that labor action.  

There's an irony to labor organizing: the best time to get workers fired up is during economic downturns, but this is probably the worst time to actually organize them.  People are most interested in union actions when jobs are scarce and they feel economically insecure, but of course, that's when they can ill-afford to take economic changes.  Unions made big gains during the Great Depression, to be sure, but they had a host of new laws and a labor-activist FDR administration throwing heavy weight behind those efforts.  Without that political help, it's hard to see how unions could have made such big gains--and of course, arguably, the higher wages that FDR's policies pushed for helped prolong the Great Depression.  

Recessions are also a time when employers don't necessarily have a lot of profits to give up.  Walmart's $446 billion of revenue last year was eye-popping, but its profit margins are far from fat--between 3% to 3.5%.  If they cut that down by a percentage point--about what retailers like Costco and Macy's have been bringing in--that would give each Walmart employee about $2850 a year, which is substantial but far from life-changing.  Further wage improvements would have to come out of the pockets of Walmart's extremely price conscious shoppers.  Which might be difficult, given how many product categories Amazon is pushing into.  

The other potential strategy is to mobilize those customers--to cost Walmart business unless they up their wage-and-benefit game.  But the Black Friday bargain hunters apparently simply pushed past the scattered protests in search of cheap flat-screen televisions--and the progressives who seem most on fire about this campaign are not really very likely to be Walmart shoppers.  Which could be a metaphor for the whole US labor movement.