The Wal-Mart Weekly: Labor relations still not where they need to be

http://www.bloggingstocks.com/2008/07/21/the-wal-mart-weekly-labor-relations-still-not-where-they-need-t/

Posted Jul 21st 2008 12:12PM by Brian White

Welcome to the 69th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions, and just a bit of everything else when it comes to a very hot topic these days: Wal-Mart.

This week, I'll be taking a look labor relations inside Wal-Mart Stores Inc. (NYSE: WMT). Specifically, reports that the world's largest retailer has recent given its general employees in its Chinese locations raises while not doing the same for its American employees.

Now, all of this is not out of the goodness of the retailer's heart, but more because of the negotiations with the union representation of Wal-Mart's China workers. Can we compare Wal-Mart's stance on living wage increases to another country's workers?

More green for being red

Although I take many things on the internet for what they're worth (sometimes, not much), an article from the Huffington Post -- which is tilted very far left in most cases -- brought up the point of Wal-Mart giving an annual 8% raise to its Chinese employees. Not only that, but the labor union representing Wal-Mart employees in China is not the labor union representing employees in the U.S. In fact, U.S. Wal-Mart employees do not have union representation.

Surprised? Shouldn't be -- labor unions are different in every country. In China, that country's economy continues to rise and the Chinese government is pushing for higher wages and benefits for employees. Wal-Mart, being a decently sized employer in that country (but not even close to being the largest), is complying. The only problem with this, as seen from the other side of the pond, is that gas prices and credit problems are haunting many U.S. households, including those of U.S. Wal-Mart employees.

A standard 3% wage increase in 2008 won't do much to help those making less than $12/hour overcome the effects of raised prices in almost every area of their lives. The Huffington Post calls this a wage "rollback." Is it Wal-Mart's job to arbitrarily give raises to employees in a country where the economy has slowed and prices have gone up? That's the theory. Is it the right attitude: That's your decision to make.

Inflation - the unspoken horror

FULL story at link.