Red alert on China, Wal-Mart
By Benjamin A Shobert
An aggressive advertising campaign from the "Wake Up Wal-Mart" group is
confronting American consumers as they enter the important festive shopping
season. The ad, which started showing at the end of last month, begins with the
provocative statement: "If you're thinking of shopping at Wal-Mart this holiday
season, there's a 70% chance the gifts you buy come from Communist China."
The month-long, million-dollar TV spot goes on to say: "America's largest
corporation stocks its shelves with products made in Chinese factories while
more and more American factories are forced to shut down. Behind those prices
Wal-Mart likes to brag
about: countless American jobs lost overseas. In this race to the bottom,
Wal-Mart gets ahead, and the middle class gets left behind. America can't
afford it any longer."
It is one thing to suggest this may represent a new low in the campaign against
Wal-Mart or that it raises questions about how trade with China impacts US
manufacturers. More important may be the influence the ad has on American
attitudes towards trade. Politics is inherently susceptible to demagoguery;
given the grave nature of this moment in the global economy, it is important to
think critically about which actors - both private and public - need to be
reformed. The Wake Up Wal-Mart campaign equates America's woes to China's gain.
This is provocative politics with potentially destructive consequences.
It serves to reason that we educate ourselves on the motives of those who
suggest Wal-Mart is somehow a contributor to America's economic contraction.
Just as Wal-Mart's critics want consumers to understand the implications of the
company's unrelenting drive for low costs, it is equally important for citizens
to grasp the motives of those who are behind ad campaigns like the expensive
series of TV commercials sponsored by Wake Up Wal-Mart.
Affiliated with United Food & Commercial Workers (UFCW), Wake Up Wal-Mart
advocates for a union representing some 1.3 million members from the retail,
grocery, packaging and processing sectors. Their grievances with Wal-Mart range
from those unique to traditional union causes - wages, healthcare, disability
compensation, the company's anti-union policy, and gender discrimination - to
other issues that seem somewhat disconnected from concerns unique to organized
labor - port security and Wal-Mart's trade practices with China in particular.
In October of this year, Wal-Mart sent a strong message to organized labor when
it closed a Canadian tire and lube center that had voted to unionize. The
UFCW's "2008 Holiday Campaign"escalates the increasingly terse relationship
between Wal-Mart and American labor unions. What is different now may have less
to do with the words of the TV campaign and more to do with the attitudes of
the viewing public.
Meghan Scott, director of WakeUpWalmart.Com, said in a December 3 statement:
"Wal-Mart workers are struggling to keep their heads above water because of
poverty-level wages, unaffordable healthcare, poor treatment, and cuts in
hours."
These carefully chosen words can be read absent employment conditions unique to
Wal-Mart, and therein hold their power. Across the country, Americans feel
anxiety about wages and healthcare, concerns over more doors closing than
opening. Even if for the majority of those watching the ad campaign a future of
working at Wal-Mart is highly unlikely, the ad draws upon a collective empathy,
an ability to project ourselves into the role of the ubiquitous Wal-Mart
greeter, and ask the question "how would I want to be treated?"
This is a not a bad question posed by the UFCW. Historically, unions have
played a necessary role in advocating the cause of workers whose individual
voices are not always heard by business. But political campaigns based on guilt
by association can spin out of control and inadvertently set off downstream
consequences. By equating America's economic problems to Wal-Mart's business
practices and then to "Communist China", Wake Up Wal-Mart is putting a spark to
the tinder of economic nationalism.
Thirty-second ads leave little room for nuance. Calling China "communist" is
certainly attention grabbing, yet it accurately describes China no better than
someone encouraged to think of Wal-Mart as placing "profit ahead of people".
More problematic is the latent meaning and heritage of the word "communist" to
average Americans. Red-baiting seems never to fall out of fashion; "communism"
is a flexible word that can be used to smear anything and everything, a choice
of word that seems intent on overlooking the complexity of modern China.
Allegations that Wal-Mart is not good for the American economy are certainly
not new. Over the past several years, questions over Wal-Mart's impact on local
economies and labor practices have been fairly common. Many of these concerns
have been voiced responsibly, and have resulted in necessary and welcome
changes on Wal-Mart's part. But certain questions raised by Wal-Mart's critics
seem to serve as proxies for deeper questions that go to the heart of America's
future.
Specifically, Wal-Mart's sheer size - it is the world's biggest retailer and,
according to Bloomberg, employs about 42,000 people in China where it buys
products from 20,000 suppliers - makes it an easy target for displaced anxiety
over what the next generation of American jobs looks like: what does it really
mean to be a service economy for underemployed manufacturing labor in the
Midwest? Are we comfortable with an American economy more reliant on retail
jobs than automotive work? Can we make a transition to new jobs in higher
technology sectors at a sufficient pace to avoid a protracted and entrenched
recession?
Potentially lost in such questions is that Wal-Mart may not be to blame for
many of our concerns. Americans should not blame structural economic problems
on those who are not responsible for them. The US has danced with protectionism
twice before over the last 100 years, and it has rarely enhanced the
competitive abilities of the industries in question. This happened both in the
1980s, when Japan was believed to be the great nemesis of the American economy,
and in the 1930s, when a once inter-connected world came apart at the seams due
to protectionism and economic disease.
It should not slip out of focus that even the brief respite granted to American
automakers in the '80s was inadequate to prevent their ultimate implosion now.
The calamity enveloping the US automotive sector has at its core reasons that
have little to do with unfair foreign competition and everything to do with
factors largely within the control of American companies. In order to make sure
American policymakers have room to think clearly about root causes, and to be
sure our political will does not crush a contributing American enterprise, we
should be wary of unduly focusing our frustrations on Wal-Mart. Doing so only
confuses the issues at hand, and prevents the formulation of sound responses.
In both the '30s and '80s, misguided reactions to economic frustration led to
responses which did nothing but make the situation worse. In particular during
the '30s, the US Congress responded to the country's economic woes through a
series of measures ostensibly designed to strengthen US industry but which
served only to sever mutually beneficial relationships between trading
partners. The political will to do this then, just as now, stems from popular
discontent. Overlooking the symbolic potency of Wake Up Wal-Mart's ad campaign
would be a mistake; in some very real sense, it captures a part of America's
mood. Unless we are careful, this could inevitably find expression first in
corrosive politics and then in destructive policy.
At times, Wal-Mart's critics seem to be reaching for any complaint which will
slow the company's growth and influence on the American economy and culture. In
these moments of over-reaching, many of Wal-Mart's antagonists may be sowing
the seeds of an economic disaster much more troubling than anything which could
be attributed to the company.
In this very real sense, Wal-Mart's greatest nemesis may not be anything
fundamental to its retail model, but rather the symbol in people's minds that
Wal-Mart represents a generation of lost opportunities and an uncertain future
for many Americans. As with many things, the Wake Up Wal-Mart advertising
campaign likely says more about America than it does anything about Wal-Mart.
If so, this holiday season's advertising campaign sounds another worrisome note
about America's attitude towards globalization and trade, common scapegoats
during times of economic malaise.
Benjamin A Shobert is the managing director of Teleos Inc
(www.teleos-inc.com), a consulting firm dedicated to helping Asian businesses
bring innovative technologies into the North American market.
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