Wal-Mart's clumsy, self-defeating attempts to influence the election.

Commentary about business and finance.
Aug. 5 2008 4:01 PM

Always Dumb Politics. Always Wal-Mart.

The retailer's clumsy, self-defeating attempts to influence Washington.

A Wal-Mart store in California. Click image to expand
A Wal-Mart store in California

Last Friday, the Wall Street Journal reported that retailing giant Wal-Mart, concerned about a potential Democratic sweep this fall, has been not-so-subtly indoctrinating managers and department heads about the perils of an Obama presidency. The operating assumption in Bentonville seems to be that a Democratic president and a Democratic Congress would pass laws such the Employee Free Choice Act, which would make it easier for unions to organize at Wal-Mart, thus hurting the company, its workers, and its shareholders. And while the executives running the meetings were careful not to instruct workers which lever to pull, the upshot was clear. "I am not a stupid person," a Wal-Mart customer-service supervisor told the Journal. "They were telling me how to vote."

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Wal-Mart denied that it was engaging in partisan politics. But, even so, these meetings are the latest in a series of clumsy political moves. Wal-Mart may be a master of many domains: global supply chains and logistics, local politics and zoning, anti-union warfare and branding. But on the stage of national politics, it has proved to be strikingly inept. Its executives seem to have a cartoonish understanding of the way Washington works, ascribing mythic powers to the nation's continually weakening private sector unions and misunderstanding the linkages between party control in Washington and its impact on the performance of the economy and individual companies.

For starters, Wal-Mart has pursued what would appear to be a self-contradictory political strategy. Clearly, Wal-Mart fears the prospect of unionization more than any other factor. Low wages, low benefits, and a generally supine workforce have been fundamental to its business model for decades. Wal-Mart clearly believes Democrats are more sympathetic to unions than Republicans. So one might think that the company would be doing everything in its power to help Republicans and hurt Democrats. That's certainly what it used to do. In the 2000 campaign cycle, its political action committee devoted 85 percent of its donations to candidates for federal office to Republicans; in 2004, the split was 78 percent to 22 percent. But with Democrats having resumed control of Congress, Wal-Mart has increasingly deployed corporate resources to help Democrats stay in power. So far in this cycle, according to the Center for Responsive Politics, Wal-Mart has basically split its $884,700 in donations equally between the two parties (52 percent to 48 percent in favor of the Republicans). The list of recipients includes long-standing friends of organized labor such as Rep. Charles Rangel of New York and Sen. Debbie Stabenow of Michigan.

Wal-Mart seems to be trying to help Democrats in retail politics, too. In the fall of 2006, Wal-Mart, seeking to bolster its public image, kicked off a campaign to help its 1.3 million employees—whoops, I mean "associates"—register to vote. The company hasn't published results of this campaign. But given the demographic makeup of Wal-Mart's workforce, any such efforts would seem to help Democrats. As Wal-Mart's 2006 EEOC data shows, 61 percent of employees are women, including 75 percent of sales workers, while 17.5 percent of workers are African-Americans and 11.4 percent are Hispanic. So it has spent money and effort helping to register voters who are quite likely to vote for Democrats.