The free market vs. organized labor

As much as the AFL-CIO would have liked it to happen on US soil, a union finally received certification in Quebec, Canada to open contract talks with Wal-Mart. Wal-Mart Canada will close the store in Jonquiere, Quebec, citing union demands that wouldn't allow the store to operate efficiently and profitably.

This is no laughing matter if you are a fan of the free market. Wal-Mart is hated by the unions because they are highly profitable and are non-union. Anytime the unions can take a dig at WM, the liberal media is more than happy to air their greivances. I read an article in Playboy a few years back that basically mocked employees at Wal-Mart who believed that they were part of something good. The article mentioned how WM offers almost no full time positions, and that a worker would be below the poverty level if they lived on their part time WM checks. This and other slanted articles, fail to mention that the workers at WM or any company have a choice, and if enough people do not want to work at WM because of the working conditions, WM would have to make changes in order to compete. And because I don't see any changes like that coming down the pike at WM, my guess is that they are going to do just fine.

Wal-Mart makes its choice

National Post
Mon 14 Feb 2005
Byline: Lorne Gunter

Not since Scottish-born socialist Joe Davidson headed up the Canadian Union of Postal Workers in the 1970s have I heard so much economically illiterate rhetoric about a labour dispute as has been generated by Wal-Mart's decision to shutter its unionized outlet at Jonquiere, in Quebec's Saguenay region.

Mr. Davidson, once famously declared that if Canadians would not back his workers' demands for "justice," then "to hell with the public."

It always seemed Mr. Davidson believed the post office existed not to deliver mail but to give his members high wages. As he saw it, even if there were no mail, Ottawa would still be obliged to operate its postal outlets and sorting plants.

Wal-Mart's announcement this week has provoked the same kind of malarkey.

Union leaders and leftist politicians have insisted Wal-Mart be forced to keep its Jonquiere outlet open unless it can prove its official claim that the store was closing because it's unprofitable.

According to Michael Fraser, the national president of the Jonquiere workers' union, the United Food and Commercial Workers (UFCW), "Wal-Mart knew they were going to be forced into a situation where they would have to have a collective agreement. That is the only reason they closed the store." He also insists the Saguenay Wal-Mart had to be profitable because "the parking lot was full."

This latter observation is neither solid evidence of profitability nor relevant. A store could be busy as can be and still be unprofitable if wages are too high, or the wholesale cost of the goods it retails rise unexpectedly, or it has to pay too much in rent, utilities or taxes.

Still, I suspect Mr. Fraser is correct: The Wal-Mart outlet was profitable.

The question then is: So what?

No government or court can make a store or other business stay open against its wishes. By what authority? More importantly, by what mechanism could such an order be enforced?

Does the UFCW, or the Quebec labour federation, or NDP MP Pat Martin, or any of Wal-Mart's other critics propose that a judge or human rights commissioner supersede the rights of Wal-Mart's shareholders and start forcing the company to run stores it doesn't want? Do those who have demanded Wal-Mart be forced to keep this store open presume to know Wal-Mart's best interests better than the company's millions of shareholders, or that they have more of a right to tell it how to spend its money?

Wal-Mart is likely withdrawing from one rural Quebec store to send a message to its 1.6 million employees at its other 5,200 stores: Unionize and you're out of work. Wal-Mart's executives know this may open their company to a boycott. They understand there may be PR damage, real estate costs and perhaps other financial downsides. Yet the company has likely calculated that all these will be trumped by the way this closure keeps labour costs down.

Wal-Mart is betting more consumers will be attracted by its low prices than are put off by its labour management practices. And I'm betting they're right. The likeliest reason the UFCW has refused to call for a national boycott is their fear a boycott would fail miserably.

So instead of relying on the free will of consumers to change Wal-Mart's mind, the union and its supporters have turned to government in hopes of pressuring legislators to use their coercive power to make Wal-Mart do as unions demand. To the credit of Quebec and federal labour officials, they have -- so far -- correctly cited a lack of legal authority to do so.

Of all Wal-Mart's critics, perhaps none go farther than McGill management professor Bob Hebdon, previously a 24-year employee of the Ontario Public Service Employees Union. He told Montreal's Gazette on Thursday that Wal-Mart was "flagrantly in violation" of the Charter of Rights and Freedoms, as well as the UN's Universal Declaration of Human Rights because it was denying its workers' freedom of association.

How? The Jonquiere workers are still free to associate, but Wal-Mart is under no obligation, and never was, to give them a place to associate.

But now we're back to Joe Davidson's theories about why workplaces exist.

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