Back in April 2005, workers at a Wal-Mart in Jonquiere,
Quebec voted to join a labour union. In response, Wal-Mart closed down the
store. Last week, The Supreme Court of Canada ruled that in doing so, Wal-Mart violated Quebec’s labour laws, and the employees who lost their jobs as a
result of the closing are now entitled to receive financial compensation. Wal-Mart’s
anti-union policies have angered many people throughout the years and the incident
in Jonquiere was also featured in the documentary WALMART: The High Cost of Low Price. It seems that many people have
this a priori assumption that
Wal-Mart is evil and anything it does is utterly contemptible. Proponents of
labour unions argue that workers cannot survive on a minimum wage and that in
order to receive adequate wages, they need the representation of labour unions.
The fact that Wal-Mart forbids employees to unionize, they argue, is indicative
of the company’s greed and contempt for its workers.
I do not believe that Wal-Mart exploits its employees or
harms poor communities. Due to their low prices, poor people can afford to buy
more goods at Wal-Mart than they could at a less competitive store. Even if someone
earns minimum wage, they can still afford to feed and clothe themselves thanks
to the cheap supply of goods available at Wal-Mart. As a result of this cheap
supply of goods, the standard of living in poor communities is greatly improved.
The reason Wal-Mart can afford to keep their prices so low is because their
business model is so austere and efficient—they cut corners wherever they can. Wal-Mart
executives don’t ride around in gold-plated limousines; they fly coach and
share hotel rooms with colleagues. The Wal-Mart headquarters isn’t a palace;
it’s just a drab, normal-looking building.[1]
This austerity extends to all Wal-Mart employees, which is why the company
frowns upon unions and ostentatious benefits. Wal-Mart maintains its low prices
because they pay their employees the wages that they do. If unionization, as in
the Jonquiere case, would entail an increase in wages, then the Wal-Mart
business model would no longer be viable to earn a profit. If the business
model is not viable then the store must close. That’s Business 101. With these
considerations in mind, one can see that Wal-Mart actually benefits poor
communities—it’s labour unions that harm them.
The classic mantra from the left is that all corporations are
greedy and wicked and they would pay their employees in pennies if the heroic
labour unions weren’t there to stand up to them. Those who make such
accusations not only betray their ignorance of basic supply and demand, but
also their seething contempt for the rich. Labour unions are entirely self-serving
organizations who benefit their own members at the expense of everyone else,
and whose sole purpose is to siphon off wealth from one beneficiary to another.
For example, if the US Airline Pilots Association bargains for a higher wage,
then the cost will be passed onto the public through an increase of airplane ticket
prices. Union leaders might claim that they are bargaining for wages at the
expense of profits, but this is not true. Corporate profits are just not big
enough. After taxes, corporate profits only amount to less than six percent of
the total national income, whereas over eighty percent of total national income
goes to pay for wages, salaries, and fringe benefits.[2] Therefore, the cost of any benefits gained
through union bargaining are almost always passed on to consumers. Since
Wal-Mart prizes its ability to sell goods cheaply, one can see how unionization
of their employees would not be in their best interest.
Unions also slow job creation. As labour unions bargain for
higher wages and benefits, the cost for the business to hire new employees
becomes more expensive. This means that a business will hire fewer employees
and many people who are looking for work in that sector will be unable to find
a job. Examples of this can be seen throughout history. In the 1920s, the
United Mine Workers of America, led by John L. Lewis secured wages for its
workers that were unprecedented at that time; as a result, the price of coal
skyrocketed. Businesses also could no longer afford to hire coal workers, so
they were gradually replaced with machines. By the early 1960s, there was massive
unemployment in the coal industry and once prosperous mining towns became
virtually deserted.[3] This
example demonstrates the fact that unions only benefit their own members at the
expense of everyone else. If unions were really looking out for the best
interests of all workers, then they would dissolve themselves immediately.
Those who condemn Wal-Mart for closing their store in
Jonquiere should reconsider their position. It is usually rich middle-class
people who hate Wal-Mart because they see the company’s austere and frugal
nature as exploitive of lower classes. However, Wal-Mart employs 1.4 million
Americans[4]
and 90 000 Canadians[5],
contributing greatly to the workforce, and they can afford to sell goods at a
discount to those who may not have been able to afford them otherwise. I see
Wal-Mart as beneficial to any community because they are a cheap source of
everyday goods. Why should Wal-Mart have kept that one store in Jonquiere open
if unionization made their business-model unviable? Rational people are in
business to make a profit, and if no profit is to be made in Jonquiere, Quebec, then businessmen will go elsewhere.
[1] http://money.howstuffworks.com/wal-mart.htm
[2]
Friedman, Milton. Free to Choose: A
Personal Statement. Pg. 234
[3] Sowell,
Thomas. The Thomas Sowell Reader. Pg.
72
[4] http://www.forbes.com/sites/realspin/2013/11/27/why-do-1-4-million-americans-work-at-walmart-with-many-more-trying-to/
[5] http://walmartcanada.ca/Pages/Company%20Profile/168/163/163
