Some doubt wisdom of Wal-Mart campaign
Wal-Mart fought back yesterday against critics of its labor practices, launching an unusual media blitz touting the benefits the company offers to employees and the communities...
Knight Ridder Newspapers
MIAMI — Wal-Mart fought back yesterday against critics of its labor practices, launching an unusual media blitz touting the benefits the company offers to employees and the communities where its stores are located.
With Chief Executive Lee Scott appearing on "Good Morning America" and full-page ads running in more than 100 major metropolitan newspapers, including The Seattle Times, the company said it pays higher wages and offers better benefits than many competitors. Wal-Mart has increasingly faced litigation on charges ranging from discrimination against women to not paying employees for the hours they worked.
"For too long, others have had free rein to say things about our company that just aren't true," Scott said in a statement. "Our associates are tired of it, and we've decided it's time to draw our own line in the sand."
But instead of silencing critics, Wal-Mart's decision to go on the offensive may reinvigorate debate about the Arkansas company's place in the U.S. economy, said public-relations experts and educators. Some question whether it was a good strategic move for the world's largest retailer.
"I think it's going to boomerang," said professor Paul Levinson, chairman of the department of communications and media studies at Fordham University in New York. "It suggests to people that there's a problem and this shines a spotlight on it. Most people just go to Wal-Mart and don't pay much attention to the controversy. But now it could make people uncomfortable about shopping there."
Wal-Mart has repeatedly been attacked by union leaders and activists who say the company puts small retailers out of business and creates low-wage jobs, which do nothing to improve the local economies.
"Their operations have had a devastating impact on the wages and benefits throughout the U.S.," said Greg Denier, spokesman for the United Food and Commercial Workers (UFCW) union, which has sought to unionize Wal-Mart employees. "When they pay low wages and don't pay adequate benefits, everyone feels the impact."
As opposition mounted, Wal-Mart found it increasingly difficult to open supercenters in states such as California, which has turned into ground zero for the battle.
Mark Muro, senior policy analyst with the Brookings Institution, thinks that Wal-Mart can be helpful in revitalizing a rundown urban market but that for other communities, these are not the type of jobs they should be seeking.
"These are lower-end, service jobs at a time when communities of all sizes should be looking for more permanent, higher-value jobs that pay better wages and provide true family support," Muro said. "It's a legitimate concern that Wal-Mart has been quite harmful in small-town America."
In the full-page ads titled "Wal-Mart is working for everyone," the company sought to silence critics and tout the benefits offered to its 1.2 million associates. It stationed executives around the country, including Craig Herkert, the Miami-based president and chief executive for the Americas/Wal-Mart International, who spent the day at the chain's store in Hialeah Gardens, Fla. The retailer also set up a Web site, walmartfacts.com.
Some benefits Wal-Mart highlighted:
An average wage almost twice the federal minimum of $5.15.
Efforts to promote from within: 76 percent of store managers started in hourly jobs.
Employee health coverage at costs ranging from less than $40 to $155 a month.
Availability of a profit-sharing/401(k) plan, merchandise discounts, life insurance, company stock and merchandise discounts.
Opportunities for women: 60 percent of Wal-Mart associates are female and more than 40 percent of store managers.
Yamilet Pupo, 28, an employee at the Wal-Mart Supercenter in Hialeah Gardens, said the company promoted her to a manager of the cosmetics department after six months on the job.
"Wal-Mart is a really good place to work because you have a lot of opportunity," said Pupo, who has been with the company four years.
But union leaders dismissed the claims in Wal-Mart's ads as "deceptive," saying most Wal-Mart employees can't afford the health insurance the company offers and many live at or below the poverty line. "This company is running away from its own record," said Denier, the UFCW spokesman.
Public-relations experts and economists said that for Wal-Mart's campaign to improve the company's image and reputation, it must be followed up with more changes.
"You can't make a silk purse out of a sow's ear," said Jared Bernstein, senior economist with the Economic Policy Institute in Washington, D.C. "A PR campaign isn't going to make Wal-Mart look like a great place for low-wage workers. The downsides are just too well-known."