No Labor Shift Seen at Wal-Mart

The prospect of unionized Wal-Mart stores throughout China prompted little enthusiasm Thursday among labor activists who have been fighting the company for decades.

Wal-Mart Stores Inc., the world’s largest retailer, agreed this week to work with the Chinese government to establish unions at each of its 60 Chinese stores, which employ a total of about 30,000 workers.

But the company was quick to note that efforts to work with the state-mandated All-China Federation of Trade Unions did not mean that Wal-Mart was softening its opposition to organized labor at home.

“This does not signal a change in our strategy in the U.S.,” Wal-Mart spokeswoman Amy Wyatt said. “China’s labor laws and its only union are much different than what you find in the U.S. and most other countries.

“Our policy is to comply with the laws of every country in which we operate, and in China it is required by law that if even one associate asks to join a union, then you have to install the union in the store.”

The company’s announcement was not encouraging to many Chinese labor experts, who said that the officially sanctioned union was more an arm of the state than a workers’ rights group.

“They’re not interested in improving the lives of their workers,” said Chris Kofinis, of WakeUpWalMart.com, a Washington, D.C., group sponsored by the United Food and Commercial Workers union. “What happened in China was more about Wal-Mart’s politics, meaning they wanted to protect their No. 1 trading partner.”

But former U.N. Ambassador Andrew Young disagreed. He was in Los Angeles on Thursday to announce the formation of a California chapter of Working Families for Wal-Mart, which receives the bulk of its funding from the retail giant. He said the company’s position in China showed its willingness to listen.

“It is recognizing the right of people to come together to have something to say about their employment,” said Young, the head of the pro-Wal-Mart group’s national organization.

That’s not to say that Young would advocate unionizing the stores in the U.S.

“At Wal-Mart, labor and management all run together because 70% of what we call management started out as labor,” he said. “It’s a very healthy workplace.”

Although Wal-Mart has said that it would not thwart unionization in China, the company has not actively worked to bring workers’ organizations into its stores and facilities.

A Chinese Wal-Mart store said two weeks ago that it would become the company’s first unionized shop in that country. Since then unions have formed at four more Wal-Marts.

Wal-Mart sees its concession in China as part of the political precondition to expanding its stores there.

“The Communist Party of China still runs China and they told them to do this. George Bush isn’t going to say that,” said Nelson Lichtenstein, a professor of history at UC Santa Barbara and editor of the book “Wal-Mart: The Face of 21st Century Capitalism.”

“Wal-Mart thinks it will win by taking a hard line in the U.S., and it is winning,” Lichtenstein said.

The company, which has more than 6,600 stores worldwide, plans to open 20 more stores in China this year.

Although Wal-Mart has opposed unionization efforts in North America, it has inherited organized labor groups and unionized workers in several of its international operations, including Japan, Brazil, Mexico, Argentina and Germany, where the company said last week that it would no longer operate.

China is not the first country in which Wal-Mart has been forced to recognize unions. Two stores in Quebec, Canada -- one of which the company has since shuttered -- voted to establish unions.

And in Britain, the company last month caved to pressure from truckers and warehouse workers at its ASDA stores. They had threatened to strike if the company would not allow their union to expand its bargaining role.

Among foreign firms with Chinese investments, about 20% to 30% of their workplaces in that country are unionized, experts said.

Paris-based Carrefour, the leading retailer in China and Wal-Mart’s biggest global competitor, says 70% of its Chinese workers are unionized.

Christian Roquigny, the store manager of a Carrefour in Urumqi, China, said he didn’t understand the commotion about unionizing at Wal-Mart.

“Really, the union in China belongs to the [Communist] Party,” said Roquigny, whose 79-employee store is unionized. “They never interfere in the daily management as long as we follow Chinese labor laws. They are not a strong force as in France.”

If Wal-Mart had not tried to thwart the unions for so long, there would not have been much of an issue, said Anita Chan, a visiting fellow at the Contemporary China Center at Australian National University.

Wal-Mart might have resisted the union because it didn’t want to pay 2% of its Chinese payroll to the organization, which is required for trade union activities, she said.

Not all experts on Chinese labor took a cynical view of the company’s announcement.

“There’s an opportunity here to improve the situation for workers,” said Susan Aaronson, a professor at the University of North Carolina’s business school and an expert in corporate social responsibility and global trade. “Wal-Mart can move markets. A step forward for Wal-Mart, even if it’s a baby step, can have huge market impact.”

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Goldman reported from Los Angeles and Lee from Shanghai.