News & Commentary

October 19, 2015

As Walmart’s stock nosedives deeper than ever in its 17-year history, many point to the company’s recent liberalization of labor practices as the culprit, the New York Times reports.  In June of this year the retail giant spent over a billion dollars to raise the minimum wage for over 100,000 of its U.S. workers to $9 an hour.  While labor groups and progressives have praised the decision, investors are taking aim.  “Investors fear that Walmart’s heavy investments in labor, in the Internet and in discounts will weigh on the retailer’s short-term earnings – and many are running the other way.”  Of course, the one billion dollars spent on the increased wages is but a small portion of Walmart’s earnings.  A spokesperson for the Making Change at Walmart campaign pushed back by noting that decriers are unfairly pinning a year of poor earnings on labor practices. “If you look at what $1 billion means to Walmart, it’s a very small fraction of their annual U.S. sales.  If they have moved the needle at all on sales, this is a conversation we wouldn’t be having in the first place.”

Also from the Times, a Coca-Cola bottler looking to downsize its Spanish operations has been given the green light by a Spanish court.  In January 2014 Coca-Cola Iberia announced it would lay-off a quarter of its 4,600 workers in Spain, a country already fraught with an alarming level of unemployment.  In response, labor unions took to the streets — with protests, strikes, and an attempted boycott of Coke products — and to court, where they claimed that they were improperly informed of the downscaling and that their right to strike had been infringed.  Ultimately, the court found that the company had acted in “good faith” in its dealing with workers and that it may proceed with its plan to scale down.

The Hill reports that a conversation Vice President Joe Biden had with the president of the International Association of Fire Fighters (IAFF) “strongly hinted that he was planning to run for president.”  In his conversation with Harold A. Schaitberger, the president of IAFF, Biden reportedly talked campaign strategy and told Schaitberger that his ever-elusive decision to run would be forthcoming.  Earlier this week Schaitberger had announced that his constituency would “certainly be very inclined to support his candidacy” if Vice President Biden chose to run.  The hypothetical endorsement is all the more interesting given recent reports that the IAFF has backtracked on plans to support the Clinton campaign.  While Clinton has gained the endorsement of many key union players, including two prominent teacher’s unions, neither the Services Employees International Union nor the American Federation of State, County and Municipal Employees has committed to a candidate yet.  Perhaps they, too, hope that Biden will be their crusader?

A recent editorial by The Washington Post criticized the District of Columbia’s pending plan to implement a tax that would allow employees to take up to 16 weeks of paid family leave per year.  Panning the proposal as “not grounded in reality” the editorial argues that it “would end up hurting the District and its workers by driving up costs and driving away jobs.”  In particular, the piece finds fault with the plan for more-than-doubling the amount of paid leave guaranteed by States with similar policies and for making it possible for some employees to recover 100% of their pay.  Another grievance lodged by the editorial board spoke for the District employers who already provide paid leave.  “Why should a company that already offers a range of leave options (vacation, sick time, short- or long-term disability insurance) be required to pay into this fund? Won’t that induce companies to cut back on pay and other benefits or just move to Virginia or Maryland?”

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