M. David Stirling- Contributor
served in the California Assembly between 1976 and 1982,
and as chief deputy attorney general from 1991 to 1998. He
is vice president of Pacific
Legal Foundation, a public interest
[go to Stirling index]
Getting Boost From Lockyer
State officials meddling in the free market......
[M. David Stirling] 2/25/04
No one has reported seeing Attorney General Bill Lockyer as
a greeter at Wal-Mart stores. But from sightings of him on picket
lines in front of Southern California supermarkets and partisan
speeches at union strike rallies, he is advancing Wal-Mart's
business dominance far more than its advertising can do.
Over 120 days have passed since supermarket chains Albertsons,
Ralphs (Kroger Co.), Vons and Pavilions (Safeway) informed their
70,000-member United Food and Commercial Workers-represented
work force that -- due to pressures of Wal-Mart competition --
the company-paid portion of employee health care benefits would
have to be reduced. As it stands, the striking workers are four
months without paychecks or health care benefits, and the three
supermarket chains have lost an estimated $750 million in sales
As he was
walking the picket lines with strikers in December, the attorney
directed his legal staff to "investigate" union
allegations that the supermarket companies were violating state
antitrust and unfair-business-practice statutes -- laws renowned
for selective prosecutions and triple damages. So, it came as
no surprise that nine strike-rally speeches later, Lockyer announced
filing of antitrust charges against the same supermarkets the
UFCW is striking.
Even though the suit's tortured basis would embarrass a less
political attorney, the attorney general knows the suit's timing
will distract the already financially strapped companies, create
unfavorable publicity for them and increase their legal bills.
Democratic candidate for governor in 2006, Lockyer likes to
union audiences, "I know who and
what I'm fighting for. I'm with you and with all the men and
women in California who work for wages ... my duty is to represent
you and your union."
But Lockyer is not the only state official using his office
to pressure the supermarket companies to back off their proposed
reduction in paid employee health benefits. Sean Harrigan, a
higher-up with the UFCW union leading the strike, also currently
serves as president of the massive California Public Employees
Retirement System, which holds $180 million of the three supermarket
Harrigan influenced the CalPERS board to send letters to each
not so subtly threatening that "blatant
disregard for quality-of-life issues for your employees is having
a significant impact on our investment in your corporation." Harrigan
knows that the giant pension system's unloading of this stock
would severely diminish the capital the companies need to withstand
(So far, there's no word from Lockyer, the state's chief law
enforcement officer, on whether he'll investigate government
officials' use of state resources to further personal agendas.)
Running full speed just off to the side of this strike -- yet
directly at the center of its motivation -- is Wal-Mart. With
$255 billion in U.S. sales last year, 3,500 U.S. stores (with
286 more planned for 2004) and over 1.2 million nationwide employees,
the world's largest company now permeates California's and the
nation's commercial landscape.
the discount giant announced plans to open 40 "super-centers" (including
full-range food markets) in California over the next four years,
the three supermarket chains went scrambling for their competitive
lives. They recognize that Wal-Mart's "always low prices,
always" are because of its lower employee pay and medical
benefits, and that its 1 million-plus daily customers show little
interest in whether Wal-Mart's employees chose to work at below
union wages and benefits.
juggernaut presents unique challenges to all traditional businesses,
which is why this strike is not your average labor
dispute. Instead, it portends one of the monumental contests
in the annals of labor management-consumer relations. The answer,
however, certainly isn't for government officials like Lockyer
and Harrigan to tamper with themarketplace's delicate balance
of power by harassing Wal-Mart's competitors as they try to meet
the Wal-Mart challenge.
After all, if supermarket companies and other traditional businesses
ultimately cannot compete, Wal-Mart will be the last one standing.
That result would not be in anyone's best interest.
This opinion piece first appeared in the Los Angeles Daily
2004 Pacific Legal Foundation