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M. David Stirling- Contributor

Mr. Stirling 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 legal organization. [go to Stirling index]

Wal-Mart 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 revenues.

As he was walking the picket lines with strikers in December, the attorney general 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.

A presumed Democratic candidate for governor in 2006, Lockyer likes to tell friendly 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 companies' stock.

In December, Harrigan influenced the CalPERS board to send letters to each company 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 the strike.

(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.

So, when 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.

The Wal-Mart 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 News

copyright 2004 Pacific Legal Foundation