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OUR Walmart Is 100% Union, 0% WMT

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OUR Walmart Is 100% Union, 0% WMT

November 25, 2014

This article originally appeared in RealClearMarkets.

This Black Friday, the start of the Christmas holiday shopping season, the United Food and Commercial Workers will be leading demonstrations at 1,600 Walmarts all over the country, demanding that Walmart pay an hourly minimum wage of $15.

Organized under the banner of OUR Walmart, which stands for Organization United for Respect at Walmart, the union pretends to represent workers. In reality, Walmart's 1.3 million employees have not elected the union or OUR Walmart to represent them, and in January, the National Labor Relations Board forbade the union from claiming to represent WalMart employees. Most of the workers "on strike" at Walmarts on Friday will be bused in from other locations.

American Federation of Labor and Congress of Industrial Organizations president Richard Trumka has invited me to join the protests. The UFCW is part of the AFL-CIO. Trumka wrote to me saying "Diana, Wouldn't it be amazing if working families gathered together on Black Friday and sent a message to the country's largest employer that its workers deserve a living wage and full-time work? Well, that's exactly what's going to happen, and you can be a part of it... Click here to find a Black Friday action near you." He signed his letter "In solidarity, Rich."

Richard Trumka knows that I do not work at Walmart. Yet he asked me, along with countless other individuals who do not work at Walmart, to protest there.

Clicking on Rich's link takes me to a page with a map of Walmarts in the Washington area, where I live, and instructs me that "To take action, you just need to go to your local Walmart with a sign saying that you support the workers fighting for fair pay and respect." It helpfully suggests that I protest at the new Georgia Avenue Walmart, or "host a protest" at the new H Street Walmart.

This time last year, when these two D.C. stores opened, 23,000 people applied for 800 job openings. Walmart had an acceptance rate of less than 3.5 percent for its new associates, more exclusive that acceptance rates for Princeton (8.5 percent), Yale (6.8 percent), and Harvard (5.9 percent). In Washington this Black Friday protests will not come primarily from the lucky 800 employees who got jobs, but from people who responded to instigations from the AFL-CIO and the UFCW.

Walmart employees are paid about $12 to $13 an hour, or about $27,000 for a full-time position, and have the opportunity of promotion to management positions. Walmart has not opposed President Obama's call for a $10.10 hourly federal minimum wage.

Even though the UFCW is asking Walmart to pay $15 an hour, my examination of UFCW contracts with the Kroger Company show that entry-level workers represented by the UFCW are paid close to the current minimum wage, never reaching $15 an hour. Even senior workers do not earn $15 an hour.

Consider meat or bakery clerks at Kroger's union shop in Dayton, Ohio. They earn a maximum rate of $14.25, even after over half a decade on the job. Those working in the salad bar, drug counter, or floral shop can earn a maximum of $10.95 after gaining years of experience. This amount is 27 percent below the $15.00 an hour "living wage" that the UFCW claims Walmart employees should be paid. UFCW-negotiated hourly rates for cashiers, grocery baggers, or in-store food demonstrators start at $7.70 and are capped at $8.25-45 percent below the $15.00 advocated by the UFCW.

These wages are no secret. Walmart employees who might consider joining the UFCW can browse its helpful easy-to-read handout to its members in West Virginia, Kentucky, and Ohio. Three sample part-time workers, named George, Cindy, and Gregory, will reach top earnings of $11.40 an hour after 8 years on the job, according to the UFCW. The sample full-time worker, named Laney, will reach a peak of $14.51 after 6 years of work.

George, Cindy, Gregory, and Laney will have even lower take-home pay once union dues (not mentioned in the fact sheet) and federal and state taxes are subtracted. Dues are mandatory and usually take between $19 and $60 a month from members' paychecks. Some portion of dues goes towards political contributions. The UFCW contributed $7.2 million during the 2014 election cycle, of which nearly 100 percent went to Democrats. Declining membership leads to declining dues and declining political power.

Unions such as the UFCW stoop to deceit due to financial pressures from declining membership. UFCW's membership fell by 8 percent from 2002 to 2013, even though private sector jobs increased by 5 percent over that time period. Yet unions need a steady flow of dues to pay salaries of union officials, to prop up failing union pension plans, and to donate to political campaigns.

Average total compensation for those employed by the UFCW, rather than represented by the UFCW, is $90,907 a year. This income is almost six times what the union negotiated for cashiers at Kroger's. Joseph Hansen, the International President of UFCW, earns over $350,000 a year-over twenty times the earnings of many of the workers he represents. The Executive Vice President, International President, and International Secretary-Treasurer all earn over $300,000. It is the entry-level union workers who fund these salaries by paying dues out of their $7.40 an hour paychecks.

One benefit that UFCW members lack is a well-funded pension. The UFCW has one of the worst records for negotiating fiscally-sound pension plans for its members. This year the Labor Department has informed the UFCW that four​ of its pension plans have reached "critical status," meaning they are less than 65 percent funded. In 2013 ten UFCW pension plans were in critical status. Some plans have been critically underfunded for over 5 years. They have low chances of regaining sustainable financing unless they can convince more new members to join and pay dues without receiving similar benefits.

UFCW protesters want Walmart employees to get lower-paying union contracts with failing pensions, and pay union dues to benefit distant and highly-paid union bosses. Black Friday shoppers should know: Protesters are representing their union bosses, not Walmart employees.


Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, directs Economics21 at the Manhattan Institute. You can follow her on Twitter here.

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