Wal-Mart Flip-Flopped
Roll Call, 6/28/06
by Tory Newmyer
Copyright (c) 2006 Roll Call, Inc.

Last October, Wal-Mart chief executive Lee Scott made waves by urging
Congress to consider raising the federal minimum wage - something many retailers had long opposed.

He noted that the store's own customers are "struggling to get by," then
added that "while it is unusual for us to take a public position on a public
policy issue of this kind, we simply believe it is time for Congress to take a responsible look at the minimum wage and other legislation that may help working families."

The declaration came as part of a broader push by the low-cost retailer to
put a friendlier face on its often troubled corporate image.

But now, with both chambers of Congress mulling hikes to the federal pay
standard, Wal-Mart's critics are charging that the company has abandoned Scott's pledge to support a higher wage. They say that after reaping good public relations from Scott's statement last fall, Wal-Mart has cynically dumped the issue, even as major trade groups it belongs to, primarily the U.S. Chamber of Commerce and the Retail Industry Leaders Association, help lead the fight against a higher minimum wage.

"They did this for PR reasons, and then the true colors come out when the
talk no longer meets up with that action. In this case, it's pretty obvious,"
said Chris Kofinis, spokesman for Wake Up Wal-Mart, a group that's critical of the company's practices.

Wal-Mart officials acknowledge, and several Congressional aides confirm, that the retail giant is sitting out the debate on the minimum wage increase. But the company disputes the notion that the move amounts to an about-face from the position Scott represented last fall.

Instead, Lee Culpepper, the company's top lobbyist in Washington, D.C., said the chief executive's statement was misinterpreted. Scott was not calling for Congress to raise the minimum wage, Culpepper said - he simply was asking lawmakers to consider the issue.

"We haven't said anything more or less," Culpepper said on Tuesday. "I think what he said was clear. He said Congress should take a look at it. If reporters want to report differently from that, I can't speak to that."

Culpepper said the company's lobbyists have communicated Wal-Mart's position on the issue to its trade groups.

"We've just made them aware that we've encouraged Congress to take a look at an increase in the minimum wage," he said. But he said the company has not gone so far as to ask the trade groups not to lobby on the issue, leaving it up to them "to determine their association position."

To Wal-Mart's critics, the company's inaction, combined with the robust
opposition to a wage hike thrown up by trade groups it belongs to, add up to a backdoor push by the nation's largest employer to stifle a higher pay standard.

Wake Up Wal-Mart, a group primarily funded by labor groups, last week
challenged the company to endorse raising the minimum wage from $5.15 to $7.25 per hour, after plans put forward by Sen. Edward Kennedy (D-Mass.) and Rep. George Miller (D-Calif.), and then to lobby in support of the change.

With any such outcome facing long odds, the company's detractors are trying to tell the story of what they call Wal-Mart's "Potomac two-step" on Capitol Hill.

"We want to hold Lee Scott to his word," said Nu Wexler, spokesman for
Wal-Mart Watch, another labor-funded group targeting the company.

Tom Kiley, a spokesman for House Education and the Workforce ranking member Miller, said Democrats are disappointed with Wal-Mart's absence from the debate.

"At the time [of Scott's statement], we welcomed that," he said. "Since then, we haven't heard from them at all. That's unfortunate, obviously."

This sparring comes as the company, expanding into urban areas dominated in Congress by Democrats, has stepped up its outreach to members of the minority party.

Wal-Mart in recent years has directed an increasing portion of its political
donations to Democrats, giving them nearly 30 percent of their political action committee dollars so far this cycle. That's still just a fraction of what the company gives to Republicans, but it's up from the minuscule 2 percent a decade ago, according to figures available from PoliticalMoneyLine.com.

Scott, the chief executive, huddled with members of the Congressional
Hispanic Caucus in February, and top Wal-Mart officials met with members of the Congressional Black Caucus last spring.

But Republicans have remained the company's most stalwart defenders on tax, health care and labor issues, among other things. And this summer, debate over a minimum wage increase has taken on a highly partisan tone. While most GOPers argue bumping up the pay standard would hurt small businesses, Democrats counter that the current wage, untouched in a decade, traps millions below the poverty
line.

The minority party is rallying around the issue as an antidote to
flag-burning, gay marriage and estate tax debates stoked by Republicans to rile their own base for the upcoming elections.

Last week, eight Senate Republicans joined 43 Democrats and an Independent in supporting a wage hike, but the votes fell short of the 60 required to clear its passage. Senate Democrats are vowing to keep the issue front and center, with Minority Leader Harry Reid (Nev.) now tying the matter to a Congressional pay increase (related story, p.1).

On the House side, Democrats are trying to attach a minimum wage increase to spending bills. After successfully adding it to the Labor-HHS appropriations bill, House Republican leaders pulled the bill from the floor schedule. House GOP leaders are signaling they will not allow a floor vote on the minimum wage this year, and it is unclear how that standoff will be resolved.

In addition, a flurry of minimum-wage initiatives may end up on ballots
nationwide, designed both for their ability to improve Democratic voter turnout as well as for the goal of improving pay for low-income workers.

For his part, Wal-Mart lobbyist Culpepper said he remains available to
explain Wal-Mart's position on the wage issue.

"One of our key missions is to meet with Members on Capitol Hill to correct the record about what our critics have said about us," he said.

Copyright (c) 2006 Roll Call, Inc.