Wal-Mart and Progressives: Part 1

(Crossposted from Tapped so you folks can comment)

A couple weeks back, The Center for American Progress hosted a forum on Wal-Mart's impact on the American economy. Standard stuff, except this one brought together opposing viewpoints that tested Wal-Mart based on similar, progressive criteria. Jason Furman's paper arguing that Wal-Mart represents a progressive success story has attracted the most attention, with the New York Times' John Tierney and The Washington Post's Sebastian Mallaby both devoting columns to it. Their pieces, sadly, were depressingly standard-issue affairs, hackish attempts to pummel liberals with Furman's conclusions, not grapple with the debate. Much more interesting was my colleague Matt's meditation on how Furman's flashes of brilliance synced with his points of myopia (notably his bizarre decision to never once mention unions).

This is an important discussion for progressives to have. In the rush to weaken Sam Walton's behemoth, liberals have emptied the armory, indiscriminately deploying whatever arguments seemed likely to wound and damaging many of their long-term goals. That's poor strategy. So over the next few days, drawing on Furman's paper, Arindrajit Dube's opposing study, and the event's transcript (all of which can be found here, I'm going to try and tease this out a bit better. I hope some of my colleagues will join in, and I invite you folks in blog land to do the same. And the place to start, I think, is with Furman's strongest criticism of the liberal argument:

I’d like to at the very least try to convince you to drop the corporate welfare attack and rather than attacking Wal- Mart employees for benefiting from these programs, celebrate it and push to expand it.

Wal-Mart claims to care about the welfare of its employees. Any corporation is going to put 98 percent of its effort into maximizing its profits and share prices. If Wal-Mart cares about its employees, rather than law being against progressive issues, it would lobby for them and it would work to expand these types of programs. If there were corporate welfare, it would help Wal-Mart’s profits and they would have an interest in lobbying for more Medicaid, EITC, food stamps. I don’t think it will help their shareholders at all, but it will help their workers a lot and that’s something that it claims to care about.

This is largely a function of having unions in the drivers seat. By nature, labor organizers are concerned with squeezing the most generous possible offer out of employers, sometimes at the expense of better societal outcomes. I don't know anyone who doesn't believe Labor's historical focus on generous employer-based health care to be a massive strategic failure, and yet they continue on the same path now. The cursory support the Labor movement generally offers efforts to nationalize health is dwarfed by the energy they expend retaining or expanding (and thus entrenching) the current system's offerings. Given their mandate to care for current union members, that's to be expected, but it's short-sighted and shouldn't be replicated across the left.

Much smarter would be an effort to force Wal-Mart into becoming a political ally. Given the choice between providing expansive health care benefits themselves and pushing the government to do the same, Wal-Mart will take the latter route. If you doubt me, ask yourself how much discomfort they've shown with their workforce's utilization of Medicaid. The strategy, then, should not be ending that alliance so all Wal-Mart employees have to pay for the corporation's paltry health benefits, but forcing Wal-Mart to become an ally in the fight to radically expand the federal options open to employees. Variants of this have been employed by SEIU's Andy Stern, often to great success:

SEIU has used its new money not just to enlarge existing campaigns, but to experiment with new strategies. In the nursing home world, for example, SEIU has explored a truce with the owners it fought so bitterly in the 1990s. SEIU recognized that nursing homes were getting squeezed by a lack of government funding for long-term care, so it proposed a deal: The union would use the political muscle of its members and community allies to try and win more state money for nursing homes; if it succeeded, the owners would increase members’ pay and let non-union workers join the union without a fight. Since 2001, SEIU has reached agreements with nursing homes in ten states and has organized twenty-five thousand new nursing home members. In California alone, SEIU has helped win $1.2 billion in new nursing home funding over the last five years.

Similarly, employers are largely (though not solely) scared of unions because of what they'll do to health costs. If health costs were no longer a factor in employee compensation, unions, though still reviled, wouldn't appear so deadly to employers' bottom lines. So criticizing Wal-Mart for its poor health offerings and willingness to send employees to Medicaid's offerings is insane. Rather, that's a trend labor and the left should seek to accelerate until Wal-Mart offers no health benefits, every employee has access to high-quality, comprehensive government care, and unionization no longer means businesses will have to pay for chemotherapy.

As part of this strategy, labor may well need to soften Wal-Mart up, and part of that effort might include demagoguing their reliance on Medicaid. Fine. But liberals in sympathy with labor's larger cause must not absorb arguments counterproductive to overarching progressive goals. And Furman is doing them a great service by pointing that out.