Labor Practices Continued Concern for Investors
Posted on April 12, 2012 by jway
Yesterday, Making Change at Walmart greeted Walmart investors as they gathered in Toronto. Making Change at Walmart activists passed out fliers highlighting how Walmart’s poor business practices have curbed their ability to grow globally and continue to represent challenges to growth in India, South Africa and urban communities in the US.
Many investors and analysts are showing increasing interest in labor issues due to a number of recent events. In January, ABP, the Netherlands’ largest pension fund pulled their investments in Walmart due to poor labor practices. ABP officials said that they were struck by the inordinately high number of lawsuits and complaints filed against Walmart.
A few weeks ago, Wharton School and Harvard Business studies made headlines by demonstrating that good staffing practices are also good business. These findings fly in the face of Walmart’s traditional model of slashing expenses through minimizing staffing and stretching existing employees.
Moreover, around the US as Walmart attempts to move into coveted markets in major cities, they are met with opposition due to the company’s notoriously bad labor relations and its creation of poverty level jobs. Most recently, Walmart was forced to delay multiple store openings in the nation’s capital due to local opposition.
In Canada, Walmart has justified its labor practices in the US by citing contextual differences between the countries. Meanwhile, despite the fact that Canada may be considered a more union-friendly country, Walmart has maintained the same demeanor toward labor there as in the US. Until Walmart improves their relationship with labor globally, the company will undoubtedly struggle to grow as they are met with opposition and investor concerns.