Retailers go political

Filed under: Opinion |

Conventional wisdom dictates that elections are decided at the polls. This year’s presidential race, however, might just be a mandate on who emerges as top dog in the warehouse-club retail battle.

Judging by the coverage on cable television and in business wire services and publications, Sen. John Kerry’s vision of the future would appear to favor Costco Wholesale Corp., while Wal-Mart Stores Inc. would probably be happy to simply maintain the status quo under President George W. Bush.

The issues that will affect the retail giants are fairly black and white: health care, minimum wage and union organization.

Kerry has floated a plan that would have the federal government pick up the tab for catastrophic health-care costs for companies that provide comprehensive health care coverage. Kerry’s camp told Bloomberg News that Costco would likely be eligible, and could save the company as much as $35 million in annual health care costs. Wal-Mart, the Kerry camp told Bloomberg, probably doesn’t insure enough workers to qualify.

Kerry also has advanced the idea of raising the minimum wage from $5.15 an hour to $7. Nobody working for Costco makes less than $10 an hour; however, Wal-Mart does have workers that fall below the $7 mark, according to television and print reports.

Without even arguing the merits of whether a higher minimum wage makes sense, it’s easy to extrapolate that Costco wouldn’t even flinch if Kerry’s plan became a reality, while Wal-Mart would definitely feel a drain of its bottom line.

On the union front, Bloomberg reports that about one-sixth of Costco’s workers belong to a labor organization. So if a Kerry administration made organizing labor easier, the company likely wouldn’t face much of a problem dealing with the change. Wal-Mart, on the other hand, doesn’t have any union employees and, based on the company’s historical opposition, doesn’t want any.

Executives from each company are showing their support for their respective candidates with their pocketbooks. And wouldn’t you know, Costco’s CEO is writing checks to support Kerry and Wal-Mart’s top man has been contributing to Bush.

The Bloomberg story said that Costco CEO Jim Sinegal supports Kerry and has donated money to “independent political groups formed to oust Bush,” while H. Lee Scott, Wal-Mart’s chief executive, has donated $2,000 (the individual maximum) to the Bush campaign.

So what does this all mean? Is there reason to worry if you’re somehow tied in to Costco or Wal-Mart? Probably not.

We all know that change doesn’t happen very quickly within the confines of the District of Columbia. Kerry could win and be faced with a Republican-controlled Congress that wouldn’t be all that enthusiastic about implementing his plans. Bush could win and tweak here and there on minimum wage and health care to build more of a legacy in his second term. Either could win and have to compromise to get anything passed by a nearly evenly divided House and Senate.

Campaign promises sound really good on the stump but rarely materialize without any changes even for the most popular of winning candidates. So for now it’s probably safe to simply sit back and watch the retailing giants battle it out in the political ring.

Managing Editor Mike Boyd can be reached at 634-3223, ext. 206 or Mike.Boyd@csbj.com.