The debate over the Employee Free Choice Act is heating up. Congress is expected to formally introduce the bill today. Just in time, Citigroup has reduced its rating of Wal-Mart's stock from "buy" to "hold" in response to negative effects the company will suffer if the bill passes.
In that case, Wal-Mart might have to shoulder higher wages for more seasoned employees and increase employee benefits significantly. In addition, its flexibility in the job functions of its workforce could be decreased, while relationships between store-level managers and store associates could be impaired, the analyst said. Wal-Mart could also see its competitiveness reduced if it's forced to raise prices to help offset higher labor costs, she wrote in a research note.
It "could be a significant drag to earnings," she said.
For more on Wal-Mart and its effects on working Americans, click here. For more on the EFCA, click here.
George Dean Patterson of AR @ Mar 11, 2009 11:04:14 AM
Jennifer Bacon of MI @ Mar 10, 2009 13:49:45 PM
Muser of NM @ Mar 10, 2009 11:59:24 AM