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Bloomberg reports this morning that Wal-Mart Stores has indicated that it will allow its employees in China to set up and join organized trade unions.

``Should associates request formation of a union, Wal-Mart China would respect their wishes and honor its obligation under China's Trade Union Law,'' the company said in a faxed statement. “Wal-Mart is currently in full compliance with China's Trade Union Law, which states that establishing a union is a voluntary action of the associates, Currently, there are no unions in Wal-Mart China because associates have not requested that one be formed.”

Wal-Mart, which views China as an enormous potential market, has faced criticism from trade unions in China for what has been perceived as an anti-union stance…which, of course, is consistent with the company’s position elsewhere in the world.
KC's View:
Could this be the first domino to fall? After all, if Wal-Mart workers in China can be unionized without resistance, why not its Canadian employees? Or California workers?

Actually, we doubt that this will have any pervasive impact on Wal-Mart’s operations. The difference between China and elsewhere is that trade unions are a significant factor, deeply entwined in the work life of the nation…as opposed to his country, where they are to a certain extent disorganized and to a great extent struggling for relevance.