(Bloomberg) — As a freshman senator with his eye on the presidency, Barack Obama said he’d never shop at a Wal-Mart and held the company up as an emblem of corporate greed.
Today, Wal-Mart Stores is one of Obama’s most reliable corporate allies, a go-to partner that’s backed the White House on more than a dozen business initiatives, particularly Obamacare and climate change.
The pairing benefits both. Obama can point to Wal-Mart’s support to beat back Republican charges that he’s hostile to business. Wal-Mart can point to the president’s embrace to lure squeamish shoppers who, like Obama of old, have stayed away out of a belief the company hurts workers and undercuts competition. This is a key part of the company’s effort to spur continued growth.
“It only makes sense for the president to be willing to strike a partnership with the nation’s largest retailer,” said Dwight Hill, a Plano, Texas-based partner with retail consultancy McMillan Doolittle. “And Wal-Mart has made more strides of late to try to be more transparent about worker pay and benefits. They have certainly seen the light.”
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The president completed the turn from Wal-Mart antagonist to fan when he visited one of the retailer’s stores in Mountain View, California, in 2014 to praise its use of renewable energy. Obama’s visit represented a “major milestone” for the company and its public image, said Jib Ellison, whose consulting firm worked on Wal-Mart’s sustainability program.
“When he got elected, his rhetoric was very anti-Wal-Mart,” said Ellison, who continues to advise Wal-Mart on environmental policies. “So it’s reaffirming.”
The partnership between the president and the retailer is especially strong in two areas: health care and climate change.
Obama’s view of Wal-Mart shifted early in his presidency when he realized he needed business support to advance the Affordable Care Act legislation, which Republicans claimed would kill jobs and drive companies out of business. Wal-Mart was one of the first major employers to sign on to the plan. In June 2009, as debate raged in Congress, Wal-Mart publicly released a letter to Obama saying it supported requiring employers to offer health insurance to their workers, a keystone of the law.
For Wal-Mart, the Affordable Care Act resolved a major gripe about the company: that it provided weak health benefits for its more than 1 million workers in the United States. The ACA created a system of subsidized insurance for middle-income Americans and expanded the Medicaid program for the poor to cover people earning poverty-level wages. Pressure subsided on Wal-Mart to provide coverage. When the ACA’s Obamacare health insurance exchanges opened in 2014, Wal-Mart stopped offering health insurance to 30,000 part-time workers.
“Obamacare is great for Wal-Mart workers; it was a huge transfer of wealth,” said Nelson Lichtenstein, director of the Center for the Study of Work, Labor, and Democracy at the University of California, Santa Barbara, who wrote a book on Wal-Mart. “The pressure is off Wal-Mart to provide better health insurance to its own employees. If you’re a single mom and work at Wal-Mart you now qualify for Medicaid.”
Wal-Mart and the White House have cooperated on Obama’s climate agenda, which current and former company executives described as a natural gelling of interests rather than a political calculation. Wal-Mart began pushing to cut its carbon footprint in 2005 as a way to not only help the environment, but also improve its public image, and is now the largest corporate user of solar energy.
Last year, the company endorsed the global accord Obama negotiated in Paris to reduce carbon emissions.
Leslie Dach, who ran Wal-Mart’s government relations and corporate affairs department from 2006 until 2013 before joining the Obama administration, published a piece in the Huffington Post shortly before leaving the company titled: “Wal-Mart Agrees With the President: The Time for Renewables Has Come.” The retailer seized upon an offhand comment by the president during a speech that week at Georgetown University, in which he said “Wal-Mart deserves a cheer” for reducing carbon pollution.
Obama’s senior adviser Valerie Jarrett said the White House has found in Wal-Mart a willing partner as its reached out to various businesses to embrace administration’s initiatives.
“We recognize that the private sector is the economic engine of our country,” Jarrett said in an interview. “It’s not enough just to have these policies on the books.”
Working with the administration helps the retailer address the social and environmental issues that the company’s customers care about, said Kathleen McLaughlin, Wal-Mart’s chief sustainability officer and CEO of the Wal-Mart Foundation.
“It’s so essential that we have these collaborations,” she said.
Some Democrats in Congress are still leery of the Walton family. (Photo: Thinkstock)
When Wal-Mart announced it would raise its minimum wage for employees in early 2015, after some encouragement from the administration, Obama called Wal-Mart Chief Executive Officer Doug McMillon from Air Force One to congratulate him and told a crowd in North Carolina that “once Wal-Mart is paying people more, then you know that something is happening, right?”