Mayor Still Has it Wrong About Wal-Mart
By Al Norman
Wal-Mart apparently views locating new stores in urban Chicagoland as something like a soccer game. To score a store you simply have to kick your opponents into the ground, or pay them to play on your side.
Yesterday the giant retailer handed out vuvuzelas at a pro-Wal-Mart rally in Daley Plaza to people that ABC news called "demonstrators." The people "demonstrating" in Wal-Mart-supplied t shirts (from China) said they were not paid to be there. If they were not, then these "teenagers from Chicago's South and West sides" have not learned the first thing about capitalism: don't give away your service for free.
Such "demonstrations" have been called 'astro-roots' events, because they are created in corporate offices, not in places like the grassroots neighborhoods of southside Chicago.
Wal-Mart has reportedly offered to raise its wage to pay its workers $8.50 an hour, and has promised the building trades union that its new stores will be built by organized labor. This is vintage Wal-Mart. I can remember 15 years ago standing in Quincy, Masssachusetts with members of the United Food and Commercial Workers, "demonstrating" against another Wal-Mart store, and being heckled by Building Trades workers who had been promised a contract by Wal-Mart to construct the store. It takes ten months to a year to build a Wal-Mart superstore. The retailer can tolerate unionized masons and carpenters---because they disappear in less than a year's time---but the baggers and clerks can last for years. Wal-Mart has spent millions in union-busting tactics to make sure that its workers never have clout--and has even closed stores when workers accept a union.
And what can you say about Mayor Richard M. Daley, who has grown increasingly aggressive in his fronting for the Wal-Mart corporation? For the Mayor, it comes down to jobs. Daley believes more Wal-Marts means more jobs--despite the fact that six months ago, a study from Loyola University and the University of Illinois at Chicago (UIC) concluded that the one existing Wal-Mart store in Chicago has not produced any new jobs in the local economy.
The study, The Impact of an Urban Wal-Mart Store on Area Businesses: An Evaluation of One Chicago Neighborhood's Experience, found that Wal-Mart's opening in Chicago has produced a loss of 300 full-time jobs. Researchers concluded that the probability of a local retailer going out of business during the study period was significantly higher for establishments close to Wal-Mart's location. The loss of jobs in the trade areas near Wal-Mart just about balanced out any 'new' jobs attributable to Wal-Mart. "These estimates support the contention that urban Wal-Mart stores absorb retail sales from other city stores without significantly expanding the market," the researchers said.
"What we're seeing here is that placing a Wal-Mart in an urban setting is basically a 'wash' in terms of sales revenue for the city and jobs for local residents," explained study co-author David Merriman, head of UIC's economics department. "This means that communities around the city should not see Wal-Mart, and other big-box retailers, as a panacea to local economic struggles."
Overall, researchers concluded, "the weight of evidence suggests that the Wal-Mart opening on the West Side led to the displacement of a range of businesses. There is no evidence that Wal-Mart sparked any significant net growth in economic activity or employment in the area."
Chicago City Alderman Edward M. Burke (14th), who chairs the Council's Finance Committee, understands that Wal-Mart does not create any net new jobs. Burke says that any project which requires city funds should have to provide a living wage of at least $11.03 an hour. Burke has told Wal-Mart that he will not support their big box project unless there is a living wage deal as part of the package. As a result of meeting with labor leaders, Wal-Mart has upped its offer to $8.50 an hour---which makes them $4,754 a year below a living wage for a new employee.
A living wage for Wal-Mart should not be a problem. The company claims that "as of March 2010, the average wage for regular, full-time hourly associates in Illinois is $12.15 per hour." Wal-Mart told the Chicago Sun-Times, "We've been willing to listen to both our critics and our supporters. But, we're not willing to make any commitments" on wages. "We feel like we pay a competitive wage nationally, here in the state, in Chicagoland and specifically at our Austin store. We feel like our jobs offer real career opportunities."
So instead of a decent wage, Wal-Mart gives the teenagers on Daley plaza t shirts and vuvuzelas.
Mayor Daley has become Wal-Mart's Diogenes. He wanders the city looking for an honest answer to his question: "Who is gonna come and build one store? Tell me. One store? " Daley keeps asking, "'Where are the jobs?" The Mayor told the Chicago Tribune. "You have to have people starting someplace on jobs. I really believe this. And that's what retailing does. You start here and you move up," Daley explained.
Mayor Daley complains that the unions are blocking Wal-Mart from expanding in Chicago---yet say nothing when the retailer files applications in the suburbs around Chicago. "If suburban areas have this, why can't we have it in the black and Hispanic communities?" Daley wonders.
I can attest to the fact that the unions have been fighting Wal-Mart in suburban Chicago---and the rest of the nation---for nearly 20 years now. I know, because I've been there with them. Some of those battles have taken place around Chicago, and throughout Illinois. At least half of all Wal-Mart's proposed this year in America will be challenged by local residents.
It is ironic to see the Mayor, Aldermen and religious leaders in Chicago turning to a national chain store to 'save' their community. What happened to the sense of self-reliance, and self-sufficiency in these urban communities? Has it come to this: the South Side of Chicago needs a national chain store owned by Arkansas billionaires to lift it up? Wal-Mart jobs were not the first choice, they say, but now these low wage jobs are looking good to some politicians. The concept of locally-owned community economic enterprise is dead. The local entrepreneur is gone. All that remains is the pathetic plea of local leaders for Wal-Mart to lead them out of the wilderness.
The politicians say the South Side is a "food desert." But it has really become a "hope desert"---because its elected leaders can find no better partner to dance with than Wal-Mart---a company which has been repeatedly sued by its own workers for racial and gender discrimination, and for stealing benefits from its own 'associates.'
On June 24th, the Chicago City Council's zoning committee will take up Wal-Mart's plan for a "Pullman Park" superstore. No doubt "demonstrators" will show with vuvuzelas and t shirts and talk about jobs. But this hearing will not be about jobs. It's about the power of a large corporation to buy its way into Chicago.
When Mayor Daley asks, "Where are the jobs?" someone in the audience should yell out: "Not at Wal-Mart, Your Honor!"
Al Norman is the founder of Sprawl-Busters, and the author of "The Case Against Wal-Mart." 60 Minutes called him the "guru of the anti-Wal-Mart movement."