Tuesday, May 4, 2004
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Wal-Mart vs. Jesse Jackson
Dan Mihalopoulos has a story in today's Chicago Tribune on the contentious neighborhood politics Wal-Mart faces in trying to open new stores in the Windy City:
As a fellow South Sider, let me just second Krystal's sentiments there. This is not a case where Wal-Mart would put "mom & pop stores" out of business, since there are appallingly few retail options in these neighborhoods.
However, local African-American leaders have taken a different and depressingly predictable position:
I can see the campaign commercial now: "Chicago's political and religious and community leadership -- keeping jobs out of your neighborhood until we get ours!!"
UPDATE: Kevin Brancato -- who helps run a blog devoted exclusively to Wal-Mart -- links to this Business Week article about Wal-Mart's devastating effects on urban centers:
You can read Basker's paper about Wal-Mart by clicking here.
Thank goodness the good Reverend Jackson is here to prevent these pernicious effects from taking place in Chicago!!posted by Dan on 05.04.04 at 05:58 PM
I highly recommend “Shakedown: Exposing the Real Jesse Jackson,” by Kenneth R. Timmerman. Jackson is a poverty pimp, a loathsome creature who has been protected for years by the liberal establishment. He is truly the shame of the Democrat Party. The Republicans goofed up by not fervently supported civil rights. This is beyond dispute and there’s no sense denying it. However, the Democrats have inadvertently screwed minorities in this country by encouraging self pity, victimization, and an over reliance on the welfare state.posted by: David Thomson on 05.04.04 at 05:58 PM [permalink]
Gee, I guess in Chicago you still have to take Jesse seriously. In the rest of the country, we've moved on to serious figures such as ... Al Sharpton, and our local favorite, Cynthia McKinney. (In case you think her a has-been, don't be surprised when she returns to her house seat.)
posted by: Appalled Moderate on 05.04.04 at 05:58 PM [permalink]
Jesse Jackson is basically saying that WalMart has refused to pay him and his cronies off.
Interesting how Jackson thinks he knows better than all of those people so "desparate" to get jobs at WalMart. I'd like to see him provide for these people in the absence of these jobs.
Plus, Jackson's opposition to WalMart doesn't exactly show any confidence in the community. He should remember that where an employee starts is not necessarily where they end up. I know a few people who started at WalMart and have worked their way up in a short period of time to nice paying positions.posted by: Another Thought on 05.04.04 at 05:58 PM [permalink]
I think the union activist who compared working at WalMart to slavery has no historical appreciation of how bad slavery was. That remark is really over the top.
The bottom line is this: WalMart offers legitimate opportunity to anyone wishing to take advantage of that through hard work and dedication.
Plus, let's remember all of those rank and file WalMart employees who have become quite wealthy due to their employee stock program.
I hope WalMart fights back hard. I really hope WalMart embarks on a national PR campaign to swat down all of these left wing myths regarding WalMart.posted by: Another Thought on 05.04.04 at 05:58 PM [permalink]
The big thing missing from this story is where does Daley stand on this? Don't kid yourself that Jackson or any aldermen have any realistic pull in the City Council.posted by: niucons on 05.04.04 at 05:58 PM [permalink]
Left wing myths?
Here's some non-myths. Wal-Mart does not offer healthcare. As a result, every taxpayer has to pick up that expense when Wal-Mart employees have to get health care. Furthermore, that expense is the largest since uninsured frequently use our most expensive medical system (emergency rooms) to get their health care.
Should Wal-Mart offer health care to their employees? While I can see why small businesses might have a hard time doing this and staying in business, I can't see why a company that has $8 billion dollars in profits cannot afford to give basic health care to its employees.
The bottom line is that the taxpayers of Chicago and Illinois increase their tax burden by subsidizing the health care costs of each new Wal Mart built.
Why shouldn't people use the zoning process to try and leverage Wal-Mart to shoulder its responsibilities to its employees.
WM does offer health insurance to its employees. 90% of WM employees have health insurance, roughly half of those are on the WM plan.posted by: Kevin Brancato on 05.04.04 at 05:58 PM [permalink]
Wal-Mart must really have saturated the market if it has to put up with this in order to open a new store. Thi8s can not be a good indicator of next year's growth opportunities.posted by: Richard A. Heddleson on 05.04.04 at 05:58 PM [permalink]
The Reverend Jackson is merely displaying his sense of humanity, his compassion for his fellow man, especially those closest to him.
What the inner city folks need is not a Wal-Mart with its low prices on everyday goods. That merely benefits the whole community – allowing everyone’s dollar to go a little farther – and makes no political or social statement worthy of a compassionate community.
Where are the good reverend and his coterie to shop? Certainly not at Wal-Mart. What the inner city needs is perhaps a Nordstrom’s, offering a few good sales and management positions, but a wonderful selection of stylish, well-fitting premium clothing for the inner shopper who cares about quality.
Using Reverend Jackson’s logic, the key to inner city happiness is perhaps a Nordstrom’s on each block. Well, I exaggerate, because other upscale retailers like Brookstone or Williams-Sonoma would fit the bill too.
That’s the ticket, no?
Is this a sign of the apocalypse?posted by: Erick Erickson on 05.04.04 at 05:58 PM [permalink]
This brings back the old Wal-Mart debate. Is having a store that has insanely good prices worth having a store that pays insanely low wages? The upside to low prices is obvious to all, when I was in college in a town 60 miles west of Chicago, I and a lot of guys I know survived on Wal-Mart prices. But I would never want to have a full time job there. Wal-Mart plain and simply abuses the Welfare system we currently have in America. I don't blame them the slightest for it; I would do the same in there position.
The simple answer in my book is a dramatic raise in the minimum wage. The whole Card Krueger Debate debate raises questions as to the validity of American labor laws. I'd fight for Wal-Mart the rest of my life if they paid a living wage, but if they don't it's clear to me we are simply subsidizing low cost goods with higher taxes to pay for the benefits of the welfare society.
I noticed the gratuitous slap at Tupelo by the lovely and talented William Lucy.
Perhaps Mr. Lucy is unfamiliar with the Mississippi Wal-Mart phenomenon. I would invite him to come to Mississippi and see the large number of black people employed in management positions in Wal-Mart, the availability of inexpensive goods, and the ability of competitors to thrive (assuming that the competitor was not the number one grocery store in town before Wal-Mart arrived). I'd invite him, but why bother?posted by: Scipiio on 05.04.04 at 05:58 PM [permalink]
I think the success of Wal Mart really speaks for itself. In the burbs there is a Wal Mart in Oak Brook Terrace that is a notorious location for failed enterprise. It has a single entrance to it off a fairly major road that connects the southwest suburbs with the Northwest suburbs. Until Wal Mart arrived the site was a dead zone for failed ventures. Wal Mart has now been at the site for over 10 years and the lot is consistently packed with shoppers.
Don't know who owns that land, but even for the suburbs, the owner will probably tell you that Wal Mart was the greatest thing that ever happenned to him/her.
The unions oppose Wal Mart expansion into the city limits for obvious reasons. Wal Mart plays with 4 aces in their hand each draw. Wal Mart provides many of the Union's benefits right in house. Employee satisfaction is among the highest in the retail business and that bothers unions.
But really, what really bothers unions is competition. Unions aren't exactly growing, nor are they forming competing unions to benefit the worker. It's still old school labor control and Wal Mart is a direct threat to that practice.posted by: brennan stout on 05.04.04 at 05:58 PM [permalink]
niucons: If the cost of goods declines by 15% with the arrival of a Wal Mart doesn't that give the consumer in that area 15% more buying power? If alone the Wal Mart store converts 1 of 4 welfare recipients to a self supportive citizen then welfare budget of city services has 25% to allocate towards programs that are more geared towards ending government dependency such education and home ownership.
Chicago is a very diverse ethnic population. I believe more than half of the Chicago residents are Black and about 15% are hispanic. For this the city council has created an affirmative action ordinance for minority owned contracting firms that guarantees them a certain number of city contracts each year. The object of design is to pump city money into minority ownership in hopes of increasing the collective buying power of said community.
The problem with this program is it doesn't begin to effect the real problems with city contracting. Creating quotas to allocate contracts to minority OWNED firms has done little to empower the minority worker. Contracter power houses are almost guaranteed to stay dominant as they're really the only firms that have the labor, skill and technology to complete the tasks on schedule. Minority OWNED firms control the contracts, but they subcontract the actual labor to the same dominant firms.
Case in point, the Englewood Community of Chicago has a new library under construction. Englewood is predominantly black community(95% I think) on the south side of Chicago. It also is one of the highest crime ridden areas in the city. The complaints vary from "there are no jobs for Englewood residents" to "residents lack the transportation to get to the jobs". The new library was the ideal opportunity to put local residents to work building a knowledge complex. What occurred instead was the same contracting scheme that has plagued the city since the quota creation. Local residents weren't working on the project. Skilled labor was brought in by the subcontracters that won the bids for the work. The prime contract may have been owned by a minority owned firm, but the work wasn't being done by minority laborers.
I don't know how Wal Mart handles the contruction work to build their super centers, but Mr. Brancato's blog sounds like a good start to find out.posted by: brennan stout on 05.04.04 at 05:58 PM [permalink]
I'm a bit bemused by the complaint implicit in many of these comments: that the persistence of Wal-Mart in acting like a business rather than a social welfare agency is forcing the real social welfare agencies to do their job.
As a libertarian conservative I suppose I ought to be tickled that so many people find the superiority of the for-profit sector so obvious even in this rather unexpected sphere, but this goes a bit far even for me. It should be possible to accept the market's verdict that Wal-Mart is a better Sears than Sears without expecting to also be a better Department of Health and Human Services than the Department of Health and Human Services (or a better St. Vincent DePaul Society than the St. Vincent DePaul Society).
For better or worse, we've decided through the democratic process that people whose labor can't be sold for enough money to let them afford things like health care will have it subsidized for them with government money obtained through a system of progressive taxation. It's no surprise that there are still a few of us who'd like to replace this system with something different. What is a surprise is that there are people who'd like to replace it with what amounts to a tax on the sort of people who do their shopping at Wal-Mart.posted by: Paul Zrimsek on 05.04.04 at 05:58 PM [permalink]
Paul, it's not surprising at all. The comfortable folks who hold those opinions are too well-off to need to shop at Wal-Mart. So that "tax" doesn't affect them one bit. In fact it has the potential to help cut _their_ actual taxes by taking the burden off the government and putting in on the shoulders of less-affluent shoppers. (And while they also claim to be against tax cuts, surprisingly few of them seem to to be donating the proceeds back to the government. I wonder why.)posted by: Steve LaBonne on 05.04.04 at 05:58 PM [permalink]
I think one fallacy that needs to be put to bed is the old canard about Wal-Mart putting "mom and pop" stores out of business. The fact is, people who patronize small shops usually don't do so because of low prices. They do so for other reasons: covenient location, good service, high degree of specialization, shopping experience, etc. If you're a small shop trying to compete with Wal-Mart's prices, your problem ain't Wal-Mart, your problem is faulty business strategy.posted by: P.B. Almeida on 05.04.04 at 05:58 PM [permalink]
The "Rev" Jesse Jackson is a corrupt venial leader who is a parasite on the African-American body politic. There are significant implicit cultural prejudices that contribute to African-American poverty and crime, but excessive racial defensiveness rather than a "can-do" attitude on the part of their political lobby and caucus not to mention the corrupt and ineffective leaders they embrace are a severe hindrance to the progress of the black ethnic community.
A case in point, NPR's report of the racial politics over MLK LA hospital where charges of racism (black vs hispanic as well as white ironicallu) are getting in the way of the hospital keeping its basic certification. The problem? Patients were dying because of mistakes so the hospital needed to be reorganized. In a case of "reverse"-racism the white local politicians let it get that bad because they feared charges of racism if they tampered with the system. As a result five people died needlessly, and the Hospital is on review and may lose it's medicare/medicaid certification which is half it's budget. Yet when hard choices have to be made, all I hear is more charges of racism.
This hospital is symbolic how the African-American ethnic community in general has allowed the politics of racial divisiveness, special interest lobby corruption, and the capitalization on "reverse"-racism in order to block their own path to progress. The liberal black caucus is dysfunctional, and needs internal reform badly. Anti-semetism and shake-downs can't be the path to progress to the future any more than rap-record studio recording is a plan for economic development in inner cities.posted by: Oldman on 05.04.04 at 05:58 PM [permalink]
Certain areas of cities such as Chicagos South Side are notoriously dereft of services of all forms (where do you have to go to see a movie Dan?).
Even if the reasons for keeping Walmart out were valid, these so-called leaders offer no alternative. Why doesn't Mr. Jackson put his money where his mouth is and start an all union big box store down there and actually do something for the neighborhood.
I know somewhat how people feel in those neighborhoods because I come from another underserved market that Walmart originally targeted, rural America. To get the goods and services offered at the Walmart seventeen miles from my hometown in northern Missouri I would have to drive an hour.
That Walmart is now going for the underserved portions of urban America isn't a sign of future slow growth, it's just going after one more market where there is a need that is not being filled.posted by: Scott on 05.04.04 at 05:58 PM [permalink]
The simple answer in my book is a dramatic raise in the minimum wage.
How much of an increase would it take to be dramatic? Would people be better off if the minimum wage were $8.00 per hour? How about $20.00 per hour? If you make the minimum wage $486.00 per hour every full-time worker would have a seven figure income.
Ten years ago in LA, after the riots, the prevalent meme about the evil big retailers was how they refused to come into the inner city, forcing inner-city residents to pay the extortionate prices and the poor selection of the local mom-and-pop stores, or to travel long distances to get to a large store.
I remember thinking then that it hadn't been too long since the meme was how these evil big retail corporations were trying to put the virtuous mom-and-pop stores out of business.
And so the pendulum swings back once again (in LA as well as in Chicago)...posted by: Curt Wilson on 05.04.04 at 05:58 PM [permalink]
Here's some non-myths. Wal-Mart does not offer healthcare.
Horsehockey. I worked at a Wal-Mart one summer in college, and on the very first day I had to fill out forms for both health and life insurance -- yes, that's right, they have an employee life insurance plan. I wasn't there 90 days so the insurance didn't kick in, but I did pick up several shares of stock.
About the worst you can say about Wal-Mart's treatment of employees is that they have a hard-core anti-Union policy. And even that I'm not convinced is necessarily bad.posted by: Sean O'Hara on 05.04.04 at 05:58 PM [permalink]
Color me educated. Wal-Mart does indeed offer health insurance.
The co-pay is very high. In fact, so high that more than 60% of Wal Mart employees do not use the Wal Mart plan.
Well, then, how can Kevin claim that 90% of WalMart employees are insured. Kevin fails to mention on his post what he does mention on his website, that half of that 90% gets its insurance from someplace else other than Wal Mart. (Kind of disingenous to imply that 90% of WalMart's employees are covered by health care from WalMart, but then, this is a fairly pro-WalMart crowd, so what the hey!)
Where do they get it? Spousal employers, universities, etc. (That 'etc' would include Medicare. Why do you think that WalMart likes to hire those over 65 so much?)
So, I was wrong when I said that WalMart didn't offer insurance. Rather I should have said that WalMart offers such a poor level of insurance to its employees that those most in need of it cannot afford it.
What does that mean? It means that WalMart has effectively shifted its health care to other businesses, universities, and the government (see Medicare).
It also means that those who do not participate in the WalMart health care system and do not have some other recourse for health care, tend to be those in the least paying jobs. Funny, that equates to most of the jobs that the WalMart in Chicago will provide.
Now some in this comment thread have stated, "Yay for WalMart! It's taking advantage of a bad system the way a good business should."
In fact one poster states:
For better or worse, we've decided through the democratic process that people whose labor can't be sold for enough money to let them afford things like health care will have it subsidized for them with government money obtained through a system of progressive taxation.
Well, this just states one side of the problem. Unfortunately for us, we've decided that using tax payer money to aid the sick and injured in poverty is more palatable than letting them die in the streets. Goodness! What are we thinking?
However, one assumption in this safety net is that large companies with big profits provide affordable health insurance to its employees. In other words, we've placed a civic obligation (though not a legal one) on companies to take care of this part of their employees lives. WalMart has decided to shirk this responsibility.
And like many other places, when one entity shirks that responsibility, others have to take up the slack. And the others here are the taxpayers and other businesses in the Chicago area.
Now, Jesse Jackson, etc. are protesting this type of practice. Does Jesse think that his protest is actually going to stop WalMart from building here? (Let's ask it another way. Does Kucinich actually think he's going to win the Democratic nomination?) Hasn't worked anywhere else, so probably not. It's mostly theater with a specific goal in mind.
That goal is to shame WalMart into shouldering more of this civic obligation that other companies (say, Costco as an example) have shouldered.
Daniel (and the other anti-Jackson rhetoricians here) are being quite naive about the political process.
Finally, I'd agree with most of you here that we need a different system for resolving the health care problem in this society and minimum wage as well.
The big problem for minimum wage is that it unfairly burdens a few (i.e. businesses that employ low-skilled labor) in order to implement a goal desired by a majority of our country's representatives (i.e. decent standards of living for all people who work).
A better solution would probably be an increase of the EITC and Family Tax Credit. That would spread the burden of this goal among all of us.
Health care is a bigger issue and this is just a comment.
Jesse Jackson is not protesting in some Quixotic quest, Kilroy. He has a well documented history of raising protests against companies and then going away once he has extracted promises for money from them. It's a shakedown and form of protection racket. The southside in particular is his territory, I drive by the Rainbow/Push HQ all the time. All he is doing is letting WM know he is in their neck of the woods so they better be ready to pay the piper.
Also, I think you're missing the forrest for the trees. Your so concerned about health care, which is important, but no health care is going to come without the jobs WalMart provides, not the mention the spending power it magnifies by allowing local consumers to get goods cheaper and closer to home.
In your rush to protect those in such neighborhoods you're overlooking the fact that often people in poorer neighborhoods have to pay MORE for basic goods, because of a lack of such stores in close proximity. Healthcare is good for the long term, but the benefits of a cheap store like Walmart is immediate.posted by: Scott on 05.04.04 at 05:58 PM [permalink]
Your first point I don't know enough about. I'd like to seem some hard OBJECTIVE evidence from a source that doesn't have an ax to grind about Jesse Jackson (a major independent newspaper would be nice, say the Chicago SunTimes or Tribune?)
Listen, I'm aware that black urban communities don't have the resources. I lived for some time in an urban setting that lacked any sort of supermarket or bank.
But WalMart is not locating its business here out of some sense of moral good. They believe they can make money in doing so. So I wouldn't go out of my way making WalMart into Sister Theresa by building a store where they can make money.
The fact is that WalMart could have better employment practices. Costco provides better pay and better benefits for their employees, and still runs a profitable business.
WalMart, on the other hand, has a history of knowingly breaking labor laws (see the contracting of illegal aliens for cleaning crews) and shirking their civic responisbility (see health care).
Besides the market of dollars, our political system (or the market of votes) is another way for like-minded citizens to modify that behavior. These citizens are figuring that WalMart's self-interest here is great enough that they might be willing to modify some behavior to build that store there and increase their overall profit.
Many people here have put up a false dichotomy. Either WalMart will build and have the same employment practices (leaving many of the 300 employees at this store uninsured by WalMart) or WalMart won't build (leaving the community without a place to get low-priced goods.)
However, I think everyone would agree that the best solution would be if WalMart built this store AND provided better health care and wages for its employees. Why shouldn't people try to reach the best solution using the political process?
"What does that mean? It means that WalMart has effectively shifted its health care to other businesses, universities, and the government (see Medicare). "
No it hasn't. WalMart doesn't have any healthcare to shift. Now its employees will need health care. If they have no job anywhere, they'll definitely have to get healthcare from the social service system. If they have a job at Wal-Mart, they might need help with their healthcare from the social service system, or they might have some other way of getting it. How is that not an improvement?
"However, one assumption in this safety net is that large companies with big profits provide affordable health insurance to its employees. In other words, we've placed a civic obligation (though not a legal one) on companies to take care of this part of their employees lives. WalMart has decided to shirk this responsibility."
Really? How did "we" manage to do a stupid thing like that? I certainly have no desire for my company to have a civic or moral obligation to give me part of my pay in the form of a health plan from the company store rather than cash.
(Oh, you thought that they were supposed to give me all the pay that I'm worth in cash and a free health plan? Ummm, no.)
Now if an individual cannot provide enough value to earn minimum wage and the cost of a nice health plan, then employers will either give him minimum wage and no health plan or they will give him no job at all. Which do you think this prospective employee would prefer?
Now our fearless leaders have decided that people who are limited in this way ought to be given health care as charity. This is not Wal-Mart's fault. Wal-Mart had no say in this decision, and certainly should not be expected to pick up the tab for charity health care for its employees. Just because someone buys your services does not make them responsible for every aspect of your life; that employment model fell out of favor about 140 years ago.posted by: Ken on 05.04.04 at 05:58 PM [permalink]
Of course Walmart is coming in because they think they can make money, they're a business! I don't expect them to be Mother Teresa (and frankly I don't completely trust them beyond the expectation that they'll do their best to make money - so, no surprises).
So, what do we want? More low-paying jobs (compared to what?) with no health care, or NO jobs with NO health care, but the warm feeling of moral victory. Why not get Walmart and the jobs in here first to help the neighborhood (commerce always helps), THEN pressure them to adopt better health care unions, etc.
I don't trust Walmart, because I know they have selfish reasons, however, I'm just frustrated by the opposition to something that would obviously help the neighborhood and bring in something that does not exist there. And I figure that is why the local Alderman still supports the plan.
PS - As for the Jackson stuff I don't have it at my finger tips, if you really want me to look it up, email me and I will.posted by: Scott on 05.04.04 at 05:58 PM [permalink]
It seems Kilroy would prefer that willing workers and willing customers of Wal-Mart not benefit from that store because the wages and benefits don't meet Kilroy's standards.
Well, Kilroy, I don't remember anyone electing you the dictator of shopping and employment.
Even if Wal-Mart offered no health care benefits as your first post asserted, that's not a big deal for many people, because they can be covered on a family member's insurance.
And as to the allegedly low wages at Wal-Mart. Not every job can pay enough to support a family, there isnt enough value added to support high wages. But for many people beginning their careers, Wal-Mart is a good place to learn basic job skills. Retirees seem to like working there, too.
I've never seen anyone forced to work at Wal-Mart or forced to shop there, so what's the problem?
I suspect Kilroy would be furious if someone tried to dictate his choice of music, entertainment or employment.
But Kilroy -- like the feckless Los Angeles City Council and California Legislature -- seems to have no problem trying to dictate where we should shop or work.
Your objections are noted and rejected.
16-21 years olds that are working there during school are most likely covered under a plan their parents have. Many other of the workers are there part-time as a supplemental income for there families. Many of those workers are covered by a spouse's plan.
I worked for WM corporate for several years and never had their insurance. Not because I couldn't afford it, but because of certain advantages we had being on my wife's company policy.
It's very easy to spout off numbers, but they aren't nearly as impressive if you actually do a little research.posted by: Matt on 05.04.04 at 05:58 PM [permalink]
On September 9, 1999 late at night just before the legislative session ended, both houses of the California Legislature passed a stealth bill prohibiting the sale of groceries in stores that sell other merchandise exceeding 100,000 square feet.
The bill was supported by the major California grocery store chains and their employee unions. I read the bill and its legislative analyses, and it was clear the bill was intended to protect Vons, Safeway, Albertsons and Ralphs and other major chains from competition by Costco and Wal-Mart.
The analyses noted that the largest traditional supermarkets occupied at most about 60,000 square feet, so those grocers would be unaffected.
Every Democrat voted for it, Republicans opposed it. Fortunately for consumers, Governor Gray Davis vetoed it.
Now if a legislature can simply outlaw a business because it prefers their competitors, I have some questions:
--Exactly what gives California the authority to favor some businesses and harm others without a compelling public safety interest?
--Aren't businesses, like individuals, entitled to equal protection under the law?
--If government is allowed to have this kind of power, what's to stop them from punishing individuals? For example, if politicians were angry at a plumber or other tradesman, they could probihit the overnight parking of work vehicles in private driveways.
--Isn't this kind of legislation really a bill of attainder (legislative punishment without trial) in disguise, and shouldn't it be unconstitutional?
I put these questions to my State Senator, Adam Schiff (D-Glendale), who graciously returned my call. Schiff, a Harvard Law graduate, couldn't really answer these questions. He did admit he voted for the grocery bill, and said he hadn't thought much about the objections.
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