UPDATED: The Case AgAainst Wal-Mart
Roland Chlapowski
Update: Local neighbors against the proposed Sellwood/Ardenwald Wal-Mart store have begun to organize. Check out their website, NoSellwoodWalMart. WakeUpWalMart is another great resource.
Sam is strongly opposed to the new Wal-Mart store proposed for SE Portland. If you were wondering why, here is a (partial) list of the issues underlying his reservations. Since Sam is concerned with the success of small businesses, family-wage jobs, neighborhood livability, and economic vibrancy, he is disturbed by the prospect of a new Wal-Mart in Portland. Below is list of Sam's concerns, and the studies they are based on.
Economic Impact - Local
• A study of Chicago businesses found that for every dollar spent at a local firm, 68 cents stayed in the city, whereas for every dollar spent at a larger chain firm like Wal-Mart, only 43 cents stayed in the local economy. (1)
• The same Chicago business study showed that for every square foot occupied by a local firm, there was a net local economic impact of $179, whereas every square foot of a chain firm generated only $105 of local economic impact. (1)
• For every million dollars in sales, Wal-Mart gives $1,000 to charity. For every million dollars in sales, local businesses give $4,000. (2)
• Wal-Mart puts local stores out of business. Studies show that if a local business sells something that Wal-Mart also sells, they are forced to scale back or shut down their business operations after Wal-Mart comes to town. (3)
• Wal-Mart hurts the civic capacity and economic innovation of the towns they move in to by driving out local entrepreneurs and community leaders. (4)
Economic Impact - National
• Wal-Mart pressures suppliers to reduce prices, putting many out of business. (5)
• Wal-Mart exports American Jobs. In a Dateline-NBC, Wal-Mart documentary, suppliers reported that Wal-Mart actively advocated that they move their operations to China to reduce prices. (5)
Wages and Poverty
• Supercenters such as those operated by Wal-Mart depress industry wages and benefits in the grocery industry. This Orange County study, concerning roughly 250,000 grocery workers, estimates an ANNUAL net negative impact somewhere between $500 million to $1.4 billion. (6)
• A study analyzing U.S. counties that gained Wal-Mart stores came to the conclusion that “Wal-Mart presence may have stalled the reduction of poverty rates during the 1990’s economic boom.” The results of the study suggest that it increases local poverty to levels higher than would have existed had Wal-Mart not moved into the community. (4)
Unionization and Worker Rights
• “Unlike other retailers, Wal-Mart refuses to open its suppliers’ factories to independent inspections. That prompted Domini Investments, which runs a ‘socially responsible’ mutual fund, to dump its 1.3 million Wal-Mart shares in 2001.” (7)
• Wal-Mart is virulently anti-union. Although it is the largest employer in the United States, none of its stores are unionized. “In 2000, when a small meatcutting department successfully organized a union at Wal-Mart, Wal-Mart responded a week later by announcing the phase-out of its meatcutting departments entirely.” (8)
• One Bangladeshi worker told the L.A. Times that employees were forced to work from 8:00 a.m. to 3:00 a.m. for 10-15 day stretches to meet Wal-Mart demands. (8)
• Wal-Mart illegally employs undocumented workers. On October 23, 2003, federal agents raided 61 Wal-Mart stores in 21 states. They arrested 250 undocumented aliens working as nightshift janitors. (8)
• Unequal pay and treatment for women: currently, Wal-Mart is facing a class-action lawsuit filed by 6 women in 2001. While 2/3 of Wal-Mart employees are women, they only hold 1/3 of managerial positions, and constitute less than 15 percent of store managers. (8)
• Wal-Mart has faced –and lost- many class-action lawsuits (in Texas, New Mexico, Colorado, Minnesota and Oregon) because of forced off-the-clock work. One former Wal-Mart manager told the New York Times, “[Wal-Mart] threatened to write up managers if they didn’t bring the payroll in low enough.” The Oregon case involved 400 employees in 27 stores suing for unpaid overtime labor. A jury sided with the workers after they heard that managers would delete hours from time records and tell employees to clean the store after they clocked out. (8)
• In January 2004, the New York Times reported on an internal Wal-Mart audit which found “extensive violations of child-labor laws and state regulations requiring time for breaks and meals.” (8)
• Wal-Mart has faced a barrage of lawsuits alleging that the company discriminates against workers with disabilities. In 2001, they paid over $6 million to settle 13 such lawsuits. (8)
• According to a January 12, 2004 New York Times article, Wal-Mart institutes a “lock-in” policy, where the entire store, including fire exits, would be shut down and only able to be re-opened by a manager. Often, this led to employees being trapped inside the stores overnight - no manager meant to way out. This violates OSHA worker safety laws. (8)
Government Fiscal Impacts – Lost Revenues and Higher Demand for Social Services
• “The fiscal benefits of supercenters, and of discount retail more generally, are often much more complex, and lower, than they first appear… the additional tax revenues [from supercenters] will in part [be offset by the reduced tax revenues received from] existing businesses elsewhere in the city.” (6)
• A U.C. Berkeley study found that families of Wal-Mart employees in California utilize an estimated 40 percent more in taxpayer-funded health care than the average for families of large retail employees. Even among its most similar retail competitors, Wal-Mart stands out. (9)
• The families of Wal-Mart employees use an estimated 38 percent more in other (non-health-care) public assistance programs such as food stamps, the Earned Income Tax Credit, subsidized school lunches, and subsidized housing, as compared to the average for families of all large retail employees. (9)
• “Wal-Mart not only affects public assistance utilization through its compensation policies, but also by actively encouraging employees to participate in such programs.” Bill Moyers reported on PBS that Wal-Mart provides its employees with a 1-800 number to call to determine their eligibility for public assistance programs and benefits. (9)
• [Wal-Mart] supercenters…typically offer much less comprehensive health care coverage than major California grocery chains.” (9)
Research performed, compiled, posted and composed by Roland Chlapowski. June 16, 2005.
(1) The Andersonville Study of Retail Economics. October, 2004. Matt Cunningham & Dan Houston. Partners, Civic Economics. Chicago, Illinois. (Updated February 2005)
(2) The Economic Impact of Locally Owned Businesses vs. Chains - A Case Study in Midcoast Maine, Institute for Local Self Reliance Study. September, 2003
(3) "Competing with the Discount Mass Merchandisers." Study by Dr. Kenneth E. Stone, Professor of Economics & Extension Economist. Iowa State University, 1995
(4) Wal-mart and County-Wide Poverty. Stephan Goetz & Hema Swaminathan, Department of Agricultural Economics and Rural Sociology, Pennsylvania State University. AERS Staff Paper No. 371. October, 18, 2004.
(5) Inside Wal-Mart, NBC-Dateline Documentary, November 10.,2004. "CNBC's David Faber has a rare glimpse inside the Wal-Mart empire."
(6) The Impact of Big Box Grocers on Southern California: Jobs, Wages, and Municipal Finances. Prepared for the Orange County Business Council by Marlon Boarnet, Ph.D. (Associate Professor, Department of Urban Planning and Economics, University of California, Irvine), and Randall Crane, Ph.D. (Associate Professor, School of Public Policy and Social Research, University of California, Los Angeles) SEPTEMBER 1999
(7) “Audit Stance Generates Controversy.” Evelyn Iritani and Nancy Cleelan. November 24, 2003. from The Los Angeles Times' Pulitzer-Prize winning Wal-Mart series.
(8) "Everyday Low Wages: The Hidden price we all pay for Wal-Mart,"a report by the Democratic staff of the Committee on Education and the Workforce; U.S. House of Representatives Rep. George Miller (D-CA), Senior Democrat. February 16, 2004
(9) Hidden Cost of Wal-Mart Jobs: Use of Safety Net Programs by Wal-Mart Workers in California, Arindrajit Dube, Ph.D., UC Berkeley Institute of Industrial Relations, & Ken Jacobs Ph.D., UC Berkeley Center for Labor Research and Education. August 2, 2004. (Briefing Paper)
Posted by Roland Chlapowski on June 22, 2005
(13) Comments | Permalink | TrackBack (2)
Filed Under Jobs & Economy, Livability & Environment, Wal-Mart
Comments by site visitors
Thanks for standing up against Wal-Mart. I live out in Gresham, just east of 182nd Street & Powell. We're trying to fight a Wal-Mart from going in out here.
Thus far I have heard very few elected officials out here stand up for the neighborhood and against Wal-Mart.
It's hard to think of many places worse for a Supercenter than a small piece of property in an area that is more than 90% single-family residential and borders a protected watershed.
I tried telling people at the DFO Summit in May that those living in Portland shouldn't think they were safe from Wal-Mart. It was only a matter of time before they tried to build more Wal-Marts within the state's largest city.
Posted by: Jenni Simonis | Jun 16, 2005 4:49:51 PM
There's a new investigative documentary about WalMart coming out, made by the producers of "Outfoxed". Viewing and distribution will be grassroots -- $10 (about the cost of a regular movie ticket) buys the DVD and encouragement to show the movie to your friends and community groups. See http://www.alternet.org/story/22250 and http://www.walmartmovie.com/
There also was a recent Frontline documentary on PBS, "Is WalMart Good for America?" The biggest myth it busted is that WalMart's prices are low across the board. Actually, there's a few strategically positioned "loss leaders" that trick consumers into believing that everything in the store is comparably low-priced. This point is crucial to convey when talking to low-income audiences who may be supporters of Wal Mart. See http://www.pbs.org/wgbh/pages/frontline/shows/walmart/
In addition to opposing WalMart, we need to talk up and build support for Buying Local: Locally Grown and Locally Owned. Keep money circulating in our economy, supporting sustainable enterprise and the Dream of Portland. Start at http://www.sbnportland.org/BALLEPortland/viewPage.cfm?pageId=952
Posted by: Flora | Jun 17, 2005 11:28:25 AM
Dear Roland,
Good work.
Check out www.wakeupwalmart.com for more "fun" facts about the organization that is China's 5th largest trading partner!
Anne Kilkenny
WC Winks Hardware
Posted by: Anne Kilkenny | Jun 17, 2005 12:46:57 PM
Thanks for the kind comments! For those interested in more information on Wal-Mart, the following websites are chock-full of facts, references and resources:
http://walmartwatch.com/home/pages/research_library
http://www.latimes.com/business/la-walmart-sg,1,1534896.storygallery
http://www.pbs.org/wgbh/pages/frontline/shows/walmart/transform/protest.html
http://www.labourstart.org/wal-mart/
http://www.kamcity.com/namnews/asp/newsarticle.asp?newsid=22753
http://www.thenation.com/directory/view.mhtml?t=02010K
http://www.guardian.co.uk/usa/story/0,12271,1319161,00.html
http://blog.wakeupwalmart.com/
http://www.ufcw99.com/Walmart%20Archive%2004.htm#Public%20pays%20the%20costs%20of%20Wal-Marts%20low%20prices
http://www.sprawl-busters.com/
Posted by: Roland Chlapowski | Jun 22, 2005 1:30:29 PM
where do we sign up? i'm just up the street and would rather see the trail go through there than a walmart.
my favorite comparison is that when Ford wanted people to buy his cars he gave middle class wages...walmart goes the other direction.
Posted by: kirsten holstein | Jun 28, 2005 3:18:24 PM
Yes, there are many issues regarding this large retail golith, but you for get that this is a free country and it is based on free enterprise. You can't restrict a company that operates within the law just because you don't like the impact of their presence.The only way that would be fair would be not to shop there, but it seems walmart has what people want and that is called FREE interprise. Our freedom to do business un obstructed by special interests or unfair regulation is much more important than the fall out from this successful retailer. If we stop Walmart from doing business who is next that we might not like. If you don't like the fall out then make legislation that applies to all businesses, don't pick on a select few. You point out many violations that walmart has committed. Walmart is the largest retailer and is bound to make mistakes with such a large organization. Walmart has every right to oursource overseas as 90% or large companies already do. Come on and stop picking on companies just because they are successful. You can't protect small business just because they can't compete. If you can't compete you need to provide a product or service that has a value in that current market condition. You are not going to stop Walmart from opening stores. They will simply open right out side the city limits and then you will lose city tax revenue as well.
Posted by: rp | May 30, 2006 1:43:43 PM
Shame on you Sam!
It is not your job to put judgement on private enterprise. Leave that up to the special interest groups and unions bosses. Not only are you siding with the special interest groups you are promoting there cause! Stop it and get back to what we elected you to do which is to manage the city and support a fair business climate.
Posted by: vp | May 30, 2006 7:17:23 PM
Very helpful information. My mom has been singing the song of no Walmart in her neighborhood for years based on the impact it has on neighboring businesses, but we as consumers need to then really support the nice small stores and put our money where our mouth is. I am glad you are in office.
Posted by: Maura | May 30, 2006 9:46:59 PM
It looks to me like a lot of BS. I see a lot of speculation, and biased opinions against them, but very little in the way of facts. If they are really that bad, then they would go out of business for many reasons. I thought this was a free country, but I guess I am wrong. Maybe we need a new Commissar. Portland has become a hostile environment for all but a select few businesses. Sam, don't you like Sam? Or are you just jealous of his success? You people should look more closely at this anti Wally World propaganda, this is not facts, this is opinions and easily manipulated studies or statistics that mean nothing. And NO I do not work for or deal with Walmart in any way, I just don't think they are as bad as some people try to make them out to be.
Fred
Posted by: Fred Flintstone | May 31, 2006 2:20:14 PM
There seem to be two sides to the dispute over whether or not Walmart promotes healthy economics: the results of research conducted by social scientists and economists and the line put out by Walmart's PR folks. It's like people who think there's a "debate" on whether or not the current climate change is anthropogenic. Or those who think there's a "debate" about whether or not intelligent design is science. Only not quite as bad because Walmart has innovated some impressive supply-line optimizations that one could argue have a positive global impact on energy conservation... any benefit of which is completely offset by the way it supports massive and mindless consumption and the degree to which its supply chain depends on even greater consumption of fossil fuels.
Which is to say, the only "debate" left about Walmart is whether or not we ought to do anything (beyond the pat "well then, don't shop there") to hinder their ability to build their business on the backs of indentured servants and at the expense of the environment and the local economies to which their stores metasticize.
Posted by: Clay Fouts | May 31, 2006 3:46:00 PM
Thanks for the great compilation of facts & sources, Roland. I hope you can help us* move Metro's policy advisory committee to action pronto!
* = residents of various communities in the region pushing for legislative action vs the negative impacts of big box retailers--not Wal-Mart per se.
Posted by: M'Lou | Jun 1, 2006 10:03:04 AM
This is not the right location to put a Wal-Mart store in the Portland area. I may not like Wal-Mart because of my preceived feeling on their negative effect on family and small businesses. Put that to the side and only look at the I-5 corridor and the incendents of travel that would result with a Wal-Mart in one of the most congested corridors in the whole NW let alone Portland. The congestion is currently killing the people and businesses caught in the I-5 corridor. This stifling congestion has added too and made this section of the I-5 the 3rd worse air quality zone in the nation. There are NO plans a foot to solve this problem. A plan to replace the Interstate Bridges will make the corridor even worse of a problem by bringing more traffic into this congested corridor. If we were to end up with a Wal-Mart at Hayden Island/Janzen Beach with only the I-5 Corridor as its only access route WOW!
Posted by: Paul Edgar | Jun 1, 2006 10:59:12 AM
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woah - bring on the FACTS
nice work Roland
Posted by: Jeff | Jun 16, 2005 12:38:12 PM