Wal-Mart’s Big City Blues

Wal-Mart’s Big City Blues

The mega-retailer has set its sights on the urban market, but the living-wage movement is putting up a fight.

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Having plundered America’s countryside and suburbs for decades, Wal-Mart is now setting its sights on unfamiliar urban territory: a grassy lot in Hartford, Connecticut. But as the mega-corporation expands out of America’s conservative strongholds, it must contend with a phenomenon it hasn’t previously encountered–an opposition armed with a living-wage ordinance.

Forging a countermovement to the retailer’s one-step-from-welfare wage policy, activists have successfully pushed living-wage ordinances in 110 cities and counties across the country since the mid-1990s, most often in Northern, urban areas–like Hartford–and in California. Typically those laws require companies seeking city contracts, property tax abatements or other public subsidies to pay their employees a living wage, which can come to several dollars above hourly minimum-wage rates.

Other big-box developers have made a mockery of similar guidelines. When politicians in St. Paul, Minnesota, granted Target Corporation a $6.3 million subsidy in 2001 to redevelop a downtown department store, the city council simply waived its own living-wage policy. But in Hartford, a coalition of progressive advocacy groups is determined not to let Wal-Mart secure the same sort of pass.

Wal-Mart has not sought a property tax break in Hartford, but the city’s housing authority owns the meadow where the store will sit. And the living-wage ordinance covers real estate deals, according to the coalition, which includes the United Food and Commercial Workers Local 371, ACORN and the state Working Families Party, among other organizations. It is a natural campaign to launch, because the unions and community groups advancing living-wage ordinances are usually part of the same crowd that opposes construction of new Wal-Mart stores. Their task is a difficult one: convincing unfriendly city officials to make the mega-retailer abide by the law.

And the corporation did its groundwork in Hartford, lining up a segment of community leaders to support the development before the plans became public. So shifting focus from prohibition of a Wal-Mart store to regulation of its labor standards is a significant change in strategy for an anti-big-box campaign. It is a shift that acknowledges how hard it is to convince residents of a depressed city to oppose the lure of economic development.

“If it’s a question of nothing versus Wal-Mart, that’s sort of a losing battle for us. So the question is: Should Wal-Mart provide living-wage jobs and [affordable] health benefits, or not?” says Jon Green, director of the Working Families Party in Connecticut. “That’s a different kind of question than, ‘Should there be nothing, or should there be a massive retail development?’ Politically, we think that’s a better wedge for us.”

Wal-Mart’s vital statistics are remarkable. Annual sales ($244 billion) comparable to the gross domestic product of Austria. Plans to open a new Supercenter every two days. No unionized American workers.

The last bit is one of Wal-Mart’s keys to profitability. By keeping wages close to subsistence level, the Arkansas-based retailer offers low prices that draw herds of gleeful shoppers away from the competition. Little wonder the company dispatches squads of unionbusters whenever its happy “associates” breathe the phrase “living wages.”

But ubiquitous as it seems, Wal-Mart operated none of its Supercenters (giant structures that include grocery stores) in urban areas at the end of 2001. And more than half of those existing stores could be found in one region: the eleven states of the Old South, according to a study by Retail Forward, an industry analysis group. California had none. To maintain its fantastic growth rate, Wal-Mart is beginning to target territory that it had previously neglected.

In Hartford–an economically depressed city with a 73 percent Puerto Rican and African-American population–the retailer plans to break ground by the end of July on a 165,000 square-foot store; without a supermarket, at first, but with enough room to build one in the future. A massive effort to build forty Supercenters is under way in California. Key to the activists’ success is explaining the hidden societal costs of allowing an unregulated Wal-Mart into town. Since workers don’t make enough money to afford company health insurance, taxpayers end up footing the bill by subsidizing Medicaid coverage and other economic assistance.

Hartford’s economic development chief says his office looked at the city’s living-wage ordinance but decided it was moot. Why? Wal-Mart indicated their wages would be high enough to comply. As a backup, city lawyers argue that the ordinance doesn’t apply to the corporation, because it only covers city land, not city housing authority land. Never mind that the city manager appoints the authority’s entire board.

Living-wage campaigns are geared specifically toward companies like Wal-Mart. It would be devastating if activists who have already achieved victory in 110 localities let skittish politicians eviscerate their hard-won ordinances.

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