Friday, July 12, 2013

The D.C. Demonization of Walmart

Walmart and the unions have engaged in a scorched earth battle for over a decade. The retailer has been spreading throughout the country from its Arkansas roots into all 50 states, especially in rural America, the small towns and suburbs. Its last frontier is the big cities. It made it into Chicago, Dallas, and Philadelphia, but is still blocked in New York. Two unionization efforts show the length to watch Walmart fights the unions. 11 meatpackers in a Texas store in 2011 voted to unionize their department. Walmart responded by not only eliminating that department, but also switching to pre-cut meats in all their stores. The workers at a Canadian Walmart in Jonquirre, Quebec voted to unionize in 2005. Walmart responded by closing the store. The strength of the unions lies in the big cities, which are overwhelmingly Democratic. The key to electoral success in these cities is winning the Democratic primary, which is often controlled by the unions. The unions will pour money into their favorite candidates and get out the vote for them. Thus, the city council members are quite attentive to the unions’ demands. The unions, especially the Food and Commercial Workers, often fund the “local” opposition to Walmart, including demonstrations and litigation to block a proposed store. Even if the anti-Walmart effort fails, they have cost the company money. Walmart faces little opposition in expanding into conservative counties, such as Orange County with its 3 million residents. The unions win individual battles, but even when they lose they have cost Walmart substantial time, resources, and money. A new twist to the anti-Walmart saga is occurring in Washington, D.C. The company is building three Walmarts and planning three others in the city. The usual tactics did not work. These stores are in the otherwise undesirable neighborhoods – not Georgetown and the revitalized downtown, which the tourists see. The minority neighborhoods have high unemployment, a lack of supermarkets, and little hope. They are underserved. The City has been trying to lure business into them for seemingly forever. These are not the communities where a Walmart will shut town small businesses and boutiques. Indeed, the presence of a Walmart in a mall will allow small stores to flourish around it. These are the communities where lines form around the block as residents apply for jobs. These are also the communities where the low prices of a Walmart can save families a couple of thousand dollars annually. Each store can add 300 jobs to the employment roll and generate $1 million in tax revenue to the City. None of this matters to the unions. It’s the damn Walmart! Eight of the 13 D.C. City Council members adopted yesterday a union drafted “living wage” ordinance for “big lot stores.” The existing minimum wage in D.C. is $8.25. The new living wage would be a 50% increase to $12.25. How do we know this is a union proposal? It applies only to stores of 75,000 square feet or more with the parent company generating revenues of at least $1 billion, but it exempts existing stores and unionized supermarkets. One council member’s na├»ve or arrogant statement is “We’re at a point where we don’t need retailers. Retailers need us.” The D.C. City Council voted 8-5 to adopt the anti-Walmart ordinance. Walmart’s immediate response is to cancel the three stores in the planning process. It has yet to decide on the three under construction. The Mayor has ten days to decide whether or not to veto the measure. Mayor Daley successfully vetoed a similar measure in Chicago. Nine votes are needed to overturn the veto. The question is not a “living wage.” The question is if there will be any wages. The supreme irony is that both Target and Home Depot are also non-union.

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