Wal-Marts are undoubtedly the most popular retailers in the United States. Using a blunt strategy of volume, volume, volume, they have become insanely successful and have changed the face of American retail forever. Their enormous stores create hundreds of jobs in the communities they settle in, and provide valuable work experience to the young and temporary relief to the unemployed.
Which would all be really great if they weren't also evil.
And not evil in the vague, G-8 protesters with the black kerchiefs on their faces waving placards sense of the word. But almost objectively, truly evil. Remember when they were caught taking out life insurance policies on the sickly seniors they were hiring to be greeters?
Now they are trying to branch out from the suburbs and finally move into Chicago, where they stand to make profits hand over fist and completely crush the local complexes of shops that define Chicago neighborhoods. They are getting an assist from 37th Ward Alderman Emma Mitts has agitated for the opening of a Wal-Mart near North Avenue and Kilpatrick on the West Side for some time now. The 37th is one of the most economically depressed wards in the city, desperate for jobs and tax revenue to bolster city services and economic vitality. Beggars can't be choosers, so Ms. Mitts was willing to overlook Wal-Mart's possible negative long-term effects on the area and push hard for an ordinance allowing one to open.
More recently, the Chicago Federation of Labor and several community groups, including ACORN, have taken the initiative in stopping another Wal-Mart location from popping up in the South Side 21st Ward, near 83rd and Stewart. Wal-Mart's proposed location in the South Side 21st Ward was to come up for a vote on Thursday, March 25, but after a huge contingent of community and labor activists showed up, they shelved the vote for another date -- which means the Council does not have to announce when they will be voting for it.
Now, to say Chicagoans have an attachment to their neighborhood businesses is like saying the Ayatollah Khoemeni had an attachment to the Qur'an. Chicagoans are fanatical in their devotion to the local places to buy everything from food to socks to car parts to liquor to music. The "City of Neighborhoods" is called that not only because there are so many neighborhoods, but because in a sense it is barely a city but rather just a confederation of neighborhoods, sort of like Switzerland without the cheese. Although this attachment is quite endearing, it doesn't necessarily translate to economic realities.
Community groups, labor unions, and even some aldermen are up in arms over the move, citing Wal-Mart's ability to crush competition and compromise union membership in the city. This is not merely a cultural issue, the way the outcries over Starbucks is more a cultural issue than anything else -- it is an economic issue. Although a neighborhood does stand to benefit initially from the tax revenue and job-creating strength of the Big Blue Box, there is quite an argument to be made that in fact the presence of the retailer would eventually be detrimental to a neighborhood's economic vitality.
Wal-Mart has made union-busting an art, resisting all attempts at unionization with a Carnegiean passion. In June of 2000, ten butchers at a Wal-Mart voted 7-3 to join the United Food and Commercial Workers. Wal-Mart promptly eliminated the meat-cutting departments in all of its stores nationwide, forcing the UFCW to take them to court, a case they eventually won -- although Wal-Mart promised to appeal. Wal-Mart's unfair labor practices cannot be understated when considering a possible move to Chicago. By killing small businesses around it, Wal-Mart scores a double victory: it eliminates competition while simultaneously eradicating the local job market, allowing them to keep their wages artificially low (although this is really not necessary, since they could afford to pay more if they needed to -- but why bother?).
Wal-Mart's infiltration is not akin to that of Starbucks. The effects of Starbucks' ubiquity varies from city to city, but it provides a stark contrast to Wal-Mart in Chicago. Chicago did not have a real coffee culture when other cities like San Francisco, Seattle and New York City did in the early '90s, although there were a few beloved local coffee shops. So, in essence, designer coffee was a luxury good and independent coffee shops were essentially specialty shops with a very specific focus and narrow clientele. When Starbucks moved in, they did indeed displace many independent coffee shops, but that wasn't necessarily a bad thing. Starbucks is a notoriously excellent employer, offering more than competitive wages, good benefits, valuable job experience and a solid record of community commitment.
Wal-Mart provides a wide range of general merchandise in vast quantities. This would seriously sap the ability of small business owners to carve an economic niche for themselves. Because of our city's notorious Fourth-Street-Main-Street design, this could cause entire commercial strips to fall into disuse and become blighted. Not only that, but Wal-Mart is a less-than-ideal employer, to say the least. Because the company's profit margins rely solely on volume (this is what allows them to charge ridiculously low prices), they have no room for the higher structural costs that would come with competitive pay scales, serviceable health benefits and especially a collective bargaining agreement.
With small business choked out, no amount of tax revenue can guarantee outside investment in a neighborhood. Ikea does not displace local business, because there is sure to be a very limited number of designer furniture retailers in a given neighborhood. Rather, it creates a new market and attracts satellite business because it is a unique shopping destination (which is why an Ikea should be put somewhere like Englewood rather than the South Loop, but that's another story). A Wal-Mart offers nothing new. There are already places to buy clothes, videos, candy, headlights, tires, cheap jewelry, music, pillows and baby strollers in every neighborhood. So there is no "unique destination" being created, at least after the novelty has worn off. Rather, an important part of the market has simply been replaced and concentrated in the hands of one firm. If variety is the spice of life, then whatever neighborhood Wal-Mart infests will become a rice cake. And nobody's lining up around the corner to eat rice cakes.
There is another side to this story, and it is exactly what Ms. Mitts is arguing: Is there a line of people waiting to bring jobs to the 37th? When was the last time you drove or took the bus out there to do some window shopping? Can the people of the 37th, desperate for work and the tax revenue necessary to rebuild the community afford to stand on principle against Wal-Mart?
It is wrong for anybody to tell the unemployed people of the 37th, many of whom do not own cars and have little access to good public transportation, that they mustn't be afforded a chance to feed themselves and their families because Wal-Mart is a mean, mean company. Unless we can do something more than tell them to "keep their eyes on the sparrows," as the preachers say, we shouldn't stand in the way of a chance to create jobs and get revenue.
But we can do something more. Opposition to Wal-Mart is much more than a cause-celebre. Wal-Mart represents a very real threat to the economic vitality of neighborhoods. It will choke out not just one type of small business but almost every retailer. It will improve the job market, sure -- but those workers will not be properly treated, especially because beggars cannot be choosers. As the examples of Maytag and Brachs candy show, when one employer dominates a localized job market a threat exists to economic stability. Suppose Wal-Mart experiences some kind of fiscal downturn and needs to close some locations (not likely, but job cutting, hiring freezes, and shift limits are not at all uncommon). Which Wal-Mart will they target (no pun intended)? The one in Naperville, or the one in North Austin? And when that location closes or has staff or hours cut back, that neighborhood is back to square one.
The City does have the ability to remove the need for a Wal-Mart and save small business as well as create a fair, competitive labor market. It does have the ability to offer initiatives to create jobs and bring tax revenue to places like the 37th Ward and 21st Ward. Property-tax redistribution is a major one, but also the little things, like a re-allotment of police officer beats. Sweeping tax incentives for developers, TIF zones, overhauls of public transportation, and the expansion of access to federal and state programs providing for the capital improvement of real estate are all viable, though admittedly complicated, options.
Wal-Mart is not the answer. It is a virus. It is dangerous. Those who read this column regularly know that I often come down on the side of sensible market solutions to social and economic problems. Opposition to a Wal-Mart opening in the city is not merely a platitude, not a generic opposition to big business or a sentimental attachment to local joints.
It is opposition to a stop-gap solution that will put the already precarious livelihoods of many city neighborhoods into the stranglehold of a company that prides itself on sucking everything and everyone involved with it dry. Sure, a job is a job -- but not if it kills all else.
At Lady Di's Tap near Kinzie and Laramie, I sat next to a man, a recently unemployed maintenance worker. He asked me if I knew of any places hiring near my apartment; I told him I didn't. He asked where he could look for a warehouse job, and I told him to try the Warehouse District, natch, but he could sense the reservation in my voice.
"Where are the jobs at, man?"
I shrugged. "Hell if I know. Downtown?"
"Naw," he answered, nodding at the bartender for another drink, "they're all stuck at the bottom, man. At the very fucking bottom."
Andrew / March 31, 2004 10:40 AM
Unfortunately, it looks like Daley's given it his blessing, so Wal-Mart, here we come.
Here's another article on just how bad Wal-Mart is, from Fast Company: The Wal-Mart You Don't Know.