Monday September 21, 2009, 4:18 pm
Wal-Mart recently announced plans to convert its existing discount store in Rohnert Park to Sonoma County's first 'supercenter.' Many cash-strapped cities are tempted to hastily approve retail projects that can generate substantial sales tax revenue given the current economic downturn. However, we should pause to consider, not only the benefits, but also the costs of the proposed supercenter for Rohnert Park.

A supercenter is a 200,000 square foot store that sells both general merchandise and groceries. Since 1988, Wal-Mart has opened 2300 supercenters nationwide. Wal-Mart announced in 2002 that it would build more than forty of these megastores in California. By 2008 only thirty-one were built, with organized grassroots opposition and environmental lawsuits blocking the others.

Wal-Mart is now the nation's largest grocer and pharmacy, with sales exceeding the combined total of major competitors, including Target, Safeway, Albertsons, Kohl's, and Kroger. How did Sam Walton develop a rural, southern discount store into the planet's largest retailer and the nation's largest employer?

According to UC Santa Barbara historian Nelson Lichtenstein in his new book, “The Retail Revolution: How Wal-Mart Created A Brave New World of Business,” the main reason for Wal-Mart's phenomenal success is containment of labor costs by a relentless downward pressure on wages and benefits, and a near-perfect record thwarting unionization.

Most Wal-Mart workers are the 'working poor' in America. According to the company's own reports, the average wage for a full-time Wal-Mart worker in 2007 was $10.51 an hour. The average wage of a Wal-Mart employee is 26 percent less than other large merchandise stores, and 18 percent less than large grocery stores, according to the New York University Brennan Center.

Kaiser Family Foundation reports that less than 50 percent of Wal-Mart employees receive health care benefits. Full-time workers must wait six months to receive medical benefits, and part-time workers wait two years. Half the workforce turns over annually. As a result, part-time employees, who are more than one-third of the workforce, rarely receive benefits. For others, high deductibles, copays, and coverage limitations make the company-provided health plan unaffordable.

Wal-Mart ensures that wages and benefits remain low by a systematic, company-wide, policy to suppress unions. A report by Human Rights Watch about Wal-Mart concluded, “while many American companies use weak U.S. laws to stop workers from organizing, the retail giant stands out for the sheer magnitude and aggressiveness of its anti-union apparatus.”

Between 1998-2003 the National Labor Relations Board issued 94 complaints and found that Wal-Mart illegally fired workers for union activity, forced workers to attend anti-union meetings and video screenings, spied on workers who supported unionization, and claimed workers would lose pay raises and benefits or the store would shut down if the employees voted for a union.

Not one Wal-Mart store is unionized in the U.S. When Quebec workers voted for representation by the United Food and Commercial Workers in 2005, the company closed the store.

What are the costs when a Wal-Mart supercenter opens in a community?

First, good middle-class jobs are replaced by poverty-wage jobs. Grocery prices at Wal-Mart are 15 percent lower than those of competing firms, and half of these major grocery chains, like Safeway, Raley's, and Albertsons, are unionized. The 'union premium' for combined pay and benefits is 30 percent more than nonunion. In Southern Nevada, Wal-Mart opened sixteen supercenters and by 2002, 1400 union jobs were lost when Raley's closed eighteen stores. According to Nelson Lichtenstein, 13,000 traditional supermarkets were closed and twenty-five regional chains forced into bankruptcy from 1992-2003 due to Wal-Mart.

Second, the taxpayers end up providing public assistance for Wal-Mart workers. A 2004 study by the UC Berkeley Labor Center, “The Hidden Costs of Wal-Mart,” concludes that uninsured Wal-Mart employees in California rely on programs like Medi-Cal and Healthy Families at a cost of $32 million a year to the taxpayer. The report also demonstrates that Wal-Mart workers earning poverty-wages rely on federal and state programs like the Earned Income Tax Credit, Food Stamps, Section 8 subsidized housing, and child care assistance to make ends meet at a cost of $54 million per year.

Third, local merchants are hurt when Wal-Mart enters a community. In 1995, economist Kenneth Stone found that, a decade after the opening of a Wal-Mart in rural Iowa communities, 60 percent of the retail sales captured by Wal-Mart came from existing retailers and hundreds of grocery, apparel, hardware, and drug stores closed. University of Missouri economist Emek Basker examined county-level employment impacts of Wal-Mart from 1977-1998. She demonstrated that, for every one hundred new jobs created by Wal-Mart, fifty retail jobs and twenty wholesale jobs were lost over the next five years.

Tuesday September 22, 2009, 12:09 pm
Thanks Suzybell

Tuesday September 22, 2009, 2:12 pm
thanx a lot!! who are w-mart suppliers? different companies have to offer these suppliers a better deal so that w-mart has no chance.
trade fair! fair trade!

Tuesday September 22, 2009, 3:27 pm
ive been a union supporter a long time. and local small merchants. w mart is not a place i would ever visit. hope your article convinces many others to do same.

Wednesday September 23, 2009, 2:20 am
TY Suzybell,for the info.

Wednesday September 23, 2009, 1:29 pm
I haven't shopped in Wal-Mart in years. Ever since I saw the movie about how they treat their employees, and the way they won't let their employees form a union, if they wish. The documentary showed many Wal-Mart ex-employees and they said that they were only given 30 hours or less a week, thereby allowing Wal-Mart not to pay benefits such as health care. And if those that worked longer, could have the option of buying health care, it was too expensive for the employees, so many of them didn't but into it. It was either buying health care insurance or putting food on the table. Quite a few of the employees even though they are working many hours, are going to medicaid to get health care or going to emergency hospital rooms as they can't afford to buy insurance. Their hourly wage is only about $8 an hour at most, making less than $250 a week does not come close to paying their rent, etc. Of course, the big CEO's have made sure that they get their bonuses, money that was gotten on the backs of their employees who work long hours.

Thursday September 24, 2009, 9:28 am
Superstores ivevitably result inthedeath of small businesses and whole towns becoming clones of the next town. How do they doit simple by crapping on the opposition from a great heigh and if that includes political lobbying and curruption there not averse to that either. One of the bigest bus opreotors in the UK gained ground following dregulation of transport, by running buses free of charge in front of loads of small operators in many towns result a crap part monopoly of poor standard and service! No choice just like the big superstores all piled high with Chinese tat and the self same brands as the other superstores boring shopping and lack of choice or service, The dream becometh the nightmare brethren!