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“No, Walmart Doesn’t Create Jobs”: Contrary To The Happy Talk, It Actually Kills Them

Because it’s a such a slow news day, and because the DC big box living wage bill is still in the news, I thought I’d write about the Walmart piece I published in Salon.com earlier this week. First, an update on that living wage fight, which I’ve written about before on this site. The bill, which would require Walmart and other big box retailers to pay a minimum wage of $12.50 an hour, passed the DC City Council. It needs the signature of DC Mayor Vincent Gray to become law, but Gray hasn’t received it yet. There have been suggestions that he’s leaning toward a veto and that Council Chairman Phil Mendelson has delayed sending the bill to Gray’s desk because he’s working to shore up support for a veto-proof majority. Walmart has threatened to cancel plans to open new stores in DC if the bill is enacted.

One of the most compelling-seeming arguments that the pro-Walmart forces have been making is that DC should reject the bill and welcome Walmart into the community, because Walmart would create much-needed jobs. So I decided to look at what the research says about Walmart’s impact on employment. Guess what? Contrary to the happy talk, Walmart does not create jobs. Actually, it kills them.

Here’s why: first, at the local level, all Walmart does is put mom-and-pop stores out of business. The overwhelming body of evidence, including the most rigorous peer-reviewed studies, suggests that when Walmart enters a community, the result is a net loss of jobs; at best, it’s a wash. In fact, the biggest, best scholarly study about the impact of Walmart on local employment was done by an economist at University of California at Irvine named David Neumark, who is not exactly a wild-eyed liberal. He’s the kind of economist, actually, who writes anti-minimum wage op-eds for the Wall Street Journal.

The devastating impact Walmart has had on jobs becomes most clear when you go macro, and look at its impact not just locally, but on the national economy. In its relentless quest for low prices, Walmart strong-arms its suppliers to cut labor costs to the bone. What this has meant in practice is that many suppliers have been forced to lay off workers and ship jobs to low-wage countries overseas. Because of Walmart, countless jobs in the U.S. have been lost, mostly in manufacturing.

I’ve been thrilled by the response to my Salon piece — over 5,000 Facebook “likes,” and counting! Thus far, none of the prominent pro-Walmart voices have taken issue with it, because the facts I present are hard to dispute.

Back to the DC controversy: neoliberal pundits and politicians hate the DC living wage bill, because they don’t want to drive Walmart away. The politicians want the photo ops at Walmart openings, where they can boast about bringing “good jobs” — um, well, okay, “jobs,” anyway — into the community.

But when Walmart comes to town, significantly more local retail jobs are destroyed than created. And to the extent Walmart grows and is empowered, even more manufacturing jobs will be lost. If Walmart’s fans understood its anti-worker business model, they would get this. Walmart’s philosophy requires cutting labor costs to a bare minimum, so it makes sense that the company would not only pay workers miserable wages, but also shred as many jobs as possible.

Some of the pro-free market ideologues do grasp this. Here’s Forbes contributor Tim Worstall, for example, with a blog post helpfully entitled: “Of Course Walmart Destroys Retail Jobs: That’s the Darn Point of it All.”

I appreciate the honesty of Worstall and others of his ilk; they celebrate Walmart for its innovation and productivity-enhancing “creative destruction.” Fine. What I don’t appreciate is those pundits who then turn around and claim that Walmart is also going to magically create jobs out of thin air, as so many are doing in the current DC debate (see, for example such gold star hacks as Mona Charen, Star Parker and, inevitably, Fox News).

Let’s be clear: the brave new economic world so many conservatives and neoliberals celebrate necessitates massive job loss. In theory, the gains from productivity brought about by Walmart’s ability to produce more output with less labor inputs are supposed to benefit everyone. But in practice, they’re going almost entirely to the the top, and the economic hit is being taken by those at the bottom. Progressives need to do all they can to change this dynamic. Supporting living wage bills like the one in DC would be a great place to start.

 

By: Kathleen Geier, Washington Monthly Political Animal, August 10, 2013

August 11, 2013 Posted by | Jobs | , , , , , , , , | Leave a comment

“Nothing To Lose But Power”: Wal-Mart Plays Hardball In The District of Columbia

There’s a power struggle going on in Washington right now, not between Republicans and Democrats but between Wal-Mart—which is supposed to open six stores in the District—and the city council, which has a bill pending to require big-box retailers to pay a living wage. As you surely know, Wal-Mart was built on keeping costs as low as possible, particularly labor costs. The model Wal-Mart recruit is someone who has no other employment options and will take whatever they can get. The retail colossus isn’t going to let some uppity city council tell it how much it can pay its employees:

The world’s largest retailer delivered an ultimatum to District lawmakers Tuesday, telling them less than 24 hours before a decisive vote that at least three planned Wal-Marts will not open in the city if a super-minimum-wage proposal becomes law.

A team of Wal-Mart officials and lobbyists, including a high-level executive from the mega-retailer’s Arkansas headquarters, walked the halls of the John A. Wilson Building on Tuesday afternoon, delivering the news to D.C. Council members.

The company’s hardball tactics come out of a well-worn playbook that involves successfully using Wal-Mart’s leverage in the form of jobs and low-priced goods to fend off legislation and regulation that could cut into its profits and set precedent in other potential markets. In the Wilson Building, elected officials have found their reliable liberal, pro-union political sentiments in conflict with their desire to bring amenities to underserved neighborhoods.

For Wal-Mart, this isn’t just about these particular stores. They can make money even if they pay a higher wage at these stores, and with over 10,000 stores around the world, the D.C. locations are a drop in their enormous bucket anyway. It’s about their relationship both to the people they employ and to the communities they locate in. It’s about power, and as far as they’re concerned, power has to reside with Wal-Mart. Their employees do what they’re told and get paid what they’re told, and if they don’t like it they can go find another job. By the same token, the city council gives Wal-Mart what it wants, and if it doesn’t they can try to find somebody else to open a store there.

My guess is that in the end, either the city council will cave or Mayor Vincent Gray will veto the bill (he says he’s considering it). Why? Because Wal-Mart can walk away from the D.C. stores without a second thought, while the council desperately wants both the jobs the stores will bring and the ability for their constituents to have a convenient place to shop. One side has virtually nothing to lose, while the other side has a great deal to lose.

Would Wal-Mart make less money if they paid their employees a little more? Not necessarily. There are other models out there, most notably Costco and Trader Joe’s, which believe that by giving their employees higher wages and good benefits, they can reduce turnover and provide better service, which lowers costs and increases sales. And it works: they’ve achieved steady growth and excellent profits by making their employees happy.

But the idea that the way to deal with employees is to basically treat them like the enemy, which includes not just paying them as little as possible but also reacting to any hint of solidarity among the employees like an outbreak of the Ebola virus, is bred into Wal-Mart’s DNA. Think I exaggerate? Back in 2000, 11 meat-cutters at a Wal-Mart in Texas voted to join a union. The company responded by announcing that it was immediately eliminating the meat-cutting departments at 180 stores and switching to pre-packaged meat, and would eventually eliminate the meat-cutting departments at every store in the country. They don’t screw around, as the D.C. Council has just discovered.

 

By: Paul Waldman, Contributing Editor, The American Prospect, July 10, 2013

July 11, 2013 Posted by | Corporations | , , , , , , , , | Leave a comment

“Memorial Day Deserves Better”: Between The Holiday Sales, Give Thought To Those Who Gave Their Last Full Measure Of Devotion

The observance of the 150th anniversary of the establishment of the Bureau of Colored Troops in the District occurred this week, only a few days before Memorial Day. It seems fitting that the sesquicentennial of the Colored Troops Bureau falls close to the day originally set aside to remember those killed in the Civil War.

More than 180,000 African American soldiers and sailors served in the Union Army and Navy. Nearly 68,000 died.

Those African American service members were honored Wednesday at a wreath-laying ceremony and a program at the African American Civil War Memorial and Museum on Vermont Avenue NW.

The event, organized by the museum’s founder and director, Frank Smith, was well-attended and inspirational but low-key. There was not even a cameo appearance by Mayor Vincent Gray or a member of the D.C. Council. If any D.C. elected official sent a representative to the commemoration, the gesture went unannounced and unnoticed.

Those “colored troops” deserved better from this city. After all, the 28th Regiment of U.S. Colored Troops and soldiers with Company E, 4th U.S. Colored Infantry, were among the units assigned to the defense of Washington during the Civil War.

Paid less than their white Union comrades, those black soldiers and sailors courageously fought in nearly 500 engagements, including, according to military records, 39 major battles.

My great-grandfather, Isaiah King of New Bedford, Mass., was one of the black Union soldiers. He enlisted at 16 and was assigned to Company D of the 5th Massachusetts Cavalry in 1864. He participated in the Siege of Petersburg that year. His unit, according to official records, was among the first Union regiments to enter Richmond on April 3, 1865.

The African American troops fought to keep the Union together and to free their enslaved brothers and sisters in the South. They volunteered to fight at a time when the country that sent them off to war did not treat them as equals.

In a speech urging President Abraham Lincoln to allow freed blacks to fight in the Union Army, the famed 19th-century black abolitionist and civil rights leader Frederick Douglass said: “Once let the black man get upon his person the brass letters U.S., let him get an eagle on his button, and a musket on his shoulder, and bullets in his pocket; and there is no power on the earth . . . which can deny that he has earned the right to citizenship.”

Those black soldiers and sailors served, fought and died years before the 15th Amendment, granting African American men the right to vote, was ratified in 1870 — a right that, in reality, went unfulfilled for nearly a century.

But that is not what this weekend is all about.

This is the time to honor those Americans, regardless of race, religion, gender, national origin or sexual orientation, who have given their all in service to our nation.

“The blood of heroes never dies,” Moina Michael wrote in a 1915 poem.

The fallen from the Civil War, World War I, World War II, Korea, Vietnam, Iraq, Afghanistan and all of the conflicts in between deserve a moment of respect. This ought to be a time when the living set aside their daily cares, albeit temporarily, to remember and honor those who made the supreme sacrifice.

Think of those boys who walked off farms and away from families to take up arms on behalf of a nation fighting to keep from falling apart.

Think of kids loaded on planes and ships and sent to foreign lands to fight in defense of their country’s interests. Think of the families left with only memories — and graves to decorate.

Doing that may be easier said than done.

Holiday observers will be competing against events such as Best Buy’s “Memorial Day Kickoff to Summer Event,”Home Depot’s “Memorial Day Savings” and “Marlo’s Memorial Day Sale — Furniture 50% Off Entire Store.”

The choice: Attend a Memorial Day parade or visit a cemetery to remember our fallen, or navigate to Coupons.com and get Memorial Day sales and “extra discounts on top of already low prices from hundreds of stores including: Macy’s, JCPenney, Home Depot, Target, Walgreens, DressBarn, and BabiesRUs.”

It may be all Memorial Day can do to get a word in edgewise.

In between the holiday sales and tips on how to enjoy a three-day weekend, give some thought to those in our country’s history who gave their last full measure of devotion.

That’s what this Army veteran will do.

 

By: Colbert I. King, Opinion Writer, The Washington Post, May 24, 2013

May 26, 2013 Posted by | Civil War, Memorial Day | , , , , , , | Leave a comment

   

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