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Wal-Mart...the Race to the Bottom - Rohnert Park Super-Center?

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WalMart...the Race to the Bottom
Rohnert Park Super-Center?

by Martin J. Bennett

WalMart has again submitted a proposal to expand its existing discount store in Rohnert Park into a Supercenter, selling both general merchandise and groceries. In 2010, widespread organized opposition across Sonoma County and a successful lawsuit derailed the project.

Much has changed since Wal-Mart first proposed a Supercenter five years ago in Rohnert Park.

According to UC Berkeley economist Emmanuel Saez, a stunning 95% of income gains went to the richest 1 percent during the Great Recession recovery from 2009-2012. In fact, the economic recovery has benefited only big business and the very wealthy: 2013 corporate profits reached record highs and have increased by 20% annually since 2008. In 2012 the top 1% of American families received 22% of national income-almost three times more than their share in 1979.

In contrast, even in a recovery, working people’s wages and incomes are going nowhere.

The Economic Policy Institute calls the 2000s a “lost decade” for low and middle-income working families.  

The bottom 70 percent of all workers saw their 2002-2012 wages fall. The Census Bureau reports that median household income in 2012 was $51,017, about 9% lower than its postwar peak in 1999, when adjusted for inflation.

What are the facts about WalMart and the recovery?

Wal-Mart, the nation’s largest employer, and the Wal-Mart family, the nation’s wealthiest, are driving a recovery characterized by new jobs that do not provide living wages or benefits, or offer career mobility to most employees. Wal-Mart is leading a ‘race to the bottom’ that destroys good jobs, widening the gap between rich and poor and increasing taxpayer costs.

A wave of one-day strikes by Wal-Mart workers last November, plus strikes against McDonald’s by fast food workers in December and May, raised public awareness about the recovery and low-wage jobs.

According to the National Employment Law Project, 22 percent of the jobs lost in the recession were low-wage in the food service, retail, hospitality and temp industries and paid less than $14 an hour. Yet from 2010-2014, 44 percent of new jobs created were low-wage. Mid-wage jobs paying $14-$20 dollars an hour accounted for only one in five of the jobs added. An ever-greater share of these new jobs will be part-time. The percentage of people working part-time jumped from 16 percent prior to the recession, to 19% in 2013.

The Wal-Mart and McDonald’s strikes also revealed that workers in retail and food services are not teenagers, new to the workforce. The Demos “Retail’s Hidden Potential” report found that workers in large retail firms average 37 years of age, and a majority of year-round retail employees provide more than half their family’s total income.

Largest employer of low-wage workers in the nation

According to IBISWorld, a market research organization, in 2011 the average wage of all full-time and part-time Wal-Mart workers was $8.81 an hour. The Huffington Post obtained internal company reports revealing that half of all Wal-Mart workers earn less than $10 an hour. Wal-Mart CEO, Bill Simon, recently stated that two-thirds of the company’s 1.3 million U.S. workers earn less than $25,000 annually.

Wal-Mart’s ‘always lower prices’ are based on low employee compensation that forces competitors to slash wages and benefits, too. A 2007 UC Berkeley Labor Center study found that Wal-Mart workers earned 17% less than employees of other large retailers and concluded that the opening of one Supercenter lowered total earnings of a county’s retail workers by 1.5%.

According to UC Irvine economist David Neumark, for every two jobs Wal-Mart creates in a county, three jobs are lost in grocery and retail sectors. Wal-Mart opened sixteen Supercenters in Southern Nevada in the 1990s, forcing the loss of 1400 good union grocery jobs when Raley’s had to close eighteen stores.

WalMart can pay more!

A 2011 UC Berkeley Labor Center study concluded that Wal-Mart could easily boost wages to $12 an hour, raising payroll costs by just 10%. Lower turnover and increased training and productivity of employees would help Wal-Mart absorb part of the wage increases. If Wal-Mart passed the entire wage increase on to their consumers, none would pay more than an additional 46 cents per shopping trip.

Waltons - how much is enough?

Wal-Mart earned $17 billion in profits in 2012, much of it passed on to the Walton family, the company’s largest shareholders. The six Walton heirs’ 2013 net worth was $144 billion, more than the combined wealth of the lowest-earning 42% of Americans.

Another Demos report, “A Higher Wage is Possible,” showed that raising the annual wages of full-time workers (employed at least 32 hours a week) to nearly $15 an hour and $25,000 a year, would cost the Wal-Mart family no more than $7 billion--a fraction of their total wealth.

Why should the taxpayers subsidize Wal-Mart?

Finally, Wal-Mart’s low wages place a substantial burden on the public sector--particularly since nearly half of Wal-Mart workers are not provided health care benefits, according to a 2011 Kaiser Family Foundation report. A recent U.S. House of Representatives Committee on Education and the Workforce report concluded that Wal-Mart workers must seek government assistance such as Food Stamps, rental assistance, Medicaid and other state-subsidized health care services to make ends meet. The committee calculates that each new Supercenter with 300 employees costs the taxpayers nearly $1 million annually.

Here in Sonoma County, we currently have a growing crisis of low-wage employment. A 2013 North Bay Jobs with Justice (formerly the Living Wage Coalition) report found that 28 percent of residents are in working poor families, receiving less than $44,000 annually from wages and other income. The California Budget Project calculates that a 2013 self-sufficiency wage for Sonoma County is $20.51 an hour for each of two parents working full-time to support two children.

Approval of the Wal-Mart Supercenter will only add to the ranks of working poor in this county and impose increased public costs on federal, state and local governments. All county residents must again join to oppose the Wal-Mart family’s naked greed, and Wal-Mart’s race to the bottom.

Please come to the Rohnert Park Planning  Commission to oppose the proposed 

Super Center in late July

 or early August...the 2nd or 4th Thursdays at 6 pm 

130 Avram St. Rohnert Park. 

The exact date of the hearing on the revised EIR will be posted at:

www.livingwagesonoma

or call 707-346-1187

 

Martin J. Bennett is Instructor Emeritus of History at Santa Rosa Junior College and co-chair of North Bay Jobs with Justice.

 

Links to websites and publications:

July 1, 2014 - Implementation of California “Ban the Box” Legislation (AB 218)
- Resource for David Neumark publications on economics of minimum wages

Comments:

 

Hi, my name is Lisa Anderson and I'm from Green Bay, Wisconsin.  Your newspaper Sonoma County Gazette made it's way all the here for one reason only, a group of concerned citizens just fought a 10 month battle with WalMart and won !!!!!  
They wanted to put a 154,000 square foot Super Center in our Broadway District, downtown, along a river with a street that was two lane and up to 494 elementary kids made their way to/from school every day.  We fought for the zoning and the PUD and what type of building can be allowed commercial, industrial, mixed use, etc. 
 
We urged everyone through these two FB pages and Change.Org email to contact their alderpersons by mail, email, fax, etc.  We supported our mayor as he was against it too.  But he needed to know we people had his back.  There was so much outreach behind the scene of people talking to people, it was amazing.
 
We held one rally when WM came for a third time for what we call a "non listening session".  They would set up their maps and designs so people would have to walk around the room to ask questions.
 
We pushed people to attend any meeting at all that had to do with WM.  It may not have been an open floor for public to speak, but they knew we were there.  We made signs and t-shirts with the B local logo.  When we knew it would be open, we planned accordingly for someone to speak about every nook and cranny of the plan.  
 
It took a lot of time and a lot of effort, but on July 15th, after an open meeting at 12:40 a.m. the vote came down 6-5 against.  We still had at least 75  people there, waiting.  It can be done!!!
 
We have two FaceBook pages:
 
 
 
Although they are both open groups, you have to request permission to join.  Post who you are and what your group is trying to do and you'll have more information, possibly something you haven't thought of.  
 
Also, I highly suggest you go to Sprawl Busters on FaceBook.  This is Al Norman's page.  He has been helping people fight WalMart for years.  I went there and found Kathleen, who is from Caledonia, WI.  Her group fought WalMart twice and won both times!!  She was instrumental for our group as we started out.  Al Norman's email address is info@sprawl-busters.com.
 
Good luck and let us know if you need help.
 
Lisa Anderson

Wal-Mart Responds 

As a long time Walmart associate who has had a successful career with the company, it’s frustrating to read opinion articles written by people who don’t know my company or have any real base of experience to speak from (Wal-Mart…the Race to the Bottom – Rohnert Park Super-Center?, July 3, 2014.) 

 In fact, most of the article didn’t even have anything to do with the Rohnert Park store but was a smoke screen of dubious statistics and debunked “studies,” like the US House of Representatives Committee on Education and Workforce report, which was widely criticized as flawed and inaccurate.

 On behalf of my store associates and our customers, I want to correct the record.  

 Walmart provides more opportunities for employment and advancement than other companies in America. We provide people the opportunity to start at entry-level positions and advance.  I’m a good example of this as I started with Walmart 12 years ago as a holiday weekend cashier and worked my way up to Store Manager.  My story is not unique throughout the company.  Approximately 75% of our store management teams started in hourly positions just like me and every year we promote more than 170,000 people, which means our associates have the ability to climb the ladder from a stocker or a cashier to a department manager to a store manager and beyond.

 Walmart pays competitive wages and offers benefits.  Our average hourly wage for full-time associates in California is $13.13 and we offer a variety of benefits, including quality healthcare starting at $18 per pay period for associate-only coverage, company-funded 401(k), 10% merchandise discount, education assistance, and bonuses based on store performance.  

 Walmart creates jobs in California.  We employ more than 81,000 associates in California and we’re on track to create approximately 3,000 jobs this year in communities throughout the state.  In Rohnert Park, we’ve opened a hiring center for the new Walmart Neighborhood Market set to open in the fall and expect to hire approximately 65 associates to staff it.  As for my store, an expansion would mean an additional 85 jobs created.   Additionally, we spent more than $23 billion with California suppliers last year supporting more than 168,000 supplier jobs. 

 The bottom line, though, is that expanding the Rohnert Park Walmart is good for our customers.  Customers who currently shop in our store want to save time and money.   By expanding the store, we’ll be able to offer them the convenience of shopping for general merchandise as well as groceries.  They also tell us they want to make their family budget go farther and need more affordable grocery options closer to home.  Ultimately, this is what our store expansion is all about and we hope the community will support our plan to provide families in the Rohnert Park area with the grocery and retail services they want and deserve.

Catherine Sullivan
Walmart Store Manager, Rohnert Park

Dear Editor:

I stand by all of the claims and references cited in my article last month (JULY 2014)  (“Wal-Mart and the Race to the Bottom”) and  particularly the following:

First, according to the market research firm IBISWorld, the average hourly wage of all full-time and part-time workers nationwide is $8.81 an hour. Wal-Mart misleads readers by claiming a higher average hourly wage based upon calculations that include supervisors and exclude temporary and part-time employees.

Second, according to the 2013 report by the U.S. House of Representatives Committee on Education and Workforce, less than half of Wal-Mart workers receive employer-provided health care benefits. In 2012, Wal-Mart excluded part-time employees from receiving health care benefits, and cut the hours of many full-timers to avoid providing them health care benefits mandated by the Affordable Care Act. Moreover, for many full-time employees, the company health care plan is unaffordable due to high deductibles and co-pays and the high costs of premiums.

Only last fall, due to declining sales--as a result of customer complaints about understaffing--and to a wave of strikes by Wal-Mart workers protesting the lack of full-time work, did the company begin to move part-time workers to full-time status.

Finally, I stand by the assertion that low wages and lack of benefits means that the taxpayers provide nearly $1 million in public subsidies every time a new Wal-Mart supercenter opens. Readers should judge for themselves by reviewing the Congressional report cited above. Try as the company may, Wal-Mart cannot avoid the fact that “always lower prices” are due to “always lower wages and benefits” and cost shifting by Wal-Mart to the taxpayers.

~ Marty Bennett