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February 26, 2010

Remington Walmart could fuel chain's critics

It'll be interesting to see if Walmart's 2nd store and rising visibility in Baltimore fuel the kind of backlash that occurred in Chicago, where anti-Walmart sentiment has held the chain to only one store even though it wants to build a lot more. Led by unions, anti-Walmart activists pushed Chicago aldermen to pass a "living wage" bill a few years ago applying to Walmart and other big-box stores. Mayor Richard Daley vetoed it, saying the city needed the jobs Walmart would bring. But the store's Chicago presence is still limited.

So far sentiment against a Walmart in Baltimore's Remington section may be confined to neighbors worried about traffic and crime. But Baltimore would seem ripe for anti-Walmart animus focused on the chain's employee pay and destruction of mom & pop stores. Baltimore is home to the nation's first living wage law applying to city contractors. Three years ago Gov. Martin O'Malley signed a living wage law for state contractors. A few years ago the General Assembly passed a law (over the veto of Gov. Robert L. Ehrlich Jr.) forcing Walmart and only Walmart to offer a certain level of health benefits. The courts struck it down. The Remington Walmart will certainly be a challenge to established, smaller stores.

Even so, the retail unions don't seem to have the kind of pull in Baltimore City Council that they do in Chicago. In any event, benefits of the low prices Walmart brings to Baltimore will outweigh the negatives of low wages. Some liberals bash Walmart as the enemy of lower- and middle-income folks when in fact its low prices deliver huge benefits to working families.

Posted by Jay Hancock at 6:07 AM | | Comments (28)
        

Comments

http://www.walmartmovie.com/

I agree with you Jay - this Walmart will be great for Baltimore. The city needs the tax dollars and the jobs and it will provide a wealth of affordable products for city residents. Most people will still frequent the independent stores in the city, but there aren't too many 'mom and pop' stores that sell bulk toilet paper or big boxes of cereal - things that we drive to the county to pick up now. As a city resdient, I'm looking forward to both the Walmart and the Lowes.

I love Walmart and am excited that they have decided to open a store in Remington. I support the local, small stores but there is nowhere to purchase basic necessities like undergarments, socks, and such. Walmart would provide decent paying jobs for lots of folks and offer economic stability for the community. I hope it will be a successful venture.

You were going along fine until the last sentence, which sounds like a Wal-Mart press release as delivered by Bill O'Reilly. Would you ever write "Some conservatives bash any minimum wage as government interference in the free market"?

Prices are cheap at Wal-Mart. But at a cost, not the least of which is driving a struggling US manufacturing sector to shutter remaining domestic factories and move overseas in order to produce at prices Wal-Mart will pay. Those displaced workers, most often in smaller towns, then end up...shopping at Wal-Mart. Quite a brilliant business model.

Good morning - we look forward to opening a new store in northern Baltimore soon and remained committed to growing our business here. Residents need more affordable grocery options and more convenient access to quality jobs. Our new 25th Street Station store will deliver on both.

These jobs - including positions in store management, pharmacy, human resources, customer service, cashiers and sales associates - offer competitive pay, quality benefits and a real opportunity to build a career. More than three-quarters of our store management team started as hourly associates and benefits include affordable health plans, profit sharing and 401(k) contributions, a stock purchase plan and a discount on store merchandise.

In Baltimore our local stores already co-exist with dozens of small, medium and large businesses; just drive around in the vicinity of our stores to see how Walmart fosters opportunity for others. This is not surprising. There have been countless studies done that show Walmart stores are a magnet for growth and development.

We look forward to working with the community over the next several months to create economic opportunity by providing good jobs and by saving customers money on their groceries and other quality merchandise.

Best regards,

Steven Restivo
Director Community Affairs
Walmart Stores, Inc.

The backlash against Wal-Mart (or, as some say, "Mal-Wart") will continue unabated no matter what the company does. People scream they want jobs in the city. These two companies are proposing to bring in jobs to the area (yes, yes, I've heard it all: low-paying menial part-time jobs. If you don't want that job, don't take it.).

Is anyone proposing a better alternative? Does anyone think a Wegman's or a high-tech electronics factory or a biology lab is going to be put there? A Lexus or Hummer dealership? No? [crickets chirping]

Did those protesting Wal-Mart also protest the Target and Shoppers Food Warehouse at Mondawmin Mall,. both of which surely killed off lots of neighborhood stores?

Go ahead and protest "Mal-Wart" all you want. You will have middle fingers and foul language raised at your pickets by the thousands standing in line to apply for jobs there, and the thousands more eager to shop there!

It's not just about a Walmart. The same people that decry the disappearance of Mom and Pop stores are sometimes the ones who did not patronize them. Just one example, we had a Mom and Pop hardware store in our area. Years ago, Hechingers opened their store on Pulaski Highway. The little hardware hung on and eventually tanked. The point? You could go in the little hardware store with any type of fix-it problem and there was plenty of sound advice. Hechingers had cashiers, plain and simple, and most with attitudes. Yet, for some strange reason, people in the area couldn't resist that ugly orange big box on Route 40. And there's hundreds of stories just like this one.....

Some liberals bash Walmart as the enemy of lower- and middle-income folks...

for very good reasons that you know very well and all of which are as true today as twenty years ago.

...when in fact its low prices deliver huge benefits to working families...

maybe we're just using different definitions for the term "benefit"; let alone huge.

When I think of Walmart and it's relationship to "working" (and poorer) families other terms come to my mind; prosecution terms like culpable, and accessory are far closer to the reality.

Jay you seem rather glib on the topic of low wages:

A Substantial Number of Wal-Mart Associates earn below the federal poverty line

* In 2008, the average full time Associate (34 hours per week) earns $10.84 hourly for an annual income of $19,165. That’s $2,000 below the Federal Poverty Line for a family of four. [http://aspe.hhs.gov/poverty/08poverty.shtml]

* Last year, Wal-Mart CEO Lee Scott earned $29.7 million in total compensation, or 1,551 times the annual income of the average full time Wal-Mart Associate. [http://articles.latimes.com/2007/apr/20/business/fi-briefs20.6]

Wal-Mart can afford wage increases

* Wal-Mart could give each of its workers a $1 per hour raise without affecting their annual $12 billion profit margin, by raising prices only one half of one penny per dollar. For instance, a $2.00 pair of socks would then cost $2.01. That half of a cent would add up to a $1,800 raise for each employee. [Analysis of Wal-Mart Annual Report 2005]

* A 2007 study found that Wal-Mart could increase its starting wage to $10 per hour, and even if were to pass 100 percent of the cost onto customers, it would only need to increase prices by 0.9%. This works out to $0.36 per shopping trip, or $9.70 per year, for the average Wal-Mart customer. [Arindrajit Dube, Dave Graham-Squire, Ken Jacobs, and Stephanie Luce, Living Wage Policies and Wal-Mart: How a Higher Wage Standard Would Impact Wal-Mart Workers and Shoppers 2007]

Wal-Mart’s wages are lower than other retail wages

* As of 2008, a full time Wal-Mart Associates earns 16% less than the average retail wage. [http://www.bls.gov/news.release/empsit.t16.htm]

http://wakeupwalmart.com/facts/

I have a question: is the City offering tax breaks to subsidize this project?

There's a shocking degree of hostility towards those who want wages to livable. If Wal-mart wants to develop in our City in an underserved area, wonderful. But why does this mean that they shouldn't they be held to basic standards of corporate decency?

We are in an economic climate where absolutely, people wil be clammoring for these retail jobs. Why does this de facto mean that we must race to the bottom on their wages, when in fact bringing them up to "living wage" will hardly place the company out of business?

For Mr. Restivo, who has kindly offered his time to post here, what is the percentage of your associates who can actually afford the cost of participating in your health insurance plan?

The real bottom line, is that municpalities have every right to expect stores to be held to standards if they are in fact using our tax dollars to subsidize them. It seems to me that if the workers at Wal-Mart can't afford the insurance that they are being offered, well, then my tax dollars are not only being spent by my government to lure wal-mart, but they are also subsidizing these workers who visit our emergency rooms when they get sick.

There is room for CONSTRUCTIVE debate here. If in fact Wal-mart (or any bog box store for that matter) is the only business that can afford to thrive in this location, why should our reactions as citizens be to accept that on any terms without negotiation?

A petition has just been created:
No Wal-Mart in Remington at the Care2 Petitionsite

http://www.thepetitionsite.com/4/no-wal-mart-in-remington

Granted the "jobs" will help; but what about the smaller hardware places that will most likely close because of this dynamic duo? I doubt that Lowe's will stock the glass bulb fuses that some households in the Hamden/ Remmington area need.

To claudiaw and others, I say:

Propose a viable alternative.

Propose an alternative employer, commercial enterprise, manufacturer, or whatever, to occupy that real estate and bring comparable or better benefits to the area in the form of higher-paying jobs, lower local retail prices, better retail competition, a better tax base, business tax revenue to the city, etc.

And furthermore, find someone willing to make the commercial investment with their own monies and debt, not tax dollars.

Propose an alternative. Hancock and I will sit by and await your response.

There's a heck of a lot I dislike about Wal-Mart, and for that matter Wegman's, Harris Teeter, Target, KMart, Giant, Home Depot, and the rest. But to take the Wal-Mart opposition's arguments to their logical extremes, we would still be riding horse carriages to little local general stores like in "Little House on the Prairie" and "The Waltons," Woolworth's, Sears, and JCPenney would never have existed, and the Sears Catalog should have been banned, never mind Amazon and internet shopping.

I am strongly opposed to the proposed Wal-Mart in Remington. Wal-Mart creates net job loss in communities, by out-competing small businesses and stealing their customers. This is particularly troubling in Remington, surrounded by Charles Village, Station North, and Hamden, where we as communities have been trying for years to establish small, independent businesses, with mostly great success.

Wal-Mart is the largest employer of people of color in the United States, and effectively keeps many African Americans and Latinos in poverty by removing independent job opportunities through competition and only providing bare minimum wages, placing most employees (especially ones with families) below the poverty line. Their staunch anti-union policies keep third party representation out of the workplace, preventing employees from fighting for better pay and benefits.

As a mega-corporation with no ties to the community or culture of Baltimore, they will not be willing to provide many of the opportunities that surrounding companies are willing to provide, such as flexible work hours for low-income or uninsured individuals in drug treatment, or mentoring and support for formerly incarcerated individuals.

My response to Alexander Mitchell IV is simple: you seem to be looking at the issue through the wrong lens. Your de facto position is that a big box store is the ONLY potential tenant for the space since there are no others willing to take that mantle.

MY position is that if City tax dollars are subsidizing this project, then the City has not merely the right, but the responsibility to bring the company in on terms that won't exacerbate the problems of poverty in an already poor city.

I suggest you read their latest SEC filing - if Wal-mart wants to increase their market shre in Baltimore City, they happen to have more than enough money to make the commercial investment out of their existing profits.

I happen to believe that welfare dollars belong in the hands of people who need a safety net. Sadly, a growing number of people these days. We can't afford to spend those dollars - and shouldn't be spending those dollars - on corporations that can more than afford to pay their own way.

"MY position is that if City tax dollars are subsidizing this project, then the City has not merely the right, but the responsibility to bring the company in on terms that won't exacerbate the problems of poverty in an already poor city."

Have we really gotten so jaded and low in self-esteem that we view it as impossible for a major commercial firm to set up a location in the city without being bribed by city government? That alone says way too much about the down side of doing business in central Maryland.

Nowhere in either the article in the Baltimore Sun or the various blogposts on the topic have I seen ANY indication or insinuation that ANY city tax dollars are "subsidizing" this proposed project. There MAY eventually be infrastructure changes undertaken by the city--street and sidewalk reconstruction, sewer and water work, etc.--that could be considered an indirect "subsidy;" I would dare to say that any other proposed tenant, such as a university or park or swimming center, would receive equal "subsidy" of an identical nature from Baltimore City. If you have any reports or proof that the city is paying or subsidizing Lowe's and Wal-Mart to come to Remington, we'd love to hear it.

Furthermore, Wal-Mart/Lowe's will add to the tax base in the area, and presumably pay lots of city real estate and commercial taxes. If a park or pool or university campus were put there, that would end up as commercial property REMOVED from the city tax rolls!

Furthermore, why isn't anyone attacking Lowe's, which presumably uses the same general commercial strategies as Wal-Mart? Heck, why not beat up on Target, or any supermarket chain that drives corner markets and arabbers out of business? Where were you when Safeway opened up on 25th Street?

You don''t want Wal-Mart and Lowe's there? Fine. Propose an alternative commercial situation creating a comparable number of jobs, pay, tax revenue, and commercial viability. Then attract enough PRIVATE commercial dollars and development and investors to make it happen. And do it without benefit of tax dollars and subsidies. Would you prefer Whole Foods and their "whole paycheck" approach? How well would THAT work in that neighborhood, huh? Yet another five Subway and Starbucks franchises?

Would you really prefer another Old Town Mall or Howard Street retail situation? Another Mt. Clare Shopping Center? Another City Market with half the vendor spaces empty?

In strong opposition of Wal-mart, I refuse to shop there. That being said, healthy debate surrounding the issue should be welcomed. I believe in shopping for domestic goods to support the US' economy and not China. I am fortunate enough to be in a position to have a healthy income with no kids that enables me to avoid shopping at Walmart. There higher costs are something that I can exchange for piece of mind and principle. Many individuals and families cannot do this, and don't even think about buying domestically.

Take the Wal-mart in Port Covington, the only Wal-mart within city limits. It's a mess of a retail store that assuredly draws most of it's business from nearby Cherry Hill, Brooklyn and Washington Village preying on the lower class for it's consumers. That's the last thing you want starting to progress through the city. I fully believe that Wal-mart is a powerful juggernaut in a vicious cycle of being the lowest price in town forcing lower income families to become used-to and sometimes dependent on them eventually drowning small businesses out.

I'm not saying the mediocre jobs won't be welcomed, but at a time in our country when we need a major realignment towards being a self sustaining economy and create jobs (overall domestically) for factory workers, one more Wal-mart is not what we need. Our money is groing through Wal-marts hands back to foreign countries at what cost? They're creating low wage positions that aren't helping the people who lost their jobs as a garbageman or electricians (besides the construction). The people in the low wage positions will be forced to shop at Wal-mart also because that's all thier job can allow them to.

I have no proposal for any other business or development to take it's place, but I do not believe that the benefits mentioned above are actaully helping people prosper or live adequately. That being said, Wal-mart is not the only company part of the beast, it's just an easy target, it's part of a larger problem that our country needs to spearhead.

Baltimore's a gritty city and we can get by without the 'helping hand' from a 13.6 Billion-dollar-a-year-profit corporation.

Jay, are we really so naive as to think the only thing Walmart would do is bring lower prices through competition? Try looking a little bigger. Its not like people magically get more stuff for less money because the name says walmart. They get other things too, as does the city. People are worried about the wage discrimination, the traffic, the foreign suppliers, the externalized health care costs, and the sustainability of this development for a reason...they impact what its like to live in this city! More stuff for less money comes with costs these developers want us to assume without discussing. I say we answer them "no!"

A report by Good Jobs First, a non-profit research organization dedicated to promoting both corporate and givernment accountability, investigated the myriad of tax incentives of thousands of Walmart stores nationwide and found that both the retail stores and the distribution centers have been subsidized by the taxpayer. Yes, this can include infrasturucture assistence, but to a greater extent this included tax increment financing (TIFs), enterprise zones, worker recruitment and job training funds, tax exempt bond financing, state corporate income tax credits... this is the nationwide fashion to do business, not merely an unfortunate climate in the region of Central Maryland. The sum total of decades of such subsidies have helped to fuel the Walmarts, and the Targets, and the Kmarts in their economic growth.

Thus, it would be naive to presume that Wal-mart isn't deriving a taxpayer subsidized benefit in addition to the profits it can make in an underserved poor neighborhood. While I am not officially among their ranks, I would certainly hope that those who are petitioning against the project start asking appropriate city officials the extent to which this deal is being financed. I would not be surprised if reporters are asking these questions as we speak.

But of course it goes without saying that this isn't just about Wal-mart, and yes, absolutely, such financing deals would be the norm for any big-box store -be it Lowes, Target, Wal-mart or a Giant or Superfresh. But regardless of the company, I would still expect to see elected officials trying to leverage their power to place strings on those dollars. I hardly think that attaching provisions to development deals demanding that a company pay a worker a living wage is detrimental to Wal-mart's ability to do business in the city.

Of course the unemployed need jobs, but they need jobs that will lift them out of poverty, not jobs that will only drive them onto medicaid rolls. We will never progress as long as we are satisifed with companies taking the low-road.

I'm not disputing that jobs would be created, but I question the quality of those jobs. Walmart pays its female workers 26-37% lower nationally than its male workers. How is a woman working there supposed to support a family? Baltimore's workforce is majority female and many low income families in the city have one female bread winner? Why not bring a company that pays more and doesn't tell it's employees to use medicare as a health insurance plan.

Personally, my dad has worked as a grocery clerk at a supermarket for over 30 years. He has raised 4 sons and owned a home on the pay from this job. I wonder if that would be possible on Wal-Mart wage and benefits.

We shouldn't be questioning development, but how we develop. Food service and retail jobs don't have to be throw away jobs. They should be middle class jobs. I feel like our city has gotten better in the last decade. We should continue that progress by requiring employers to give back to the community that they profit from by paying decent wages

This is a company that currently has over 80 lawsuits against it for wage and hour violations nationally plus a number of class action suits.

I think its great that businesses are targeting Baltimore as a place to do business in, but as a resident living less that 3 blocks away I do feel its our right to question which businesses can/should be in our neighborhoods.

A good alternative would be a bus station.

To all the people in Remington and surrounding areas , you would have to be crazy not to want a Walmart. The jobs it will bring for the area. There are a lot of elderly people in the area that travel to Walmart to save money.Most of them have a small amount of money each month. They have to strech it out . An crime, there is crime everywhere. So if you think Walmart will bring more crime to Remington, thats a laugh. With the drug dealers on the corners.If anything maybe more police in the area. That seems to I that s a good thing... If Walmart does come to Remington the MTA should expand the 98 shuttle to 25th street. thats all I got to say for now. Thank you for your time.

All of the people who hate Wal-Mart are welcome to shop elsewhere. Personally, the smaller "mom and pop" stores simply do not offer the price or variety that I demand as a consumer.

I could care less what the workers are making. I'll leave it to them to figure out their own life and employment situation.

As a Remington resident and homeowner-know that this will not happen without a fight. The Walmart was never presented to the residents of Remington. We were presented with a Lowes store. For those of you who are looking forward to Walmart in Baltimore-I say have one in your neighborhood. Steve Restivo--how much money is enough for you people? The residents of Baltimore City live here because we enjoy living a life where we can distinguish one place from another, we prefer to spend our money at locally owned, independent businesses and we loathe Walmart and the like and their business model. You will have a fight on your hands.
Those who would come shop at Remington Walmart---you are not wanted. We do not want your traffic, or your inevitable crime and trash. We have many great businesses now-come to them! Come to the Dizz, come to the Paper Moon, come take your pictures in front of Charm City Cakes!! Please, please please----NO WALMART IN REMINGTON!!!!!!

Hey Daniel? You have a mouse in your pocket? When you say "we" who does that include? It surely isn't me.I can't afford the local business' prices,so yeah I'll take the big box store.Inevitable crime & trash? Have you looked out your door lately?The only thing this hood is missing a flush handle!

Hey Ziggy:

There are many Remington residents who feel as I do. And some of us make painstaking efforts to keep it clean and safe despite the effort of others to trash it.
I'm outside daily cleaning and so are my neighbors. And as far as crime goes, I live on one of the safest streets in the city and yes, it is right here in Remington. I've got great neighbors, great businesses to go to and big box stores' value is lost in tax subsidies,sweetheart deals and jobs that go 'bye bye' when suppliers can't meet the demands of this bohemoth monopoly. You say you can't afford the local stores? I say we can't affort WalMart

And by the way, the issue here is that this WalMart was never presented. What was presented was a LOWES.
Walmart was snuck in through the back door. The residents of Remington were never informed and had no say in the matter.

Wal-Mart has an amazing business model. While I think it is important for local communities to stick together, I don't know that keeping Wal-Mart out will help. It could provide many new jobs and create a way for lots of folks to save money.

I guess I take the approach that businesses who were making horse carriages when automobiles started to become main stream needed to alter their businesses to come inline with the trends - not ban automobiles. Change happens and sometimes we just need to roll with it.

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
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