Hundreds of Wal-Mart protesters crowd into Chicago’s City Hall on May 5th. Photo courtesy of Acorn
July 2004
Wal-Mart: The Blockbuster
Coming soon to a Neighborhood Near You?
by Kari Lydersen
Katie Brown has lived just south of the Austin neighborhood, in North Lawndale, on Chicago’s West Side for nearly half of her 77 years. She’s seen a lot of changes during that time, including the tail end of the white flight during the ‘50s and ‘60s and then the slow, fitful economic resurgence that is currently underway and characterized by an influx of Latino and Asian residents among the mostly African-American neighborhood. She’d like to see more changes — more investment, less crime. But one thing she doesn’t want to see is a huge, new Wal-Mart. “Now we have all these mom-and-pop stores where you can walk to buy a loaf of bread or a gallon of milk,” said Brown, who until recently worked as a homecare provider. “Then there’s the Dominick’s and Marshall’s and Radio Shack you can go to. Sometimes one store will have a sale, another time another one will,” said Brown, sitting in her living room surrounded by family photos. “But if the Wal-Mart comes in, they’ll drive all the others out of business and then [Wal-Mart] will control everything.”
The store, which Wal-Mart plans to build on the sprawling lot of a former Helene Curtis shampoo factory at Grand and Kilpatrick Avenues is a contentious issue for this part of the city. Another proposed Wal-Mart, on the site of a vacant factory at 83rd Street and Stewart Avenue on the South Side, has drawn similar reactions.
In its brightest light, the prospect of these Wal-Marts is seen by some as a long-awaited validation of the buying power of Chicago’s African-American community and a sorely needed source of new jobs in a neighborhood with chronic high unemployment.
Others, including Katie Brown, see it as a 900-pound gorilla that will strangle existing local retailers while offering only subsistence level jobs with low pay and few or no benefits. They fear, not only will the Wal-Mart have a harmful effect on the Austin community, but it will drive down wages and working conditions in various retail sectors across a significant swath of the city.
Last May 5th, when the Chicago City Council was slated to vote on zoning changes that would enable Wal-Mart to build its two proposed stores, about 300 protesters jammed the second floor lobby of City Hall demonstrating against the Bentonville, Ark.-based company. The protesters, most of them affiliated with community organizations, churches and labor unions, waved placards denouncing Wal-Mart and adorned their bodies, clothes and purses with bright yellow stickers showing Wal-Mart’s trademark smiley face ... frowning.
That day the City Council delayed the vote. Reconvening three weeks later, the council decided to allow the zoning changes for the West Side store, after what various aldermen described as one of the most contentious council sessions in recent history. Zoning for the South Side store was voted down, but since more than half the full council didn’t vote against it, the issue is expected (as we go to press) to come up again in late June.
Brown, who is robust and active, despite some health problems, was in the thick of things at the May 5 protest. When she saw some younger women propped up against a table taking a breather she cautioned, “Your bodies might have given out, but you better not give up.”
Retail Predator?
Currently there are several Wal-Marts in Chicago suburbs, but none within the city limits. Some residents, including the aldermen in both wards where Wal-Mart wants to build, welcome the proposed two stores. In these economically depressed neighborhoods, they see Wal-Mart as a convenient, cheap place to shop as well as a ready supply of jobs.
But Wal-Mart opponents, including union activists, warn of ominous consequences if Chicago allows the nation’s largest retailer and company to open stores within the city limits. They said that Wal-Mart Stores, Inc., with nearly $9 billion in profits last year, systematically offers low-wage jobs with poor benefits and few opportunities for advancement. They point to scores of class action lawsuits filed against the company for gender and racial discrimination in its hiring and promotion practices.
Wal-Mart is also fiercely anti-union, and since it is such a huge company, its policies are a threat not just to retail sector employees but to organized labor as a whole, said Eddie Caumiant, an organizer with the United Food and Commercial Workers (ufcw) labor union. “They have a tendency to drive down wages, benefits and working conditions for everyone,” said Caumiant, who unsuccessfully fought several stores that Wal-Mart planned to build in southern Illinois. He describes a typical Wal-Mart scenario as follows: Wal-Mart begins by selling everything from groceries and guns to clothing and electronics at cut-rate prices, making it nearly impossible for a small business, or even larger grocery chain stores, to compete. These other stores are often driven out of business, causing local jobs to be lost. That hurts the area’s economic and cultural diversity, and saps the vitality of the neighborhood.
Caumiant said that after Wal-Mart methodically drives out its competitors by marking down its merchandise, it turns around and jacks the prices up once the other stores are gone from the area. Then, “like a snake shedding its skin” Wal-Mart will often close its store after a few years in a community and open a larger Supercenter nearby, said anti-sprawl activist Al Norman. The closed stores often remain vacant for years because Wal-Mart won’t sell the properties unless the buyer signs an agreement promising not to open a discount store, pharmacy, warehouse club or other competitive business, said Norman who founded the website www.sprawl-busters.com.
“If (Wal-Mart executives) can’t expand the store they’ll put it on a list to close it, and then build another larger one a quarter of a mile away,” said Norman. “The smaller stores are left empty. What they’re doing is playing a game of retail musical chairs, leaving assets empty. That’s Wal-Mart’s idea of competition. If they dump these stores [to build a bigger one] they don’t want a Target opening up in the same place.”
Some residents in Nowata, Okla. said they are still dealing with the fallout nearly a decade after a Wal-Mart opened and many small businesses shut down. After just a few years of operating , the Nowata Wal-Mart closed its doors in 1994 and the company opened a Supercenter 20 miles away in Bartlesville, leaving an empty building and a devastated local economy in the town of approximately 4,000 residents, said Gary Hensley, production manager of Nowata Printing Company.
“All the mom and pop stores closed down after the Wal-Mart moved in, nothing was left,” said Hensley. “Downtown used to have all kinds of little stores, but they couldn’t compete with Wal-Mart and they closed up. Now there’s no place to buy anything.”
As of February, 2004 Wal-Mart had 371 buildings on the market, according to Norman, comprising 28.4 million square feet. The total amount of vacant space, including buildings not on the market, was even greater: more than 32 million square feet.
In Rockwood, Tenn., the Wal-Mart store that closed down several years ago is still standing empty, while the new Wal-Mart Supercenter is thriving. Rockwood’s finance manager Jim Heinz said the community is happy with the new Supercenter, and vacant lots aren’t a problem. “Everybody’s shopping at the Supercenter,” he said.
Though the West Side Austin neighborhood clearly suffers from disinvestment, with long stretches of corner grocery stores and liquor stores, Wal-Mart has chosen to locate in a thriving, highly commercialized part of Austin that includes Cub Foods, Old Navy, Walgreen’s and other major stores. Just south of this strip are myriad small businesses serving the various ethnic groups, including Madrid Joyeria (a jeweler), Muebleria Q Natural (furniture), Rainbow clothing store, Dollar Mark Plus store, Payless shoe store and many others.
Given the experience of other towns where Wal-Mart has located, residents and analysts believe these stores would be at great risk of going under once Wal-Mart moves into the neighborhood. Nonetheless, 37th ward Ald. Emma Mitts in Austin has been an outspoken supporter of the proposed Wal-Mart. “Citizens shouldn’t have to go out to the suburbs to shop,” said Mitts in a brief interview. “And we need the jobs here in our community.”
Her colleague in the 21st ward Ald. Howard Brookins Jr., wants the Wal-Mart if the retailer agrees to some concessions. Brookins is supporting the demands of a coalition of labor, community and religious groups asking Wal-Mart to sign a so-called “community benefits agreement” saying it will provide good benefits, reinvest in the community, grant workers the right to organize a union if they choose and other measures. “It’s better to attempt to change Wal-Mart from within than to keep Wal-Mart out altogether,” said Brookins. “I’ve asked them for certain concessions, and they have agreed to certain concessions, though the unions say those don’t go far enough. [Wal-Mart] has promised that they won’t ask for a dime from the city, and that they’ll use union labor to construct the store.”
Aside from the agreement, local pastors have also asked Wal-Mart to hire some ex-offenders, pointing out that many live on the West Side, and their criminal records make it especially hard for them to get jobs.
Skeptics underscore that Wal-Mart has never in its history signed a community agreement. “They just don’t do that,” said D.C.-based ufcw national spokesperson, Jill Cashen.
“It’s going to be rough [to get them to sign a commitment], they’re such a major player,” said Elce Redmond, an organizer with South Austin Coalition, a neighborhood activists’ group. “They epitomize capitalism.”
Wal-Mart officials failed to return calls to comment on this story, despite several attempts to reach them.
Though Brookins wants Wal-Mart to agree to concessions, such as hiring ex-offenders, he waffles on demanding they sign agreements: “Other stores don’t have to sign agreements; they should be treated just like anyone else.”
Brookins’ wavering position illustrates the bind in which decision-makers are put over whether to accept or reject Wal-Mart’s overtures. Welcoming a Wal-Mart is immediate gratification to downtrodden West-siders and South-siders who are clamoring for jobs and a cheap, one-stop shopping retailer. But is it a Faustian agreement that will eventually take its toll?
The Rev. Jesse Jackson, who vociferously opposes Wal-Mart, has said just as much. In a statement, Jackson calls the company a “Confederate economic Trojan horse.”
“On the outside it looks like a show horse,” he said. “But open it up and what do you see? Jobs at welfare-level wages, jobs without health-care benefits, jobs without the right to organize, a Wal-Mart that forces out local small business and throws their workers into the unemployment lines.”
Jackson said that Wal-Mart is a leader in the national trend of companies that are hiring primarily part-time workers to avoid paying benefits. “[Wal-Mart’s] cheap prices are the Kool-Aid on the outside, but its anti-labor, anti-business practices are the cyanide on the inside,” Jackson said.
Labor organizer Caumiant agreed, noting that with the part-time labor issue and other policies, Wal-Mart has set labor standards (or “substandards”) for various industries. “They cut wages and benefits and have nine out of 10 people working 25 hours a week or less, so other companies need to do the same thing,” he said.
Why Aren’t You Smiling?
At a Workers’ Rights Board hearing at St. Sabina Church on the South Side in May, current and former Wal-Mart employees talked about their experiences with the company. Twenty-two-year-old Gonza Kaijage described her 38-hour-a-week job at a Wal-Mart in Carbondale, Ill. with no benefits. She said she was ordered to lift heavy boxes while stocking candy aisles even after she complained of back pain. Additionally, she raised charges of racism and sexism, saying black employees typically weren’t given jobs working with customers and female employees were pressured to smile. “I would be doing my job and multiple managers would come around asking me questions like, ‘Why aren’t you smiling?’ “ she said. “And I would tell them, ‘I’m hurting my back to stock candy for minimum wage. Where’s the happiness in that?’ “
Wal-Mart initially located its stores in rural and suburban communities. Its practice of opening stores in major cities is relatively new. And hasn’t always been successful. For example, a handful of county boards and city councils in northern and southern California have passed ordinances that would prevent Wal-Mart from coming in.
Could that happen in Chicago? Not likely, according to Caumiant, who sees Wal-Mart morphing its approach to convince the community that it will be a good neighbor. “I think in Chicago consumers make decisions based on factors other than price,” he said. “It’s not always about the bottom line. So you see Wal-Mart catching on to this and putting out ads portraying themselves as a responsible part of the community. I say trying, because if you look at the fact that they have class action suit after class action suit after class action suit filed against them, they’re obviously not a responsible company.”
Kari Lydersen is a Chicago-based writer. Erin Meyer contributed to this report.
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