Walmart's New Urban Strategy Comes With a Lousy Track Record

By Joslyn Williams 7-26-2011

Walmart has launched a charm offensive as part of its new urban strategy to impose smaller versions of its big box in inner cities across the country. It has proposed four stores for Washington, D.C. -- all in predominantly minority, and most in low-income, neighborhoods.

The debate over building Walmart stores in D.C. is engaging intense public sentiment, and for good reason. While Walmart promises new jobs in a community, in reality it displaces other local businesses, leaving in question whether there is a net jobs gain; one study showed that for every retail job Walmart brought, communities lost 1.4 other jobs. In addition, Walmart passes on the cost of its low wages to taxpayers when associates and their families rely on publicly funded health care and other assistance programs.

Walmart promises D.C. 1,200 retail jobs and some 400 in the construction industry -- but the company's well-documented track record is all the evidence the affected communities need to sound the alarm and demand proof for promises.

In Chicago, when Walmart made its first foray into the urban market, it made initial oral agreements for worker and community protections -- pledges on which the big-box retailer later reneged. There was nothing in writing to force Walmart to live up to the promises that had won it a pass into the community.

The Washington Metropolitan Labor Council, aligning with community activists, environmentalists, clergy, and small businesses, has thrown down the gauntlet with a simple retort to Walmart: Respect D.C.

Our proposed community benefits agreement asks Walmart to commit, in writing, to responsible corporate citizenship. This means paying living wages, hiring and training D.C. residents, using responsible local contractors, protecting the city's natural environment, mitigating negative impacts on traffic and community safety, providing incentives and assistance to small businesses, and allowing local businesses opportunities to advertise and market products in Walmart stores.

Walmart's reputation for labor abuses is legendary. In addition to being the subject of what was the largest class-action suit in U.S. history by female employees, the corporation has been forced to settle scores of employee wage-theft lawsuits and discrimination complaints.

Despite Walmart's claim that their full-time workers in the area make an hourly wage of $12.49, in reality many hourly employees at stores around the country and in the D.C. metro area have yet to attain that figure. Worse, many long-time workers never see that figure because Walmart systematically creates part-time positions to avoid paying standard wages and health benefits. According to an independent market research group, the average "associate" at Walmart makes $8.81 per hour. Even if such a worker is allowed to work 34 hours a week, which is what Walmart considers full-time status, this equals only $15,576 per year. In contrast, Walmart CEO Mike Duke received $18.7 million in total compensation during 2010.

Walmart can easily afford to pay living wages and health care; a recent study by the Center for Labor Research and Education at the University of California at Berkeley established that if Walmart started paying a minimum wage of $12 per hour to all its associates currently earning $9 or less per hour, it would only raise the average cost of a visit to Walmart by 46 cents. A whopping 41.4 percent of such a pay increase would go to workers in families with total incomes below 200 percent of the federal poverty level.

In a city like D.C., where poverty rates have skyrocketed beyond the national averages, Walmart has the potential to greatly impact our future, for better or for worse.

More than just a fight against Walmart, this is a call for social justice; our city must demand the respect that it deserves. Walmart can afford to be a responsible corporate neighbor. D.C. cannot afford the alternative.

Joslyn Williams is president of the Metropolitan Washington Council, AFL-CIO.

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