Live better?

In the past couple of weeks, there has been a lot of conversation regarding the opening of a Walmart in midtown.  I am one of those who has been very vocal in their anti-Walmart stance.

Everyone is entitled to their opinion.  There is always someone who is going to disagree.  The problem is that you can’t take your disagreement to the press and build a biased and misinformed argument for your cause.  At a time when we are discussing the welfare of our community, there is a lot of danger in ignorance and misinformation.

Bringing a Walmart to the the center of a thriving community is a horrible idea.   But to say that it is only a horrible idea because of its lack of aesthetic value or who the intended or potential customers are, is an incredibly simplistic line of reasoning.  Opening a Walmart in Midtown is a bad idea because Walmart eliminates more jobs than it creates, drives out competitors, lowers wages for the rest of the industry, and  costs taxpayers money.

Some people argue that a Walmart would bring more jobs when the reality is that within a year, it is more likely to result in a net loss of jobs and undermined wages in the displacement.  It is a very risky proposition to believe that all jobs are created equal. Walmart jobs are created at the expense of higher paying jobs from active players within communities.

In his op-ed, Mr. Zarwi tells a story about driving 20 miles away to the Walmart in Doral to buy a bike. This is how it begins: Not only did he waste gas, he also took away his business from one of the 3 locally owned bicycle shops in the midtown area. At this juncture begins the displacement of workers from higher-paid jobs in the retailers he is choosing not to patronize. Walmart is not even here and already it wins.

In any case, Mr. Zarwi wrote his article as a rebuttal to Grant Stern’s article, which although impassioned and on the right side of the issue, I feel was lacking facts outside of the commonsensical.  I am going to point out a few things that I feel were left unsaid.

According to Walmart’s financial report, in 2010 they had a revenue of 408.2 billion dollars.  To put that in perspective, that is more than the GNP of more than half of all the countries in the world. In the United States it also employs, 1.4 million people- 1% of the U.S.’s 140 million working population.

The salary for full-time employees is on average $8.81 an hour for 28-40 hours a week. This pay scale places employees with families below the federal poverty line, which as you may or may not know, opens the door to public assistance.

Someone on Twitter said that it doesn’t make a difference if Walmart employees get public assistance, considering they’d get it anyway if they are unemployed. It is my belief that a person working full time should be able to cover their basic needs. A decent day’s wages for an honest day’s work.

The Democratic Staff of the Committee on Education and the Workforce, estimates that one 200-person Wal-Mart store may result in a cost to federal taxpayers of $420,750 per year. Specifically, the low wages result in the following additional public costs being passed along to taxpayers:

  • $36,000 a year for free and reduced lunches for just 50 qualifying Wal-Mart families.
  • $42,000 a year for Section 8 housing assistance, assuming 3 percent of the store employees qualify for such assistance, at $6,700 per family.
  • $125,000 a year for federal tax credits and deductions for low-income families, assuming 50 employees are heads of household with a child and 50 are married with two children.
  • $100,000 a year for the additional Title I expenses, assuming 50 Wal-Mart families qualify with an average of 2 children.
  • $108,000 a year for the additional federal health care costs of moving into state children’s health insurance programs, assuming 30 employees with an average of two children qualify.
  • $9,750 a year for the additional costs for low income energy assistance.

According to the St. Petersburg Times, in 2005  Wal-Mart Corp. had more employees and family members enrolled in Medicaid than any other company in the state of Florida. From the 91,000 full-time and part-time employees Walmart had in Florida at that time, 12,300 workers or dependents were eligible for Medicaid and 3,342 children qualified for Florida Healthy Kids and KidCare.

An excerpt of a Wal Mart internal memo posted by the NY Times illustrates that this is something they are aware of, if not part of their business plan:

“We also have a significant number of Associates and their children who receive health insurance through public-assistance programs… In total, 46 percent of Associates’ children are either on Medicaid or are uninsured.” 

Taxpayers subsidizing low salaries by paying companies to create jobs, yet paying for some of the health care for the employees essentially amounts to corporate welfare.  Walmart has also been known to receive tax subsidies and rebates from communities to open up stores.  Since the 80s it has collected over a billion dollars in tax breaks and subsidies which have deprived communities of income and reallocated funds that could be used for schools, police, public works, or even to subsidize the same public programs their employees require for survival. They don’t bring any kind of long term value to the communities they serve.

A 2004 paper by two professors at Penn State University found that U.S. counties with Wal-Mart stores suffered increased poverty compared with counties without Wal-Marts. As the world’s largest retailer, it sets standards for wages, benefits and corporate responsibility, which impact millions of retail workers and their communities. A study by UC Berkley’s Labor Center found that Wal-Mart reduces the take-home pay of retail workers by $4.7 BILLION dollars annually.

The company is also strongly anti-union and has opposed the Employee Free Choice Act. Whereas Wal-Mart employees start at the same salary as unionized employees in similar lines of work, they make 25 percent less than their unionized counterparts after two years at the job.

Wal-Mart has a long history of labor violations, from failing to pay workers for overtime hours, violating child labor laws, discrimination, and locking workers into stores at night. Back in February, in a hearing before the NYC Council, Annette Bernhardt, Ph.D. Policy Co Director of the National Employment Law Project said about Walmart:

“the right to be paid at least the minimum wage and the right to be paid overtime, are being violated at alarming rates. The sheer breadth of the problem, as well as its profound impact on both workers and their communities demand urgent attention”

Social responsibility and good corporate citizenship are necessary for a business to thrive in a community and to allow the community to thrive with it.  Walmart is neither.  And I am not the only one who thinks so. Just last week the largest pension fund in the Netherlands (ABP) divested itself of all shares in Walmart as a result of the company’s anti-union position and poor labor standards.

It is a mistake to bring Walmart to an area like Midtown, which has slowly but surely become the artistic center of the city of Miami.  To expose this still fragile area to the life sucking force that is a Walmart, might irreparably damage the community that has built the area, starting by the very public it is likely to serve- which coincidentally it is most likely to be the same people it will end up employing.  We need our local businesses to be able to thrive so that we can ensure that the full time workers in our community can earn a decent wages that will keep them from being a burden on taxpayers.

Despite what Walmart may think, struggling for survival shouldn’t have to be some people’s American dream.

If you haven’t already, I encourage you to go sign the petition to keep Walmart out of Midtown!

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7 Responses to Live better?

  1. Kareem Zarwi says:

    That was extemely well written. I agree with you.

  2. PL Holden says:

    Good luck with your petition. I recently did a case study about Walmart’s debut in Japan and how they weren’t well received because out there lower prices translates to lower quality. They (as of at least 2006 were sticking to their guns and getting the things they need from the places that had better quality even if it meant paying more. I think it would be hard for so many people living around the poverty line to give that up in most North American cities but we world be better off with more small businesses than a big box store with a catch phrase like “Live Better” who couldn’t give a damn about how well off the cities they stroll into thrive.

  3. Grant Stern says:

    Even the shiniest apple, can contain poison. Walmart is one of those apples.

  4. Kareem Zarwi says:

    I will.

  5. LoreLama says:

    This issue has been a little perplexing to me. This area was completely gentrified, 10-15 years ago you wouldn’t go into this area knowingly, much less in the evening hours. The rebirth of this area as been amazing to watch, it’s full of beautiful high rise condo buildings, wonderful restaurants, shops, etc… I could go on. There was a concerted effort to bring into this area young, professional & affluent folks into this area. This is not the demographic that shops at Walmart (I hate to be politically incorrect in an effort to be honest.) Furthermore, lets say the Walmart does go up, their patrons are not very likely to flow over lets say into lunch or dinner at Sugarcane. Not going to happen. Just take a drive out to Doral or Westchester where there are Walmarts, and take a look at the parking lots and traffic clogs. Walmarts are better suited in the sub-urban sprawl, not in the urban cores where there are are not large tracts of land that are needed for the monstrosities that are those stores. That’s just my 2 cents…

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