La City council takes on WalMart

[mikester]

This has been a raging issue in Socal for some time now - some are for and some are against...

the text of the article:

L.A. Council Votes to Restrict Superstores
* The law would require studies of possible harm before large centers such as Wal-Mart's are built.

By Jessica Garrison, Times Staff Writer

The Los Angeles City Council on Tuesday overwhelmingly backed a proposed law that would make it harder for Wal-Mart to erect superstores in the city by requiring the company to study whether surrounding areas would be harmed by the addition of the mammoth centers.

City officials pushing the law believe that Wal-Mart may have a tough time showing that its mega-stores would have a positive impact on communities, which could give the City Council a reason to reject them.

But Wal-Mart officials declared Tuesday that the proposed law was a win for the company, saying the firm kept Los Angeles from adopting an all-out ban on the Supercenters — 200,000-square-foot stores that combine the traditional discount offerings with groceries.

Under the ordinance, retailers wanting to build stores larger than 100,000 square feet that devote more than 10% of their sales floor to food and other nontaxable items would have to pay for an economic analysis. The report would forecast whether a proposed store would eliminate jobs, depress wages or harm neighborhood businesses in many parts of the city.

"This is highly significant," said Nelson Lichtenstein of the Center for Work, Labor and Democracy at UC Santa Barbara. He added that the law, which has the support of 13 of the 15 council members, could help transform the way the world's largest company does business.

The council gave its initial approval to the law Tuesday and will vote today on the actual ordinance, which applies not only to Wal-Mart but also to other retailers, such as Target.

The ordinance could become effective as soon as September.

Labor leaders and their allies on the council hope the law will become a national model. Since the nonunion Wal-Mart announced plans to build 40 Supercenters across California, unions and some local governments have battled the Bentonville, Ark., company.

Tuesday's City Council vote on the issue, one of labor's top priorities, comes in the midst of a mayoral election campaign in which two candidates, incumbent James K. Hahn and Councilman Antonio Villaraigosa, are vying for union support. In 2001, when the pair also faced off, Villaraigosa had the backing of much of organized labor.

Hahn and Villaraigosa both support the proposed law.

Two years ago Councilmen Eric Garcetti and Ed Reyes proposed banning superstores in economically depressed areas of the city, but later scaled back their measure.

Speaking by cellphone from the barbecue section of the Wal-Mart in Baldwin Hills, company spokesman Peter Kanelos said, "Organized labor and other special interests have failed in their objective."

He said Wal-Mart had already provided a huge economic boost to three Los Angeles neighborhoods with its discount stores.

Bernard C. Parks, the only council member to vote against the policy, said it would "make it rough … to do business in L.A." and would send businesses and jobs to other cities that would absorb them like a sponge."

Parks, who is running for mayor as a pro-business candidate, said the Baldwin Hills shopping center sat half-empty for five years until Wal-Mart opened a store there last year. Now, the area has sprung back to life, he said.

"There's a whole lot of folks in Los Angeles that would give their left arm for a $9-an-hour job," he said.

But many labor and community groups believe that the discount retailer has a devastating effect on local communities, depressing wages, driving out existing businesses and creating nightmarish traffic.

On Tuesday, some pointed to a UC Berkeley Labor Center report released last week that said Wal-Mart cost California $86 million annually in state aid by giving its workers inadequate wages and benefits. Wal-Mart dismissed the report as biased.

The specter of the coming Supercenters also fueled the longest supermarket strike in Southern California history last fall and winter, as union employees protested health-benefit reductions that the supermarkets said they needed to hold their own against Wal-Mart.

Some California municipalities have enacted bans that would prohibit superstores, prompting Wal-Mart to fight back. In the Bay Area's Contra Costa County and the border town of Calexico, the company sponsored referendums and persuaded voters to repeal the bans. In Alameda County and the San Joaquin Valley city of Turlock, the company filed lawsuits.

In Inglewood earlier this year, Wal-Mart tried a different tack. The company sponsored a sweeping initiative that would have allowed construction of a shopping center the size of 17 football fields without normal city input. Voters defeated the idea soundly.

The lesson Los Angeles officials took from these battles was that communities were more likely to support tighter control over development than outright bans. A month after the Inglewood vote, Los Angeles officials decided to retool their ordinance to require companies to pay for reports on the economic impact of the proposed developments.

The reports would be submitted to the city's Planning Department and would be considered by the City Council.

Membership-based stores such as Costco and Sam's Club, which is owned by Wal-Mart, would be exempt.

At the state level, Sen. Richard Alarcon, who is also running for mayor of Los Angeles, has introduced a proposal that would make reports similar to those in the city's ordinance mandatory statewide.

Gov. Arnold Schwarzenegger said Tuesday that decisions on whether to build Wal-Mart stores should be left to individual communities.

"In most cases in America, the communities welcome them because you have cheaper prices and you have great additional employment," he said. "But in some communities, there's the argument: 'I like my little store, where they hand-make the ice cream and you still go shopping the way you did in the old days.' "

California's first Supercenter opened this spring in La Quinta, and others are slated to open in Hemet and Stockton in the fall.

Labor and city officials in Los Angeles stressed that the ordinance would protect vast swaths of the city that have been declared economically vulnerable.

"Fundamentally, this is about land use and about blight," Garcetti said. "We have a flexible, thoughtful, rational ordinance that says … we have a basic right to comment on what happens in our communities."

As assembled opponents of Wal-Mart cheered in the audience, Councilman Martin Ludlow added some sharp words for the company itself.

"I think we have a moral obligation to vote this vote today," he said, "to send a message loud and clear that we are open for business, but we are not open for abuse."

Councilman Greig Smith recused himself, saying he owned stock in Wal-Mart.

In contrast to past hearings on the ordinance that have been packed with partisans on both sides of the issue, no one spoke against the measure Tuesday.

Wal-Mart spokesman Kanelos said officials would "reserve all of our options" as they saw "how this ordinance is applied and make sure it is applied fairly and equitably to all businesses."

Some analysts were perplexed by Kanelos' attempt to portray the council vote as a victory, and predicted that the company would fight hard if the council used the reports to keep Supercenters out of the city.

"That's the kind of victory where, if you have many more of them, you're going to want a defeat now and then," said Harley Shaiken, a geography professor at UC Berkeley who studies labor and the political economy. "For Los Angeles, this is something that concerns the city. But for Wal-Mart, this concerns all of California and other places as well."

[mikester]

Now for my view.

I think walmart is generally bad for the economy. They have driven prices and competition down so far that very few can compete with them. The quality of much of their merchandise in my experience has been less that acceptable. Everything is made in china - they used to tout that everything was made in the USA but when that became a liability to low prices they promptly dumped it.

I believe that the LA City Council should not be legislating something like this though - big government isn't really good and these days it is hard to tell the republicans from the democrats on that subject. The problem isn't that these stores provide low quality jobs, the problem isn't that these stores provide low price and low quality merchandise; the problem is that people in general are too stupid to care that when they shop outside their local economy that same local economy is depressed as a result. As much as I can I shop in and around where I live because I want my tax dollars spent their and not else where. I don't go 40 miles away to the nearest walmart just to save a few bucks when I could spend it locally and have that money stay in my local economy where it does me some good after I've spent it.

[widebody911]

Originally posted by mikester
I don't go 40 miles away to the nearest walmart just to save a few bucks when I could spend it locally and have that money stay in my local economy where it does me some good after I've spent it.

I use the same rationale when going to the ACE Hardware store around the corner, rather than trucking all the way down to Home Depot.

In general, Americans need to re-evaluate the long-term effects of cheap overseas products and labor.

[mikester]

I vote every day with my dollars.

[turbo6bar]

I have only recently found the value in supporting local businesses, as long as the business provides honest, competent service. However, I don't see the good in government restricting the choices of Americans. It's not my fault some people have no insight.

Home Depsh~t has it's value, but it's not everything to everyone. I'm constantly surprised how a 2000 SF hardware store can have common, often used hardware that cannot be purchased or even ordered at Home Depot.

[Rot 911]

Now for an opposing viewpoint. Before Lowes came to Jefferson City, Missouri, if you wanted home improvement materials you had the locally owned Tharp Lumber and Fab Home Improvement. Both of these business made the majority of their money from contractors. Because of this both of them closed at noon on Saturday and were closed all day on Sunday. In addition the contractors always got the better deal and the better picks of lumber. I understand that you cater to the big buyer, but at least they could have shown some interest in selling to the everyday home improvement guy. 2 years ago Lowes came to town. Hired around 150 local people and have great weekend hours. Good prices. So now the other two "locally owned" companies can no longer rape the homeowner. They left such a bad taste in my mouth I hope they both go bankrupt.

[RallyJon]

They have driven prices and competition down so far that very few can compete with them. The quality of much of their merchandise in my experience has been less that acceptable.

Isn't this self contradictory? If the quality is crap, they'll only succeed in capturing the market that was previously overpaying for their crap. This is a net benefit to society.

Everybody needs low quality crap sometimes. When I want crap tools, I'm glad Harbor Freight is around. I wasn't going to buy the $500 Porter Cable version anyway, so it's not like Harbor Freight cost them a sale. When I want commodity housewares, Wal-Mart is great. Why pay another chain store more for the same item?

If Wal-Mart puts the screws to othe mega chains, like supermarkets and Toys-R-Us, good for them. If a small mom-and-pop retailer can't figure out how to compete on anything except price, they were doomed anyway.

Edit: Kurt is spot-on. Many of the so-called "pillars of the community" local retailers routinely abuse their customers with high prices and poor selection and service. I can think of no better way to make them appreciate their customers and go the extra mile in customer service than a Wal-Mart opening down the street.

[techweenie]

While Kurt's point is very good, I doubt it applies to the majority of communities.

What people argue about WalMart impact is that the combination of wages and working hours are so low that people can work there and qualify for Public Assistance (welfare) and collect food stamps. That means that instead of just shoppers paying a premium for dealing with a local merchant, the entire community ends up subsidizing prices through their taxes.

I've heard this argument, and have not delved in to it because I have no idea where the nearest WalMart is, and don't care. I live in a town of 13,000 and try to support local businesses.

[widebody911]

Originally posted by RallyJon
Isn't this self contradictory? If the quality is crap, they'll only succeed in capturing the market that was previously overpaying for their crap. This is a net benefit to society.


Wow. There's so many disingenuities in there, you'd think they were breeding.

For one, WalMart destroys the local retailers by selling at a loss until they go out of biz, then raises prices to the same level or higher than previously, while at the same time lowering the quality of the goods. They also pay their employees less than they would make at the other retailers.

Do some reading on the subject - there's lots out there.

[911/914gary]

My sister-in-law works as a clerk at WalMart and she is not on public assistance. She is also darn glad to have the job. I don’t understand these arguments against WalMart when I see hundreds of full trucks driving away from the ports of Long Beach and LA . As well as hundreds of empty trucks driving back to the ports. I know darn well that all these trucks didn’t just go to WalMart!

[RallyJon]

Disingenuities = lies. I'm not a liar.

WalMart destroys the local retailers by selling at a loss until they go out of biz, then raises prices to the same level or higher than previously, while at the same time lowering the quality of the goods.

Now THAT is disingenuous. How does one "lower the quality" of a roll of Bounty paper towels? Wal-Mart sells a lot of the same brands and products everyone else does. As I said in my prior post, if they sell cheap private label crap, and cheap crap is what you're willing to accept for the price, then you're better off being able to buy it at Wal-Mart than not being able to buy it at all.

Done a lot of reading on the topic. Pretty good at seeing through people's agendas too. Lots of pro-union BS floating around on the whole wage issue. It's not Wal-Mart's fault if the unions have snookered the local food store into paying $15 an hour for a bagger.

[turbo6bar]

An old neighbor used to work at Wal-Mart as a clerk. She bought stock in Wal-Mart through the employee program. She amassed quite a nice portfolio, so not all Wal-Mart employees are dirt poor.

[Rot 911]

Have to agree with Jon here. Haven't seen any outrageous prices at the Walmart here and they pay the same wages as the local businesses do. Now maybe it is different in the "big" cities, but Walmart has to stay competitive wage wise here if they want employees.

[widebody911]

Originally posted by RallyJon
Disingenuities = lies. I'm not a liar.
http://www.m-w.com/cgi-bin/dictionary?va=disingenuous

giving a false appearance of simple

[RallyJon]

http://dictionary.reference.com/search?q=pedantic
http://dictionary.reference.com/search?q=diversion

[Mulholland]

I have been following this bull***** for a while. The fact is it boils down to labor unions cozy relationship with left-wing politicians, denying companies not strangled by union thugs to bring employment and products to impoverished neighborhoods...The consequence is less jobs in poverty stricken areas and people forced to either drive or take a bus to save money, or buy products at a higher price for convenience.

This makes both labor unions and democrats happy...Labor unions are happy because they have successfully strong armed non-labor union businesses. The Democrat politicians are happy because the labor unions are happy and dthe constituency has a greater need for government jobs and handouts because of lack of resources and low priced goods and services.

[techweenie]

...so you're saying Jesus would shop at Walmart?

[Mulholland]

Originally posted by techweenie
...so you're saying Jesus would shop at Walmart?

You need to understand nothing but this about Jesus...

1 John 5:9-12 -- "Surely we can believe the testimony that comes from God. And God has testified about his Son. All who believe in the Son of God know that this is true. Those who don't believe this are actually calling God a liar because they don't believe what God has testified about his Son.

And this is what God has testified: He has given us eternal life, and this life is in his Son. So whoever has God's Son has life; whoever does not have his Son does not have life."

Love it, learn it, or burn.

[mikester]

Originally posted by Kurt V
Now for an opposing viewpoint. Before Lowes came to Jefferson City, Missouri, if you wanted home improvement materials you had the locally owned Tharp Lumber and Fab Home Improvement. Both of these business made the majority of their money from contractors. Because of this both of them closed at noon on Saturday and were closed all day on Sunday. In addition the contractors always got the better deal and the better picks of lumber. I understand that you cater to the big buyer, but at least they could have shown some interest in selling to the everyday home improvement guy. 2 years ago Lowes came to town. Hired around 150 local people and have great weekend hours. Good prices. So now the other two "locally owned" companies can no longer rape the homeowner. They left such a bad taste in my mouth I hope they both go bankrupt.

That's a perfect example of how an economic study would likely work in favor of the big box store. I think that's the perfect place for a Home Despot.

My point mainly was that Tech stated perfectly. Walmart's contribution via it's employees wages has been such that the wages those employees make help to keep the local economy depressed by draining the local public assitance programs either via welfare, medicaid or other public assitance programs.

The thing is, Mc Donalds provides just as low of quality jobs and I don't see people opposing Mc Donalds much the way they oppose WalMart. I don't know where the nearest walmart is in my area ether - I don't care. Even if there was one I wouldn't shop at it because I know what effect a WalMart has and I don't want my money going that way. So, I pay more - but I feel better and my local economy is better for it.

I don't think LA should be making "Walmart illegal" it's just too bad that the people are too stupid to see the damage they do.

[nostatic]

the issue in LA has to do with tax benefits and grants provided for economic redevelopment in certain parts of the city. WalMart has to show that coming into those neighborhoods does not unravel that money spent. It isn't about unions, as most of the mom-and-pop business affected aren't union shops. It has to do with (potentially) unfair competition, and the possibility of sending taxpayer money down the drain.