Opponents Worry Walmart’s Low Prices Could Cost District Jobs

Will the world’s largest retailer make life better for D.C. residents? Many city officials are convinced the answer is “yes.” They say that six Walmart stores planned for  the District will bring new jobs, expanded retail options and the philanthropic support of the  Walmart Foundation.

Yet some grassroots leaders continue to wonder if the good of Walmart will outweigh the bad. Will  Walmart workers be able to live decently on the wages they receive, or will they struggle for their basic needs? Will Walmart stores stimulate the economies of the neighborhoods where they open, or force out other businesses? These are among the many questions that haunt Mike Wilson, organizer of Respect D.C., a coalition of District residents and organizations concerned about the arrival of Walmart.

“We’re trying to educate people about what Walmart is actually going to bring in terms of poverty-wage jobs and real access to benefits,” said Wilson.

“We understand that there is definitely a desire for jobs and for retail options, but there’s also a strong desire to make sure these developments are the best they can be. We want to make sure people are aware that Walmart’s promises don’t match up with their track record.”On Nov. 22, 2011, Mayor Vincent Gray signed a Community Partnership Initiative with Walmart in which the corporation promised such things as“competitive market salaries,” “accessible hiring centers in Wards in which Walmart stores will
be located,” and “citywide workforce development program[s].”

But the initiative is not legally binding. According to a spokesman for the mayor’s office, Pedro
Ribeiro, “Walmart was not legally obligated to enter into any partnership with the District.” Once the stores open, Wilson and other members of Respect D.C. wonder— will the corporation keep its word? Wilson said he wishes District leaders had been more forceful in laying out the city’s demands and keeping Walmart accountable. “We really wanted to see an agreement that had any sort of enforcement,” Wilson said. “There’s nothing [in the Community Partnership Initiative] that allows the city to say, ‘You said you’d do this, but you didn’t.”

One of the main concerns of Respect D.C. is that Walmart will not pay its District employees a living wage. Though in the Community Initiative Partner- ship, Walmart expresses a commitment to paying “competitive salaries,” the new stores will only be required to pay minimum wage.

By law, the minimum wage in D.C. is $8.25 per hour. But the living wage— the amount of money a person needs to earn in order to meet  basic needs—is $12.50 per hour. That figure is set by the District’s Living Wage Act but only  applies to firms contracted with the city.

According to Walmart’s corporate website, the average hourly income for full-time Walmart employees is $11.74 in Maryland and $11.84 in Virginia. Steve Restivo, senior director of community affairs for Walmart, suggested that these salaries provide an estimate for what D.C.  employees will make.

Another major concern about the new Walmart stores is that instead of increasing employment  opportunities in the District, they could ultimately lead to a net loss in jobs.

The six stores, which will be located in wards 4, 5, 6 and 7, are expected to open in 2013. According to a Walmart press release, each store is expected to create about 300 jobs, and all six  stores combined will generate about $10 million annually in tax revenue. These will be the first Walmart stores in the District; Walmart opened its first store within the Beltway in Landover Hills, Md., in 2007.

“Even without a store in D.C., we already employ more than 600 D.C. residents; and last year, D.C. residents spent more than $41 million at our stores in Maryland and Virginia,” Restivo said. “We know Washingtonians want to shop and work in our stores, and we want to make access more convenient.” But to Mike Wilson, the Landover Hills Walmart is a good example of what Respect D.C. does not want to see in the District.

“If you go there now, it is just sitting back in a huge parking lot,” he said. “The only other things close by are some fast food chains that were already there. The Safeway nearby closed. … It certainly hasn’t led to some new wave of development.”

Wilson expressed concern that Walmart in D.C. will force the closure of such unionized employers as Safeway and Giant. Walmart does not allow its employees to join unions.

Members of Respect D.C. often cite academic studies that suggest Walmart can have an overall negative impact on the communities where it does business.

A 2009 study conducted by professors at Loyola University and the University of Illinois at Chicago
concluded that the opening of an urban Walmart store in a Chicago neighborhood was followed by the loss of some 300 full-time jobs. The finding was based on the fact that 82 of the 306 enterprises near the store went out of business within two years of the Walmart’s opening. The study also found that the stores closer to the Walmart were significantly more likely to have gone out of  business during the study period than those farther away.

A 2007 study, “The Effects of Walmart on Local Labor Markets,” conducted by economists at various
American universities, looked at nearly 3,000 Walmarts and found that on average, the opening of a Walmart store reduces county- level retail employment by about 150 workers. According to the study, each Walmart worker replaces 1.4 retail workers at competing businesses. The study also concluded that a Walmart leads to a decline in county-level earnings by about $1.2 million by forcing down wages at competing enterprises.

Though the stores will not open for at least a year, Walmart has already made a mark on D.C. philanthropically: The corporation gave more than $2 mil- lion to such groups as the Boys and Girls Club and the Capital Area Food Bank, $665,000 to school nutrition and the Mayor’s Summer Youth Employment Pro- gram, and $100,000 to be spent toward cleaning the Anacostia River.

Walmart is also supporting organizations that provide job training for D.C. residents. The corporation granted $1.25 million to the Community Foundation for the National Capital Region (CFNCR) and
$1.65 million to the Community College of the District of Columbia (CCDC) to be used for workforce
development.

CFNCR divided the donation evenly among five local nonprofits (Goodwill, Covenant House, Carlos
Rosario Charter School, Latin American Youth Center, and So Others Might Eat) chosen for their commitment to providing adult education and helping individuals overcome barriers to work, such as transportation and child-care constraints. According to Benton Murphy, CFNCR Program Officer, the job training programs made possible by this money have already served some 290 clients among the five nonprofits. As of Jan. 1, more than 20 of the graduates from these programs had jobs.

The grant given to CCDC is currently helping provide job training to 40 adults who live in D.C.’s public housing system, said C. Vanessa Spinner, the college’s dean of Workforce Development and Lifelong Learning. Spinner says that the $1.65 million grant, which is sup- posed to last three years, will hopefully train 300 D.C. residents by the end of the first year and 500 by the end of the second year, ultimately helping at least 1,000 residents.

Spinner said that CCDC will work closely with the D.C. Department of Employment Services and the
D.C. Department of Human Services “to be sure the training goes to people most in need and to people who really want to be trained.”

By the middle of 2013, the Walmart grant money will also help the college create a retail academy
that will offer an associates degree in retail.

Some people, however, are wary of Walmart’s generosity. As LeRoy Hall, a resident of Ward 5 and a
member of Respect D.C., said, “I feel this is what businesses do; they give money to certain organizations in the neighborhoods where they do business. In some cases, it’s like a bribe. It’s a business practice to build a better image.”

Marina Streznewski, executive director of the D.C. Jobs Council, a coalition of job training and adult education providers, also showed some concern about Walmart’s presence in the District and the corporation’s charity.

“Philanthropic contributions are a good thing,” she said, “and there are members of the DC Jobs
Council that are going to benefit from the Walmart contribution, but that’s not enough. We are
still concerned about fair wages and consistent hours and employees having a voice on the job.”

Streznewski acknowledged that many D.C. residents are excited about the stores.

“Early on, there was this one lady who lives in Ward 7 who said that she was looking forward to having a place in her neighborhood where she could buy a shower curtain and pantyhose,” she said. “I think what we want is not as relevant as what is best for the residents of the District of Columbia. We need entry level jobs, but we have to make sure the people who take those jobs are compensated fairly.”

Now that it is clear the Walmart stores will be built, Streznewski said that Respect D.C. will
continue to try to work with Walmart and the city to ensure there is a balance between the needs
and desires of the corporation and the best interests of D.C. residents.

“If Walmart could do the right thing be the kind of company where people are paid fair wages—they could change the whole retail landscape throughout the entire country,” she said. “I’d like to encourage Walmart to be better …to use their power for good.”


Issues |Civil Rights|Income Inequality|Jobs


Region |Washington DC

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