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Sunday, July 19, 2009

Walmart, the Unions, and the Chicago Way

WalMart's history with the city of Chicago is long and often contentious. So far, the city has two WalMart stores. That's only because WalMart has done an enormous amount of lobbying, and because the store chain didn't give up after being roundly rejected many times. WalMart often has problems finding their way into urban areas. That's because those areas are often run by Democrats. Those same Democrats are often tied to unions. Unions hate WalMart. First, WalMart refuses to unionize itself. Second, their superior price structure becomes an unacceptable alternative to unionized stores. For instance, here in Chicago, too many WalMarts would become a serious problem for the unionized grocery chains of Jewel and Dominick's. That's why the city of New York has zero Walmarts. The Democratic dominated city council has far too much power to approve one.

It's easy to demonize WalMart during good economic times. Here's how WalMart opponent, city council woman Helen Schiller characterized her opposition in 2004.

We are dealing with a huge company with a long history of predatory practices," Alderman Helen Shiller argued during the meeting Wednesday, also accusing Wal-Mart of not providing its employees adequate health care.

"They count on the city to provide assistance to their workers," she said. "We are creating more loss than gains."

Such demonization, no matter how non sensical, is much easier during good economic times. No one notices the economic loss that a lack of a WalMart superstore brings when jobs are plentiful. In 2004, they were. Of course, it isn't, in my opinion, mere coincidence that supporters of proposed WalMarts are almost always the alderman that serve that particular neighborhood. For instance, in 2004, the most vocal supporter of the WalMart project was alder woman Emma Mitts. That WalMart, now a reality, was to be put up in her ward. It's almost always those that represent districts not directly affected by the WalMart that oppose it. That way they can get in bed with their union supporters without necessarily hurting their own constituents that much.

So, now we have the exact same scenario. Another WalMart is being proposed and it's being proposed in the area represented by alderman Howard Brookins of the 21st Ward. Brookins is the biggest supporter of the proposed WalMart. The proposed WalMart will be placed where there is currently an empty lot. It will employ 500 people, not to mention all those that will be needed just to build it. The city of Chicago's unemployment rate is north of 10% currently. So, unlike 2004, it's much more difficult a job creating project like building a WalMart.

So, what's a politician, tied to the unions, to do? They simply ignore the media entirely. Currently, the rules committee, chaired by powerful alderman Richard Mell (and father in law of disgraced former Governor Rod Blagojevich), has buried the proposal. The editorial board of the Chicago Tribune attempted to contact Mell to find out why it's still stuck in the committee. Mell ignored their attempted contacts.

That's not surprising. Chicago politics works like a giant boy's club. If you're in the club, you get preferential treatment. Nosey reporters are NOT part of the club. Instead, adoring reporters that look the other way are part of the club. That's why John Kass is so reviled by most of Chicago political class. The unions and Chicago's politicians have a very cozy relationship. Alderman Mell is really no longer answerable to the voters. That's because winning elections is no longer in doubt. What are the chances that a legitimate candidate would ever be able to orchestrate a campaign against such a powerful alderman? Instead, Mell is answerable to his allies, allies like the unions. Alderman Brookins, and his constituents, are simply not as powerful and as allied to Mell as the unions are. That's why WalMart's proposal continues to be buried.

6 comments:

Neil in Chicago said...

So, when WalMart pays so little that in some locations they include applications for Food Stamps with their job applications, that's a good thing?

mike volpe said...

First of all, so little compared to what? More than 10% of Chicagoans are unemployed. Walmart pays more than zero.

They are under no obligation to pay "a lot" especially your version of "a lot". I know that they get ten times the applications as they have jobs available on average when they build a new store. Clearly, the people in the area don't mind how much they pay.

Tony Cookson said...

There's a great podcast on Walmart from the perspective of a guy who took a job there for a week. Here's the link:

http://www.econtalk.org/archives/2009/06/platt_on_workin.html

The point he makes (in a nutshell) is that it is actually pretty nice to work at Walmart, compared with the alternatives. Moreover, his impression was that employees get treated reasonably well compared to similar jobs.

asif said...

WalMarts also have a tendency to put local shops out of business because of their discounts, so 500 new jobs is far from a gain.

If this is an argument about cheap groceries and daily, necessities Chicago has tons of CSAs, Farmer's Markets, thrift stores and junk shops that need to be recognized and promoted over a Walmart.

mike volpe said...

Why would Walmart put stores out of business if there's so much cheap stuff already here as you claim? The only stores that Walmart puts out of business are those that can't sell things as cheaply as Walmart. You seem to think that a business should stay in business even though someone else can do things better. That's just nonsense.

You all seem to think that there won't be any economic gain by putting a 100,000 square foot facility in a space that is currently an empty lot. Are you really saying that building a massive super store where there is empty space won't create economic development?

Jason said...

Asif/
Do you live in the neighborhood where this store will built? Exactly what local shops would be put out of business at 85th and Stewart? How easy is it to get to these farmers markets from there? Is it really better for these families to buy their goods - school supplies, toiletries, electronics, etc - from "junk shops" as opposed to a well lit reliable store (with a return policy) that sells a huge variety of brand name goods?

I'm going to go out on a limb and say that you do not live anywhere near where this store is going and probably don't have several mouths to feed.