Alderman Moore: Walmart Creates No Jobs

Alderman Joe Moore represents the 49th ward in Chicago and he made this statement about Walmart at a gathering in front of a progressive group.



Now, something similar to this was said in a study about a year ago. The University of Illinois at Chicago did a study of the only Walmart in Chicago and said that job creation was negligible. In response, Walmart commissioned Mari Gallagher to do her own study. Gallagher found that the original study was flawed. For instance, the original study found that Walmart job gains were off set by the job losses from other retailers that left.

Gallagher found that UIC didn't take into account the stores that replaced these retailers and the jobs that brought.

Alderman Moore claims that Walmart doesn't make anything and so it doesn't create jobs. Of course, by this logic, no retailers ever create jobs. There are a lot of companies involved in the business process and simply making the underlying product is not the only way to create jobs.

The Sun Times has an editorial about all this today.

The study's anti-Wal-Mart conclusions don't add up.
On Thursday, the City Council Zoning Committee, short on votes, once again deferred a vote on a massive development on the Far South Side that would include Chicago's second Wal-Mart, giving Chicagoans more time to analyze this study, as well as all things Wal-Mart.
First, let's take a careful look -- and quickly dismiss -- this flawed study by researchers at Loyola University Chicago and the University of Illinois at Chicago.
Though pegged as the first urban analysis of Wal-Mart's impact on local businesses and jobs, the study turns out to be little more than a cheap shot at Wal-Mart.
The underlying data are weak, even if the researchers' forceful conclusions are not.
In other words, their conclusions are no conclusions at all.

It all comes as the proposed Walmart in Pullman Park continues to work its way through the legislature and continues to draw controversy.

To supporters, the 148,000-square-foot store would be a much-needed source of jobs in an area of the city plagued by poverty and unemployment, an oasis in a food desert without a major supermarket and a first step toward revitalizing the Ninth Ward, which all involved agree has seen shopping and dining options dwindle over the past few decades.
The project’s opponents argue that Walmart would pay low wages while doing its best to deny its employees the right to unionize. They charge that the 24-hour superstore would drive out of businessthe few neighboring retailers that do exist and make the revitalization of the area’s local shopping districts that much more unlikely.
At its May 19 meeting, the Pullman Civic Organization asked its membership whether to support the project. The vote was tied 19-19, with the tie broken by the group’s president, Drew Sexton, who strongly supports the project.

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Walmart in Pullman Park?

With the proposal for a Walmart in the Chatham neighborhood of Chicago stalled in the finance committee, there's a proposal that will be on the table soon for another Walmart in Chicago. This one will be in the far Southside of the city and is part of development known as Pullman Park.

This time we're talking about a Wal-Mart Supercenter proposed for an empty lot between 103^rd and 111^th streets next to the Bishop Ford Freeway. Wal-Mart is the critical element in an ambitious development called Pullman Park, which would bring thousands of jobs to the Far South Side.

Pullman Park would transform a 180-acre wasteland that once housed the Ryerson steel plant into a thriving business center for neighborhood stores and restaurants, 800 homes, a hotel, a recreation center, a park … and a Wal-Mart.

There are many similarities between this development of Walmart and the other proposal in Chatham. First, several hundred UNION contractors will be hired to build the store. The store will be self financed by Walmart. As such, this is a shovel ready project and will immediately create jobs during construction. It will also hire several hundred employees once the store is completed. Currently, the planned development is occupied by dirt as that area is not built by anything.

There is one difference between this project and the other Walmart in Chatham. This project will be part of a mini mall development and the developer is counting on Walmart to attract all other merchants into the mall. That means that if the Walmart isn't approved the entire Pullman Park project falls apart. The entire project including the Walmart has the support of the alderman in that ward, Anthony Beale of the 9th ward. Similarly, Alderman Howard Brookins supports the project now languishing in Chatham.

Chatham WalMart Back in Spotlight

This summer the city of Chicago was focused on the Olympics bid. There was however a few weeks when the city took some time to consider the proposal of WalMart to build a new store in the Chatham neighborhood. The proposal was being stalled in the Finance Committee chaired by Ed Burke. Burke stalled the bill and the momentum was lost as the city council took time off during the fall.

The Chatham WalMart proposal would create 500 UNION jobs just during construction. It would create another 400 permanent non union store jobs. Furthermore, WalMart will self finance this proposal in cash and will require absolutely no assistance from the city of Chicago and its tax payers. Another Chicago WalMart has generated over $10 million in tax revenues for the city since its inception 2 years ago. Meanwhile, Chicago residents spend $500 million yearly at Walmart stores immediately outside the city.

In fact, the proposal should be a no brainer. The city has 10% plus unemployment. It has no money and Walmart will not only bring in jobs but a self financed project. Worse yet, the place where Walmart wants to build is currently a bunch of gravel. The only reason this proposal is being held up is that much of the city council is in bed with the unions. Even though Walmart hires union workers to construct the store, that isn't enough. Because Walmart itself isn't unionized, the city council must take a stand against its construction.

This story was laying on the backburner until yesterday. Then, Mayor Daley said this.

Chicago Mayor Richard Daley has launched a new push to bring more Walmart stores to Chicago.

He says with the recession dragging on, Aldermen, labor leaders and Walmart need to come up a way to make it happen.

The mayor says he knows he's raising a political hot potato.

There was a huge debate five years ago over a so-called "big box" minimum wage ordinance when Walmart was trying to build two stores in the city.

Now, in the last two days, both the Sun Times and the Chicago Tribune have each, again, come out in favor of the proposal.

Only seven shopping days left till Christmas, and you know what that means: Head for the suburbs.

This year's holiday shoppers have shorter lists, and they're looking for bargains like never before. Industry surveys show that half or more of them are spending time and money at big-box discount chains.

Can you say Wal-Mart? Consumers who are seduced by those ads for a $195 iPod
Touch or a $299 Toshiba laptop will likely find their closest Wal-Mart outside the city limits, thanks to Chicago's labor unions.The city still has just one, in the West Side Austin neighborhood.This is doubly maddening if all you want for Christmas is a job. Since 2004, when a divided City Council voted to allow Chicago's first Wal-Mart, the economy has gone down, down, down, while efforts to bring in a second Wal-Mart -- and 500 new jobs -- have gone nowhere

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and...

The time for a South Side Wal-Mart has come. Unemployment in the Chicago region hovers above 11 percent, with higher rates among blacks.

City revenues are down 31 percent from a high point in 2007.

Even Mayor Daley, who hasn't pushed hard for Wal-Mart for fear of alienating the unions, is publicly going to bat for the superstore.

"People can't get jobs," Daley said Wednesday. "They're not only being laid off, they're being eliminated out of their companies. So I'm calling on everyone -- both the alderman, the community, all the unions involved and Wal-Mart -- to sit down and come up with some common ground as quickly as possible."

It's now up to Ald. Edward M. Burke to make it happen.

Burke, however, is making his stand. Meanwhile, Mayor Daley is paying lip service to this proposal but if he really wanted to have a Walmart built, they'd have already broken ground.

Wake Up to Wake Up Walmart

If you watch enough tv, you'll soon see this commercial.



This ad paints Walmart as not only heartless but in effect taking a bailout from the tax payers. It's a remarkable accusation to make for a company that continues to enjoy billions in profits even into the teeth of the biggest recession in years.

The ad comes to this conclusion because Walmart doesn't provide health insurance benefits for all its employees. As such, the ad makes the claim that this is a bailout since those employees must then go to the government to get their health care.

Now, I am not insensitive to the idea that corporations have a responsibility to society. I don't believe that corporations can make a profit at the expense of our environment. I also don't believe that corporations should make a profit at the expense of our national security. I don't believe that corporations should make a profit by manipulating markets.

That said, private businesses must be free to make internal decisions without the pressure of outside influence. Community organizations, for instance, are fond of demanding that all retailers pay a living wage. They rarely define a "living wage" and they aren't afraid of picketing and boycotting to force retailers to pay their workers more than the corporation is willing to pay.

This is a perversion of reality. A job is not a right. A retailer has no responsibility to provide health insurance any more than a living wage. The free market takes care of that. The retailer that does the worst job of providing for their employees gets the worst employees. That's where it should be left. Walmart gets ten applications for every position so it's totally absurd to demand that they do anything more than they do already for their employees.

There's of course something more sinister at play here. The group behind these ad is the United Food and Commercial Workers International Union. Walmart is not unionized but if it were, you can bet that this group would get a large portion of the workers. That's not something that the ads reveal. This isn't so much about holding Walmart accountable for mistreating their workers, as it is a public relations campaign to convince the country their workers will only be treated right if they're organized.

I have said before that the reason that Walmart refuses to organize is because Walmart has built its business on the concept of economies of scale. Their whole entire operation is predicated on lowering costs, all costs, labor included. Unions raise costs and so Walmart has resisted the unions.

With or without the unions, Walmart has no trouble getting employees. Often, attacks on Walmart turn into little more than rank propaganda. This is just one example. For instance, on the site, there is one campaign to "stop Walmart's war on free speech" and this campaign is directly below "end Walmart's support for Glenn Beck". So, it appears to this union, free speech is a selective right.

Never have I seen a private company attacked and demonized the way that Walmart has been. Walmart isn't doing business with Iran. There's no evidence of a monopoly, polluting the environment, or manipulating markets. In fact, what makes Walmart the enemy of many is their stead fast refusal to unionize and their ability to sell things cheaper and better than their competition. The market should decide their fate not a union with an agenda they don't readily admit.

Walmart, the Olympics, and the Chicago Way

Two local stories I have recently been covering, the Olympics and Walmart's proposal to put a store in the Chatham neighborhood, have finally crossed over and affected each other. Yesterday, Alderman Richard Mell (the father in law of former Governor Rod Blagojevich) decided to move the decision on Walmart's proposal from his own Rules Committee to the Finance Commitee which is run by Alderman Ed Burke. The City Council is ready to break until September. The Internation Olympic Committee will make its final decision for 2016 on October 2nd. Alderman Burke characterized to the Chicago Sun Times the chances of a vote on this matter prior to October 2nd this way.

I doubt that it will.

Alderman Burke also made it plainly clear what the problem with the proposal is.

Chicago is a strong union town...They can build 14 stores here. All they have to do is make a commitment to the rights of working men and women in Chicago to organize.

Walmart, as I've pointed out, is committed to providing 500 UNION jobs to build the store. Walmart, however, resists unionizing its store employees. Of course, this whole thing has been much more about perception than reality from the beginning. The unions are a critical part of Daley's Olympic coalition and he's been able to keep labor peace in preparation for the bid vote. Wal-Mart's approval would jeopardize all that and create unneeded chaos in anticipation of the vote.

Meanwhile, a poll conducted on July 27th found that not only did nearly 80% of residents favor the Walmart but it was favored handily in each and ever ward, including those run by Mell and Burke. In fact, the worst performing ward was the 37th which had Walmart favored 57-35, and that's the ward where this proposal fared worst. (incidentally Burke's ward favored Walmart 7014 and in Mell's ward Walmart was favored 62-25) That should put some context on Alderman Burke's statement that this is "union" town. The results show that the folks want the jobs, union or not, and they want the cheap groceries, clothes, and other retail items that the Walmart store would sell.

What Alderman Burke is really saying is that this is a union City Council. There's no doubt about that. In other words, what Burke, Mell, and Daley are really saying is that in order to play ball with them you must be ready to unionize. The fact that the building a 150000 square foot superstore on any area that is now dirt is economically stimulative by any measure is beside the point. The politicians of this city have their allies and those allies are against Walmart. That's really all that matters. This isn't about good policy, good economics, or listening to the people. Instead, it's about pleasing a constituency even if that constituency represents a 20% minority of all the citizens of the city.

If you read the tea leaves though, this is also the most cynical of political stunts. Walmart will get its Chatham location later or sooner, mostly later, but they'll get it. There's too much media attention and there's too much public demand for it. The council will just stall and delay long enough to appease their major constituency, the unions. More than that, they'll stall them long enough for the IOC to have its vote. Once Chicago is chosen in 2016 then the unionize can stomp and shout and it won't matter because the city has already been chosen. That's really what this is all about. This Walmart proposal threatens a major player in the Olympic bid and so their proposal must be delayed long enough for the Olympic bid to be decided. After that, the politicians will likely throw the unions under the bus in favor of public opinion. The politicians will eventually do the right thing, but first the IOC must vote on the Olympic bid. Welcome to the Chicago way.

Fun With Numbers: The Chatham Walmart Proposal

I have a stimulus proposal. It's a 150,000 square foot superstore. The construction would require 500 UNION contractors, electricians, construction workers, etc. The construction project would keep these 500 employed for about a year. Once built, the superstore would employ another 400 employees to operate it. This project would be entirely privately financed and would require absolutely no public funds. In fact, this private entity has all the cash available. This is important because in the current commercial mortgage market trying to finance such a project is very difficult. For instance, my mayor's (Richard M. Daley) nephew, Robert Vanecko, attempted to fund a similar, though much smaller, project and was unable to secure financing in this market. That won't be an issue here because this private entity has cash on hand to fund the entire project themselves. This project is SHOVEL READY. In fact, as soon as the city council approves the project, all that needs to happen is securing the proper permits and then they'll break ground on the superstore. In fact, several project managers would be hired immediately even while the permits are gathered. So, this project would produce jobs immediately. Finally, the area where this superstore would be built is currently occupied by dirt.

Of course, I am describing the proposal by Walmart to build its second superstore in the city of Chicago. Chicago's latest unemployment rate is 10.3% and climbing. So, a project that would employ 500 UNION workers to build a superstore and then 400 more people would be hired to manage and operate the store is one that would have plenty of takers. There's more. This store would be placed on 83rd and Steward in the Chatham neighborhood. According to Walmart's records, which measured the receipts from credit cards and checks, the three zip codes that surround this proposed location spent $80 million at Walmart stores in the suburbs, In fact, according to the same records, Chicagoans spent $500 million last year in suburban Walmarts. (keep in mind the real receipts are much higher because cash payments can't be measured)

Chicago has one Walmart currently. That store is on North Avenue and Cicero. (4600 W. North Avenue) In the two years since that store was completed, a Menard's, Bank of America, Dunkin Donuts, among several strip stores have since been built. That store, slightly smaller and without groceries (like what would be proposed), has generated $10.3 million in tax revenues for the city, county and state.

The reason that I love to use a plethora of numbers in my stories is because numbers don't lie. The numbers are clear and they are unmistakable. Walmart would create jobs. It would create revenue for the city. In fact, it would keep revenue in the city that is currently moving to the suburbs. If you don't believe the numbers, then just think about this. In order to believe that Walmart wouldn't stimulate the Chicago economy you would have to believe that a plot of dirt is more economically stimulative than a 150,000 square foot super store.

So, why aren't the folks at Walmart not working right now to gather the proper permits to begin building? It's because powerful Alderman Richard Mell has buried their proposal in his rules committee. Chicago politicians have a long history of connections to the unions. That's why Chicago politicians hate Walmart. Walmart employees are NOT unionized. Yet, that's why I capitalized unions in pointing out that constructing the superstore would employ strictly union employees. In other words, the same people that are trying to protect union jobs are, ironically enough, costing 400 union jobs that would be needed to construct the project. As such, even protecting the unions becomes a lot more perception rather than reality. Ultimately, this is nothing more than demonizing Walmart.

If the Chicago economy had 4% unemployment that would be one thing. It doesn't. Chicago's unemployment crossed 10%. Here comes Walmart presenting a SHOVEL READY project that they're willing to finance all on their own. (the city can contribute up to $10 million to encourage business construction) They've even committed to hiring up to 500 UNION workers to build this store. Still, that's not enough. Their proposal isn't allowed to see the light of day while a powerful politician buries the proposal. What does Mell have to say for himself? Not very much, that's what. He ignored my email just as he ignored the call of the Chicago Tribune when we both asked the same question. Why are you against this proposal?

This is what happens when politics trumps policy. There's a plot of dirt there now, and Walmart wants to put a 150,000 square foot super store there. They want to pay each and every dime to build and maintain the store. They want to hire UNION workers to build it. They want to hire hundreds of people to operate the store. Finally, if it's not built, Chicagoans will simply spend $500 million in Walmarts in the suburbs. Talk about a no brainer. That's only if you have the best interest of the citizens of Chicago in mind. I'd like to believe that Richard Mell has the citizens of Chicago's best interest but not only does he refuse to allow this proposal to even receive a vote but he refuses to even explain himself.