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2005-03-01 Public hearing
NOTICE OF PUBLIC HEARING Notice is hereby given that a public hearing will be held by the City Council of Iowa City, Iowa, at 7:00 p.m. on the 1st day of March, 2005, in Emma J. Harvat Hail, 410 E. Washington Street, Iowa City, Iowa, or if said meeting is cancelled, at the next meeting of the City Council thereafter as posted by the City Clerk; at which hearing the Council will consider: An ordincance amending the Zoning Code, Section 14-6-O Sign Regulations, to permit electronic changeable copy signs in the Community Commercial (CC-2), Highway Commercial (CH-l) and Intensive Commercial (C1-1) zones. Copies of the proposed ordinances and resolutions are on file for public examination in the office of the City Clerk, City Hall, Iowa City, Iowa. Persons wishing to make their views known for Council consideration are encouraged to appear at the above-mentioned time and place. MARIAN K. KARR, CITY CLERK City of Iowa City MEMORANDUM January 27, 2005 To: Planning and Zoning Commission From: Karen Howard - Associate Planner Re: Electronic Changeable Copy Signs In response to a request from Iowa State Bank and Trust Company, the Commission asked staff to research and draft an amendment to the sign regulations to allow signs where the copy can be changed electronically. Subsequent to that request, the City also received a letter from Sign Productions, Inc., writing on behalf of Conoco/Phillips gas stations. Conoco/Phillips is updating signs for all their fueling stations nationwide and would like to have electronically changeable gas price signs. A copy of their letter is attached. The City's regulations currently allow signs where the copy is changed manually, but not electronically. While electronic changeable copy signs provide greater flexibility and convenience for the property owner, they can also cause problems if they are animated, too bright, contain large videO-type images, or if there are too many of them. In the current ordinance, electronic changeable copy signs are considered "animated" signs. Animated signs are prohibited in Iowa City due to concerns about traffic safety, sign clutter, and aesthetics. If a sign has flashing, scrolling, or moving images or text, or lighting that is too bright, it can be very distracting to drivers. Due to advances in technology, the use of light emitting diode (LED) displays are becoming more common. LED signs can be several magnitudes brighter than other types of illuminated signs, so if not properly controlled can iproduce glare that is disabling to drivers. Sign clutter is also an issue. Due to their brightness and appearance of movement a proliferation of such signs can make a commercial area look cluttered, making it more difficult to distinguish between businesses. LED technology also opens up the possibility for bright video-type images, a proliferation of which may change the character of any given commercial area. For these reasons many cities prohibit or restrict the use of such signs. Changes to the ordinance that would allow electronic changeable copy should, therefore, be carefully considered in order to address concerns about animation, sign clutter, and brightness. Attached is a draft of an amendment to the current sign regulations that would allow electronic changeable copy signs with the following restrictions. · Such signs would be limited to the Community Commercial (CC-2), Intensive Commercial (C1-1), and Highway Commercial (CH-1) Zones and could not be located within 100 feet of a Residential Zone. These commercial zones are generally located along major streets and highways and away from residential neighborhoods. · Electronic changeable copy would only be allowed on freestanding and freestanding, wide-base signs. The changeable copy portion of the sign could not exceed 40 percent of the area of the sign face. In the current code, the maximum size of these types of signs is 125 square feet per sign face, so the 40% limit would allow 50 square feet of electronic $ignage per sign face (100 square feet on a double-faced sign). The allowance is greater for properties close to the interstate highway and for "common signs" for properties that contain more than one business, so on such signs, the electronic char~geable copy portion could also be larger. Electronic changeable copy would be allowed on only one sign per lot. Limiting the number will help prevent sign clutter. Since freestanding signs are typically double- sided signs, it will allow electronic signage on two sign faces per lot. · Iowa City currently allows electronic time and temperature signs. Changing the definition of time and temperature signs to exclude it from the definition of changeable copy signs will allow a property owner to add electronic copy to a freestanding sign on the property without having to eliminate an existing time and temperature sign that is attached to the building. · The sign copy may be changed no more than once per hour and may not be animated (no scrolling, flashing, or moving text or images). · To address concerns about excessive brightness, the proposed regulations contain language to prevent signage that might interfere with, obstruct the view of, or confuse drivers and must meet certain illumination standards. New language is necessary to address LED technology. Of particular importance is a provision that requires such signs to use a dark background with only the sign copy illuminated in a single color. This will prevent signs where the entire display is lit except for the sign copy or text. Allowing on!ly monochromatic signs will prevent video-type images and help to prevent potential problems of disability glare and light pollution. In addition, the proposed regulations include a provision requiring that LED signs have ambient light monitors that will automatically adjust the brightness level of the sign based on the ambient light conditions. In a recent phone conversation with representatives from Sign Productions, Inc., it was evident that they may advocate for more far-reaching amendments to the sign ordinance to allow video image-type signs. The changes proposed herein will allow the type of signs requested by Iowa State Bank and Trust Company and Conoco/Phillips, but will not allow animated or multi-colored video-image type signs. If the Commission believes that a more far-reaching amendment should be considered, staff suggests that this amendment be deferred until the pros and cons of LED video image signs can be more fully researched and discussed. In summary, these proposed amendments to the Zoning Code are in response to a request submitted to the Commission by Iowa State Bank and Trust Company and by Sign Productions, Inc, on behalf of Conoco/Phillips, to allow electronic changeable copy signs to replace reader boards that are changed manually. The changes will provide 2 flexibility and ease of use to the sign owner, but not open the door to animated signs or video-image signs that may change the character of Iowa City's commercial streets and districts. The proposed changes to the regulations will be particularly useful for banks, gas stations, and other businesses that currently use changeable copy to display changing rates, products, and prices. ATTACHMENTS: · Proposed amendment to the sign ordinance · Letter and attachments from Sign Productions, Inc. Approved by: ?~/"tS~'nz,/~'" ' Robert Miklo, Senior Planner Department of Planning and Community Development Amend 14-60-2: Definitions, as follows: ANIMATED SIGN: Any sign or part of a sign ,~,m.,,~. ,,,~.~ ........ ~, ,,,~--~ intermittent ,,~,,.,,,u~'*~"~ which, throu.qh the use of movinq structural elements, flashinq or sequential li.qhts, lighting elements, or other automated method, results in movement, or the appearance of movement. CHANGEABLE COPY/CHANGEABLE COPY SIGN: A sign, or part of a siqn, such as a reader board, ,,,:,h ........ , .... ::" "~' ..... :':"' ~"' "~"'":~"~ ~"'~ ,",ct c!cctronic methe¢~ where the copy is easily changed manually or by electronic means, but is not animated. TIME AND TEMPERATURE SIGN: An identification sign which shows the current time and temperature in an electronic digital format in a manner similar to that illustrated below. At least 40 percent of each sign face shall be devoted to the display of time and temperature. For purposes of this Title, a Time and Temperature Siqn is not considered a chanqeable copy si.qn. Amend 14-60-4B-1 as follows: 1. Changeable Copy Signs: a. Any siqn may cqntain copy that is chan.qed manually. Such signs shall be installed in accordance with the dimensional requirements of the zone in which the sign is located. b. Signs where the,copy is changed by electronic means are only allowed as specified below: 1). The si.qn must be located in a CC-2, CH-l, or C1-1 Zone, but may not be located withil~ 100 feet of a Residential Zone. 2). Electronic changeable copy is allowed on only one si.qn per lot. 3). The changeable copy may not be animated (See definition of ANIMATED SIGN in Article 14-9C, Siqn Definitions). The copy may be chanqed no more than once per hour. 4). The sign may not contain ima.qes or be of a brightness that will interfere with, obstruct the view of, or confuse traffic. The siqn may not contain ima.qes that may be confused with any authorized traffic siqn, siqnal or device. The $iqn may not make use of the words, "stop," ".qo slow," "caution," "drive in," "danqer," or any other word, phrase, symbol or character in Such a way as to interfere with, mislead or confuse traffic. 5). The si.qn must comply with the illumination standards as specified in the followin.q subsection. 6). Electronic chanqeable copy is only allowed on freestandinq siqns and freestandinq,, wide-base si.qns, which must be installed in accordance with the dimensiolqal requirements of the zone in which the si.qn is located. 7). The electronic chanqeable copy portion of the sign may not exceed 40 percent of the area of the siqn face. Add the following paragraphs to 14-60-7D. Illuminated Signs: 5. Illumination throuqh the use of LEDs is allowed only as specified for electronic changeable copy. All signs using LEDs must have installed ambient liqht monitors that automatically adiust the briqhtness level of the electronic sign based on ambient light conditions. At no time shall the sign be operated at a briqhtness level .qreater than the manufacturer's recommended levels. The electronic changeable copy must be monochromatic. It must utilize a dark background with only the message or image lit in a single color. 6. Permit applications for electronic chanqeable copy signs must include a copy of the manufacturer's operating manual, which includes the manufacturer's recommended standards for brightness and other display operations. 7. For electronic chanqeable copy signs, whether the sign is programmed from the site or from a remote Iocatiqn, the computer interface that programs the siqn shall be made available to the Buildinq Official, or desiqnee, for inspection upon request. If the computer interface in not immediately available, the sign shall cease operation until such proqram can be provided. Iowa City Planning and Zoning Commission Attn: Jan Ream 410 East Washington St Iowa City, Iowa 52240 Dear Ms. Ream, Re: Upgrades to Pylon signs located: Delimart #1 1920 Lower Muscatine Rd Iowa City, Iowa 52240 Delimart #2 525 Highway 1 West Iowa City, Iowa 52240 Conoco/Phillips are changing the look of all fueling stations nation wide over the next few years. Included in the image change was the approval for their customers to upgrade gas price changers to LED. In the Cedar Rapids/Iowa City/Coralville area all Conoco/Phillips marketers will be upgrading their fueling centers. If they are to remain consistent with other ConoCo/Phillips marketers the opportunity to upgrade to LED Gas pricers needs to be addressed. Conoco/Phillips has approved Sign Productions to manage the Oasis project in this area. We would like to request a meeting with the Planning and Zoning Commission of Iowa City to discuss a change in the sign ordinance code allowing LED gas pricers. The un/ts will be Daktronics 2fi high x 6ft long Double faced LED Gas Price Sign. Control unit at base of sign with 18" LED characters. The signs will have a single price displayed. The units can not be changed to allow scrolling messages. Enclosed are drawing of how the signs would look if LED gas pricers are approved. Discussion points: Unifoi-~-dty for Conoco/Phillips Ease of Maintenance for customer Safety Aesthetics Please let me know when it would be convenient to meet? 11310 FIRST ST. NW ,, CEDAR RAPIDS, I13WA 5£405 · 319-364-6697 · FAX 319-363-803,4 DESlONERS & BUILDERS OF CUSTOM SIt:~NS Sincerely, ~_-~-- 31~47-~58 ext 133 1010 FIRST ST. NI/V · CEDAR RAPlD$~ IOI/I/A 5£405 · $19-$64-6697 · FAX 319-363-8034 JOB DESCRIPTION QTY. (1) D/F ILLUMINATED DUAL-POLE PRICE SIGN CONVERSION - KEEP EXISTING POLES/FOUNDATION REVISE: 10,05.04 EXIS71NG SIGN: TO BE REMOVED PL.4TE DETAIL: ,.JOB DESCRIPTION QTY. (I) NEW D/F ILLUMINATED DUAL-POLE PRICE SIGN TO REPLACE EXISTING SINGLE POLE SiGN NOTICE OF PUBLIC HEARING Notice is hereby given that a public hearing will be h~ld by the City Council of Iowa City, Iowa, at h f 7:00 p.m. on the 15 day o February, 2005, in Emma J. Harvat Hall, 410 E. Washington Street, ~,~ IowaI City, Iowa, or if said meeting is cancelled, at 0.,* the dext meeting of the City Council thereafter as posted by the City Clerk; at which hearing the Cour~cil will consider: Ani ordinance to rezone approximately 25.57 - ac!es by amending a Planned Development Hqusing Overlay - Low Density Single-Family R(~sidential (OPDH-5) Plan to allow additional zelo-lot line dwellings for property located on Wi!ntergreen Drive. Copies of the proposed ordinances and resolutions are on file for public examination in the officeof the City Clerk, City Hall, Iowa City, Iowa. Pers~3ns wishing to make their views known for Council consideration are encouraged to appear at th~ above-mentioned time and place. MARIAN K. KARR, CITY CLERK NOTICE OF PUBLIC HEARING ON ORDINANCE AMENDMENTS TO CREATE AN ILLICIT DISCHARGE AND CONNECTION STORMWATER ORDINANCE IN THE CITY OF IOWA CITY, IOWA TO ALL TAXPAYERS OF THE CITY OF IOWA CITY, IOWA, AND TO OTHER INTERESTED PERSONS: Public notice is hereby given that the City Council of the City of Iowa City, Iowa, will conduct a public hearing on ordinance amendments to create an Illicit Discharge and Connection Stormwater Ordinance in said city at 7:00 p.m. on the 1st day of March, 2005, said meeting to be held in the Emma J. Harvat Hall in City Hall, 410 E. Washington Street in said city, or if said meeting is cancelled, at the next meeting of the City Council thereafter as posted by the City Clerk. Said ordinance amendments are now on file in the office of the City Clerk in City Hall in Iowa City, Iowa, and may be inspected by any interested persons. Any interested persons may appear at said meeting of the City Council for the purpose of making objections to and comments concerning said plans, specifications, contract or the cost of making said improvement. This notice is given by order of the City Council of the City of Iowa City, Iowa and as provided by law. MARIAN K. KARR, CITY CLERK Public Notice Notice is hereby given that a public hearing will be held by the City Council of Iowa City, Iowa, at 7:00 p.m. on the 1st of March, 2005, in Emma J. Harvat Hall, 410 E Washington St, Iowa City, Iowa or if said meeting is cancelled, at the next meeting of the City Council thereafter as posted by the City Clerk; at which hearing the Council will consider: 1. The Iowa City Housing Authority's updated 5-Year Plan and Annual Plan advising HUD, its residents and members of the public of the needs of low-income and very low-income families, and their strategy for addressing those needs in the upcoming fiscal year. Copies of the plans will be on file for public examination in the office of the Iowa City Housing Authority, City Hall, Iowa City, Iowa, by January 12, 2005. Persons wishing to make their views known for Council consideration are encouraged to appear at the above- mentioned time and place. MARIAN K. KARR, CITY CLERK NOTICE OF PUBLIC HEARING Notice is hereby given that a public heating will be held by the City Council of Iowa City, Iowa, at 7:00 p.m. on the 1st day of March, 2005, in the Emma J. Harvat Hall, Civic Center, 410 E Washington Street, Iowa City, Iowa, or if said meeting is cancelled, at the next meeting of the City Council thereafter as posted by the City Clerk; at which hearing the Council will consider: 1) Resolution to adopt the updated and amended Iowa City Housing Authority's Housing Choice Voucher (HCV) Administrative Plan Copies of the plan will be on file for public examination in the office of the Iowa City Housing Authority, City Hall, Iowa City, Iowa, by February 2, 2005. Persons wishing to make their views known for Council consideration are encouraged to appear at the above-mentioned time and place. MARIAN K. KARR, CITY CLERK NOTICE OF PUBLIC HEARING Notice is hereby given that the City Council of Iowa City will hold a public hearing on the 1st day Of March, 2005, at 7:00 p.m. in Emma J. Harvat Hall, City Hall of the City of Iowa City, 410 E. Washington Street, Iowa City, Iowa, or if said meeting is cancelled, at the next meeting of the City Council thereafter as posted by the City Clerk; at which hearing the Council will consider a Resolution Approving a Purchase Agreement with Price Properties for approximately 21.76 acres of property lying within Lots 10 through 17 of North Airport Development Subdivision and Lots 2 through 4 of North Airport Development Subdivision - Part Two. Copies of the proposed resolution are on file for public examination in the office of the City Clerk, City Hall, Iowa City, Iowa. Persons wishing to make their views known for Council consideration are encouraged to appear at the above- mentioned time and place. MARIAN K. KARR, CITY CLERK Wal-Mart planning supercenter ~ ["k~ Page 1 of 1 Marian Kart From: Case, Rhonda [Rhonda. Case@pearson.com] Sent: Friday, February 11, 2005 12:36 PM To: 'online@press-citizen.cam' Cc: 'council@iowa-city.erg' Subject: Wal-Mart planning supercenter Bigger is not always better. Someone please tell the Iowa City Council that. Why do we need our Wal-Mart to be a supercenter? I don't supersize my fries or soft drink. I appreciate that my HyVee on Waterfront Drive isn't huge like the others. And I don't see any need for Wal-Mart to supersize. Friday's article on Wal-Mart said that the Iowa City location in only 10 miles from the supercenter in Coralville and that the increase is so that it can include a grocery store. Do we need another grocery store option? Let's count. We have Cub Foods next door to Wal-Mart. We have two Fairways; one on Mormon Trek, one at Scott BIvd & Hwy 6. We have three HyVees; Waterfront Drive, First Avenue, and on north Dodge street. And of course New Pioneer Co-op. Is that not enough? Eagle Foods (2 locations), Randals and Econofoods closed because there was not enough business to support them. Do we want to dilute the business to the grocers we already have? That certainly doesn't seem fair to those who have served us so well for so long. Please, City Council, consider the impact before making this decision. Rhonda Case Iowa Ci~ **************************************************************************** This email may contain confidential material. If you were not an intended recipient, Please notify the sender and delete all copies.. We may monitor email to and from our network. 2/11/2005 Bravo to you Garry Page 1 of 1 Marian Karr From: Case, Rhonda [Rhonda. Case@pearson.com] Sent: Tuesday, February 22, 2005 11:48 AM To: 'the3rdiowa@mchsi.com' Cc: 'cou ncil@iowa-city.org'; 'online@press-citizen.corn' Subject: Bravo to you Garry Garry, Thank you for pointing out that there is little "super" about a Super Wal-Mart. I just hope the City Council will use their long-term let's-think-this-through hearing, and not the short-term how-many-bucks-can-we-get-out-of-this hearing. http:~www~press-citizen~c~m~apps~pbcs.d~artic~e?A~D=~2~/~P~N~N~2[~22~3~3~1~18 Rhonda Case Iowa Ci~ **************************************************************************** This email may contain confidential material. If you were not an intended recipient, Please notify the sender and delete all copies.. We may monitor email to and from our network. 2/22/2005 I hope you're reading the Press Citizen regarding Super Wa-Mart :~ / ~. Page 1 of 2 Marian Karr From: Case, Rhonda [Rhonda. Case@pearson.com] Sent: Thursday, February 24, 2005 12:33 PM To: 'council@iowa-city.org' Subject: I hope you're reading the Press Citizen regarding Super Wa-Mart Thursday, February 24, 2005 Letters Get all details from Wal-Mart The guest opinion "Super Wal-Mart not so super" (Feb. 22) was well written and caused me to think about the "bigger picture"of a Wal-Mart acquisition. I believe it is important for the citizens of Iowa City to have easy access to the basic details of the Wal-Mart contract (e.g., the ability to control the use of the land surrounding the purchased property) and the long-term consequences of this expansion for the city and its citizens. Hopefully, the City Council will give careful consideration to the author's questions. Cathy Colony Bunnell What brings one to live someplace I moved to Iowa City 12 years ago after having lived in Germany for 10 years. I ended up in Iowa City because I was yearning for some of the quality of life features that I had found in Germany. As anyone who has traveled to Germany could confirm, it's so clean that you can "eat off the streets." When I first came to Iowa City, it impressed me with the cleanliness and spirit of the downtown. No more! Although it's worse on the weekends (kids will be kids, nod, nod, wink, wink), the downtown now has the features of a toxic waste dump much of the time. I used to make a special effort to buy downtown to support the businesses, but the aesthetic yuckiness of it has made me want to join the zombies who wander Coral Ridge Mall. My second point that relates to quality of life has to do with the possibility of another Wal-Mart Supercenter ("Area doesn't need superstore," Feb. 16). Iowa Citians, wake up and see what you have! When Wal-Mart successfully squashes all competition, and Iowa City lacks any uniqueness or diversity, it certainly won't attract people like me. But maybe we don't want people seeking quality of life? Mark Cannon Box store design bad aesthetics In "lC doesn't need superstore" (Feb. 16), a reader protested the building of a new Wal-Mart supercenter at the already enormous Wal-Mart location on Highway 1. That reader cited the negative economic effects that Wal- Marts have on communities, with which I fully concur. But let me add an additional reason why the city council and Iowa City residents should oppose this move. Super Wal-Marts and other big box stores are as ugly as can be. They and the vast parking lots that surround them despoil the landscape. They use the cheapest materials and mindless designs. They pay no consideration to the surrounding environment. They are capitalism's home-grown equivalent of the brutal tower-block housing of the former Soviet bloc. The statement they make is that their owners, and by implication, those who shop there, consider the outskirts of our cities and towns to be wastelands, expanses of unredeemable ugliness. At its best, the built environment can ennoble and improve the lives of those who live, work and spend their time in these spaces. At its worst -- and make no mistake, Super Wal Marts are the worst -- bad design can be 2/24/2005 I hope you're reading the Press Citizen regarding Super Wa-Mart Page 2 of 2 depressing, dehumanizing and alienating, diminishing the lives of those who live in these surroundings. We can choose how to develop, use or preserve public lands. Mark Peterson Oh, I should probably mention that've I've not seen a single letter in support of said Super Wal-Mart. Sincerely, Rhonda Case Iowa City This email may contain confidential material. If you were not an intended recipient, Please notify the sender and delete all copies.. We may monitor email to and from our network. 2/24/2005 Marian Karr From: Kevo50@aol.com Sent: Saturday, February 26, 2005 5:09 PM To: cou ncil@iowa-city.org Subject: Two Comments I will not be able to attend the March 1st City Council meeting, but I wanted to make two comments. I want the council to vote in favor of the student liason. I don't want the council to allow the new Wal-Mart super-store to be built. Kevin Owens Marian Karr From: Matthew A. Bricker [mattbricker@earthling.net] Sent: Saturday, February 26, 2005 11:23 AM To: cou ncil@iowa-city.org Subject: Yahoo! News Story - Big grocers under stress Matthew A. Bricker (mattbricker@earthling.net) has sent you a news article. (Email address has not been verified.) Personal message: Greetings, This article may be of interest. Please vote against selling the land to Wal-Mart; we dont need it. Thank you for your time and attention, -- Matthew A. Bricker Big grocers under stress http://story.news.yahoo.com/news?tmpl=story&u-/csm/20050225/ts csm/awinn Yahoo! News http://dailynews.yahoo.com/ Page 1 of 1 Marian Karr From: katharine nicholson [katharn@avalon.net] Sent: Saturday, February 26, 2005 12:43 PM To: cou ncil@iowa-city.org Subject: Please refuse Wal-Mart Dear Council, Please refuse Wal-Mart license to open a super Wal-Hart in Iowa City. Let's support our local businesses. Thanks, Katharine Nicholson 2018 Plaen View Drive (hm. 3:L9-339-4604 & katharn@avalon.net) (wk: kathadne, nicholson@iowaglass.c_om & 396-1234 or 1-800-747-5402 ext 5237) 2/28/2005 [~ i'~ Page 1 of l Marian Karr From: Mary Vermillion [austennow@hotmail,com] Sent: Saturday, February 26, 2005 3:18 PM To: council@iowa-city.org Cc: mmcwilli@iowacity.gan nett.com Subject: Wal-Mart Dear Council members: I urge you to vote against the proposed purchase agreement that would allow Wal-Mart to build a supercenter on the west side of town. Wal-Mart has already done enough damage to Iowa City's downtown. We don't need to sacrifice Cub Foods and Fareway as well. If these two civic-minded stores go out of business, there will be no convenient grocery store for west-side citizens, like myself, who refuse to shop at Wal-Mart. More important, our city needs to defend its progressive values and quality of life. We need to take a stance against a corporation that hurts small businesses, damages the environment, and lowers wages and working conditions all over the world. We need to take a stance against a corporation that has a long history of sexism, racism, and dishonesty. A progressive place like Iowa City has no business welcoming Wal-Mart. Thank you for your attention, Mary Vermillion author of Death by Discount 1017 Wylde Green Rd Iowa City, IA 52246 2/28/2005 February 26, 2005 Dear Council members: Please. I urge you to vote against the proposed purchase agreement that would allow Wal-Mart to build a supercenter on the west side of town. Wal-Mart has already done enough damage to Iowa City's downtown. We don't need to sacrifice Cub Foods and Fareway as well. If these two civic-minded stores go out of business, there will be no convenient grocery store for west-side citizens who refuse to shop at Wal-Mart. More important, our city needs to defend its progressive values and quality of life. We need to take a stance against a corporation that hurts small businesses, damages the environment, and lowers wages and working conditions all over the world. We need to take a stance against a corporation that has a long history of sexism, racism, and dishonesty. A progressive place like Iowa City has no business welcoming Wal-Mart. Thank you for your attention, Patty McNichol Page 1 of 1 Marian Karr From: Ann Zerkel [annzerkel@msn.com] Sent: Sunday, February 27, 2005 9:51 AM To: council@iowa-city.org Subject: Oppose Super Wal-Mart Dear Iowa City Council Members, Our beautiful, progressive, sane and caring community does not need to welcome WaI-Mart's new superstore, now or at any time. To argue that Wal-Mart stores provide consumers with a progressive shopping alternative is sheer sophistry. Wal-Mart's profit motive is amoral; it's business practices are immoral. It has been well documented that Wal-Mart's success depends on hurting people: the human beings whose bodies and spirits are starved by living in sweatshop conditions to provide Wal-Mart with goods to sell; the frustrated Wal-Mart employees who struggle in guilt and shame yet cannot adequately support themselves; and the local economies of the "host" communities that collapse under the weight of Wal- Mart's cutthroat pricing. Please! Vote with your conscience and help Iowa City to grow strong by standing up to Wal-Mart and just saying NO MORE. Sincerely, Ann Zerkel 1110 East Washington Street Iowa City, IA 52245 2/28/2005 Marian Karr From: Cecile Goding [cecile-goding@mchsi.com] Sent: Sunday, February 27, 2005 10:34 AM To: council@iowa-city.org Subject: Wal-Mart: Proposed Purchase Agreement Dear Council members: I urge you to vote against the proposed purchase agreement that would allow Wal-Mart to build a supercenter on the west side of town. I and my husband have been doing a lot of research into Wal-Mart, its hiring practices, and its strategies to remove freedom of choice from consumers. Wal-Mart has a long history of sexism and racism, and contributes to lowering wages all over the world. One example: employees are made to clock out, and then keep working overtime for free! One of its practices is to move into an area, drive out smaller grocery stores and downtown shops through lowering prices (at a loss), and then either raising prices or closing down completely, leaving towns nothing but an empty building, acres of asphalt, and a long drive to the nearest strip mall. We have already seen the damage Wal-Mart has done to Iowa City. In the last years, we have lost our last grocery store within walking distance, and our last department store. I am not saying the expansion was totally at fault, but the expansion certainly was a factor. Isn't Iowa City a unique environment, voted as one of the best cities in the nation for quality of life? Our city needs to defend its progressive values and quality of life, as a few other cities in America have. We can join them. We need to take a stance against a corporation that hurts small businesses, damages the environment, and lowers wages and working conditions all over the world. We need to take a stance against a corporation that has a long history of sexism, racism, and dishonesty. A progressive place like Iowa City has no business welcoming Wal-Mart. Thank you. Cecile Goding 811 Brown Street Iowa City IA 52245 ~I~__~ Pagelofl Marian Kart From: Bonnieinia@aol.com Sent: Sunday, February 27, 2005 3:18 PM To: council@iowa-city.org Subject: 22 Acres for Walmart Dear City Council Members: I have the following comments pertaining to the purchase agreement for the 22 acres of land to build a new Super Walmart: Iowa City's retail growth is the result of demand by the population. Iowa City is a diverse community. In addition, we attract consumers from rural areas, other towns, and other counties in Iowa. Not everyone is in a position to shop at a high-end retail store. I am personally aware of a number of people who bypass the Iowa City Walmart to shop at the Coralville one because it offers groceries. Some of these people are young families with small children. Rather than drag their kids around to yet another store, they do their grocery shopping at the Walmart for convenience. Iowa City is no longer a "small town" and to be concerned about putting small businesses out of business is narrow-minded. Those people who are devoted to particular stores will continue to frequent them. The residents of Iowa City and Johnson County deserve to have options afforded to them. If you try to force residents of this city to have limited options they will just end up shopping in Cedar Rapids where there are two Walmarts. An expanded store, in my opinion, would only bring more consumers to this area. Bonnie Bradley 138 Amhurst St Iowa City, IA 52245 2/28/2005 _-~ {--~_._. Page 1 of 1 Marian Karr From: danice Ahrens [jahrens@aea10.k12.ia.us] Sent: Sunday, February 27, 2005 5:47 PM To: council@iowa-city.org Subject: Wal-Mart To all Iowa City Council members, Please vote against the proposed agreement to build a West side Super-Wal-Mart. I have made a personal commitment to boycott Wal-Mart because of its unfair business trade practices, its damage to small town businesses, and its poor treatment of women and minorities, feel it would be a great disservice to Iowa City to encourage continuance of the Wal- Mart ethic. Thank you, Janice Ahrens 1412 Buresh Ave Iowa City, Iowa 52245 2/28/2005 Page 1 of 1 Marian Karr From: Mike Brown [bbearsrock@mchsi.com] Sent: Sunday, February 27, 2005 7:33 PM To: council@iowa-city.org Subject: Wal-Mart Dear Council members: I urge you to vote against the proposed purchase agreement that would allow Wal-Mart to build a supercenter on the west side of town. Wal-Mart has already done enough damage to Iowa City's downtown. We don't need to sacrifice Cub Foods and Fareway as well. If these two civic-minded stores go out of business, there will be no convenient grocery store for west-side citizens who refuse to shop at Wal-Mart. More important, our city needs to defend its progressive values and quality of life. We need to take a stance against a corporation that hurts small businesses, damages the environment, and lowers wages and working conditions all over the world. We need to take a stance against a corporation that has a long history of sexism, racism and dishonesty. A progressive place like Iowa City has no business welcoming Wal-Mart. Carrie Thank You, 4575 Jenn Brown Iowa City, IA Lane NE 52240 2/28/2005 Marian Karr From: Marilyn Calkins [marilyn.calkins@mci.com] Sent: Monday, February 28, 2005 7:06 AM To: cou ncil(~iowa-city.org Subject: comment on new Wal-Mart Dear Council Members: I urge you to vote against the proposed purchase agreement that would allow Wal-Mart to build a supercenter on the west side of town. Johnson County already has many 'super' stores that are part of national companies. With this area's wonderful bus system, people can easily travel to most of these locations if that is where they choose to shop. The proposed site for a new Wal-Mart supercenter is no more accessible than any of the existing stores. There are regular letters to the letter, Council references, and newspaper articles about the dearth of local businesses in the downtown area. Stores fled Old Capital Mall when Coralridge opened. Why allow a new competitor into the city to further dissipate the existing, available shopping dollars? I refuse to shop at Wal-Mart because of its marketing practices which hurt the manufacturers who help supplies the goods as well as employees and the local economy. Along with many other of my neighbors and friends, I ask that you make this decision in light of your avowed support of local business people and revitalization of downtown Iowa City. Thank you for your attention, Marilyn R. Calkins 2714 Wayne Ave., Apt 12 Iowa City, IA 52240 Marian Karr From: Nancy Romalov [nancyromalov@mchsi.com] Sent: Sunday, February 27, 2005 11:24 PM To: co u ncil(~iowa-city, org Subject: super wal-mart Council members: I am writing to voice my strong opposition to the building of a Super Wal-Mart in Iowa City. Iowa City is already well served with ample retail and grocery stores. Wal-Mart's history of exploitation of workers should not be further encouraged by allowing the store to continue to grow here. Please vote against Wal-Mart's expansion on Tues. Thank-you Nancy Romalov 802 7th ave. Iowa City 337-6679 Marian Karr From: jane.stewart@act.org Sent: Monday, February 28, 2005 9:27 AM To: council@iowa-city.org Subject: Walmart Supercenter - Please vote no! Dear Council Members, I am writing to ask that each of you to protect downtown Iowa City from further decay by voting against the proposed Walmart Supercenter. Walmart has done enough damage to towns large and small in Iowa and it needs to stop. Their practices of racism and sexism are inconsistent with the stated goals and policies of Iowa City. Their unfair labor practices are widely known. I do not shop at the current Walmart or at the Supercenter in Coralville and I will not. I feel that, as a consumer, and as a citizen of a city I care about, I have to take a stand against the injustices they promote and the revenue they siphon from local businesses by undercutting prices. I would prefer to pay more for my groceries and other goods by shopping at stores that pay their employees a decent wage and provide opportunities for advancement {especially for women and minorities). Please vote "No". Sincerely, Jane Stewart 2802 Friendship St. Iowa City, IA 52245 jane.stewart@act.org Marian Karr From: Leslie A. Schwalm [leslie-schwalm@uiowa.edu] Sent: Monday, February 28, 2005 9:33 AM To: cou ncil@iowa-city.org Subject: Wal-Mart Dear Council members: I am writing to urge you to vote against the sale of land that would allow Wal- Mart to build a supercenter in Iowa City. I do not believe that the city should be involved in land sales to a corporation like Wal-Mart that pays its workers so poorly, a corporation that strives to undermine locally-owned and operated businesses, a corporation that creates a visual blight on the landscape. Let's protect Iowa City's commitment to businesses that offer a living wage, decent working conditions, and a healthy, safe environment. Let's protect our city from the blight of empty warehouses (Wal-Mart's practice of leaving hundreds of empty stores to mar the landscape) and acres of pavement. Please vote against the proposed land sale. Sincerely, Leslie A. Schwalm 819 East Market St. Iowa City, Iowa 52245 .B ~,~.-... Page 1 of 1 Marian Karr From: russdee47@aol.com Sent: Monday, February 28, 2005 9:49 AM To: council@iowa-city.org Subject: Vote no to Walmart Expansion Dear Council Members: I have long been opposed to the negative influence that Walmart Stores make upon local communities--often causing the closing of small community business and leaving small towns with empty store fronts. We moved to Iowa City and enjoy the culture of a strong local business community along with the University and Hospitals. I object to the aggressive process where a Walmart Store will move in regardless of the wishes of the majority of local citizens. This domination of a large corporation does not belong in our local business-University Community. Please vote no to the proposed agreement to allow Wal-Mart to build a supercenter in Iowa City. Thank you for your commitment to community leadership, Rev. Russ & Dee Fate 806 Dover St. Iowa City, IA 52245 2/28/2005 % \.~_~ Page I of 1 Marian Karr From: Kvervaec@ao[.com Sent: Monday, February 28, 2005 10:22 AM To: council@iowa-city.org Subject: proposed Wal-Mart supercenter Dear Council Members, I'm writing to ask that you vote against the purchase agreement which would allow a Wal-Mart supercenter to be built on the west side of town. Your vote AGAINST another Wal-Mart is a vote FOR local and civic-minded businesses and fair labor practices. It would affirm the progressive values of the Iowa City community, values that define the essential nature of our city. Thank you. Kris Vervaecke 2060 Lynncrest Drive Coralville, IA 52241 2/28/2005 Marian Karr From: Caroline Dieterle [caroline-dieterle@uiowa.edu] Sent: Monday, February 28, 2005 3:51 PM To: council@iowa-city.org Subject: Wal-Mart Super Center Dear Council: The majority of you must be out of your minds, if you think that this idea to sell land and allow the development of a Wal-Mart Super Center is a good one for Iowa City. Past Councils have made a lot of bad decisions in the area of land use and zoning, which have led to the sad state of things downtown. Please don't join them by going ahead with this scheme. Wal-Mart~s record is a dismal one - poor wages and working conditions for employees and ruined businesses in the wake of its coming to a town are just two reasons to discourage any more of them, let alone a Super Center. Try not to get sucked in by the warm fuzzy ads it has on the nightly propaganda TV stations. If you are worried that Wal-Mart devotees will all continue to go to the Super Center in Coralville, let them! Building one here certainly won't significantly hurt the one in CV, but It will hurt Iowa City businesses. People on the east side of Iowa City are now finding that the businesses in the rejuvenated Sycamore Mall and Wardway Plaza and the area due south of Iowa City below Highway 6 are convenient places to go. Don't ruin what you have now got prospering there. Caroline Dieterle February 25, 2005 Regenia Bailey City Council Office 410 E. Washington Street (iii" i ~ ' ~- Dear Regenia, We have worked together with the Iowa Women's Foundation and now it seems to me that an important human fights issue is before the City Council. The purchase agreement sought by Wal-Mart for a new "Supercenter" requires City Council approval. I do not want to see the presence of Wal-Mart expanding in our community. As the world's largest retailer, this corporation violates all decent labor standards in its headlong dash to provide inexpensive products and make huge profits. Women and children are often the victims of their policies. Why is it that Wal-Mart can boast about the lowest prices for products in town? How is it possible that this huge international corporation can offer such "good deals" to American comers? I had the privilege of meeting two women who make pants for Wal-Mart. They live and work in Bangladesh, but they came to the U.S., sponsored by the National Labor Committee to let Americans know of their hard work their working conditions, their pay, and their lives as subcontracted worker~ for Wal-Mart. Those women firmly believe that ffthe American people knew how those Wal-Mart prices got so very low, surely America would rise up with democratic spirit and a sense of fair play to support the improvement of the lives of all those subcontracted working people who make Wal-Mart's low prices and high profits possible. Let me relate the story of Maksuda as I remember it. She has visited Wal-Mart and found the products that she made. She began working at 11 years of age as a Bangladeshi garment worker among the loud machines. She found a factory that paid $34.14 a month for 7 work days a week, 8am to 10pm. No lalking is allowed and they are permitted two toilet breaks a day. On those days when products go out to Wal-Mart, workers like Maksuda, are expected to be at their workplace from 8am until 3am. This entire situation means that Maksuda works 66 hours a week for 13 cents an hour! It is no wonder that after eight years of working hard, living on lentils and rice, she owns little and lives in endless poverty. There is no maternity leave policy, though 85% of the workers are women. Beaten when she asked for time off to give birth, she lost her baby. She is hoping that her story will awaken the American consumers so that she and her fellow workers can make some progress in their dedicated effort to live better. Their wants as workers are quite reasenable--one day off each week, no beatings, legal maternity leave, a ten hour day, the equivalent of about $75 a month--these few things would help make their dreams come tree! It might add 25 cents to the cost of the products they make, but for them it would change their lives significantly in a positive way. Bangladesh actually has good labor laws, but they are abused and ignored. Once when the workers tried to stop products fi.om leaving the compound, eight workers were shot by police. This reminds me vividly of the labor protests in the U.S. at the turn of the century and during the Great Depression when the government/police sided with owners, ignoring the needs of workers. The United States once overcame these bamers to decent employment through labor unions, through legislation, and strong leadership that required attention to ethical business practices as well as to the needs and value of the labor force. We need to do that again. We need to recognize the human fights of international workers that serve our corporations daily to meet our economic needs. The mistreatment and dehumanization of thousands of international workers that serve Wal-Mart subcontractors is far too high a human price to pay for low priced clothing for Americans. The Bangladesh women said lhat by age 35, the women workers are worn out, and consequently are kicked out of their jobs, just like trash put on the sUreet and forgotten. These conditions are inhumane and tantamount to a modern form of slavery. Wal-Mart pretends this is not their problem, because they sub-contract the work, but they can set decent · tandards and require basic humane working conditions from their subcontractors. They can require that the tlbor laws of the country of the workers be enforced by their ~nbcontractors. Wal-Mart could provide a useful service to the world, to the U.S., and to their own reputation by instituting and enforcing such provisions in their business practices. Until they do so, I hope that Iowa City will not give Wal-Mart the oppommity to expand in our Thank you for considering my viewpoint on this important issue that has worldwide implications. I will ~ at the public hearing on March I with many others who recognize the human fights violations of Wal-Mart. I look forward to seeing you there. Please feel free to share my letter with other City Council members. Marian Karr From: Chuck Hauck [chauck7@yahoo.com] Sent: Tuesday, March 01,2005 8:57 AM To: cou ncil@iowa-city.org Subject: "No" to Wal-Mart Supercenter Dear Ceuncil members: Please do net allow Wal-Hart t© build a Supercenter in Iowa City. I encourage yeu te vete "no" te this project. Having been raised in a small tewn, I have seen firsthand the damage that Wal-Hart does to lecal communities, killing small businesses and putting undue pressure on cempetiters and suppliers. Hasn't Wal-Hart already dene enough damage te Iewa City? Ecenefoods is gene, Eagle is gone. Who's Rext? Iowa City and Coralville need to take a stand against this behemoth and this current project that will undoubtedly kill even more businesses in our area. I urge you to take a stand and vote "no". Thank you. Charles H. Hauck Coralville Do you Yahoo!? Yahoo! Hail - Helps protect you from nasty viruses. http://promotions.yahoo.com/new_mail Dear Council Member: I am writing today to attempt to persuade you to vote No on the sale of city land to Wal-Mart. I have included several articles detailing the damage Wal- Mart does to communities across the nation. These articles include the Pulitzer Prize winning series in the Los Angeles times. When selling city land to a business it is your responsibility to way the cost versus the benefits that that business will have in this community. Please read the enclosed materials and ask yourself what price we will pay for Wal- Mart grocery and retail. Please educate yourself about the damage Wal-Mart does to a community and vote NO on the sale of our land to this company. Thank you for your time, William Batten 1333 Cedar Street Iowa City, Iowa 52245 319-330-0631 Wal-Mart Watch Page 1 of 2 ¢urc~¢~r:~u~'t,~z=. Struaale for a Voice I News on the Wal J US Labor Headlines I How to Download Real ~¢i_a Playez ~[ Ad0be Acrobat ~e~d~r J General Info Myths and Reality Myth: Wal-Mart creates "hundreds" of new jobs for communities. Fact: Studies show that for every two jobs created by a Wal- Mart store, the community loses three. Jobs that are retained by a community are merely shifted from local businesses to the giant retailer. In a 1994 report, the Congressional Research Service warned Congress that communities need to evaluate the significance of any job gains at big-box stores against any loss of jobs due to reduced business at competing retailers. The report also pointed out that these so-called new jobs "provide significantly lower wages then jobs in many industries, and are often only part-time positions, seasonal opportunities, or subject to extensive turnover." The Real Story is that when Wal-Mart moves into the neighborhood, it devours local businesses and lowers community living standards. Myth: Wal-Mart has "always Iow prices, always." Fact: The local newspaper in Carroll County, Arkansas conducted a test of WaI-Mart's iow price claim. Surveying a list of 19 common household items at six Wal-Mart stores over a one month period, the newspaper staff found that Wal-Mart was cheapest on only two of the items. The lowest register receipt for all 19 items was $12.91. The highest total for all items came from Wal-Mart at $15.86. The Real Story is the high cost of WaI-Mart's pdces: lower wages, more imports, lost U.S. jobs, lower community living standards. Myth: WaI-Mart's presence in a community generates tax revenues. Fact: Studies conducted by small towns on the impact of proposed Wal-Mart stores have shown that tax revenue reductions are more likely to occur after a Wal-Mart moves into an area. A Maryland study showed that in the years following the arrival of Wal-Mart, "town tax receipts from personal property and ordinary business corporation taxes grew but at a declining rate." The study said that "the expected growth in income taxes may have been offset http ://www.walmartwatch.com/info/myths.c fm?subsection_id= 103 2/24/2005 Wal-Mart Watch Page 2 of 2 by Iow-wage jobs offered by the large retailer and by the loss of employment in competing businesses .... " Myth: WaI-Mart's workers receive good health benefits. Fact: WaI-Mart's Health Coverage Leaves Most Workers Uncovered. Huge employee premium payments and big deductibles keep participation in WaI-Mart's health plan to 38% of employees. That's 6 out of every 10 employees-more than 425,000 Wal-Mart employees, most of them women, who have no company provided health coverage. Nationally, more than 60% of workers are covered by company paid health plans. There's more: Wal-Mart workers pay insurance premiums that cover close to half of WaI-Mart's health plan expenses. The national average shows that employee premiums cover just over 25% of health plan expenses incurred by companies nationwide. The Real Story is that Wal-Mart freely acknowledges shifting its health care costs to taxpayers and responsible employers. A company spokesperson said, "[Wal-Mart employees] who choose not to participate in [WaI-Mart's health plan] usually get their health-care benefits from a spouse or the state or federal government." Wal-Mart is the biggest beneficiary of its health plan because the company shifts $1 billion in health care costs to the government and responsible employers. Myth: Wal-Mart "Buys American" and Wal-Mart "Brings it Home to the USA." Fact: Two 1998 studies that surveyed clothing on Wal- Mart store recks and shelves found 80% and sometimes more thatn 9o% of the apparel items were produced overseas, many in countries where sweatshops and child labor are prevelant. "The truth is," says the National Labor Committee, "Wal- Mart has moved far more production offshore than the industry average." There's more: Commenting on Wal- Mart's "Buy Mexican" program, an expert on economic nationalism said Wal-Mart is "...shamelessly manipulating nationalist sentiments in both countries... · For all its public nationalism, Wal-mart is reinvesting its ali-American dollars overseas." http ://www.walmartwatch.com/info/myths.c fm?subsection_id= 103 2/24/2005 Wal-Mart Watch Page 1 of 1 of Ern01ovee~ I Worker Mistreatment [ Wal of Shame Top 10 Wal-Mart Worst Actions · A judge fined Wal-Mart $18 million because the company provided incomplete and false evidence in a lawsuit brought by a woman who had been abducted in a Wal-Mart parking lot. · Upholding a $2.3 million verdict awarded to two women sexually harassed by a Wal-Mart manager, the judge said, the manager's conduct was "outrageous and apparently Wal-Mart was aware of this, since his conduct was witnessed high-level [supervisors]. · Federal judges in three states have fined Wal-Mart--as much as $120,000--for destroying evidence, withholding documents, and other violations in cases where Wal-Mart shoppers were either injured or a crime victim at a Wal-Mart store. · A jury found that Wal-Mart fired a white female employee because she was dating a black man, in a 1998 case. · A 14-year Wal-Mart worker was awarded $2.75 million after a jury decided store officials wrongly accused her of stealing. · Three existing community jobs are destroyed for every two new jobs at Wal-Mart. · Wal-Mart, the company that wrapped itself in the American Flag, is so patriotic i! runs a Buy Mexican campaign. · Wal-Mart sold fake Tommy Hilfiger apparel to consumers after a judged ordered the company to stop. · Only 38% of Wal-Mart employees have company provided health insurance--compared to a national average that shows 60% of employees are covered by company plans. · After the FTC charged Wal-Mart with not identifying the country of origin on apparel items listed on its Internet sales site, Wal-Mart removed the items, apparently preferring not to disclose where the clothing was made. WAL OF SHAME CATEGORIES: · Discrimination · Harassment · ~r~angedng ~ons~.~FS ~nd .~p!oy~f~s · Poor Treatment of Employees http://www.walmartwatch.com/wal/?subsection_id= 117 2/24/2005 Wal-Mart Watch Page 1 of 1 Neighborhood Protection Add your story here Title Data S~ao Marcos C_it_ig_e_r~...~_ro_u~p For_c_e_$_W~al_Mg_d.~.~__~(cLt_e_ January 17, 2004 LAKEWAY CITY COUNCIL VOTES AGAINST BIG-BOX December 6, 2003 Walmart Moving Into Small Town Community._AGAIN June 23, 2003 San Marces, CA Battliqg._Q_n June 12, 2003 Wal-Mart withdraws plan for store in Inver Grove H July 23, 2002 .N_._o!..H_e_r...e_.! May 28, 2002 WaI-Mad Abandons Piggy Back Proposal May 8, 2001 Article on WaI-Mart's plan to build near the Penja March 8, 2001 we r_e_t[yj.n_g March 8, 2001 Western Branch in Chesapeake, VA December 7, 2000 Fort_ Wright KY_~q_t~d_..5~t~_l NO_T to__Rezpne October 12, 2000 Big Box Bites the Big One on Kent Island September 21, 2000 Riverside, California Swats Wal-Mart Away June 28, 2000 F_O_R_T WAYNEJN~D.J_A_.N__A_HO_M_E__O...~V~___.E_R~S~VVlN June 27, 2000 Rockville Approves Moratorium On Big Boxes May 2, 2000 Aqg_ry._i_n_.R_o_b_ed~L__o_u_i.sj. an_a_ March 21, 2000 Community Wins Battle in Surrey, BC, Canada February 23, 2000 South San Fancisco Puts Moratorium on B q Boxes February 3, 2000 Fi.!~d_.da__CP_u_nty Sa_y~_ N_.._o...'['.o_ Wal:M_a..r~...S~percent_er February 1, 2000 Taos New Mexico December 15, 1999 I.o_qd~r! County,_ .Vjrgi.[~i_a December 14, 1999 Stratham, NH November 4, 1999 Eureka, CA Sept:ember 13, 1999 Temecula, C_.~ September 8, 1999 Middletown, Connecticut September 8, 1999 Rehoboth Beach Delaware September 8, 1999 Simi Valley, California September 8, 1999 Tijeras, New Mexico June 15, 1999 http ://www.walmartwatch.com/neighbor/success.cfm?subsecfion_id=98 2/24/2005 Yahoo! News - Developer Drops Plans for NYC Wal-Mart Page 1 of 3 Yahoo! MyYahool Mail Search the [geb NEWS Lend P_e_r ~e Search All News ~' "fo Yahoo! News Thu, Feb24,2005 j ~ ~ News Home Business - AP Top Stories U.S. National Developer Drops Plans for NYC ~..,~i.~,~ · Business Wal-Mart Economy Stock Markets I hour, 41 minutes ago U' ~;'~!;] B_usj.i~e,SS -_A.P_ Earnings_ Personal Finance, Industries By SAM DOLNICK, Associated Press Writer C_ _ommentarv_ NEW YORK - A real estate developer scrapped plans to build the city's first Wal- Press Releases Mart store amid intense pressure from residents and union leaders· Most Popular World Related Quotes The decision, announced by city officials ~ X/~q_C) 68.81 -0.01 Wednesday, comes as a blow to the retail giant, Sports DJ!_A. 10659.09 -14.70 which has sought for years tO move into the ~, Technology. NASDAQ 2025·53 -5.72 lucrative NewYork City market. Po..._tics S&P 500 1189.89 -0.91 Science ~ ~: The company had announced Dec. 6 that it would ............... open a new store in the Rego Park neighborhood H~_a Ith ~ of Queens. Odd y~Epough Delayed Data O.~./.Ed Pr~v_.id_e~ - QL~c!.~Jm~[ Wal-Mart Stores Inc. spokeswoman Mia Masten Local said Wednesday the company had never signed C~mi~cs. by: a deal with the developer, Vornado Realty Trust, Ne~ws Photos for the 132,000-square-foot space· She said Wal- Mart was still interested in exploring other Most...pop¢!a r locations in the city. Weather I~w PE~_ Pi~tCgrrn Aud.o/Vi~e,p Vornado spokeswoman Roann Kulakoss declined F~ull Coverage- to comment Thursday. News Resources Opponents formed coalitions to block the store immediately after Wal-Mart, the world's largest retailer, announced plans to expand into New York. Providers · Re_~t:er~ Small businesses feared Wal-Mart would drive many retailers out and · A~P residents near the site raised concerns about traffic and parking at the proposed site. Union leaders cited a list of labor offenses against the company, · AFP including a recent settlement of allegations that Wal-Mart violated child labor · Forbes.corn laws and the company's decision to close a Quebec store when workers · Bu_s. ~3ess_W...~ek_.Qnli_n.e moved to unionize. - USATODAY.¢om · N~.w_~Fa~to.r Meanwhile, in California, Wal-Mart Chief Executive H. Lee Scott Jr. said Wednesday that the company is renewing efforts to expand its Supercenter · NP_R stores there. Public outcry had stalled the company's plans there last year~ · FT.com http://news~ yah~~~c~~~news?tmp~=st~ry&u=/ap/2~~5~224/ap-~n-bi-ge/wa~-mart-expans~~~ 2/24/2005 Yahoo! News - Developer Drops Plans for NYC Wal-Mart Page 2 of 3 · Investor's Business Daily Scott said that although WaI-Mart's $1 million campaign to gain voter approval Business Ed for superstore projects in the Los Angeles and San Diego areas failed, it is · Motley Fool moving ahead with plans to open 25 new stores in the state this year· · Q_n!i_ne MB_~ p · TheDeal._c.o_.~ · Browse All Bu · CP "We're not going to lay down," he said· "We've got nothing to apologize for." Programs Services from Yahoo! Edu Analysts have said that Bentonville, Ark.-based Wal-Mart needs to tap into the · News Alerts New York City and Southern California markets to make up for slow growth elsewhere in recent years. r~ News Alerts more Subscribe to alerts for Wal-Mart shares fell 2 cents to $51.58 in early trading Thursday on the New ~ New York Stock Exchange York Stock Exchange (news - web site~). Story Tools _More News via RSS Ratings; Would you recommend this story? Business News Not at all '~ = 2 = 3 - 4 - _5 Highly Business ~ Avg Rating: 3.75, 8 votes Stocks ~ U.S. Economy ~ epecial Feature Earnings ~ Personal Finance ~ Mi_ss~e_d~T~ech_Tu~es~d_a_y? ,- Check our DVR Special. Is TiVo the best one available? More Business I All Feeds Next Story: _LAn_d_p_E..~h~E_es_CLose Lowe_£ (AP) More Business - Top Stories Stodes · Viac_o~m_l~_o._s.t_s._~;_!..~..4_l~_Q_Lp_ss on Cha_~rg_es_ (AP) · Rvanair buys 140 Boeina lets in four bin dlr deal, creates 2,500 job8 (AFP) · Copycats (Forbes.corn) · The January CPI's Deceptive Story (BusinessWeek Online) · Ebbers' defense begins with internal auditor (USATODAY.COm) Customer Contact Center Consulting Destination Excellence specializes in innovative teleservices solutions to maximize efficiency, increase profitability, and maintain cost. Contact us for more ... Web-Based Sales System Contact center management software. Automated sales and marketing processes for real estate developers· www.focus-3.com Call Center Learning Center Comprehensive call center directory including books, articles, benchmarking results, software solutions, training and technology for call center managers and www.call-center.net Wha_t'A tt!i~ ) Copyright © 2005 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadc redistributed without the prior written authority of The AssOciated Press. Copyright © 2005 Yahoo! Inc. All rights reserved, Questions or Comments Privacy Policy -Terms of Service - Copyright Policy - Ad Feedback http://news.yahoo.com/news?tmpl=story&u=/ap/20050224/ap on bi_ge/wal mart expans._ 2/24/2005 Yahoo! News - Developer Drops Plans for NYC Wal-Mart Page 3 of 3 http ://news. yah~~.c~m/news ?tmp~=st~ry &u=/ap/2~~5~22 4/ap-~n-bi-ge/wa~-mart-expans... 2/24/2005 Print Page 1 of 3 chatterbox The Wal-Mart Manifesto The retail giant's CEO says his company pays workers handsomely, He doesn't want you to betieve him. By Timothy Noah Posted Thursday, Feb. 24, 2005, at 9:14 AM PT H. Lee Scott Jr., the chief executive officer of Wal-Mart, argued in a speech yesterday in Los Angeles (click here to listen to it) that Wal-Mart is a force for good in the economy. Scott is hardly the first corporate chairman to echo "Engine" Charlie Wilson's claim that what's good for General Motors is good for America. And many independent observers have noted that Wal-Mart's relentless downward pressure on overhead has been a boon to American consumers. (In a recent Neu, Yorker column, James Surowiecki took this further, arguing that the retail economy has become a sort of dictatorship of the consumer, and that Wal-Mart, which earns only pennies on each dollar of sales, is merely doing what it must to stay alive.) What's fairly new in Scott's speech (a related ad campaign was launched last month) is Wal-Mart's rising on its hind legs to tell the world that it is good to its employees. I'd thought it was a settled matter that Wal-Mart had achieved its miraculously low prices by squeezing its employees. Not so, said Scott: Wal-Mart's average wage is around $10 an hour, nearly double the federal minimum wage. The truth is that our wages are competitive with comparable retailers in each of the more than 3,500 communities we serve, with one exception a handful of urban markets with unionized grocery workers .... Few people realize that about 74 percent of Wal-Mart hourly store associates work full-time, compared to 20 to 40 percent at comparable retailers. This means Wal-Mart spends more broadly on health benefits than do most big retailers, whose part-timers are not offered health insurance. You may not be aware that we are one of the few retail firms that offer health benefits to part-timers. Premiums begin at less than $40 a month for an individual and less than $155 per month for a family. The apparent purpose of the speech was to counter political resistance to the building of Wal-Mart "supercenters" in California. But if Scott saw much danger that Wall Street might believe his rosy picture of labor relations, he wouldn't paint it, because that would create an investor stampede away from Wal-Mart stock. What we have, then, is a unique rhetorical form: Nonsense recited by someone who is relying on most of his listeners to understand that he is spouting nonsense. Wal-Mart took the trouble to send this speech out to writers "who are in a position to influence a lot of others," according to a cover e-mail I received from Mona Williams, Wal-Mart's vice president for corporate communications. I took Williams' email as a plea to expose the dishonesty in Scott's remarks (Stop us before we kill again.t) disguised as a plea to give Scott's remarks a fair hearing. I will try to oblige. Wal-Mart's average wage is around $10 an hour. As Tom Geoghegan, a labor lawyer in Washington (and author of Which Side Are }~m On?: Trying To Be For Labor ~Yhen It's Flat On Its Back) points out, the relevant number isn't the average, which would be skewed upward by the large salaries of relatively few highly-paid company executives--Scott, for example, receives, by one reckoning, 897 times the pay of the average Wal-Mar_t worker--but the median. In the Dec. 16 New York Review of Books, Simon Head, director of the Project on Technology and the Workplace at the Century Foundation, stated, "the average pay of a sales clerk [italics mine] at Wal-Mart was $8.50 an hour, or about $14,000 a year, $1,000 below the government's definition of the poverty level for a family of three." That the current minimum wage of $5.15 per hour leaves families http://slate.msn.com/toolbar.aspx?action=print&id=2113954 2/28/2005 Print Page 2 of 3 even farther below the poverty line is a depressing topic for another day. The truth is that our wages are competitive with comparable retailers in each of the more than 3,500 communities we serve, with one exception---a handful of urban markets with unionized grocery workers. Wal-Marts have traditionally targeted rural areas where unions are weak, so of course the pay would be lousy at comparable retailers nearby. What Scott doesn't mention is that Wal-Mart is now so large--its workforce, Head points out, is "larger than that of GM, Ford, GE, and IBM combined"--that it drives down wages at other retailers, too. As Geoghegan observed to me, Wal-Mart is the behemoth that forces everyone else's wages down and then says, "Hey, we're no worse than anyone else." They turn everyone else into Wal-Mart and then say, "Are we any worse than the other Wal-Mart wannabees?" Now that everyone has to play their game, they like to come across as the industry's statesman. It's disgusting. The disparaging reference to "urban markets with unionized grocery workers" is a reminder that Wal- Mart has successfully resisted virtually all efforts to unionize its stores, even in labor-friendly blue states. Few people realize that about 74percent of Wal-Mart hourly store associates work full-time, compared to 20 to 40percent at comparable retailers. Yes, but what exactly is a "full-time worker"? Typically, full-time is defined as 40 hours a week or more. At Wal-Mart, it's defined as 34 hours a week. So of course Wal-Mart has more "full-time" workers. Fewer hours worked, I need hardly point out, means that Wal-Mart's "full-time" employees are less likely than employees elsewhere to be able to afford premiums for any health insurance they're offered. According to Head, fewer than half of Wal-Mart's employees can afford even the company's least-expensive health plan. I won't bother enumerating the many, many times Wal-Mart has been accused of violating its own professed policies regarding child labor, working employees off the clock, promoting women, and so on, but you can find that here. Halfway through his speech, Scott took an amazing U-turn. He stopped arguing that Wal-Mart paid its workers handsomely and instead argued that of course the pay is lousy at Wal-Mart. Pay is always lousy in the retail sector: Retail sector wages have been about 25 percent lower than economy-wide wages for the last 15 years and this gap is at least as large in other advanced nations. Auto wages, by contrast, have been 40 to 50 percent higher than economy-wide wages. The discrepancy, Scott argued, is due to the fact that the auto industry is capital-intensive while the retail industry is labor-intensive. But if Scott took this argument at all seriously, he'd have to concede that his own pay should be reduced drastically below its current level. In 2003, the most recent year for which I can find data, Scott sucked down $29 million (including stock-option grants). That same year, G.R. Wagoner, president and CEO of General Motors, hauled in about half that amount, $15 million. Following Scott's logic, I don't see how he can avoid knocking his own pay down to around $10 million. And if Scott wants to argue that he works for the nation's biggest company? We all know how to http://slate.msn.com/toolbar.aspx?action=print&id=2113954 2/28/2005 Print Page 3 of 3 answer, don't we? All together now: "Dude! It's only retail!" Timothy Noah writes "Chatterbox "for Slate. Article URL: bttp:llslate.msn.comlid12113954/ http://slate.msn.com/toolbar, aspx?action=print&id=2113954 2/28/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 1 of 1 THE PUL1TZER BOARD PRESENTS The Pulitzer Prize 2004 NATIONAL REPORTING Los Angeles Times Staff November 23, 2003: An Empire Built on Bargains B ~.mo _k~ ~.b~ ~_~.r!~ing .~rl d November 23, 2003: Proud to Be at the Top November 24, 2003: tip. Gi_ve Shoppers an $8.63 Polo Shirt November 24, 2003: Se.o~..~6.~t~l....~.r!E~y~! November 24, 2003: Audit Stance Generates Controversy November 25, 2003: Grocery Unions Battle to Stop Invasion of the Giant Stores November 25, 2003: Se!.!i~g Ef~!_a_nd ~bi~.~e~ F~e~..~-.l~!u~ M&Ms and Sony TVs [H.gme] [Hi~t_o_...ry_] [R_esour_ce_s_] [Archive] [2004_1 [Entry Fermi] [E&~.] ~h.a~.H~w] http ://www.pulitzer.orF_,/vear/2004/national-reportinedworks/ 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 1 of 16 THE PL~L~ZER BOARD PRES~qTS The Pulitzer Prize 2004 -..,..... N~TIONAL REPORTIN~ index I next First of Three Parts An Empire Built on Bargains Remakes the Working World Wal-Mart is so powerful that it moves the economies of entire countries, bringing profit and pain. The prices can't be beat, but the wages can. By Abigail Goldman and Nancy Cleeland Times staff writers November 23, 2003 LAS VEGAS -- Chastity Ferguson kept watch over four sleepy children late one Friday as she flipped a pack of corn dogs into a cart at her new favorite grocery store: Wal-Mart. The Wal-Mart Supercenter, a pink stucco box twice as big as a Home Depot, combines a full-scale supermarket with the usual discount mega-store. For the 26-year-old Ferguson, the draw is simple. "You can't beat the prices," said the hotel cashier, who makes $400 a week. "1 come here because it's cheap." Across town, another mother also is familiar with the Supercenter's Iow prices. Kelly Gray, the chief breadwinner for five children, lost her job as a Raley's grocery clerk last December after Wal-Mart expanded into the supermarket http ://www.pulitzer.org/year/2OO4/national-reporting/works/walmart l .html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 2 of 16 business here. California-based Raley's closed all 18 of its stores in the area, laying off 1,400 workers. Gray earned $14.68 an hour with a pension and family health insurance. Wal-Mart grocery workers typically make less than $9 an hour. "It's like somebody came and broke into your home and took something huge and important away from you," said the 36- year-old. "1 was scared. I cried. I shook." Wal-Mart gives. And Wal-Mart takes away. From a small-town five-and-dime, Wal-Mart Stores Inc. has grown over 50 years to become the wodd's largest corporation and a global economic force. It posted $245 billion in sales in its most recent fiscal year-- nearly twice as much as General Electric Co. and almost eight times as much as Microsoft Corp. It is the nation's largest seller of toys, furniture, jewelry, dog food and scores of other consumer products. It is the largest grocer in the United States. Wal-Mart's decisions influence wages and working conditions across a wide swath of the world economy, from the shopping centers of Las Vegas to the factories of Honduras and South Asia. Its business is so vital to developing countries that some send emissaries to the corporate headquarters in Bentonville, Ark., almost as if Wal- Mart were a sovereign nation. The company has prospered by elevating one goal above all others: cutting prices relentlessly. U.S. economists say its tightfistedness has not only boosted its own bottom line, but also helped hold down the inflation rate for the entire country. Consumers reap the benefits every time they push a cart through Wal-Mart's checkout lines. Yet WaI-Mart's astonishing success exacts a heavy price. By squeezing suppliers to cut wholesale costs, the company has hastened the flight of U.S. manufacturing jobs overseas. By scouring the globe for the cheapest goods, it has driven factory jobs from one poor nation to another. Wal-Mart's penny-pinching extends to its own 1.2 million U.S. employees, none of them unionized. By the company's own admission, a full-time worker might not be able to http ://www.pulitzer.org/year/ 2oO4/national-reporting/works/walmart l .html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 3 of 16 support a family on a Wal-Mart paycheck. Then there are casualties like Kelly Gray. As Wal-Mart expands rapidly into groceries, it is causing upheaval in yet another corner of the economy. When a Supercenter moves into town, competitors often are wiped out, taking high- paying union jobs with them. Wal-Mart's plans to enter the grocery business in California early next year have thrown the state's supermarket industry into turmoil. Fearful of Wal-Mart's ability to undercut them on price, the Ralphs, Vons and Albertsons chains have sought concessions from their unionized workers in Southern and Central California, leading to a work stoppage now entering its seventh week. Half a century ago, the nation's largest and most emulated employer was General Motors Corp. "Today," said Nelson Lichtenstein, a history professor at UC Santa Barbara, "for better or worse, it's Wal-Mart." GM brought prosperity to factory towns and made American workers the envy of the world. With a high-wage union job, an assembly-line worker could afford a house, a decent car, maybe even a boat by the lake. There was a bit of truth, Lichtenstein said, to the famous assertion by Charles Wilson, General Motors chief from 1941 to 1953, that what was good for GM was good for the country. With Wal-Mart, the calculus is considerably more complex. 'We Have Split Brains' Glenn Miraflor used to chide his wife for shopping at Wal-Mart. As a member of Ironworkers Local 416, the 50-year-old father of four is well aware of the POCKETBOOK APPEAL: Glenn and Debbie Uiraflor shop at aWaI-Martin LasVegas. retailer's anti-union stance. But Glenn, a member of Ironworkers Local 416, when the family's credit card dislikes the retailer's antiunion stance but asks, "Where else are you going to find a debt topped $10,000, WaI-Mart's computer for $498?" (photo: Genaro deals suddenly looked Molina/Los Angeles Times) irresistible. "Where else are you going to find a computer for $498?" he asked, looking for a PC with his wife, Debbie, at the http://www.pulitzer.org/year/2004/national-reporting/works/walmart 1.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 4 of 16 Supercenter on Serene Avenue, far from the glitz of the Las Vegas Strip. "Everyone I work with shops here." Surveys by the Teamsters and the United Food and Commercial Workers -- the two unions most threatened by Wal-Mart -- show that many of their own members shop at the discounter. "We have split brains," said Robert Reich, U.S. secretary of Labor under President Clinton and now a professor of economic and social policy at Brandeis University in Waltham, Mass. "Most of the time, the half of our brain that wants the best deal prevails." The connection may be lost on many, Reich said, but consumers' addiction to Iow prices is accelerating a shift toward a two-tiered U.S. economy, with a shrinking middle class and a growing pool of Iow-wage workers. "Wal-Mart's prices may be lower," he said, "but that's small consolation to a lot of people who end up with less money to spend." Others insist there is a net benefit whenever consumers can get more for less. "If you have lower real prices, you're saving money," said Arthur Laffer, a key advisor to President Reagan who is now an economic consultant in San Diego. "The prices' falling, in effect, raises the wages of everyone who buys their products." That's basically the way the Miraflors saw it as they cruised the aisles of the Supercenter -- Wal-Mart Store No. 2593 -- and snapped up deals: Ragu pasta sauce for 89 cents, Aunt Jemima pancake mix for 48 cents, pork shoulder steaks for $1.49 a pound and five cans of Del Monte vegetables for $2. After making their way through the groceries, the Miraflors turned their attention to the housewares section, stopping in front of a 20-inch box fan. Glenn Miraflor checked the price and made room for it in their cart. "Ten bucks," he said. "You can't beat that. That's why we come here." Vendors' Alley The fan was made 1,700 miles away in Chicago at Lakewood Engineering & Manufacturing Co. A decade ago, the same fan carried a $20 price tag. http://www.pulitzer.org/year/2004/national-reporting/works/walmart 1.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 5 of 16 But that wasn't Iow enough for Wal-Mart. So Lakewood owner Carl Krauss cut costs at every turn. He automated production at the red-brick factory built by his grandfather on the city's West Side. Where it once took 22 people to put together a product, it now takes seven. Krauss also badgered his suppliers to knock down their prices for parts. In 2000, he took the hardest step of all: He opened a factory in Shenzhen, China, where workers earn 25 cents an hour, compared with $13 in Chicago. About 40% of his products now are made in China, including most heaters and desktop fans. The Miraflors' box fan was assembled in Chicago, but its electronic guts were imported. "My father was dead set against it," Krauss said of the move overseas. "1 have the same respect for American workers, but I'm going to do what I have to do to survive." Survival in an age when consumers are hyper-vigilant about prices means shaving expenses again and again. "Nobody wants to be on the shelf with the same item for $1 more," Krauss said. All the retailers he supplies m including Home Depot Inc. and Target Corp. -- drive a hard bargain with manufacturers. But none is as tough as Wal-Mart, Krauss said. Twice a year, his sales representatives travel to Wal-Mart headquarters to pitch their products. There, competitors sit side by side, waiting to be ushered into one of 60 glass- sided cubicles -- a space some call Vendors' Alley. Then the haggling begins. "You give them your price," Krauss said. "If they don't like it, they give you theirs." The suppliers are at a disadvantage. The Wal-Mart buyer can always go out to the waiting room and find someone who will go lower. "Your price is going to be whittled down like you never thought possible," Krauss said. After moving much of his manufacturing abroad, Krauss doesn't see any way to push costs lower. "If you're doing things legally, you can't," he said. He may have to find a way. At the Serene Avenue store, shopper Sarah Saxon, 17, http:llwww.pulitzer.org/year/2OO4/national_reportin~/works/walmartl html 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 6 of 16 pulled a $40 Lakewood heater off the shelf. She looked it over, then put it back in favor of an AirTech model selling for $34.88. She said it looked better than the Lakewood. "Besides," she said, "it's cheaper." WaI-Mart's culture of cheap emanates from Bentonville, a town of 20,000 tucked into the Iow green hills of northwest Arkansas, where a young Sam Walton opened his first five- and-dime in 1950. Even then, Walton had a vision of a different kind of retail. Rather than charging a little less than his competitors, Walton wanted to slash prices as much as he could and still make a profit. Other stores would use price breaks from manufacturers as a way to boost their bottom lines, paying less at wholesale while leaving retail prices untouched. Walton passed such savings on to his customers as his discount business evolved into Wal-Mart stores in 1962. He figured he would make up the difference in volume. He was right. By the mid-1980s, Wal~Mart's success had catapulted Walton to No. 1 on the Forbes list of richest Americans. Still, he drove an old pickup truck to haul around his bird dogs, refused to fly first class and shared hotel rooms with colleagues on business trips. Bentonville, like the man who put it on the map, is a combination of Southern charm and Midwestern practicality. The town square is anchored by the original Walton's five- and-dime (now a visitors' center) and dotted with small shops. But the real action is down Business Route 71, where the Wal-Mart Supercenter rises up, big enough to fit three 747s with room to spare. Across the street is the base of Wal-Mart operations: the Home Office. The world's biggest company occupies an industrial- looking hodgepodge of windowless work spaces, connected by bunker-like hallways. The drab gray-and- blue walls display the visage and sayings of Sam Walton, HUMBLE BEGINNINGS: Sam Walton opened his first five-and-dime in 1950 in who died in 1992: Bentonville, Ark. From there, WaI-Mad has grown into the world's largest corporation, with $245 billion in sales in its most recent fiscal year. (photo: Brian vander Brug/Los http ://www.pulitzer.org/year/2 OO4/national-reporting/works/walmart l .html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 7 of 16 "Listen to your associates .... Angeles Times) They're the best idea generators." "To succeed, stay out in front of change." "Swim upstream. Go the other way. Ignore the conventional wisdom." Lists abound. The best-performing stores. The worst- performing stores. Under a picture of the founder asking, "Who's taking your customers?" is a roster of competing retailers, including Costco Wholesale Corp., Circuit City Stores Inc. and Target, with the name and picture of each company's chief executive. It's all part of the Wal-Mart culture: a zealous attention to competition, customers and costs. Wal-Mart employees, unlike their counterparts at other retailers, are forbidden to accept so much as a soda from vendors -- or anybody else the company does business with -- on the theory that such frills ultimately are paid for by consumers. The company's meticulous management of the flow of goods, from the factory floor to the store shelf, has shaved shipping and inventory costs to a degree that retailing experts say is unprecedented. "You could argue that some of what Wal-Mart does to cut costs has been win-win," said Richard S. Tedlow, a professor of business administration at Harvard Business School. "What's being squeezed out is waste." The company is so ruthlessly efficient that 4% of the growth in the U.S. economy's productivity from 1995 to 1999 was due to Wal-Mart alone, researchers at the McKinsey Global Institute estimated last year. No other single company had a measurable impact. Wal-Mart also has forced competitors to become more efficient, driving the nation's productivity -- output per hour of work even higher. Walton, who still is referred to as Mr. Sam throughout the corporation, worked in a ground-floor office barely big enough for a conference table. The current occupant, Chief Executive H. Lee Scott Jr., is the keeper of Mr. Sam's vision. Like all Wal-Mart executives, he empties his own trash and shares budget hotel rooms when traveling. Everyone flies coach. http://www.pulitzer.org/year/2OO4/national-reporfing/works/walmartl .html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 8 of 16 "We do not have limousines," said Scott, who certainly could afford one, having made nearly $18 million last year in salary, bonus and stock, plus options with an estimated value of $11.3 million. "1 drive a Volkswagen Bug." WaI-Mart's stinginess reaches from the executive suite to the loading dock. Some truckers complain that they must unload their own cargo -- or pay Wal-Mart to do it. Other big retail chains absorb that cost themselves. "They're awful," said independent driver George Hauschild of Palm Springs. "They don't even let you use the bathroom." At every one of the 2,966 WaI-Marts in the U.S., thermostats are kept at a steady 73 degrees in summer, 70 degrees in winter; raising or lowering the temperature is considered a waste of money. Such measures seem mild compared with what Wal-Mart has done to cut payroll costs. In one case, a jury in Oregon last year found that company managers had coerced hundreds of employees to work overtime without pay. The managers were driven by intense pressure from Bentonville, witnesses said. Managers whose labor costs were considered too high were singled out during the company's weekly in-house satellite broadcasts. In response, managers tampered with electronic time cards or bullied employees to work off the clock, according to trial testimony. The Oregon jury found last December that WaI-Mart's behavior was illegal and willful. A separate trial to determine damages for the 290 plaintiffs is set for early next year. Wai~Mart settled similar overtime suits in Colorado and New Mexico for undisclosed amounts. More than 40 other cases are awaiting trial. The company says it prohibits off-the-clock work and blames the problems on a small number of rogue managers. Last month, Wal-Mart ran into trouble because of another cost-cutting practice: using dirt-cheap janitorial services. A grand jury is investigating whether Wal-Mart knew that janitors provided by subcontractors were illegal immigrants cheated out of overtime pay. Federal agents raided 61 Wal- http ://www.pulitzer.org/year/2004/national-reporting/works/walmart 1 .html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 9 of 16 Marts across the country and seized boxes of documents from the Bentonville headquarters. Wal-Mart has denied wrongdoing. Scott, the CEO, lauded WaI-Mart's employment record. Even in tight labor markets, he said, the company never has trouble finding workers. "It is not fomed labor," he said. "The truth is, I go to the stores and shake hands with the associates, and they like working at Wal-Mart." On the Fast Track Aaron Rios liked working at Wal-Mart so much that he decided to make his career there. Like two-thirds of WaI-Mart's store managers, Rios started off as an hourly worker -- in his case, stocking shoes on the graveyard shift at the Wal-Mart in his hometown of Hanford in the San Joaquin Valley. After two years, Rios was recommended for management training the company's fast track -- leading him to quit community college and pursue a climb through the Wal-Mart ranks. "There's just something about a Wal-Mart environment," said Rios, who became manager of the Serene Avenue Supercenter in Las Vegas at age 26. "It changed who I am, where I was going and what my career goals were." Wal-Mart store managers earn about $95,000 annually, including bonuses, according to the company. Supercenter managers earn $130,000. A management position requires long hours -- as many as 80 a week -- and, often, a willingness to relocate. Rios worked at six California Wal-Mart stores before taking the helm at Serene Avenue. "It doesn't come free," said Rios, a divorced father who shares custody of his 2-year-old son. Still, he said, the benefits outweigh the sacrifices. "1 have an open opportunity. I could go into real estate for Wal-Mart. I could do systems, analysis, accounting. It's endless," Rios said. "If I wanted to go to Germany or Japan http://www.pulitzer.org/year/2004/national-reporting/works/walmart 1 .html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 10 of 16 or Brazil or any of the markets we have, I believe I could go." A few weeks later, Rios snared another promotion, moving back to California as a district manager in the Antelope Valley, overseeing seven stores from Barstow to Palmdale. Larry Allen had his own dreams of climbing the Wal-Mart ladder. In the fall of 2001, he and his wife, Jacque, left Portland, Ore., where the economy was sputtering, and headed to Las Vegas. He was an executive chef and ~he worked in catering. They looked forward to a fresh start in unionized casino jobs, making more than $15 an hour, with health insurance and pensions. But their timing was lousy. Recession and terrorism were hitting the gaming industry hard, and work of any kind was scarce. Just before their money ran out, the Aliens lowered their expectations and took jobs at the Serene Avenue Wal-Mart. Jacque, then 43, worked the counter at the in-store restaurant, Radio Grill. Larry, 46, stocked produce. They each earned $8 an hour. Despite the letdown, Larry Allen said he attacked the job with enthusiasm. Inspired by tales of well-paid Wal-Mart managers who had started out as hourly employees, such as his manager Aaron Rios, he figured on working his way up. That was Sam's way, he said. 'Tve been following Sam Walton since the 1970s," he said. "He's the American dream." The glow faded quickly. At his 90-day review, Allen said, he received an unenthusiastic write-up and an hourly raise of 35 cents. His supervisor told him that if he continued working hard, in two years he might make his way up to $10 an hour. Allen thinks he knows why he received such mediocre marks. For one thing, he was prone to question company policy. Then, Allen committed the ultimate act of disloyalty: He openly promoted unionization. West Coast Ambitions For decades, Wal-Mart has tantalized and frustrated union http://www.pulitzer.org/year/2004/national-reporting/works/walmart 1.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTiNG, Works Page 11 of 16 organizers. But the company's move into the grocery business m a labor stronghold -- has raised the stakes dramatically. Union organizers say the high wages and benefits of their members are at risk, as Wal- ECONOMIC POWERHOUSE: Shareholders gather at WaI-Mart's annual meeting in Mart expands its Supercenters June, filling the Bud Walton Arena at thebeyond the Southand Midwest. University of Arkansas in Fayetteville. According to researchers, 4% of the growth The company recently in the U.S. economy's productivity from 1995 to 1999 was due to Wal-Mart alone. (Photo: established a beachhead in Las Associated Press) Vegas, with five centers. Next stop: California, where Wal-Mart plans to open 40 Supercenters starting early next year. In a sense, it has already arrived. Wal-Mart's Iow wages are a central factor in the labor dispute between California's three major supermarket chains and the United Food and Commercial Workers. "They are the third party now that comes to every bargaining situation," said Mike Leonard, director of strategic programs for the UFCW. Over many years of hard negotiating, the union has won and maintained premier contracts for its 800,000 grocery workers. But with the opening of each new Supercenter, the union's clout erodes. Every one of the giant stores sucks away about 200 UFCW jobs, said retail consultant Burr P. Flickinger III, who runs Strategic Resource Group in New York. That means less power at the bargaining table and less money to hire organizers. On average, Flickinger says, WaI-Mart's wage-and-benefit package is about $10 an hour less than those offered by unionized supermarkets. For shoppers, that makes a big difference. A cartful of groceries is 17% to 39% cheaper at a Wal-Mart Supercenter than at a unionized supermarket, according to a survey last year in Las Vegas, Dallas and Tampa, Fla., by investment bank UBS Warburg. WaI-Mart's move into groceries has led 25 regional supermarket chains around the nation to close or file for bankruptcy protection, eliminating 12,000 mostly union jobs, http ://www.pulitzer.org/year/2OO4/national-reporting/works/walmart l .html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 12 of 16 Flickinger said. With this in mind, Safeway Inc. recently aired a videotaped message to employees, whose contract in Las Vegas expires next fall. "Wal-Mart wants our customers and your jobs," said Safeway executive Larree Renda. Total wage and benefit costs represent 15% of sales at Safeway, Renda said. At Wal-Mart, they account for 9%. "If we don't change," Renda said, "you bet we'll lose jobs -- and it will be in the thousands." Staying Unorganized From their first day on the job, Wal-Mart employees are advised to avoid unions and to report any organizing activities to their supervisors, "If a union got in here, every benefit we've got could go on the negotiating table, every one of them," says a man identified as Russell, a veteran employee, in a video shown to new hires. "Unions will negotiate just about anything to get the right to have dues deducted out of paychecks. You see, they need big money to pay union bigwigs and their lawyers." Company policy prohibits any union talk in work areas, and organizers say they routinely are asked to leave stores. The retailer sought, and last year received, a court order keeping organizers out of all of its stores in Arkansas. The state Supreme Court nullified the order in July. At the first hint of union activity, Wal-Mart managers are supposed to call a hotline, usually prompting a team visit from Bentonville. Wal-Mart spokeswoman Mona Williams said the intervention was meant to help store managers respond effectively and legally. "Our philosophy is that only an unhappy associate would be interested in joining a union," she said, "so that's why Wal- Mart does everything it can to make sure that we are providing our associates what they want and need." But dozens of times in the last four years, attorneys for the National Labor Relations Board have claimed that the http ://www.pulitzer.org/year/2OO4/national-reporting/works/walmart l .html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 13 of 16 company infringed on the supermarket union's legal right to organize. Although some of those claims have been thrown out, others have been upheld by administrative law judges, who have ruled that Wal-Mart illegally influenced employees with offers of raises, promotions and improved working conditions just before they were to vote on whether to join a union. Judges also have found that Wal-Mart illegally implied that workers could lose benefits such as insurance and profit sharing if they unionized. What's more, managers illegally confiscated union literature, threatened to close down a store if workers voted to join the union, fired several union supporters and failed to promote others, according to rulings from Minnesota to Florida. Stymied in their previous attempts to organize Wal-Mart workers, UFCW leaders adopted a new strategy in 2000. They decided to marshal their resources for a concerted organizing effort in one place: Las Vegas. The union reached out to workers with a Web site and a weekly radio talk show, and posted organizers outside Wal- Mart stores at all hours. When they could, UFCW members would leave union literature inside stores, hoping that workers would see it before managers ordered the material thrown away. Larry Allen got his first glimpse at a union pamphlet last year as he carried it to the garbage at the Serene Avenue Supercenter. He was hooked, and began advocating for an election to bring in the union. LABOR RELATIONS: Larry Allen, who "Somebody has got to step up worked at a Las Vegas WaI-Mart where he and fight for what is right," Allen s~voc~tedroraunme~mm, is.owan organizer. Sandy Williams, an employee of said. Sam's Club, which is owned by Wal-Mart, also backs the union. (photo: Genaro Molina/Los Angeles Times) Ripple Effect Less than a mile away from the Serene Avenue store, another shopping center stands deserted, in desperate need of an anchor. A year ago, the Raley's grocery store here drew thousands http ://www.pulitzer.org/year/2OO4/national-reporting/works/walmart l .html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 14 of 16 of shoppers who spilled out to neighboring businesses, buying flowers, mailing packages, getting their nails done. Today, the store is gone. The remaining shops are struggling. "I'm probably down 45%," said Bonnie Neisius, who owns a UPS Store franchise in the center. "1 just don't get the foot traffic anymore." A few doors away, Windmill Flowers owner Diana I. Murphy leaned on a table where she would have been arranging bouquets had there been customers. "There are a couple of things in play," Murphy said. "The recession, terrorism. And Wal-Mart. It's had a direct effect on me, because they sell flowers, too .... They even deliver." Unlike small towns with boarded-up commercial centers, fast-growing Vegas quickly loses track of its Wal-Mart victims. Wal-Mart's costs to the community tend to show up in subtler ways. In an informal survey in the late 1990s of people who used Las Vegas emergency rooms for routine medical care, patients Who said they were employed but uninsured were asked where they worked. WVaI-Mart came up more than any other," said Dr. Raj Chanderraj, a Las Vegas cardiologist and chairman of the Clark County Health Care Access Consortium, a group that works to provide medical services to the uninsured. The reason, say critics: Because Wal-Mart pays such Iow wages, many employees can't afford the health insurance the company offers. And those who do have health coverage through the company often can't afford deductibles that run as high as $3,000 a year. "Their employees are ending up at the county hospital and become the burden of the county," said Clark County Manager Thom Reilly. Wal-Mart disputes that. Williams, the company spokeswoman, said that 48% of employees are covered by Wal-Mart's health insurance plan. Among those who aren't, 26% have coverage from another source such as a spouse's employer or Medicare, Williams said. http ://www.pulitzer.org/year/2004/national-reporting/works/walmart 1 .html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 15 of 16 The notion that Wal-Mart doesn't provide adequate health coverage is "just rhetoric," she said. "It's simply not true." According to the Employee Benefit Research Institute in Washington, neady 44% of workers in the retail sector as a whole have employer-provided health coverage. Among big companies in all industries, the figure is 66%. Those who accuse Wal-Mart of shortchanging its employees, Williams suggested, don't understand the modern service economy. "Retail and service wages are what they are," she said, "whether you look at a department store, a discount store, the local dry cleaners, the bakery or whatever. "Wal-Mart is a great match for a lot of people," Williams added. "But if you are the sole provider for your family and do not have the time or the skills to move up the ladder, then maybe it's not the right place for you." '1 Still Believe in Wal-Mart' Larry Allen spent about a year advocating for the supermarket union while working at Wal-Mart. In the parking lot and in the break room, he passed out fliers and talked up the benefits of unionizing. But he and his fellow union backers didn't get as far as they hoped. About 42% of workers in the grocery department at Serene Avenue signed UFCW cards -- not enough for the union to feel confident about winning an election. In August, Allen was fired. NLRB attorneys said it was because of his union activities and filed a complaint against Wal-Mart, seeking his reinstatement. On a recent afternoon outside the Supercenter, dozens of union members rallied to support Allen. "Larry, Larry, Larry," they chanted. Over at the store entrance, the demonstration was a muffled, distant bit of noise. Store managers watched on a screen as surveillance cameras scanned the crowd. Asked about the commotion, a gray-haired Wal-Mart greeter named Robert just smiled. "They want to make the store union," he said. "But that would make the prices go up for our customers. We can't let that happen." On some level, even Larry Allen understands. "1 still believe http ://www.pulitzer.org/year/2004/national-reporting/works/walmart 1.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 16 of 16 in Wal-Mart," said Allen, who now is on the union payroll as an organizer. "1 like the idea of it -- give a quality product at a Iow price. It's what the American public wants." (Copyright (c) 2OO3, Los Angeles Times) inc~e~ I n~ext [Home] [His:tory] [R.esources] [Arc_hive] [2004] [Entry Forms] [F~,~] ~hatsNew] http ://www.pulitzer.org/year/2004/national-reporting/works/walmart 1 .html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 1 of 3 THE PI.2 LITZER BOARD PRESENTS The Pulitzer Prize 2004 ci~a~i0n ~orks Biograph,.j NATIONAL REPORTING previous I index I next Proud to Be at the Top By Abigail Goldman November 23, 2003 H. Lee Scott Jr., 54, joined Wal- Mart in 1979, overseeing the company's trucking fleet. He gained a reputation as a master of logistics, moved into sales and merchandise, and became CEO in 2000. A friendly, plain- spoken man, Scott sat down in his office and talked about where the company has been and where it is going: Question: What obligations does Wal-Mart have as the biggest company in the world, ON STAGE: H. Lee Scott talks to and are you meeting them? sharehoidres at an annual meeting this year in Fayet~eville, Ark. (photo: Associated Answer: We have an obligation Press) to give back to the community, and I think we are. We do not have a sense that we have to make corporate donations to rebuilding monuments or supporting operas or the arts or any of those things. We think our obligation is to give back in that individual community. That's where that money came from, that's http ://www.pulitzer.org/year/2004/national-reporting/works/walmart2.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 2 of 3 where it ought to go back to. Founder Sam Walton said that Wal-Mart wouldn't go where it wasn't wanted. Is that still true? I think that is true. How do you define 'where it's not wanted'? Is it not wanted by those people who would like to not see lower prices? I don't think we're going to let them define whether or not we come. Is it going to be those people who do not want to compete with Wal-Mart? I don't think we're going to let them define it. What services or products can Wal-Mart add? Well, I think financial services is one we would like to be in. We're already offering money orders. We've dramatically lowered the costs of wiring money. There's probably a place for us in mortgages. I think the dot-com is going to be a very powerful tool. How big can Wal-Mart be? We are 8% of the nonautomotive, nonrestaurant sales in the U.S. I'm not sure why it couldn't be 24%. We've really done a great job for our customers, lowering prices, lowering the cost of living, raising the standard of living. Is it really unhealthy for us to be 32%? Could we be four times bigger right here? I don't know why not. Tell us about plans for expansion in California. When will people see that? I think they're going to see it very quickly. Our goal is to roll out Supercenters as we get the permission from individual towns, and to roll out Supercenters fairly aggressively in California. What is your response to critics who say Wal-Mart is replacing high-paying supermarket jobs with inferior ones? I think it's interesting that people think that they can legislate what the world is going to look like. That they can set up a process of protections that doesn't reward efficiency. We went through the lowest period of unemployment we've http ://www.pulitzer.org/year/2004/national-reporting/works/walmart2.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 3 of 3 had in years, and yet we staffed our stores. We hired people. We trained people. So, if our jobs were so poor, when you had 2% unemployment, 3% unemployment, how did we get a million people? Do you think your wages and benefits should be better? No. But I think one of the goals would be to pay people as much as you can pay them. I think that's obviously anybody's goal, so that you can have a balance between what the prices should be [and] what the pay should be. I think health care is a huge issue for all of us and whether it's buried in the costs of the product or whether it's in your paycheck, I think there's something that we as a country are having to address as we see these costs going up. Are you proud of the wages and benefits you provide? Yes, I'm proud. I think it's very competitive, but I'm particularly proud of the careers we provide. I see associates who like us and appreciate what the company has done for them and who know that the company appreciates what they have done. (Copyright (c) 2003, Los Angeles Times) previous I index I next [Home] [History] [Resources] [Archive] [2004] [Entry Forms] [FAQ] [VVhats New] http ://www.pulitzer.org/year/2004/national-reporting/works/walmart2.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 1 of 10 THE PUL1TZER BOARD PRES~qTS The Pulitzer Prize W INN ~R~ 2004 NATIONAL REPORTING previous I index i next Second of Three Parts Scouring the Globe to Give Shoppers an $8.63 Polo Shirt Wal-Mart, once a believer in buying American, extracts ever lower prices from 10,000 suppliers worldwide. Workers struggle to keep pace. By Nancy Cleeland, Evelyn Iritani and Tyler Marshall Times Staff Writers November 24, 2003 SAN PEDRO SULA, HONDURAS -- When Wal-Mart Stores Inc. demands a lower price for the shirts and shorts it sells by the millions, the consequences are felt in a remote Chinese industrial town, at a port in Bangladesh and here in Honduras, under the corrugated metal roof of the Cosmos clothing factory. Isabel Reyes, who has worked at the plant for 11 years, pushes fabric through her sewing machine 10 hours a day, struggling to meet the latest quota scrawled on a blackboard. She now sews sleeves onto shirts at the rate of 1,200 garments a day. That's two shirts a minute, one sleeve every 15 seconds. "There is always an acceleration," said Reyes, 37, who can't http :/ /www.pulitzer.org/year/2OO4/national-reporting/works/walmart3.htrnl 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 2 of 10 lift a cooking pot or hold her infant daughter without the anti- inflammatory pills she gulps down every few hours. "The goals are always increasing, but the pay stays the same." Reyes, who earns the equivalent of $35 a week, says her bosses blame the long hours and Iow wages on big U.S. companies and their demands for ever-cheaper merchandise. Wal-Mart, the biggest company of them all, is the Cosmos factory's main customer. Reyes is skeptical. Why, she asked, would a company in the richest country in the world care about a few pennies on a pair of shorts? The answer: Wal-Mart built its empire on bargains. The company's size and obsession with shaving costs have made it a global economic force. Its decisions affect wages, working conditions and manufacturing practices -- even the price of a yard of denim -- around the world. From its headquarters in Bentonville, Ark., the company has established a network of 10,000 suppliers and constantly pressures them to lower their prices. At the same time, Wal- Mart buyers continually search the globe for still-cheaper sources of supply. The competition pits vendor against vendor, country against country. "They control so much of retail that they can put someone into business or take someone out of business if they choose to," said Pat Danahy, a former chief executive at Cone Mills Corp. in Greensboro, N.C., one of the few surviving U.S. textile producers. In Honduras, the pressure keeps factory managers on edge, always looking for ways to cut expenses without running afoul of labor laws or Wal-Mart's own contractor rules, which call for "reasonable employee work hours." "1 think we have reached the limit," said Shin Woo Kang, manager of the enormous Han Soil Textile Ltd. sewing plant on the outskirts of San Pedro Sula. The plant employs 1,600 workers, mostly young women. Wal-Mart is its biggest customer. The brightly lighted factory is filled with humming machines, mounds of clothing parts and fast-moving hands. Down one production line, pieces of navy blue fabric take shape as Bobbie Brooks polo shirts, each bearing a Wal-Mart price tag http :/ /www.pulitzer.org/year/2OO4/national-reporting/works/walmart3.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 3 of 10 of $8.63. Kang said Wal-Mart was paying Han Soil about $3 a shirt -- a few cents less than last year. Asked what he would do if the retailer pressed for an even lower price, Kang grew quiet. "We would have to find something," he said finally. "Honestly speaking, I don't know what it is." To cut costs, Honduran factories have reduced payrolls and become more efficient. The country produces the same amount of clothing as it did three years ago, but with 20% fewer workers, said Henry Fransen, director of the Honduran Apparel Manufacturers Assn., which represents nearly 200 export factories. "We're earning less and producing more," he said with a laugh, "following the Wal-Mart philosophy." That's harsh medicine for a developing country. The clothing industry is one of the few sources of decent jobs for unskilled workers in this nation of 6 million. Many of those jobs depend on Wal-Mart. "You could be looking at a government meltdown if something were to happen to this industry," said Raja Rajan, a factory manager active in the apparel association. In Rajan's view, Wal-Mart is so important to the stability of Honduras that leaders should cultivate stronger ties with the company, almost as they would a foreign country. He has lobbied the government to send high-level envoys to Wal- Mart's Arkansas headquarters, something Bangladesh and other countries already do. Even with such efforts, Rajan fears that the migration of sewing jobs to China and other lower-cost countries can't be stopped, only slowed. Chuck Wilburn figures that his 1,300 employees will be among the casualties. He manages a factory on the outskirts of San Pedro Sula that cranks out clothing for Wal-Mart, Target Corp. and other retailers. Wilburn's employer, Oxford Industries of Atlanta, once owned 44 factories in the American South. It shuttered them all in the last 15 years and moved the work to cheaper locales. That's how Wilburn found himself in Honduras. http ://www.pulitzer.org/year/2004/national-reporting/works/walmart3.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 4 of 10 He is proud of his clean, modern factory. "It's nicer than the one I ran in South Carolina," Wilburn said. Still, he has had trouble turning a profit. He laid off 500 employees two years ago. Even here, it's hard to meet Wal~ Mart's prices. Wilburn expects that Oxford will close his factory in the next few years and move on to another country where basic cotton clothes, such as Wal-Mart's Old Glory khaki pants, can be produced for less. "Our business is a lot of twill stuff," he said. "That will be gone." Waving the Flag It wasn't long ago that Wal-Mart was fighting to keep manufacturing jobs on U.S. soil. In 1985, founder Sam Walton launched his "Bring It Home to the USA" program. "Wal-Mart believes American workers can make a difference," he told his suppliers, offering to pay as much as 5% more for U.S.-made products. In his 1992 memoir, "Made in America," Walton claimed that the program had saved or created neady 100,000 jobs by using "the power of this enormous enterprise as a force for change." But the late Walton's much-trumpeted effort soon was overtaken by the rise of the global economy. The spread of the Internet and other technology, along with U.S.-led efforts to tear down trade barriers, made it easier to move goods and capital across borders. To maintain its edge on pricing, Wal-Mart quietly joined other retailers in a worldwide search for the cheapest sources of production. In apparel, the process begins with Celia Clancy. From a renovated warehouse near the company's headquarters, the Wal-Mart executive vice president oversees the world's largest clothing budget, estimated at $35 billion in 2000. Clancy gives her buyers a "Plus One" mandate every year: For each item they handle, they must either lower the cost or raise the quality. http ://www.pulitzer.org/year/2OO4/national-reporting/works/walmart3.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 5 of 10 To demonstrate, she pulled a pair of girls' shorts off the wall of her cramped office and gave them a tug. "This was a dumb little knit pull-on short," Clancy said. "We improved the fabric, put some more fashion in it and are selling it for the same price as last year -- $5.19." Keeping prices Iow like this means squeezing costs at every step. Clancy and her buyers have trimmed back the number of brands, styles and color schemes. That allows Wal-Mart to consolidate its purchases of fabric, accessories and thread and to wrangle steep discounts from suppliers. Clancy's buyers used to rely on a Hong Kong company and other intermediaries to find bargains overseas. This year, Wal-Mart established its own global procurement division to hunt for the cheapest raw materials, manufacturers and shipping routes. Last year, for instance, the company rerouted cargo from a port in Hong Kong to the southern Chinese province of Guangdong, where shipping rates were lower. The savings: $650,000. In purchasing fabrics such as denim and khaki, Wal-Mart plans to approach three to five mills around the world and pit them against each other. "We'll be putting our global muscle on them," said Ken Eaton, head of the global procurement division, which has 21 offices in 18 countries. Eaton believes he can reduce costs at least 20% by cutting out the middleman and buying directly from foreign factories. He feels a sense of urgency about his mission, in part because he believes the company's "Buy American" CUTTING OUTTHE MIDDLEMAN: Ken focus left it playing catch up. Eaton, head of Wal-Mart's new global procurement division, believes he can cut supplier costs at least 20%. (Photo: David Frank Dempsey for The Times) "Honestly, we're kind of late to the party," he said. "There are a lot of companies out there that have been direct-importing and understanding the global aspect of sourcing for a long, long time." As late as 1995, Wal-Mart said imports accounted for no more than 6% of its products. Today, consulting firm Retail Forward estimates that 50% to 60% of the merchandise in the company's U.S. stores is imported. http :/ /www.pulitzer.org/year/2OO4/national-reporting/works/walmart3.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTiNG, Works Page 6 of 10 Wal-Mart Chief Executive H. Lee Scott Jr. said in an interview that the trend reflected an inescapable reality: U.S. consumers aren't willing to pay even a little extra for a "Made in America" label. "The customer ultimately drives that," he said. Big in Bangladesh Wal-Mart is the most powerful corporate citizen in Bangladesh, even though it doesn't operate a single store in the country. When the company complained to Bangladesh's Export Promotion Bureau this spring about delays in moving cargo, the response was swift. Officials in the southern port of Chittagong are speeding up efforts to reduce paperwork and modernize facilities. Over the objections of labor leaders, port officials also are building a five-berth container terminal that will be privately managed. Already, giant cranes have helped shorten a ship's turnaround time from six days to fewer than four. It's no wonder Wal-Mart wields such clout in this country, where nearly half the population lives in poverty. The company bought 14% of the $1.9 billion in apparel that Bangladesh shipped to the U.S. last year. "Wal-Mart is our biggest customer and it's important to me," said Commerce Minister Amir Khasru Mahmud Chowdhury. But, he added, Wal-Mart's prices "are coming down all the time -- that's the biggest threat to us." Bangladeshi factory owners say Wal-Mart and other retailers have asked them to cut their prices by as much as 50% in recent years. One apparel manufacturer described a visit from a Wal-Mart buyer who showed him a EurOpean-made garment that retailed for $100 to $130. The buyer asked the Bangladeshi to produce a knockoff for $10 a dozen. He declined. "They say to come down in price, but we have to make a profit," complained another clothing maker. Hoping to land a Wal-Mart order for 600,000 http://www.pulitzer.org/year/2OO4/national-reporting/works/walmart3.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 7 of 10 fleece jackets this year, he bargained down his suppliers of fabric, thread and fastenings, and managed to cut his price by 20%. It wasn't good enough for Wal- Mart. "They said they will place BUYER AND VENDOR: Supplier Stan Adler the order in Vietnam or China," pre~,ta new fashionsto a Wal-Mart buyer. he recalled. The retailer is always looking for cheaper supply sources. (photo: Brian Vander Brug/Los Angeles Times) Syed Naved Husain had hoped to avoid this sort of nickel-and-diming by going upscale. As head of the apparel division for Beximco, Bangladesh's largest private company, Husain spent $300 million in 1995 to build a computerized textile and apparel manufacturing center in a rice paddy outside Dhaka. He hired hot designers from Asia and Europe. Within a few years, he was manufacturing clothes for European retailers Diesel and Zara, and his lushly landscaped "manufacturing oasis" had become an industry showpiece. But the market has started to change. Wal-Mart is selling more-fashionable clothes, and Husain's high-end customers are nervous. They are pushing him like never before to cut costs. "Unfortunately," Husain said of Wal-Mart, "they've created a model that has taken the world by storm." U.S. retailers began making their way to Bangladesh in the 1980s. They found a large population of poor, young women willing to work from dawn to dusk for a few pennies an hour. Many factories lacked ventilation and fire escapes. Labor activists estimated in the mid-1990s that as many as 50,000 Bangladeshi children were sewing apparel for companies such as Wal-Mart and Kmart Corp. The resulting outcry prompted a government crackdown on the use of child labor and led companies such as Wal-Mart to require suppliers to adhere to labor laws and safety standards. Sheikh Nazma, a former child laborer, has seen the way Wal-Mart can help clean things up. http ://www.pulitzer.org/year/2OO4/national-reporting/works/walmart3.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 8 of 10 She worked at a Dhaka garment factory that had no clean drinking water and only a few filthy toilets for hundreds of employees. After the owner refused to pay their wages for three months, the employees complained to Wal-Mart, the factory's main customer. "Wal-Mart interfered, and ... the owner paid our salaries and overtime and even paid bonuses to each worker," recalled Nazma, who later helped launch the Bangladesh Independent Garment Workers Union Federation. But Nazma and others say Wal-Mart undermines its good efforts with its incessant push for lower prices. To fill orders on short schedules, factories often force their employees to work overtime or stay on the job for weeks without a day off, according to Sayeeda Roxana Khan, a former factory manager in Dhaka. To conceal such practices, auditors say, some factories keep two sets of books. "It's the workers who suffer when entrepreneurs have to survive by cutting corners," said Khan, who now works for Verite, a firm that conducts factory audits for Tommy Hilfiger, Levi Strauss and other U.S. companies. Khadija Akhter can attest to that. For about $21 a month, nearly three times what a maid or cook would make, the 22- year-old worked in a Dhaka factory, performing final checks on men's shirts and trousers. Employees, she said, often worked from 8 a.m. to 3 a.m. for 10 to 15 days at a stretch to fill big orders from Wal-Mart. Exhausted, she quit after a year and took a lower-paying but less grueling job. All the speeding up by Bangladeshi factories may not be enough to satisfy Wal-Mart. A. Hasnat, Wal-Mart's general manager in Bangladesh, said the country's factories need to become more efficient still. From his vantage, many are poorly managed, have outdated equipment and run too slowly. "1 think they need to improve," he said. "When I entered a factory in China, it seemed they are very fast." 3,000 Factories in China http ://www.pulitzer.org/year/2004/national-reporting/works/walmart3.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 9 of 10 Eyes down, hunched forward, 20-year-old Ping Qiuxia steered a pair of green women's briefs through a sewing machine. Then her fingers whipped the briefs 180 degrees and moved them back toward her, this time with elastic bands stitched neatly around the edges. Within seconds, she was at work on the next pair. The garment was part of a 6,000-piece order scheduled for shipment to Wal-Mart stores in Germany. For nine hours a day, sometimes six days a week, Ping and other employees of the Gladpeer Garment Factory in the southern Chinese city of Dongguan churn out undergarments, sleepwear and children's clothing. In southern China, Wal-Mart has found all the ingredients it needs to keep its "every day Iow prices" among the lowest in the world. Although labor costs more here than it does in Bangladesh, China offers other advantages: Iow-cost raw materials; modern factories, highways and ports; and helpful government officials. Wal-Mart has been instrumental in making this corner of China the world's fastest-growing manufacturing zone. Last year, the company shipped $12 billion in products out of China, 20% more than in 2001. The marriage between the world's largest and most efficient retailer and China's Iow-cost factories is setting a new global "cost standard" for manufactured products, according to consulting firm Deloitte Touche Tohmatsu. The phenomenon is rattling competitors worldwide and worrying international labor activists. They cite the Chinese government's hostility toward organized labor and its lack of worker protections. "Wal-Mart has really been at the forefront in driving down wages and working conditions," said Kent Wong, director of the UCLA Labor Center, who has made two trips to China in the last year. "They're not only exporting the Wal-Mart name and the corporation and the identity. They're also exporting that way of doing business." Wal-Mart has more than 3,000 supplier factories in China, and the number is expected to rise. But that doesn't mean workers in China are secure. http ://www.pulitzer.org/year/2OO4/national-reporting/works/walmart3.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 10 of 10 Gladpeer used to make clothes in Hong Kong. It moved production to China in the 1980s because costs were much lower, said Simon Lee, a managing director of the family- owned firm. Gladpeer's 1,200 workers -- mostly young women -- are paid about $55 a month and live in clean but cramped dormitories, eight to a room. But Lee is likely to reduce his employment in Dongguan soon. He is planning to open a new factory in Guangxi province, a remote region of western China where labor, electricity, housing and taxes are cheaper. "Competition is intense, and our biggest single issue is cost," Lee said. "Many customers look at cost first, then they look at the workmanship. That's why we're going to Guangxi." Cleeland reported from Honduras, Iritani from Bangladesh and Marshall from China. Times staff writer Abigail Goldman and Hong Kong bureau researcher Tammy Wong contributed to this report. (Copyr http://www.pulitzer.org/year/2OO4/national-reporting/works/walmart3.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 1 of 2 THE PU LITZER BOARD PRESEZNT$ The Pulitzer Prize 2004 NATIONAL REPORTING previous I index [ next Seams Start to Unravel By Nancy Cleeland Times Staff Writer November 24, 2003 Sewing contractor Rob Reed shut down his Commerce factory this summer after 17 years, laying off 100 workers and adding his name to a long list of bankrupt U.S. manufacturers. He isn't shy about assigning blame for what happened. "We've been forced out of business, No. 1, because of the likes of Wal-Mart," Reed said. Wal-Mart was once a solid account for his company, Stitches. But every season, Reed said, the retailer SHUT DOWN: Rob Reed closed his factory demanded a lower price, after demands for lower prices squeezed his profit. (photo: Carlos Chavez/LosAngeles shrinking his profit to the point Times) that an unexpected expense could push him into the red. In January, he lost money on a Wal-Mart order. A few months later, he was asked to make 10,000 intricately worked cardigans for the retailer within a week. The sample http ://www.pulitzer.org/year/2OO4/national-reporting/works/walmart4.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 2 of 2 already bore a Wal-Mart price tag: $8.47. "You can't make it here at that price," Reed said at the time. "Not legally, anyway." Although desperate for work, he turned the order down. Reed, 61, now works as a consultant and dreams of opening another contract shop that can focus more on quality and still succeed. He isn't terribly hopeful, however. "The thing is," Reed said, "with so many contractors on the verge of extinction, there's always someone willing to do it cheaper." (Copyright (¢) 2003, Los Angeles Times) previous I index I next [Home] [History] [Resources] [Archive] [2004] [Entry E~r.m.s] [~_~Q] g/Vh~t~.....b!.~v] http ://www.pulitzer.org/year/2OO4/national-reporting/works/walmart4.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 1 of 2 THE PULITZER BOARD PRESFE~TS The Pulitzer Prize 2004 NATIONAl_ RfiPORIING E -- previous I index I next Audit Stance Generates Controversy By Evelyn Iritani and Nancy Cleeland Times staff writers November 24, 2003 Safe working conditions. Reasonable hours. No child labor. These are among the rules that Wal-Mart Stores Inc. and other retailers imposed on their foreign contractors after a series of scandals in the 1990s. Yet just how well Wal-Mart's contractors abide by its standards is something of a mystery -- and a source of controversy. Unlike other retailers, Wal-Mart refuses to open its suppliers' factories to independent inspections. That prompted Domini Investments, which runs a "socially responsible" mutual fund, to dump its 1.3 million Wal-Mart shares in 2001. "At the very least you want some transparency," said Domini's Kyle Johnson. Wal-Mart insists that it rigorously enforces its code of conduct, sending inspectors on unannounced visits to about 300 plants a week. The company says it won't open the factories to independent audits for competitive reasons. Few expect the giant to budge. "They want to set their own agenda and do it the Wal-Mart way," said Vidette Bullock http ://www.pulitzer.org/year/2OO4/national-reportin~/works/walmart5.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 2 of 2 Mixon, director of corporate relations and social concerns for the $11-billion United Methodist Church Pension Fund. (Copyright (c) 2003, Los Angeles Times) I~r~¥i~U_s I in~dex I ~t [!-to_m_.e_] [M.i¢_tory] [~__e._s_o._u_rces] [&r_.c....bive] [2_0q4] [~_n_try Eerms] [E~Q] ~.~ew] http ://www.pulitzer.org/year/2OO4/national-reportin~works/walmart5.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 1 of 8 THE PULITZER BOARD PRIiSIgNTS The Pulitzer Prize 2004 NATIONAL REPORTING Article, i ime, previous I index I next Third of three parts Grocery Unions Battle to Stop Invasion of the Giant Stores Wal-Mart plans to open 40 of its nonunion Supercenters in California. Labor is fighting the expected onslaught, but the big retailer rarely concedes defeat. By Nancy Cleeland and Abigail Goldman Times Staff Writers November 25, 2003 Inglewood seemed to offer the perfect home for a new Wal- Mart Supercenter, with Iow-income residents hungry for bargains and a mayor craving the sales-tax revenue that flows from big-box stores. .~. But nearly two years after deciding to build on a 60-acre lot near the Hollywood Park racetrack, Wal-Mart is nowhere near pouring concrete. Instead, the world's biggest company is at war with a determined opposition, led by organized NEW TARGET: Workers move their picket labor. line last month from a Vons store in Oxnard to an adjacent Wal-Mart. Grocers say they needcost cuts to compete with the big "A line has been drawn in the http://www.pulitzer.org/year/2004/national-reporting/works/walmart6.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 2 of 8 retailer. (photo: Bob Carey/Los Angeles sand," said Donald H. Eiesland, Times) president of Inglewood Park Cemetery and the head of Partners for Progress, a local pro-business group. "It's the union against Wal-Mart. This has nothing to do with Inglewood." Indeed, similar battles are breaking out across California, and both sides are digging in hard. Wal-Mart Stores Inc. wants to move into the grocery business throughout the state by opening 40 Supercenters, each a 200,000-square- foot behemoth that combines a fully stocked food market with a discount mega-store -- entirely staffed by non-union employees. The United Food and Commercial Workers and the Teamsters are trying to thwart that effort, hoping to save relatively high-paying union jobs. The unions have amassed a seven-figure war chest and are calling in political chits to fight Wal-Mart. The giant retailer is aggressively countering every move, and some analysts believe that WaI-Mart's share of grocery sales in the state could eventually reach 20%. The state's first Supercenter is set to open in March in La Quinta, near Palm Springs. "If we have an advantage," said Robed S. McAdam, Wal- Mart's vice president for state and local government relations, "it's that we are offering what people want." In fact, Wal-Mart has won allies by providing people of modest means a chance to stretch their dollars. "We need to have retail outlets that are convenient and offer quality goods and services at Iow prices," said John Mack, president of the Los Angeles Urban League. "1 really think that there are potential economic benefits for this community with the addition of a Wal-Mart." Yet the Supercenters also threaten the 250,000 members of the UFCW and Teamsters who work in the supermarket business in California. For decades, the unions have been a major force in the state grocery industry and have negotiated generous labor contracts. Wal-Mart pays its grocery workers an estimated $10 less per hour in wages and benefits than do the big supermarkets nationwide -- $19 versus $9. As California grocery chains brace for the competition, their workers face severe cutbacks in compensation. http://www.pulitzer.org/year/2OO4/national-reporting/works/walmart6.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 3 of 8 "We're going to end up just like the Wal-Mart workers," said Rick Middleton, a Teamsters official in Carson who eagerly hands out copies of a paperback called "How Wal-Mart Is Destroying America." "If we don't as labor officials address this issue now, the future for our membership is dismal, very dismal." The push for concessions has already started, prompting the longest supermarket strike in Southern California's history. About 70,000 grocery workers employed by Albertsons Inc., Kroger Co.'s Ralphs and Safeway Inc.'s Vons and Pavilions have been walking the picket lines since Oct. 11, largely to protest proposed reductions in health benefits. The supermarkets say they need these cuts to hold their own against Wal-Mart, already the nation's largest grocer. Rick Icaza, president of one of seven UFCW locals in Southern California, has taken issue with much of the supermarkets' rhetoric since the labor dispute began. But he doesn't doubt that Wal-Mart is the biggest threat ever posed to the grocery chains -- and, in turn, his own members. "The No. 1 enemy has still got to be Wal-Mart," he said. The unions and their community allies have stopped Wal- Mart in some places and slowed it down in others. They have persuaded officials in at least a dozen cities and counties to adopt zoning laws to keep out Supercenters and stores like them. Homeowner groups, backed by union money, sued to stop construction of two Supercenters in Bakersfield, arguing that the stores would drive local merchants out of business. Contra Costa County and Oakland also have passed measures that could block Supercenters. In Los Angeles, several City Council members are drafting an ordinance to require an examination of how large-scale projects such as Supercenters would affect the community, including the possible loss of union jobs. As envisioned by supporters, the measure would allow the city to insist on higher wages as a condition of project approval. "We want Wal-Mart to be able to help us with our economic development," said Councilman Eric Garcetti, who is co- sponsoring the measure. "We just want to be able to do it on our terms and not theirs." Wal-Mart, however, can more than match its foes in http ://www.pulitzer.org/year/2OO4/national-reporting/works/walmart6.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 4 of 8 resources and resolve. To soften its outsider image, the retailer has hired local political insiders to coax projects through planning bureaucracies. It has promised jobs and sales-tax bonanzas to cities struggling with deficits and unemployment. When the answer is "no," Wal-Mart rarely concedes defeat. At least nine times during its latest California push, the company has responded to legal barriers by threatening to sue or to take its case straight to local voters by forcing referendums. That's what happened in Inglewood after the City Council in October 2002 adopted an emergency ordinance barring construction of retail stores that exceed 155,000 square feet and sell more than 20,000 nontaxable items such as food and pharmacy products. The measure was tailored to block a Supercenter. icaza declared victory. "WaI-Mart's plans to enter the retail grocery business in Inglewood are dead!" he crowed in a union newsletter. But they weren't. Within a month, Wal-Mart gathered 9,250 signatures on petitions, more than enough to force a public vote. The company also threatened to sue the city for alleged procedural violations. Looking at a possible court battle or an embarrassing failure at the polls, Inglewood officials withdrew the ordinance they had passed a month earlier. Furious with the council, Icaza ran his own candidate in city elections in June. Ralph Franklin, a former supermarket clerk and manager and now a UFCW business agent, won with 70% of the vote, ousting a council member who had gone against the union. Worried that the council might try to trip it up again, Wal-Mart went on the offensive. In late August, the company, through a group called the Citizens Committee to Welcome Wal-Mart to Inglewood, began gathering a new batch of signatures to force a popular vote on the Supercenter. The initiative, which calls for building permits to be issued without a public hearing or environmental impact study, is expected to be on the March 2004 ballot. "When people feel they're not getting a fair shake with the legislative process, they take things to a vote" of the http://www.pulitzer.org/year/2OO4/national-reporting/works/walmart6.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 5 of 8 electorate, said McAdam, the Wal-Mart vice president. WaI-Mart's opponents have vowed to sue to block the initiative on the grounds that it oversteps the limits of the ballot process. UFCW and Teamsters locals have raised dues or diverted funds from other programs to bankroll anti-Wal-Mart campaigns. With more than $1 million now available, thousands of members to draw from and encouragement from national leaders, local labor would seem to be in a strong position. But union efforts have been hampered by personality conflicts and disagreements over strategies and goals, according to people close to the situation. As in Inglewood, many union locals have focused on so- called site fights, winning zoning restrictions at the local level. That strategy can temporarily save union jobs and give leaders victories to celebrate, but it does little to stop the long-term march of Wal-Mart, critics say. After all, there are 478 cities in California, 88 in Los Angeles County alone. Pushing for zoning restrictions also can backfire, stirring resentment among consumers and business owners -- even those who directly compete with Wal-Mart. Wal-Mart opponents "try to use the government to accomplish things that they may not be able to accomplish in the marketplace," said Alan Zaremberg, president of the California Chamber of Commerce. "It's not government's role to interfere with what consumers want." For their part, national labor strategists want local leaders to focus less on zoning campaigns and more on the daunting, long-term goal of unionizing Wal-Mart employees. Few take the advice, and those who do quickly realize just what they are up against. George Hartwell, president of UFCW Local 1036 in Camarillo, hired 18 organizers to hit the nine Wal-Mart stores in his jurisdiction. With few leads to go on and employees in stores forbidden to talk about unions, progress was slow. Then in mid-summer, a group wearing union T-shirts was served with trespassing papers and asked to leave a Wal- Mart in Lompoc. Lawyers tussled over that for months. Now Hartwell and his crew can enter the stores, but with strict limitations. "We go through and say, 'good morning' or 'good http ://www.pulitzer.org/year/2OO4/national-reporting/works/walmart6.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 6 of 8 afternoon,' just to be visible," he said. Despite the long odds in taking on the company, many union activists insist they have no choice. "I've put 29 years of my life into this job, and now they're trying to pull the rug out from under me," said Diane Johnson, a union cashier at a Pavilions store in Los Angeles who is helping to coordinate anti-Wal-Mart efforts in Inglewood through the Los Angeles Alliance for a New Economy. Johnson and co-workers have made door-to-door visits and spoken from church pulpits, hoping to turn public opinion against the discounter. "For me to go backwards would just be hell," she said. But Wal-Mart, the nation's largest seller of everything from toys to DVDs, has plenty of defenders too, some of them politically and financially powerful. They range from prominent Los Angeles toy importer Charlie Woo, who recently took up Wal-Mart's case before Los Angeles City Council members, to Jeffrey Katzenberg, a co-founder of Hollywood studio DreamWorks SKG. He lobbied former Gov. Davis against signing a statewide anti-big-box measure passed by the Legislature five years ago; Davis vetoed the bill. McAdam said Wal-Mart doesn't order its suppliers to lobby on the company's behalf. But it does spell out for vendors the consequences of anti-Wal-Mart legislation. "It's our belief that on certain issues, they have a vested interest in seeing ... that our company can continue to grow," McAdam said. Wal-Mart also helps smooth entry into new markets by cultivating relationships with civic groups. As it prepared last year to buy and renovate a former Macy's in the south Los Angeles community of Baldwin Hills, corporate officials met with leaders of the Los Angeles Urban League and arranged to hire some employees through the organization. Allies in organized labor tried to dissuade the Urban League's Mack from cooperating. Normally pro-union, Mack turned them down, saying the community badly needed jobs and Iow-cost shopping options. http ://www.pulitzer.org/year/2004/national-reporting/works/walmart6.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 7 of 8 "I'd rather have a person on somebody's payroll -- even if it isn't at the highest wage -- than on the unemployment roll," Mack said. "We're not going to punish job seekers by refusing to refer them to Wal-Mart for a job." By the time the Baldwin Hills-Crenshaw Plaza Wal-Mart opened in January, Wal-Mart had doled out thousands of dollars, mostly in $1,000 grants, to local institutions such as schools and youth programs. The company cut the Urban League a $3,000 check. It also provided $10,000 for new lights at the Martin Luther King Jr. Little League Baseball field. The ordinance being considered in Los Angeles would ask planners to weigh the "community benefits" of a mega-store in any zone that receives federal, state or municipal funding or incentives -- essentially the entire city. Like an environmental impact report, the community-benefits study would consider possible negative outcomes and propose ways to mitigate them. Wages could be held to "prevailing standards." If supermarkets were deemed the standard, that would mean union scale. Backed by Garcetti and Councilman Ed Reyes, the ordinance could be ready for a council vote next month. Several studies commissioned in recent years by independent groups, including the Orange County Business Council and the San Diego Taxpayers Assn., found the state would suffer a net economic loss if union jobs were traded for jobs at Wal-Mart. Wal-Mart had declined to respond with numbers of its own until a few months ago, when it commissioned the Los Angeles County Economic Development Corp. to measure the effect of Supercenters on the region. Researcher Gregory Freeman said the study balanced wage losses with consumer savings, noting that Supercenter prices are typically 20% lower than at union markets. The study was completed two weeks ago, Freeman said, but hasn't yet been released. As he began his study in mid-summer, Freeman told council members that other analyses haven't fairly measured all the pros and cons of the Supercenters. For one thing, he said, savings from lower grocery prices could be used by working- http ://www.pulitzer.org/year/2004/national-reporting/works/walmart6.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 8 of 8 class shoppers for other things, such as buying homes. As for those merchants who won't be able to compete with Wal-Mart, others say, progress always carries a price. "1 grew up in Pennsylvania; my father had a corner market there. When I was 3 or 4, the A&P moved in and put him out of business," recalled the Chamber's Zaremberg. "That was tough for us, but I don't think anyone would go back and say we shouldn't have supermarkets." (Copyright (c) 2003, Los Angeles Times) previous I index I next [Home] [History] [Resources] [Archive] [2004] [Entry Forms] [FAQ] [Whats New] http://www.pulitzer.org/year/2OO4/national-reporting/works/walmart6.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 1 of 4 THE PULITZER BOARD PRES~TS The Pulitzer Prize 2004 NATIONAL REPORTING previous I index Selling Eel and Chicken Feet -- Plus M&Ms and Sony TVs Wal-Mart is growing fast in China, where its stores are local attractions. The firm's overseas empire is changing buying habits in 10 nations. By Tyler Marshall Times staff writer November 25, 2003 SHENZHEN, China -- Lau Man-ching has a new habit: Three times a week, she shops at Wal-Mart. Like a growing number of middle-class Chinese consumers, the 30-year-old real estate agent is drawn by the dazzling array of goods offered under one roof. Lau buys most of her produce at a Wal-Mart Supercenter near the Hong Kong border, occasionally venturing upstairs to browse through the aisles of clothing, appliances and sporting goods. The fact that sales and checkout clerks smile and try to help is a bonus. For China's long- suffering consumers, weaned on long lines and patient waits for shoddy merchandise, the change is almost revolutionary. http ://www.pulitzer.org/year/2OO4/national-reporting/works/walmart 7.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 2 of 4 OPENING DAY: Workers prepare forthe "It's fast, it's convenient and it's opening of Wal-Mart's first Beijing outlet, a Sam's Club. The retailer plans to expand into clean," Lau said. "And it's all Shanghai in 2005. (photo: Associated Press) right here." After more than eight years of treading cautiously, Wal-Mart is pulling out the stops in China, one of the latest additions to a fast-growing overseas retail empire that includes more than 1,300 stores in 10 countries. After stumbling badly in Germany, where it met fierce resistance from competitors and labor unions, Wal-Mart started doing its homework. In Britain, it purchased the ASDA department store chain, acquiring not only one of that country's largest retailers but also picking up the popular George fashion line that it is importing into the United States. Wal-Mart entered Japan's notoriously closed market by purchasing a 34% share of Seiyu, a troubled department store chain. Along the way, Wal-Mart has not only introduced discount shopping but transformed buying habits. In Mexico, where Wal-Mart opened its first foreign outlet in 1991, the company's Walmex division accounts for more than half of all supermarket sales. Consumers used to getting their meat from neighborhood camicerias are buying beef wrapped in plastic. They've also developed a taste for bagels. In China, the spectacle of shoppers crowding to buy Max Factor beauty products, Johnson & Johnson lotion and Sony TV sets is a powerful sign of how consumer tastes are changing in the world's most populous country. Exotic foreign goods that would have been hard to come by a decade ago -- from potato chips to feminine hygiene products -- are brisk sellers today. Many customers here treat Wal-Mart in much the same way an American might venture into Harrods in London. Families dress up and go there for the day. Young people visit on dates. The store is a must-see for out-of-town visitors. One Shenzhen shopper said she'd brought her four grandchildren to Wal-Mart just to look around. "1 don't have any plans to buy anything today," she said. Still, business is robust. A Sam's Club membership store owned by Wal-Mart in Shenzhen set a single-day sales record for the company two years ago, taking in $1.7 million during the Chinese new year holidays. http ://www.pulitzer.org/year/2OO4/national-reporting/works/walmart 7.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 3 of 4 Because of such volume, Wal-Mart is about to embark on an ambitious expansion in China, including its first outlets in the consumer strongholds of Beijing and Shanghai. The company, which employs 15,000 people in China, will have more than 30 stores open in the nation by year's end, up from 25 last year. To American eyes, the selection offered at a Wal-Mart in Shenzhen is remarkably similar to that found in a U.S. store, but with an overlay of products catering to Chinese tastes. In the food section, white bread, U.S.-style birthday cakes, sliced pizza and breaded fried chicken are lined up next to eel, chicken feet, pork meat balls and frozen dim sum. The store's pharmacy is divided in two: one area filled with Western brand-name medications such as Tylenol, the other with Chinese herbs and a stack of dried sea horses. (The Chinese boil them in soup for added energy.) Wal-Mart executives claim chewing-gum sales per store are higher in China than in the U.S. "People say the Chinese don't like sweets," said Joe Hatfield, the president of Wal- Mart's Asian retail operation. "But we sure sell a lot of M&Ms." It's not just Western goods that are new. Wal-Mart is mass- marketing Chinese products that were previously available only in isolated parts of the country. Suddenly, peanuts and coconut juice from Guangdong province in the south are available to Wal-Mart customers in western Yunnan province. Hams and mushrooms from rural Yunnan, along with oats from coastal Fujian province in the east, are on shelves in Shenzhen in the south. WaI-Mart's start in China was rocky. It first failed to break into a highly competitive market in Hong Kong in the mid- 1990s. Then, just a few months before opening its first two stores in mainland China in 1996, the company split with its Asia joint-venture partner, Thailand-based Charoen Pokphand Group. Wal-Mart also proved less nimble than some of its competitors, including French retailer Carrefour Group, and got caught up in China's vast central bureaucracy. But before long, Wal-Mart found its way out of the thicket. It has won government approval to open three outlets in Beijing. One of those -- a Sam's Club warehouse store -- http ://www.pulitzer.org/year/2OO4/national_reporting/works/walmart 7.html 2/24/2005 2004 Pulitzer Prizes-NATIONAL REPORTING, Works Page 4 of 4 opened in July, with two others scheduled to open next year. Planning is also underway to expand into Shanghai, with a target date of 2005 for opening the first store, according to company officials. Hat-field, who has lived in China for nine years, sees only more growth in the future. "What this place is going to look like 10 to 20 years from now -- and what the consumer will be ready to buy -- is hard to even think about," Hatfield said. "There are 800 million farmers out there who've probably never even tasted a Coke." Times Hong Kong bureau researcher Tammy Wong and staff writers Evelyn Iritani and Abigail Goldman contributed to this report. (Copyright (c) 2003, Los Angeles Times) [HomE] [Hi~tory] [BesQu.[~¢s] [,~rchj~] [2~(~] [ES.t~ Forms] [FAQ] [Wh~t~ New] http ://www.pulitzer.org/year/2OO4/national-reporting/works/walmart 7.html 2/24/2005 Marian Karr From: Eiteen Bartos [eileen-bartos@uiowa.edu] Sent: Tuesday, March 01,2005 2:51 PM To: cou ncil@iowa-city, org Subject: Tonight's council meeting Dear Council members: I urge yeu te vote against the proposed purchase agreement that would allew Wal-Mart te build a supercenter on the west side ef tewn. Wal-Mart's practices and so-called 'values' have already done enough damage to Iowa City's dewntown. In addition, eur city needs to defend the pregressive values and quality of life that Iowa City is known for. Please take a stand against Wal-Hart--a cerperatien that hurts small businesses, damages the environment, and lewers wages and working cenditiens all ever the werld. Thank yeu, Eileen Bartos 28 West Park Read Iewa City, IA 52246 1010 Highwood St. Iowa City, IA. 52246-: Tel. 337-4648 I/}I { 't /q M~ch 1, 2005 .~ To: Members of Iowa City Co~cil Iowa City. Iowa From: Le~ W. K~gas, Iowa CiW Resident, T~payer ~d V°t~c~{~ // - v/]~e~ Before the City Council votes to approve the offer ~om Wal-Mm to "super center" along Ruppea Road, let's exmine some of the major consequences such ~ approval would overlook: -What would be the impact of Wal-Mart's typical price cutting on our established existing groceries, i.e. HyVee, Cub Foods, the Pioneer Coop, Fareway and John's Market all of whom are solid corporate citizens, tax payers and good employers? -Wal-Mart's low prices are directly tied to Wal-Mart's low wages and experience shows they tend to depress industry-wide wages in the area over time. Do we really want to endorse this "spiral to the bottom?" -The PBS news program, "Now with Bill Moyers" recently reported that Wal-Mart's personnel offices actively encourage employees to apply for public assistance including health care and food stamps. Economists at the University of California Berkeley's Institute for Labor and Employment estimate that in 2002, California taxpayers subsidized $20.5 million worth of medical care for Wal-Mart employees. Does Iowa City want to follow suit? (Are the staffs at UI Hospitals and Clinics and the Emergency Room at Mercy Hospital prepared to provide unpaid services to the employees and dependents of the world's largest and richest employer? These are employees whose low wages prevent them from subscribing to Wal-Mart's own company health insurance.) -Accustomed to opposition from labor unions (whose formation Wal- Mart steadfastly opposes) and environmentalists, Wal-Mart was caught off guard when the National Organ/zation of Women in 2002 designated the corporation a "Merchant of Shame"--- a label bestowed upon businesses that have the worst labor practices. -There already are two Wal-Marts in the immediate area now Coralville has a "super center" which is not only on the same planet but in the same county 3 miles away from Iowa City and a standard big box store off Highway 6. One could even argue there is no obstacle today to avail oneself of Wal-Mart's low prices and the 60 % of its merchandise made by its partners in China by underpaid and often exploited workers. We realize that the City Council is saddled with a "white elephant" (or at least a "dosmant elephant") piece of real estate next to the airport and hasn't managed to sell even one lot in the past two years. Nevertheless, the prospect of a $3.1 million purchase price and subsequent tax income very likely is illusory as the depressing effects of a behemoth retailer imposing ever lower wage rates, drawing customers from downtown, draining subsidized services for its employees and their dependents fi'om the city treasury ripples through our downtown economy and community. Lastly, let us please reflect on what kind of city center, downtown and image we want to project for Iowa City. Do we want wall-to-wall bars and saloons and no no, mai retail, or do we want to abandon our city center to corporate giants who play the famous Parker Brothers' game, "Monopoly" for keeps? And as a previous commentator remarked, "big boxes are ugly." Wake up Iowa City; as a well-known First Lady once said, "Just say no!" (These and a multitude of other legal actions against Wal-Mart are fully documented in Congressman George Miller's (Dem. Calif.) 25 page report of February 16, 2004 "Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart." Another source: "The Rockridge Institute." (www.rockridgeinstitute.org/projects/moral/walmart/2.22.04. If you internet, Google will help you find it. I assume City Councilors will ~ download and read. It's their job.) ,- Leuni Kangas and his family are new residents (October, 2004) in I6W/i' City. He is a former Senior Foreign Service Officer with a background in economics and public health. He can be reached at (319) 337-4648, or at lenni55~mchsi.org SEARCH GO Site Quick Find: Home >> Eye on Corporate America >> WaI-Hart Wal-Mart's Cost to Taxpayers Wal-Mart Workers Speak Ogt Wd44 art ~hutw it~ ! ~rlltlll~ WaI-Mart's Iow prices don't come cheap. In fact, each ]onquiaee, quebec, I~111 ~e&li Wal-Mart store employing 200 people costs taxpayers wo~kees eho~e ee k Liberty 5erna~s approximately $420,750 annually in public social paycheck never ~ } Sign a peUUon ar reflected ~ services used by Wal-Mart workers whose Iow wages Wal-Nar~accoun and unaffordable health insurance mean most of them ~ Read a letter sig~ overt!me pay. ~LW are among the working poor. That's the finding of No~ ~merican ~ :: ..... Everyday Low Wages: ?he Hidden Price We Ail Pa)/for peot~stJng WaI-N : ! lal~ ~__1't Wal-Mart, a report by the minority staff of the U.S. action. Forced to return to q~ i work one day after ~ ! House of Representatives Education and the Workforce severing part of hts_m.~l~l~l~ Committee. hand on the job.i~r~l~~ Zf there's a Wal-Mart in your area, chances are your taxes are paying: $36,000 $42,000 $121,000 $100,000 $9,7S0 for free and for Section 8 for federal tax for Title 1 for energy reduced ~hoo[ federal housing credits and educational assistance lunches for the assistance, deductions for funds based on subsidies for children of 50 tow-income 50 qualifying Iow-income qualifying WaJ- families. Wal-Mart families, Mart families, families with an average of two children, §ased on average costs for all V,'aL.~art stores, each v~th an estimated 200 hourly workers. Get the Facts · Wal Platt keeps its workers in poverty and impoverishes er]tire communities. · See how your' tax dollars provide health care for WaI-Nar-t wot-kers. · Get the report Everyday Low Wages: 1-he Hidde~ Price We All Pay for WaI-Plart by the staff of Rep. Ge (Calif.), the House Education and the Workforce Committee's senior Democrat. http://www, aflcio.org/corporateamerica/walmartJwalmart_ l .cfm 2/25/2005 Ko¢~noge Institute - wal-Mart vs. contra costa county ~'age I Ot 3 Back to Wal-Mart vs. Contra Costa County http://www, rockfidgeinstitute.org/projects/moral/walmart/2.2e.o4 Rockridge Institute Wal-Mart vs. Contra Costa County by Ruth Rosen ASK SHOPPERS in Martinez why they shop at the Wal-Mart there and they'll tell you that the prices can't be beat, there's plenty of parking and its one-stop shopping allows them to buy everything from toothpaste to T- shirts. So why have hundreds of communities across the nation tried to prevent Wal-Mart from moving into their towns? And why, in particular, did the Contra Costa County Board of Supervisors pass an ordinance that would ban certain big- box stores larger than 9o,ooo square feet (the size of two football fields) from unincorporated parts of the county? Do all these people share some perverse pleasure in forcing consumers to pay higher prices for the food and the goods they buy? Of course not. The reason is that union members, environmental activists, members of the clergy and elected officials realize that every new Wal-Mart, which brings new jobs and low prices, also comes with hidden costs - to other retail workers, to small businesses, to smart growth, and most of all, to taxpayers who discover, much to their surprise, that they end up subsidizing the largest corporation in the world. The Los Angeles City Council, for example, released a 2003 study that described how Wal-Mart super-centers drive down wages in the local retail industry, create a strain on public services and damage small businesses. The report concluded that Wal-Mart should be banned unless the corporation increases wages and benefits for its employees. "Everyday Low Wages: The Hidden Price We All Pay For Wal-Mart" is a new report just released by Rep. George Miller of Martinez, senior Democrat on the House Committee on Education and the Workforce. Wal-Mart's violations of labor law, according to the report, "range from illegally firing workers who try to organize unions to unlawful surveillance, threats and intimidation of employees who dare to speak out." Wal-Mart is also infamous for manufacturing 60 percent of its products in China and other countries, often under grotesque labor conditions; forcing its workers to work off the dock, and http://www.rockfidgeinstitute.orgtproj ects/moral/walmarff2.22.04/?forPrint= 1 2/24/2005 Roclcnrlge Institute - Wal-Mart vs. Contra Costa county Page 2 or' 3 for undercutting unionized janitors by hiring illegal immigrants. None of this is news to many Californians. Seventy thousand grocery workers in Southern California have been on strike and locked out of supermarkets for more than four months. Their employers have concluded that they can no longer compete with Wal-Mart's low cost of business if they continue to offer decent wages and affordable health-care benefits. Critics of Wal-Mart describe this as a race to the bottom and the death of the American Dream. The average union grocery worker earns about $x7 per hour, which has allowed generations of workers to maintain a middle-class standard of living. Wal-Mart "associates," who work in the grocery departments of its super-centers, by contrast, earn about Sxo for the same work. One reason Wal-Mart is so profitable is that it uses us, the taxpayers, to subsidize its labor costs. Among the 44 million uninsured Americans, according to Miller's report, are the majority of Wal-Mart's workers, who simply cannot afford the premiums offered by their employer. The PBS news program, "Now With Bill Moyers,' recently reported that Wal- Mart's personnel offices actively encourage employees to apply for public assistance. In addition, economists at the Institute for Labor and Employment at UC Berkeley estimate that in 2oo2 California taxpayers subsidized $20.5 million worth of medical care for Wal-Mart workers. . In other words, we taxpayers pay for the federal programs that provide health care for ih~ children of Wal-Mart's workers. We also pick up the tab for the local public hospitals that ~ , provide health care for Wal-Mart employees. Wal-Mart, however, always insists that such accusations and studies are false and neve~ ~akes n~? for an answer. ~ ~:" After the Contra Costa supervisors passed the ordinance blocking big-box grocers last June, Wal-Mart parachuted in signature-gatherers to place the issue on the ballot. Determined to overturn a decision made by the county's elected officials, Wal-Mart is now arguing that the issue is really about 'consumer choice." But what it's actually about is Wal-Mart's efforts to boost its profits by opening 4o new super- centers in California. Those of you who live in Contra Costa County now face an important decision: Should you subsidize the world's largest retailer or should you support your county's right to protect the standard of living of ordinary working families? Vote "yes" on Measure L. Contact Us · Support Rockridge http://www.rockridgeinstitute.orgtproj ects/moral/walmart/2.22.04/?forPfint= 12/24/2005 Roc~cnoge Institute - wal-Mart vs. Uontra Uosta Uounty Page 3 or' 3 The Rockridge Institute is a project of the Tides Center, a tax exempt research and educational institntion organization operating under Section 5m(c)(3) of the IRS Code. Our mission is to advance public policies leading to a more just, democratic, environmentally sustainable, and humane society. We do not endorse or oppose any particular candidate or party. http://www.rockridgeinstitute.org/proj ects/moml/walmarff2.22.04/?forPrint= 1 2/24/2005 Wal-Mart Wars by Ruth Rosen WOULD YOU LIKE a Wal-Mart "supercenter" store to move into your communlt~..'" Think of the low prices and the convenience of one-stop shopping! You just park once and get whatever you need -- groceries, drugs, plants, toys, dog food, even eyeglasses. Sounds great, doesn't it? So why have nearly ~oo communities refused to allow such big-box stores to enter their lives? Do they know something we don't? To find out, I embedded myself in the Wal-Mart wars that have recently broken out in Contra Costa County. What I learned, in a nutshell, is that Wal- Mart's nonunion, big-box stores drag down other workers' salaries, destroy downtown businesses, prevent smart-growth development and increase traffic congestion. What really surprised me though is that we, the taxpayers, end up subsidizing Wal-Mart stores by paying for the health and retirement needs of its workers. Wal-Mart has announced its intention to open 40 new supercenter stores -- each the size of four football fields -- in such fast-growing California suburban areas as Contra Costa County. But Contra Costa County has fought back. A year ago, Martinez prevented a traditional Wal- Mart store from expanding into a supercenter that could sell groceries. On June 3, the county Board of Supervisors voted to ban such supercenter stores from unincorporated areas of the county. In making its decision, the board cited a study done by the San Diego County Taxpayers Association (SDCTA), a nonprofit, nonpartisan organization. It found that an influx of big-box stores into San Diego would result in an annual decline in wages and benefits between $~o5 million and $221 million, and an increase of $9 million in public health costs. SDCTA also estimated that the region would lose pensions and retirement benefits valued between $89 million and $~7o million per year and that even increased sales and property tax revenues would not cover the extra costs of necessary public services. "Good jobs, good pay, and good benefits should be the goal of an economy," SDCTA concluded, "and supercenters are not consistent with that objective." Wal-Mart, as is its custom, has launched a counterattack against Contra Costa's ordinance. The company parachuted in platoons of signature-gatherers who are stationed outside discount stores and asking shoppers to sign a petition that would place the board's decision on a ballot. If they collect 27, ooo legitimate signatures, Wal-Mart could reverse the board's ban. In response, a coalition of community groups have mobilized to defeat Wal- Mart's counterattack. But they face a formidable enemy. Over the last 4o years, Wal-Mart has grown http://www, rockfidgeinstitut¢.org/projects/mora1/walmart]6.26.04 2/25/2005 into the nation's biggest employer and the world's largest retailer. Every two days, Wal-Mart opens another superstore. It has more people in uniform than the U.S. Army. Last year, it banked about $7 billion in profits. The troops fighting Wal-Mart's invasion of Contra Costa County include the Gray Panthers, small businesses, dozens of churches, the National Organization for Women, and environmental and smart-growth activists. Young people, recruited by the Association of Community Organizations for Reform Now (ACORN), fan out daily to discount stores and try to convince shoppers not to sign Wal- Mart's petition. They even carry cards that allow voters to withdraw their signature if they have already signed the petition. The generals in charge of this community resistance are union leaders. John Dalrymple, director of the Contra Costa Central Labor Council, admits they face an uphill battle. The giant retailer is infamous for its take-no- prisoners, anti-union policies. Wal-Mart's ability to offer such low prices, as any union member will tell you, has been achieved by paying its workers -- or "sales associates" -- low wages, offering unaffordable health coverage and no retirement benefits and importing most of its products from developing countries, some of which use child and prison labor. The United Food and Commercial Workers (UFCW) Local 1179, located in Martinez, is headquarters for the war against Wal-Mart. Barbara Carpenter, the union's president, comes from a family whose members have worked for decades at retail companies that provided decent wages, affordable health benefits and pension plans. "It's about saving the American dream," she told me. Wal-Mart, she points out, lowers wages among working families and crushes family businesses. "It not only pays workers less than most of its retail competitors, two-thirds of workers don't have health-care coverage -- a cost taxpayers are picking up across the country." Did she say taxpayers? That's right. We, the customers, get such low prices and convenient shopping because we, the taxpayers, subsidize Wal-Mart profits by paying for county public health services, food stamps and social services for its retired employees. So should you shop at Wal-Mart? To make up your mind, consider this: If you earn a livable wage or are protected by a union, you can probably buy all your monthly needs at Wal-Mart. But that's because the average Wal-Mart employee, who earns about $15,ooo a year, cannot do the same. Convenience and cheap prices, it turns out, come with hidden costs. Contact Us · Support Rockridg~ http ://www.rockridgeinstitute.org/proj ects/moral/walmart/6.26.04 ~/25/2005 Rocknclge Institute - Merchant oI Sl~ame Page Merchant of Shame by Ruth Rosen WAL-MART -- the world's largest corporation -- doesn't take no for an answer. When it decided to build 40 new big-box stores in California, it acted as though it had a divine right to expand its empire into the state. ~' '-' ~ z When Contra Costa County supervisors tried to ban the behemoth, Wal-Mart placed a referendum on the ballot -- and won. When Oakland decided to ban such "supercenters!! stores the size of several football fields that also sell groceries -- Wal-Mart sued. If, as expected, the San Francisco Board of Supervisors approves a ban on such big-bo~ stores this week, you can be sure the corporation will fight back. R's unlikely, however, that Wal-Mart will employ the same tactics that resulted in its recent defeat in Inglewood. With breathtaking arrogance, Wal- Mart tried to exempt itself from all environmental, traffic and zoning laws in that low-income community. In response, residents stood up to the giant retailer, opposed the corporation's initiative, and on April 6 voted the plan down, 61 to 39 percent. But neither community opposition nor 6~549 active individual employee lawsuits worry the giant retailer. The real threats that have rattled corporate headquarters in Bentonville, Ark., are the class-action suits, especially a huge sex discrimination claim awaiting certification by a San Francisco federal judge. In eom, two California women, joined by four workers from other states, (Dukes vs. Wal-Mart Store, Inc.) charged that Wal-Mart had discriminated against its female employees in promotion, wages and job assignments. Between ~996 and 2om, women took home about 5 percent less than men doing similar jobs. Most women workers -- 72 percent of the sales force -- earned $6ao per hour and $~2,688 per year, which made half their families eligible for the federal food stamp program and government-funded health care for their children. In September 2003, lead attorney Brad Seligman asked a San Francisco federal judge to certify the suit as a class-action suit. Wal-Mart argues that any discrimination that has occurred is due to different job descriptions and rogue managers. Seligman, however, says that the corporation fosters a common culture. "All managers are trained together. This is not a case involving disparate autonomous stores." If the judge rules favorably, the suit will represent ~.6 million former and current women http://www.rockridgeinstitute.org/proj ects/moral/walmart~5.3.04 2/25/2005 KOC~a-~Oge Institute - Merchant oI :~laame Page 2 ot 3 workers -- making it the largest class-action suit in history against the biggest corporation in the world. "Individual employee lawsuits," says Seligman, "are like a fly biting an elephant. 0nly large class-action suits scare such a large corporation." Mona Williams, a Wal-Mart spokeswoman, agrees. "It's No. x on our radar screen right now," she said, soon after Seligman filed for class-action status. Accustomed to opposition from labor unions and environmentalists, Wal- Mart was caught off guard when the National Organization for Women in 2oo2 officially designated the corporation a "Merchant of Shame" -- a label bestowed upon businesses that have the worst labor practices. Since then, hundreds of NOW activists have been canvassing local Wal-Mart stores, trying to inform consumers -- who like the low prices, easy parking and one-stop shopping -- how the corporation is able to offer such great deals: Wal-Mart pays a pittance to workers in sweatshops in China, squeezes its suppliers, compensates its employees with the industry's lowest wages and offers unaffordable health benefits. Wal-Mart also faces 3o other employee class-actions suits across the country, four of which have received certification. Last week, the California Supreme Court gave the green light to a class- action suit that will proceed to trial next September in Oakland. The suit, which represents about 2o4,ooo California employees, charges that Wal-Mart managers routinely forced workers to labor without taking required rest or meal breaks and to work overtime without payment. The reasons for these practices, according to Jessica Grant, an attorney with the San Francisco firm that represents the workers, is that Wal-Mart habitually understaffs its stores. Workers must skip breaks and work unpaid overtime or risk getting fired. Grant also told me that Wal- Mart has recently asked workers to sign waivers for meal breaks. When the case goes to trial, the corporation will then argue that workers didn't really want any time to eat. Wal-Mart has denied all allegations. It has also launched a television advertising campaign that features beaming workers describing their excellent health care and casts the corporation as a good neighbor who contributes "good works" to local communities. Wal-Mart knows no shame. Contact Us · Support Rockridge ~, . The Rockridge Institute is a project of the Tides Center, a tax exempt research and educational institution organization operating- ~ ;;- ~:? under Section 5o1(c)(3) of the IRS Code. Our mission is to advance~;: http ://www. rockri dgei n stitute, org/proj ects/m oral/w al m art/5.3.04 2/25/2005 Koc~-aage msutute - Merchant oI 5name Page 3 of 3 public policies leading to a more just, democratic, environmentally sustainable, and humane society. We do not endorse or oppose any particular candidate or party. http://www.rockridgeinstimte.org/proj ects/moml/walmarff5.3.04 2/25/2005 EVERYDAY LOW WAGES: THE HIDDEN PRICE WE ALL PAY FOR WAL-MART A REPORT BY THE DEMOCRATIC STAFF OF THE COMMITTEE ON EDUCATION AND THE WORKFORCE U.S. HOUSE OF REPRESENTATIVES REPRESENTATIVE GEORGE MILLER (D-CA), SENIOR DEMOCRAT FEBRUARY 16, 2004 WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 2 of 25 TABLE OF CONTENTS INTRODUCTION ......................................................................................................................... 3 WAL-MART'S LABOR PRACTICES ....................................................................................... 3 WORKERS' ORGANIZING RIGHTS .................................................................................. 3 LOW WAGES ........................................................................................................................... 4 UNEQUAL PAY AND TREATMENT ................................................................................... 5 OFF-THE-CLOCK WORK ..................................................................................................... 5 CHILD LABOR AND WORK BREAKS VIOLATIONS .................................................... 6 UNAFFORDABLE OR UNAVAILABLE HEALTH CARE ............................................... 7 LOW WAGES MEAN HIGH COSTS TO TAXPAYERS ................................................... 8 ILLEGAL USE OF UNDOCUMENTED WORKERS ....................................................... 10 TRADING AWAY JOBS ....................................................................................................... 11 DISABILITY DISCRIMINATION ....................................................................................... 14 WORKER SAFETY ............................................................................................................... 14 WAL-MART'S RESPONSE ...................................................................................................... 15 CONGRESSIONAL RESPONSES ........................................................................................... 19 LABOR LAW REFORM AND THE RIGHT TO ORGANIZE ........................................ 19 PROPOSALS TO INCREASE WAGES AND PROTECT OVERTIME ......................... 19 CHILD LABOR ...................................................................................................................... 20 SWEATSHOPS ....................................................................................................................... 20 AFFORDABLE AND MEANINGFUL HEALTH INSURANCE ...................................... 20 FAIR TRADE AND THE FIGHT TO SAVE GOOD-PAYING JOBS ............................. 21 CONCLUSION ........................................................................................................................... 21 ENDNOTES ................................................................................................................................. 22 WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 3 of 25 INTRODUCTION The retail giant Wal-Mart has become the nation's largest private sector employer with an estimated 1.2 million employees.1 The company's annual revenues now mount to 2 percent of the U.S. Gross Domestic Product? Wal-Mart's success is attributed to its ability to charge low prices in mega-stores offering everything from toys and furniture to groceries. While charging low prices obviously has some consumer benefits, mounting evidence from across the country indicates that these benefits come at a steep price for American workers, U.S. labor laws, and community living standards. Wal-Mart is undercutting labor standards at home and abroad, while those federal officials charged with protecting labor standards have been largely indifferent. Public outc~ against Wal-Mart's labor practices has been answered by the company with a cosmetic response. Wal-Mart has attempted to offset its labor record with advertising campaigns utilizing employees (who are euphemistically called "associates") to attest to Wal-Mart's employment benefits and support of local communities. Nevertheless - whether the issue is basic organizing rights of workers, or wages, or health benefits, or working conditions, or trade policy - Wal-Mart has come to represent the lowest common denominator in the treatment of working people. This report reviews Wal-Mart's labor practices across the country and around the world and provides an overview of how working Americans and their allies in Congress are seeking to address the gamut of issues raised by this new standard-bearer of American retail. WAL--MART'S LABOR PRACTICES WORKERS' ORGANIZING RIGHTS The United States recognizes workers' right to organize unions. Government employers generally may not interfere with public sector employees' freedom of association. In the private sector, workers' fight to organize is protected by the National Labor Relations Act? Intemationally, this fight is recognized as a core labor standard and a basic human right.4 Wal-Mart's record on the right to organize recently achieved international notoriety. On January 14, 2004, the Intemational Confederation of Free Trade Unions (ICFTU), an orgamzafion representing 151 million workers in 233 affiliated unions around the world, issued a report on U.S. labor standards.~ Wal-Mart's rampant violations of workers' fights figured prominently. In the last few years, well over 100 unfair labor practice charges have been lodged against Wal-Mart throughout the country, with 43 charges filed in 2002 alone. Since 1995, the U.S. government has been forced to issue at least 60 complaints against Wal-Mart at the National Labor Relations Board .6 Wal-Mart's labor law violations range from illegally firing workers who attempt to organize a union to unlawful surveillance, threats, and intimidation of employes who dare to speak out. ¢~ ~.: ~ c~ WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 4 of 25 With not a single Wal-Mart store in thc United States represented by a union, the company takes a pro-active role in maintaining its union-free status. Wal-Mart has issued "A Manager's Toolbox to Remaining Union Free," which provides managers with lists of warning signs that workers might be organizing, including "frequent meetings at associates' homes" and "associates who are never seen together start talking or associating with each other. ''? The "Toolbox" gives managers a hotline to call so that company specialists can respond rapidly and head offany attempt by employees to organize. When employees have managed to obtain a union election and vote for a union, Wal- Mart has taken sweeping action in response. In 2000, when a small meatcutting department successfully organized a union at a Wal-Mart store in Texas, Wal-Mart responded a week later by announcing the phase-out of its meatcutting departments entirely. Because of deficient labor laws, it took the meatcutters in Texas three years to win their jobs back with an order that Wal- Mart bargain with their union,s Rather than comply, Wal-Mart is appealing this decision? Wal-Mart's aggressive anti-union activity, along with the nation's weak labor laws, have kept the largest private sector employer in the U.S. union-free. Breaking the law that guarantees workers' fight to organize has material consequences for both the workers and the company. According to data released by the Bureau of Labor Statistics in January 2004, union workers earn median weekly salaries of $760, compared to non-union workers' median weekly salaries of $599 - a difference of over 26 percent,l° In the supermarket industry, the union difference is even more pronounced, with umon members making 30 percent more than non-union workers. Union representation also correlates with higher benefits,n For instance, 72 percent of union workers have guaranteed pensions with defined benefits, while only 15 percent of non-union workers enjoy such retirement security.12 On the health care front, which will be explored in more detail later, 60 percent of union workers have medical care benefits on the job, compared to only 44 percent of non-union workers.'3 For companies like Wal-Mart seeking to maintain low labor costs, these statistics obviously provide an incentive to remain union-free. Unfortunately, U.S. labor laws fail to provide a sufficient disincentive against violating workers' rights. LOW WAGES By keeping unions at bay, Wal-Mart keeps its wages low - even by general industry standards. The average supermarket employee makes $10.35 per hour. 14 Sales clerks at Wal- Mart, on the other hand, made only $8.23 per hour on average, or $13,861 per year, in 2001.~ Some estimate that average "associate" salaries range from $7.50 to $8.50 per hour. ~6 With an average on-the-clock workweek of 32 hours, many workers take home less than $1,000 per month? Even the higher estimate of a $13,861 annual salary fell below the 2001 federal poverty line of $14,630 for a family of three.~8 About one-third of Wal-Mart's employees are pm-time, restricting their access to benefits? These low wages, to say the least, complicate employees' ability to obtain essential benefits, such as health care coverage, which pl ex ored in a later section. 57~ The low pay stands in stark contrast to Wal-Mart's slogan, "Our people make the-- difference." Now-retired Senior Vice President Don Soderquist has explained: "'Our People WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 5 of 25 m~ake the difference' is not a meaningless slogan - it's a reality at Wal-Mart. We are a group of dedicated, hardworking, ordinmy people who have teamed together to accomplish extraordinary things.''2° With 2002 company profits hitting $6.6 billion, Wal-Mart employees do indeed "accomplish extraordinary things.''2~ But at poverty level wages, these workers are not sharing in the company's success. UNEQUAL PAY AND TREATMENT Title VII of the Civil Rights Act prohibits discrimination in employment based on employees' race, color, religion, sex, or national origin.22 Additionally, the Equal Pay Act, an amendment to the Fair Labor Standards Act, prohibits unequal pay for equal work on the basis of sex.~ These basic labor and civil fights laws have become an issue at Wal-Mart. In 2001, six women sued Wal-Mart in Califomia claiming the company discriminated against women by systematically denying them promotions and paying them less than men. The lawsuit has expanded to potentially the largest class action in U.S. history - on behalf of more than I million current and former female employees. While two-thirds of the company's hourly workers are female, women hold only one-third of managerial positions and constitute less than 15 percent of store managers.24 The suit also claims that women are pushed into "female" departments and are demoted if they complain about unequal treatment. One plaintiff, a single mother of four, started at Wal-Mart in 1990 at a mere $3.85 an hour. Even with her persistent requests for training and promotions, it took her eight years to reach $7.32 an hour and seven years to reach management, while her male counterparts were given raises and promotions much more quickly. For this plaintiff, annual pay increases were as little as 10 cents and never more than 35 cents per hour.2~ OFF-THE-CLOCK WORK While wages are low at Wal-Mart, too often employ¢¢a are not paid at all. The Fair Labor Standards Act (FLSA), along with state wage and hour laws, requires hourly employ¢c~ to be paid for all time actually worked at no less than a minimum wage and at time-and-a-half for all hours worked over 40 in a week.26 These labor laws have posed a particular obstacle for Wal- Mart. As of December 2002, there were thirty-nine class-action lawsuits against the company in thirty states, claiming tens of millions of dollars in back pay for hundreds of thousands of Wal- Mart employees.27 In 2001, Wal-Mart forked over $50 million in unpaid wages to 69,000 workers in Colorado. These wages were paid only after the workers filed a class action lawsuit. Wal-Mart had been working the employees off-the-clock. The company also paid $500,000 to 120 workers in Gallup, New Mexico, who filed a lawsuit over unpaid work? In a Texas class-action certified in 2002 on behalf of 200,000 former and cur~,i~t Wal-i Mart employees, statisticians estimated that the company shortchanged its workers $i~0C~lli0ti over four years -just based on the frequency of employees working through their d~[ 15 minute breaks.29 ~ WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 6 of 25 In Oregon, 400 employees in 27 stores sued the company for unpaid, off-the-clock overtime. In their suit, the workers explained that managers would delete hours from their time records and tell employees to clean the store after they clocked out. In December 2002, a jury found in favor of the workers? One personnel manager claimed that, for six years, she was forced to delete hours from employee time sheets.31 In the latest class-action, filed in November 2003, noting evidence of systematic violations of the wage-and-hour law, a judge certified a lawsuit for 65,000 Wal-Mart employees in Minnesota_ Reacting to the certification, a Wal-Mart spokesperson told the Minneapolis Star Tribune: "We have no reason to believe these isolated situations.., represent a widespread problem with off-the-clock work. ,32 Many observers blame the wage-and-hour problems at Wal-Mart on pressure placed on managers to keep labor costs down. In 2002, operating costs for Wal-Mart were just 16.6 percent of total sales, compared to a 20.7 percent average for the retail industry as a whole.3~ Wal-Mart reportedly awards bonuses to its employees based on earnings. With other operating and inventory costs set by higher level management, store managers must turn to wages to increase profits. While Wal-Mart expects those managers to increase sales each year, it expects the labor costs to be cut by two-tenths of a percentage point each year as well.~4 Reports from former Wal-Mart managers seem to corroborate this dynamic. Joyce Moody, a former manager in Alabama and Mississippi, told the New York Times that Wal-Mart "threatened to write up managers if they didn't bring the payroll in low enough." Depositions in wage and hour lawsuits reveal that company headquarters leaned on management to keep their labor costs at 8 percent of sales or less, and managers in turn leaned on assistant managers to work their employees off-the-clock or simply delete time from employee time sheets? CHILI) LABOR AND WORK BREAKS VIOLATIONS The Fair Labor Standards Act and state wage and hour laws also govern child labor and work breaks. These work time regulations have likewise posed a problem at Wal-Mart stores. In January 2004, the New York Titnes reported on an internal Wal-Mart audit which found "extensive violations of child-labor laws and state regulations requiring time for breaks and meals.''~6 One week of time records from 25,000 employees in July 2000 found 1,371 instances of minors working too late, during school hours, or for too many hours in a day. There were 60,767 missed breaks and 15,705 lost meal times.~? According to the New York Times report: "Verette Richardson, a former Wal-Mart cashier in Kansas City, Mo., said it was sometimes so hard to get a break that some cashiers urinated on themselves. Bella Blaubergs, a diabetic who worked at a Wal-Mart in W~ngton State, said she sometimes nearly fainted from low blood sugar because managers oft~(~fild not: give breaks.''38 ~ . :z · PO WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 7 of 25 A store m~anager in Kentucky told the New York Times that, after thc audit was issued, he received no word from company executives to try harder to cut down on violations: "There was no follow-up to that audit, there was nothing sent out I was aware of saying, 'We're bad. We screwed up. This is the remedy we're going to follow to correct the situation.' ,39 UNAFFORDABLE OR UNAVAILABLE HEALTH CARE In 2002, 43 million non-elderly Americans lacked health insurance coverage - an increase of almost 2.5 million from the previous year. Most Americans receive their health insurance coverage through their employers. At the same time, most of the uninsured are working Americans and their families, with low to moderate incomes. Their employers, however, either do not offer health insurance at all or the health insurance offered is simply unaffordable.4° Among these uninsured working families are a significant number of Wal-Mart employees, many of whom instead secure their health care from publicly subsidized programs. Fewer than half- between 41 and 46 percent- of Wal-Mart's employees are insured by the company's health care plan, compared nationally to 66 percent of employees at large firms like Wal-Mart who receive health benefits from their employer,nj In recent years, the company increased obstacles for its workers to access its health care plan. In 2002, Wal-Mart increased the waiting period for enrollment eligibility from 90 days to 6 months for full-time employees. Part-time employees must wait 2 years before they may enroll in the plan, and they may not purchase coverage for their spouses or children. The definition of part-time was changed from 28 hours or less per week to less than 34 hours per week. At the time, approximately one-third ofWal-MaWs workforce was pm-time. By comparison, nationally, the average waiting period for health coverage for employees at large firms like Wal- Mart was 1.3 months.42 The Wal-Mart plan itself shifts much of the health care costs onto employees. In 1999, employees paid 36 percent of the costs. In 2001, the employee burden rose to 42 percent. Nationally, large-firm employees pay on average 16 percent of the premium for health insurance. Unionized grocery workers typically pay nothing.43 Studies show that much of the decline in employer-based health coverage is due to shifts of premium costs from employers to employeesfi4 Moreover, Wal-Mart employees who utilize their health care confront high deductibles and co-payments. A single worker could end up spending around $6,400 out-of-pocket - about 45 percent of her annual full-time salary - before seeing a single benefit from the health plan.45 According to an AFL-CIO report issued in October 2003, the employees' low Wal-Mart's cost-shifting render health insurance unaffordable, particularly for those eml~Oyees: with families. Even under the Wal-Mart plan with the highest deductible ($1,000) - WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 8 of 25 therefore with the lowest employee premium contribution - it would take an $8 per hour employee, working 34 hours per week, almost one-and-a-half months of pre-tax earnings to pay for one year of family coverage.46 Wal-Mart's spending on health care for its employees falls well below industry and national employer-spending averages. A Harvard Business School case study on Wal-Mart found that, in 2002, Wal-Mart spent an average of $3,$00 per employee. By comparison, the average spending per employee in the wholesale/retailing sector was $4,800. For U.S. employers in general, the average was $5,600 per employee.47 In the end, because they cannot afford the company health plan, many Wal-Mart workers must turn to public assistance for health care or forego their health care needs altogether. Effectively, Wal-Mart forces taxpayers to subsidize what should be a company-funded health plan. According to a study by the Institute for Labor and Employment at the University of California-Berkeley, California taxpayers subsidized $20.5 million worth of medical care for Wal-Mart in that state alone.48 In fact, Wal-Mart personnel offices, knowing employees cannot afford the company health plan, act,~!ly encourage employees to apply for charitable and public assistance, according to a recent report by the PBS news program Now With Bill Moyers. 49 When a giant like Wal-Mart shifts health insurance costs to employees, its competitors invariably come under pressure to do the same. Currently engaged in the largest ongoing labor dispute in the nation, unionized grocery workers in southern California have refused to accept higher health care costs resulting from cost-shifting on health insurance premiums by their grocery chain employers - cost-shiffing, the grocers say, inspired by the threat of Wal-Mart competition. Beginning on October 11, 2003, 70,000 groce~ employees of Vons, Pavilions, Ralphs, and Albertsons have either been on strike or locked out. The companies want to dramatically increase workers' share of health costs, claiming that the change is necessary in order to compete with Wal-Mart's incursion in the southern California market. E. Richard Brown, the director of the Center for Health Policy at the University of California, Los Angeles, told the Sacramento Bee that, if the grocery chains drastically reduce health benefits, the trends toward cost shifting and elimination of health coverage will accelerate. Following the grocers' lead, more employers would offer fewer benefits, would require their workers to pay more, and may even drop health benefits altogether? Whether the current pressure from Wal-Mart is real or imagined or merely a convenient excuse for the grocers' cost-cutting bargaining position, Wal-Mart has sparked a new race to the bottom among American retail employers. Undeniably, such a race threatens to undermine the employer-based health insurance system. LOW WAGES MEAN HIGH COSTS TO TAXPAYERS Because Wal-Mart wages are generally not living wages, the company uses taxpayers to subsidize its labor costs. While the Califomia study showed how much taxpayers were subsidizing Wal-Mart on health care alone, the total costs to taxpayers for Wal-Mart'~s_labor policies are much greater ~-'" r,.~ WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 9 of 25 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 - about $2,103 per employee. Specifically, the low wages result in the following additional public costs being passed along to taxpayers: $36,000 ayear for flee 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 q,alify 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 (S-CHIP), assuming 30 employees with an average of two children qualify. · $9,750 a year for the additional costs for low income energy assistance. Among Wal-Mart employees, some single workers may be able to make ends meet. Others may be forced to take on two or three jobs. Others may have a spouse with a better job. And others simply cannot make ends meet. Because Wal-Mart fails to pay sufficient wages, U.S. taxpayers are forced to pick up the tab. In this sense, Wal-Mart's profits are not made only on the backs of its employees - but on the backs of every U.S. taxpayer. The ultimate costs are not limited to subsidies for underpaid Wal-Mart workers. When a Wal-Mart comes to town, the new competition has a ripple effect throughout the commumty. Other stores are forced out of business or forced to cut employees' wages and benefits in order to compete with Wal-Mart. The Los Angeles City Council commissioned a report in 2003 on the effects of allowing Wal-Mart Supercenters into their communities. The report, prepared by consulting firm Rodino and Associates, found that Supercenters drive down wages in the local retail industC¢, place a strain on public services, and damage small businesses. It recommended that the City Council refuse to allow any Supercenters to be built in Los Angeles without a promise from Wal-Mart to increase wages and benefits for its employees.~: The findings of the Rodino report are alarming. The labor impacts ora Wal-Mart Supercenter on low-income communities include~ · "Big box retailers and superstores may negatively impact the labor rnarket in an area by the conversion of higher paying retail jobs to a fewer number of lower paying retail jobs. The difference in overall compensation (wages and benefits) may be as much as $8.00." · "Lack of health care benefits of many big box and superstore employees can result in a greater public financial burden as workers utilize emergency rooms as a major component of their health care." · "A study conducted by the San Diego Taxpayers Association (SDCTA), a nonprofit, ~' nonpartisan organization, found that an influx of big-box stores into San Dieg~uld i i WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 10 of 25 result in an annual decline in wages and benefits between $105 million and $221 million, and an increase of $9 million in public health costs. SDCTA also estimated that the region would lose pensions and retirement benefits valued between $89 million and $170 million per year and that even increased sales and property tax revenues would not cover the extra costs of necessary public services." · "[The threat of Wal-Mart's incursion into the southern California grocery market] is already triggering a dynamic in which the grocery stores are negotiating with workers for lowered compensation, in an attempt to re-level the 'playing field.'" · "One study of superstores and their potential impact on grocery industry employees found that the entry of such stores into the Southern Califomia regional grocery business was expected to depress industry wages end benefits at an estimated range from a low of $500 million to a high of almost $1.4 billion annually, potentially affecting 250,000 groceC¢ indnst~ employees... IT]he full impact of lost wages and benefits throughout Southern California could approach $2.8 billion per year.''~2 Reports such as these have provided supporting evidence to localities which seek to pass ordinances restricting "big box" or supercenter stores. Such ordinances were recently passed in Alameda and Contra Costa counties in California. Wal-Mart, however, has moved to overturn those ordinances. In Contra Costa, Wal-Mart launched a petition drive to challenge that county's ordinance in a referendum in March 2004. In Alameda, the company has filed a lawsuit to void an ordinance passed by the Board of Supervisors in January 2004.53 One of the most cited studies on Wal-Mart's impact on local communities was performed by economist Kenneth Stone at Iowa State University in 1993. Stone looked at the impact of Wal-Mart on small towns m Iowa He found a 3 percent spike in total retail sales in communities immediately after a Wal-Mart opened. But the longer term effects of Wal-Mart were disastrous for nearby independent businesses. Over the course of the next several years, retailers' sales of mens' and boys' apparel dropped 44 percent on average, hardware sales fell by 31 percent, and lawn and garden sales fell by 26 percent. Likewise, a Congressional Research Service report in 1994 explained that Wal-Mart uses a saturation strategy with store development. In other words, it builds stores in nearby connected markets in order to stifle any competition in the targeted area by the size of its presence? By all accounts, Wal-Mart's development strategy has been working. Currently, Wal- Mart operates around 3,000 total stores and close to 1,400 Supercenters. It is the largest grocer in the U.S., with a 19 percent market share, and the third-largest pharmacy, with a 16 percent market share. According to Retail Forward, a global management consulting and research firm, for every one Supercenter that will open, two supermarkets will close.5~ Since 1992, the supermarket indust~ has experienced a net loss of 13,500 stores? Over the next five years, Wal-Mart plans to open 1,000 more Supercenters in the U.S.~? By 2007, Wal-Mart is expected to control 35 percent of food and drug sales in the ILLEGAL USE OF UNDOCUMENTED WORKERS WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 11 of 25 Among the lowest paid workers in the U.S. economy are undocumented immigrants. As was reported in the fall of 2003, these workers are not foreign to the floors of Wal-Mart stores. On October 23, 2003, federal agents raided 61 Wal-Mart stems in 21 states. When they left, the agents had arrested 250 nightshift janitors who were undocumented workers.~9 Following the arrests, a grand ju~y convened to consider charging Wal-Mart executives with labor racketeering crimes for knowingly allowing undocumented workers to work at their stores. The workers themselves were employed by agencies Wal-Mart contracted with for cheap cleaning services. While Wal-Mart executives have tried to lay the blame squarely with the contractors, federal investigators point to wiretapped conversations showing that executives knew the workers were undocumented,o° Additionally, some of the janitors have filed a class-action lawsuit against Wal-Mart alleging both racketeering and wage-and-hour violations. According to the janitors, Wal-Mart and its contractors failed to pay them overtime totaling, along with other damages, $200,000. One of the plaintiffs told theNew York Times that he worked seven days per week for eight months, earning $325 for 60-hour weeks, and he never received overtime.6~ A legal question now being raised is whether these undocumented workers even have the right to sue their employersfi2 Not surprisingly, this recent raid was not the first time Wal-Mart was caught using undocumented workers. In 1998 and 2001, federal agents arrested 102 undocumented workers at Wal-Marts around the counttyfi3 President Bush's newly proposed tempormy foreign worker plan would legalize such undocumented workers without granting them an opportumty for citizenship, creating a new class of indentured servants and a safer source of cheap labor for companies like Wal-Mart. TRADING AWAY JOBS Since the recession began in March 2001, the United States has lost 2.4 million jobs. In every recession, since the Great Depression, jobs were recovered within the first 31 months after the recession began - until now. The latest recession began 34 months ago and officially ended in November 2001, but the jobs have not been recovered. For American working families, by all accounts, the "jobless recovery" has been of little benefit to them While GDP growth was strong or solid in the third and fourth quarters of 2003, real wages for workers remained stagnant and even declinedfa Indeed, of the jobs that remain, the pay is low. The countW has seen a dramatic shift from high-paying jobs to low-paying jobs. For instance, in New Hampshire, which still has not recovered the number of jobs it lost in the recession, new jobs pay 35 percent lower wages than lost jobs. In Delaware, those wages are 43 percent lower; in Colorado, 35 percent lower; in West Virginia, 33 percent lower. In fact, the low-pay shift has hit all but two of the fifty states? WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 12 of 25 Moreover, these changes in the labor market reveal themselves in a marked decline in living standards for low- and middle-income workers. The real weekly earnings for full-time workers age 25 and older fell for the bottom half of the workforce between the fourth quarters of 2002 and 2003. In particular, workers in the 10t~ percentile saw their weekly earnings fall 1.2 percent; in the 20th percentile, by 0.5 percent, in the 50th percentile, ~ 0.1 percentfi6 Conversely, earners in the top percentiles of income experienced growth. The 90 percentile, for instance, saw a 1.1 percent increase in weekly earnings. As the Economic Policy Institute points out: ~nis pattern of eamings growth suggests that while the economy is expanding, the benefits of growth are flowing to those at the top of the wage scale.''~7 These lower-paying jobs are largely service sector jobs, like retail, replacing traditionally higher-paying and unionized manufacturing jobs. Between January 1998 and August 2003, the nation experienced a net loss of 3 million manufacturing jobs.68 During the "recovery," 1.3 million manufacturing jobs disappearedfi9 American manufacturers find it increasingly difficult to keep jobs in the U.S., given the availability of cheap labor abroad. In 2003, the U.S. trade deficit hit a record high of $551 billion, increasing 15 percent from 2002 and exceeding 5 percent of GDp. 7° Wal-Mart plays a curiously illustrative role in this jobs phenomenon - not just in the creation of low-paying jobs and the downward pressure on wages and benefits, but also in the export of existing manufacturing jobs to foreign countries offering cheap labor. Wal-Mart markets itself with a patriotic, small-town, red-white-and-blue advertising motif. But Wal- Mart's trade practices are anything but small-town. Indeed, Wai-Man conducts intemational trade in manufactured goods on a scale that can bring down entire nations' economies. While the red-white-and-blue banners remain, long-gone are the days when Wal-Mart abided by the mottos of "Buy American" and "Bring It Home to the USA." In 1995, Wal-Mart claimed only 6 percent of its merchandise was imported. Today an estimated 50-60 percent of its products come from overseas.7! In the past five years, Wal-Mart has doubled its imports from Chimt In 2002, the company bought 14 percent of the $1.9 billion of clothes exported by Bangladesh to the United States. Also in 2002, the company purchased $12 billion in merchandise from China, or 10 percent of China's total U.S.-bound exports, a 20 percent increase from the previous year. In 2003, these Chinese purchases jumped to $15 billion, or almost one-eighth of all Chinese exports to the United States.72 Today, more than 3,000 supplier factories in China produce for Wal-Mart.73 Wal-Mart maintains an extensive global network of 10,000 suppliers.74 Whether American, Bangladeshi, Chinese, or Honduran, Wal-Mart plays these producers against one another in search of lower and lower prices. American su~pliers have been forced to relocate their businesses overseas to maintain Wal-Mart contracts. ~Overseas manufacturers are forced to engage in cutthroat competition that further erodes wages and working conditions of what often already are sweatshops. To keep up with the pressure to produce ever cheaper goods, factories force employees to work overtime or work for weeks without a day off. A Bangladeshi factory worker told the Los ~4ngeles Times that employees at her factory worked from.8..a~m, to 3. a.m. for 10 and 15 day stretches just to meet Wal-Mart price demands.And st~ll,' W~,Mart' 's ~ WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 13 of 25 general manager for Bangladesh complained of his country's factories, telling the Los Angeles Times, "I think they need to improve. When I entered a factory in China, it seemed they are very fast..76 While low-wage jobs displace higher-paid manufacturing jobs in the United States, undercutting living standards at home, living standards abroad are not reaping the benefits one might expect. Reports indicate that Wal-Mart's bargaining power is able to maintain low wages and poor working conditions among its foreign suppliers. The Washington Post has explained: "As capital scours the globe for cheaper and more malleable workers, and as poor countries seek multinational companies to provide jobs, lift production, and open export markets, Wal-Mart and China have forged themselves into the ultimate joint venture, their symbiosis influencing the terms of labor and consumption the world over.''77 Thanks to a ban on independent trade unions and a lack of other basic human rights, China offers Wal-Mart a highly-disciplined and cheap workforce. A Chinese labor official who asked to remain anonymous for fear ofpumshment told the Washington Post that "Wal-Mart pressures the factory to cut its price, and the factory responds with longer hours or lower pay. And the workers have no options. ,78 One employee of a Chinese supplier described the difficulties of surviving on $75 per month. She could rarely afford to buy meat, and her family largely subsisted on vegetables. Over four years, she had not received a single salary increase.?~ Wal-Mart has countered that it insists that its suppliers enforce labor standards and comply with Chinese law. One-hundred Wal-Mart auditors inspect Chinese plants, and the company has suspended contracts with about 400 suppliers, mainly for violating overtime limits. An additional 72 factories were permanently blacklisted in 2003 for violating child labor standards. Still, critics point out that the Wal-Mart does not regularly inspect smaller factories that use middlemen to sell to the company. Nor does it inspect the factories of subcontractors. A Chinese labor organizer explained that the inspections are "ineffective," since Wal-Mart usually notifies the factories in advance. The factories "often prepare by cleaning up, creating fake time sheets and briefing workers on what to say."~° The factories themselves complain that, because Wal-Mart demands such low prices, they have slim profit margins - if any. A manager of one Chinese supplier told the Washington Post, "In the beginning, we made money ... But when Wal-Mart started to launch nationwide distribution, they pressured us for a special price below our cost. Now, we're losing money on every box, while Wal-Mart is making more money."8~ Obviously, one way to regain a profit for such suppliers would be to begin cutting back on labor costs. Finally, as testament to Wal-Mart's stalwart anti-union policy, none of its 31 stores in China are unionized, despite the fact that the Communist Party-controlled official union has told the company that it would not help workers fight for higher pay.82 Oddly enough, Article 10 of China's Trade Union Law requires that any establishment with 25 or more workers must have a union. Wal-Mart, however, claims that it has received assurances from the central government that it need not allow unions in any of its stores? As one reporter has explained, "TI~- explanation for the apparent contradiction may be that the government's desire for fo~-., WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 14 of 25 investment and jobs trumps any concern for workers' rights. That wouldn't be surprising in the Chinese environment, where strikes are forbidden and the official labor grouping actively supports the government's efforts to block the rise of independent unions.''84 With China, any company in search of pliant and cheap labor has found a perfect mix of cooperative government officials and workers made submissive through fear. DISABILITY DISCRIMINATION The Americans with Disabilities Act (ADA) prohibits discrimination against persons with disabilities in employment matters. In particular, an employer may not discriminate against an employee or prospective employee who is otherwise qualified to perform the job if given reasonable accommodations.85 In addition to lawsuits over lost wages or unequal pay, Wal-Mart has faced a barrage of lawsuits alleging that the company discriminates against workers with disabilities. In 2001, Wal- Mart paid over $6 million to settle 13 such lawsuits. These cases were brought by the U.S. Equal Employment Opportunity Commission (EEOC) on behalf of disabled persons whom Wal-Mart failed to hire. The settlement also required Wal-Mart to change its procedures in dealing with disabled job applicants and provide more training for its employees on anti-discrimination laws.s6 Yet, on Januoly 20, 2004, the EEOC filed another lawsuit against the retail giant on behalf of a job applicant who claims he was not hired because he needed a wheelchair. The lawsuit was filed in Kansas City after the EEOC failed to obtain a settlement with Wal-Mart.87 WORKER SAFETY The Occupational Safety and Health Act (OSHA) is designed to protect workers from workplace injuries and illnessesfi8 OSHA is enforced by the Department of Labor's Occupational Safety and Health Administration. Regulations issued by that agency lay out clear roles for such safety matters as the provision of exits for employees,s9 The latest Wal-Mart scandal to hit the news is its reported lockdown of its nighttime shift various stores around the country. According to a January 18, 2004, New York Times report, the company institutes a "lock-in" policy at some of its Wal-Mart and Sam's Club stores.~° The stores lock their doors at night so that no one can enter or leave the building, leaving workers inside trapped. Some workers are then threatened that, if they ever use the fire exit to leave the building, they will be fired. Instead, a manager is supposed to have a key that will unlock doors to allow employees to escape. Many workers have found themselves locked in without a manager who has a key, as the New York Times story detailed.9! The company has claimed that the policy is designed to protect stores and employees from crime. Former store managers, however, have claimed the real reason behind the lockdown is to prevent "shrinkage" - i.e., theft by either employees or outsiders. It is also desigll~d to eliminate unauthorized cigarette breaks or quick trips home.9~ r--D ~,, WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 15 of 25 Locked-in workers have had to wait for hours off-the-clock for a manager to show up to let them go home after they completed their shift. One worker claims to have broken his foot on the job and had to wait four hours for someone to open the door. Another worker alleges she cut her hand with box cutters one night and was forced to wait until morning to go to the hospital, where she received thirteen stitches.°~ In the history of American worker safety, some of the worst tragedies have involved employees locked in their workplaces in an emergency, including the Triangle Wast Company fire of 1911 in which 146 women died in a fire because the garment factory's doom were locked. As recently as 1991, 25 workers perished in afire at a chicken processing plant in North Carolina. The plant's owner had locked the doors for fear of employee theft and unauthorized breaks. According to recent reports, ten percent of Wal-Mart's stores are subjected to the nighttime lockdown.°n In 2002, in a telling junction of alleged labor law violations, the National Labor Relations Board (NLRB) issued a complaint against a Wal-Mart in Texas regarding health and safety threats made by management against employees. According to the complaint, a company official told workers that, after a worker filed complaints regarding unsafe conditions with the Occupational Safety and Health Administration (OSHA), any fines imposed upon the company would come out of employee bonuses? WAL-MART'S RESPONSE Wal-Mart's response to this extensive list of labor problems has been to treat the charges as a public-relations matter and not a substantive issue of workplace famess. Seemingly, Wal- Mart believes only its image- not its behavior- needs to be adjusted. In that regard, Wal-Mart has undertaken aggressive advertising campaigns, has financed its own economic-impact studies to counter those that show the costs of Wal-Mart to local communities, and has become a major political campaign contributor. On the advertising front, Wal-Mart launched a television ad series called "Good Jobs" in early 2004. The ads feature Wal-Mart employees talking about how great it is to work at Wal- Mart. Spots also show Wal-Mart's community involvement. One ad features a Wal-Mart employee who attests that Wal-Mart health insurance made it possible to treat his 7-year-old son for liver disease.96 It is not known what the total cost of the ad series will be in the end. Wal-Mart has also financed its own studies, to counter publicly commissioned reports which detail the burden that Wal-Mart imposes on communities. After the Rodino report was commissioned by Los Angeles City Council members, the Los Angeles Economic Development Corporation (LAEDC), a private non-profit corporation, released its own study. The LAEDC study was commissioned and financed by Wal-Mart Stores, Inc. Unsurprisingly, it clamed that Wal-Mart Supercenters would provide extraordinary benefits for the Los Angeles economy. WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 17 of 25 say that puts extra pressure on higher-paid workers to be more productive. "You keep people making $10 an hour to ahigh standard," putting more pressure on them for small mistakes, said Lyndol Jackson, a Wal-Mart manager until he left for another job in 1998. Often, those workers quit and can be replaced less expensively, added Jackson, who lives in Memphis, Tenn. Former Wal-Mart cashier Dana Mailloux, 33, worked for eight years at a store in Fort Myers, Fla~, moving up to $ 9.15 an hour. Last fail, her manager called her and more than a dozen other longtime employees into his office and told them he had to lay them offbecause of lack of work. That same day, Mailloux said, she passed a room with six new hires, red vests in hand, filling out paperwork. Returning to the store that weekend, she said, she saw newly advertised positions listed on a bulletin board. "Basicaily, I was thrown out like a piece of trash," said Mailloux. Wal-Mart spokeswoman Sarah Clark said the company continually lays offand hires workers as saies rise and fail. She said that if"labor adjustments are necessary," the company before making cuts asks for volunteers to take time off and carefully controls hours. "It is ludicrous and contrasy to our business model to think the company would benefit from replacing experienced associates with new, lower-paid ones," Clark said in a statement. "It's clear that experienced associates are golden with us." Clark declined to discuss Mailloux's dismissal, citing employee privacy.~°2 In other words, there may be other reasons for the wage difference than just the frequency of store openings. Nor does the lack-of-longevity reason for the wage differences square with previously-mentioned accounts of actuai pay raises of just a few cents per year. The second reason claimed for wage differences - that Wai-Mart promotes its best employees to management - would appear to be exaggerated. To the extent that such promotions do happen, their effect on the average Wai-Mart wage must be minimal. Wal-Mart is not promoting half of its workforce. The average Wal-Mart store has one manager, one-to-three assistant managers, and 15 department heads (who may or may not be counted as hourly), compared to 300 to 350 "associates.''~°3 WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 18 of 25 Moreover, according to the study, Wal-Mart's health care benefits are better than often portrayed. The authors acknowledge that the Wal-Mart health insurance plan is not as comprehensive as the unionized grocery store plans in Southern California and that Wal-Mart employees must pay part of the premium while union workers pay nothing. However, the authors note, the Wal-Mart plan does not include a cap on medical expenses, thereby protecting participating employees from the bankrupting costs of catastrophic illnesses. The unionized store plans do have a cap, according to the LAEDC study, lO4 The relative worth of a catastrophic plan versus a more comprehensive health plan comes into focus when considering the frequency with which workers utilize various services. While childrens' vaccinations are covered by the union plans, such routine medical needs are excluded from Wal-Mart's coverge. Such out-of-pocket costs for these low-wage employees might be $75 per shot at a private clinic. On the other hand, Wal-Mart touts the 60 transplants it covers per year at a cost of $1 million each. As one commentator has noted, 60 transplants amounts to slightly over one-hundredth of one percent of Wal-Mart's 500,000 insured workers. On the issue of health care coverage, the LAEDC study explained: Since they must pay some of the upfront costs of medical care, many Wal-Mart employees who are eligible for the coverage choose not to participate. This leads to much lower participation rates among Wal-Mart employ¢= than among union workers, virtually all of whom participate since their up front costs are paid by their employer. It is worth noting that more than 90 percent of all Wal-Mart employees have health coverage from some source, including the company itself, a covered spouse, parents, through retirement benefits (from another job), etc. l°~ According to the LAEDC, low participation rates in Wal-Mart's health plan are a matter of mere "choice," not affordability. Nevertheless, most Wal-Mart employees, according to the study, have health care from "some source," including "a covered spouse" - that is, a spouse at another company with better health care benefits, now subsidizing what should be Wal-Mart's labor cost. The study did not go into any finther detail on what these unnamed other sources of coverage might be, but did not rule out public assistance programs. In July 2003, California Assemblywoman Sandy Lieber (D-San Jose) released copies of employee handouts from Wal- Mart which explained how to use an employment verification service when applying for Medicaid, food stamps, and other public services. ~07 The LAEDC study continued on the topic of health care coverage: "The issue of participation rates may become moot in California, however. In October, Governor Davis signed SB2 - Health Care for Working Families that mandates large employers to provide health coverage to all of their employees.''1°8 While Wal-Mart currently covers about two-thirds of the costs of employee health care, SB2 would require Wal-Mart to cover 80 percent. The long waiting periods for Wal-Mart coverage would also have to be cut by 3 months for full-time workers and one-year and nine months for part-time workers. While the study claimed SB2 might render the debate over participation rates moot, it failed to mention that Wal-Mart has :: helped finance an employer-backed campaign for a referendum to repeal SB2.~°9 ' r-. ~' WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 19 of 25 On the political front, Wal-Mart has stepped up its campaign donations. The company contributed about $475,000 in soft money to the Republicans in the 2000 and 2002 election cycles, compared to $50,000 for Democrats in the same time period,no In 2003, Wal-Mart contributed over $1 million to federal campaigns - 85 percent to Republicans and 15 percent to Democrats -jumping from the 71st biggest campaign contributor in 2002 to the second biggest single contributor in 2003. m These contributions come at a time when the public outcry against Wal-Mart's behavior is louder than ever. CONGRESSIONAL RESPONSES Wal-Mart is certainly emblematic of structural changes within the U.S. economy. Unfommately, as a rising standard-bearer of those changes, its employment practices pose a real and growing threat to U.S. labor standards. Indeed, Wal-Mart's sheer size and market power render it more than just an emblem but a leading agent of these changes. While Congress has failed to address the issues posed by Wal-Mart's ascension, Congressional Democrats advocate a legislative program that tackles issues such as growing income disparities, the plight of the working poor, the lack of health care, unemployment and the shift from high-paying to low-paying jobs, the exodus of manufacturing jobs from the country, and the lack of effective enforcement of workers' rights. LABOR LAW REFORM AND THE RIGItT TO ORGANIZE Representative George Miller (D-CA) and Senator Ted Kennedy (D-MA), along with over 130 cosponsors, have introduced HR 3619 "The Employee Free Choice Act." This bill consists of comprehensive reform of the nation's labor laws in order to give meamngful effect to workers' right to organize- an internationally-recognized human right. The Employee Free Choice Act proposes triple damages for unlawful firings of pro-union workers during organizing drives, instead of the meager straight backpay remedy which allows employers to violate fights and destroy organizing drives at very little cost to them; imposes civil fines on employers who commit serious or repeated violations of the right to organize, instead of often meaningless and ineffective notice postings; provides for a card check system for choosing a union, rather than the easily-manipulated NLRB election process; and provides for first-contract mediation and binding arbitration, so that employers cannot stall bargaining until workers give up and abandon their umon. PROPOSALS TO INCREASE WAGES AND PROTECT OVERTIME Democratic Members of Congress and Senators continue to fight for a higher minimum wage so that one day no one working full-time will be forced to live in poverty. While Wal-Mart typically pays more than the minimum wage, its average hourly rate still puts many working families below the poverty line. i,~-~ ! Additionally, Democratic Members of Congress and Senators are fighting the Mi z~ Administration's attempt to gut the nation's overtime laws. Under the Bush Administration's ;: WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 20 of 25 proposed rule, 8 million working Americans will lose their overtime pay. In exchange, the Bush Administration claims 1.3 million Americans will gain the right to overtime pay; the real number is actually much less, according to analysts at the Economic Policy Institute. President Bush's Department of Labor has issued public advice to employers on how to skirt the law and avoid paying even those additional workers any overtime pay. Other proposals aimed at improving workers' living standards include tax cuts targeted to working families and making higher education more affordable by boosting funding to Pell grants and increasing the HOPE Scholarship tax credit. Congressmembers and Senators have fought the Bush Administration's efforts to privatize Social Security and have worked to shore up the private pension system of employer-based retirement plans with proposals to protect the pensions of older employees and give workers greater control over their pension savings. CHILD LABOR Representative Tom Lantos (D-CA), along with over 40 cosponsors, has introduced HR 3139, "The Youth Worker Protection Act," which imposes limits on the amount of hours teenagers - who should be focused on their education - may work. Wal-Mart's internal audit in 2000 pointed to extensive child labor violations. Longstanding research has established the detrimental impacts of excessive work on school performance. SWEATSHOPS Democrats, led by Representative George Miller (D-CA), have introduced HR 3550, "The Recruiter Accountability Act." This bill holds labor recruiters and employers accountable for the promises they make to foreign workers when they lure them to the U.S. Recruited workers often find that, despite promises of good pay and healthy working conditions, their new jobs provide poverty wages - if any wages, at all - and no benefits such as basic health insurance. Additionally, workers are kept in debt to their recruiter for bringing them to the U.S. Democrats will put an end to this practice - which not only amounts to exploitation of foreign workers but undercuts the wages and benefits of working Americans. Democrats are also introducing a bill to prevent federal agencies from contracting with anyone who operates or does business with a sweatshop. Taxpayer dollam should no longer be used to enrich those who violate basic human rights at home or overseas. AFFORDABLE AND MEANINGFUL HEALTH INSURANCE Congress continues to look for solutions to the health care crisis in this country. Democrats have offered mixes of public and employer-sponsored plans to achieve universal care - a key policy goal of the party. They have also focused on the cost of health care. As Wal-Mart demonstrates, offering a health care plan to employees is not enough if employees cannot afford to participate. Proposals include providing tax credits to small businesses to assist the~ in ~., providing a health plan, reducing the prescription drug prices by making it easier for ~?c ,;i; WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 21 of 25 drugs to be sold, and ensuring a Medicare prescription drug benefit that obtains the best prices for seniors. FAIR TRADE AND THE FIGHT TO SAVE GOOD-PAYING JOBS Democrats have led the call for fair trade agreements - with environmental and labor standard protections. American manufacturers simply cannot compete with foreign workforces that are paid pennies per hour, utilize child and slave labor, and do not enjoy basic human rights. Democrats are exploring ways to end sweatshop practices around the world; to ensure basic human rights at home and abroad for all workers; and to ultimately stop the exodus of jobs out of the country. Proposals include tax deductions for manufacturers who expand their U.S. operations and fully funding job training and manufacturing development programs. CONCLUSION Wal-Mart's success has meant downward pressures on wages and benefits, rampant violations of basic workers' rights, and threats to the standard of living in communities across the country. The success of a business need not come at the expense of workers and their families. Such short-sighted profit-making strategies ultimately undermine our economy. In the past few years, Wal-Mart has been subjected to dozens of class-action suits seeking backpay for hundreds of thousands of shortchanged workers, dozens of unfair labor practice complaints by the U.S. government for violations of workers' right to organize, and other legal actions stemming from the company's employment practices. At the same time, it has managed to keep its wages low and put suppliers on a downward spiral to cut their own wages. To keep up with Wal-Mart's low-cost demands, U.S. manufacturers have found it increasingly difficult to remain in the U.S. Cuts in health care benefits to Wal-Mart employees are pushing other U.S. grocers to do the same. Wal-Mart's current behavior must not be allowed to set the standard for American labor practices. Standing together, America's working families, including Wal-Mart employees, and their allies in Congress can reverse this race to the bottom in the fast-expanding service industry. The promise that every American can work an honest day's work, receive an honest day's wages, raise a family, own a home, have decent health care, and send their children to college is a promise that is not easily abandoned. It is, in short, the American Dream. WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 22 of 25 ENDNOTES I Anthony Bianeo and Wendy Zellner, "Is Wal-Mart Too PowenSfl?" Business Week 100 (October 6, 2003). 2 Charles Stein, "Wal-Ma~ Finds Success, Image Breed Contempt," Boston Globe H1 (November 30, 2003). 3 29U. S.C. § 141 etseq. 4 International Labor Organization, Convention No. 87, Freedom of Association and Protection of the Right to Organize (1948), and No. 98, Right to Organize and Collective Bargaining (1949). 5 International Confederation of Free Trade Unions (ICFTU), Internationally Recognised Core Labour Standards in the United States: Report for the WTO General Council Review of the Trade Policies of the United States IGeneva, January 14-16, 2004). Id. at 3-4. 7 Wal-Mart, A Manager's Toolbox to Remaining Union Free at 20-21 (no date). Available online at http://www.ufcw.org/issues and actions/walmart workers_eampaign_info/relevant_links/anti_union_manuals.cfm. s Pan Demelrakakes, "Is Wal-Mart Wrapped in ljnion Phobia?" Food & Packaging 76 (August 1,2003). 9 Dan Kasler, '*Labor Dispute Has Historical Precedent," Scripps HowardNews Service (November 3, 2003). l0 Bureau of Labor Statistics, Department of Labor, "Union Members in 2003," Table 1 (January 21, 2004). n StephenFrank~inandDe~r~yA~exander~``Crr~ceryWa~k~utsHaveBr~adReach~~~Chicag~TribuneC~ (November 12, 2003). t2 Bureau of Labor Statisties, Department of Labor, "Employee Benefits in Private lndustry, 2003,' Table 1 (September 17, 2003). ~3 /d. in Charles Williams, "Supermarket Sweepstakes: Traditional Grocery Chains Mull Responses to Wal-Mart's Growing Donfm~ance," The Post and Courier (Charleston, SC) 16E (November 10, 2003 ). ~6 "Unaffordable Health Care, Low Wages, Sexual Discrimination - the Wal-Mmt Way of Life," http://www.ul'cw.org/workplace cormections/retail/industrv news/index.cfm (January 26, 2004). ~7 Doug Dority, "The People's Campaign: Justice~Wal-Mart," Air Line Pilot 55 (Febmary 2003). la Bi,nco and Zellner, supra note 1. 19 PBS, "Store Wars: When Wal-Mart Comes to Town," _htt~://wwwA~bs.org/ilvs/sterewarffstores3.html (February 2, 2004). This percentage of part-time employees was based on the earlier Wal-Mart definition of part-time as working 28 hours or less per week. In 2002, Wal-Mart changed the definition to less than 34 hours per week, which likely increased the company's number of part-time workers. 20 Wal-Mart. eom, "3 l~sie Beliefs," http ://www.walmartstores.com/wmstorc/wm store s/Mainabout .i sp? pagctypc=about&cate gorvOID=- 8242&catlD=- g242&template=ContcntLanding.isp (January 26, 2004). 2~ Karen Olsson, "Up Against Wal-Mart," Mother Jones 54 (March/April 2003). 22 42 U.S.C. § 2000e etseq. 23 29 U.S.C. § 206. 2n Neil Buckley and Caroline Daniel, "Wal-Mart vs. the Workers: Labour Grievances Are Stacking Up Against the World's Biggest Company," Financial Times 11 (November 20, 2003). ~ Sheryl McCarthy, "Wal-Mart- Always Low Wages fur Women!" Newsday (May l, 2003). ~6 29U. S.C. §201 etseq. 27 Associated Press, "Federal Jury Finds Wal-Mart Guilty in Ove~me Pay Case," Chicago Tribune, Business 3 (December 20, 2003). 28 Id. 29 Steven Greenhouse, "Suits Say Wal-Mart Forces Workers to Toil Offthe Clock," New York Times A1 (June 25, 2002). ~0 Associated press, supra note 27. ~l Kristian Foden-Vencil, "Multiple Lawsuits Accuse WaMVla~t o f Violating Workplace Regulations,~'~ NPR Morning Edition (January 14, 2004). aw .do yn r=d and John "Wa - m Suit Status," r.'b.., ir> ovem WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 23 of 25 33 Greenhouse, supra note 29. 34 United Food & Commercial Workers (UFCW), "Wal-Mart's War on Workers' Wages and Overtime Pay," http://www.ufcw.or~press room/fact sheets and backgrounder/walmart/wages.cfm (January 26, 2004). 35 Greenhouse, supra note 29. 3~ Steven Greenhonse, "In-Hous~ Audit Says Wal-Mart Violated Labor Laws," New York Times 16A (January 13, 2004). 37 Id. 38 Id. 39 Id. 40 Kaiser Family Foundation, The Uninsured: A Primer- Key Facts About Americans Without Health Insurance, at I (December 2003). 41 AFL-CIO, Wal-Mart: An Example of Why Workers Remain Uninswred and Underinsured, at 1 (October 2003 ). 42 Id. at 11. 43 Id. ns John Holab. an, "Changes in Employer-Sponsered Health Insurance Coverage," Snapshots of America's Families 11I, Urban Institute (September 17, 2003). 45 AFL-CIO, supra note 41, at 16. ~ ld at 12. 47 Panjak Ghemawat, Ken Mark, and Stephen Bradley, "Wal-Mart Stores in 2003," case study, Harvard Business School (revised January 30, 2004'). ns Sy~via Chase~ "The True C~st ~f Sh~ppmg at Wa~-Mart~~~ N~w with Bill M~yers~ Transcript (December ~ 9~ 2003). 49 50 Laura Meeoy, "Health Benefits Fight Heats Up: South State Grocery Strike Spotlights a Contentious Trend in Contract Talks," Sacramento Bee A1 (January 19, 2004). ~ Nancy Cleeland, 'T2ity Report is Criticel of Wal-Mart Supereanters," Los Angeles Times C1 (December6,2003). 52 Recline Associates, Final Report on Reseorchfor Big Box Retail/Superstore Ordinance, prepared for Industrial and Commercial Development Division, Community Development D~partment, at 18-20 (October 28, 2003). 53 Michelle Maitre, "Wal-Mart is Suing Alameda County: Retail Giant Challenges Law that Bars Supercenters in Unincorporated Areas," Alameda Times-Star (Alameda, CA) at More Local News (January 27, 2004). 54 Jessiea Hall and Jim Troy, "Wal-Mart Go Home! Wal-Mart's Expansion Juggernaut Stumbles as Towns Turn Thumbs Down and Noses Up," WarfieM's Business Record 1 (July 22, 1994). 55 Bience and Zallner, supra note 1. 56 Matthew Swibel, "How to Outsmart Wal-Mart," Forbes. com (November 2 4, 2003 ). 57 Bianoo and Zellner, supra note 1. 5s Williams, supra note 14. 59 Steven Greenh~use~ ``St~t by Wa~-Mart C~eaners Asserts Rackets Vi~~ati~n,~~ New York Times~ ~2A (N~vember 1 I, 2003). ~0 Grag S~hneider and Dina EIBoghdady, "Wal-Mart Confh-ms Probe of Hiring," Washington Post El (November 5, 2003). 61 Greenhouse, supra note 59. 62 Sarah Paole~, "Q: Should illegal aliens be able to sue U.S. employers for labor racketeering?; Yes: Employees who have suffered discrimination or exploitation in the workplace are entitled to sue, regardless of their inunigration status," Insight Magazine 46 (Januat~ 19, 2004). ~ Steven Greenh~use~ ``~~~aga~~y in the U.S.~ and Never a Day ~~ at Wal-Mart~~~ ~nternati~nal HeraM Tribune 2 (November 6, 2003). 64 Jobwatch.org, Economic policy institute, http://www.iobwatchorg/(january 26, 2004)' 65 Economic Policy Institute, "Jobs Shift from Higher-Paying to Lower-Paying Industries," Economic Snapshots (January 21, 2004). 66 Ee~n~mi¢P~icyInstitute~"E~n~mi~Gr~wthN~tRea¢hingMiddle-endL~werWageEarners~Ec~n~mic Snapshots (Janua~ 28, 2004). WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 24 of 25 ~ Josh Bivens, Robert Sex)R, and Christian Weller, "Mending Manufactm~g: Reversing poor policy decisions is the only way to end current crisis," EPI Briefing Paper #44 (September 2003). 69 E~~n~mi~ P~~i~y Institute~ ``J~b Gmwth Up~ J~b Qua~ity D~wn~~~ Ec~n~mic Snapsh~ts (D~cember ~ 7~ 2~~3). 7o Ec~n~mi~ P~~i~y ~ns~tute~ ``S~u~ng Tmde De~~it Threatens t~ Destabi~ize U.S. Finaneia~ Markets~~~ Ec~n~mic Snapshots (January 7, 2004). 7~ Nancy Cleeland, Evelyn Iritani, and Tyler Marshall, "The Wal-Mart Effect: Scouting the Globe to Give Shoppers an $8.63 Polo Shirt," Los Angeles Times A1 (November 24, 2003). 72 Peter S. Goodman and Philip P. Pan, "Chinese Workers Pay for Wal-Mart's Low Prices," Washington Post A1 (Februmy 8, 2004). 73 Clecland, Ivitani, and Marshall, supra note 71. 75 Abigail Goodman and Neney Cleeland, "The Wal-Mart Effect: An Empire Built on Bargains Remakes the Working World," L~I. Times 1 (November 23, 2003); Charles Fishman, "The Wal-Mart You Don't Know," Fast Company 68 (December 2003). 76 Cleeland, Iritani, and Marshall, supra note 71. 77 Goodl~an and Pan, supra note 72. 78 Id. 7~ Id. 8o Id. al Id. az Id. 83 Carl Goldstein, "Wal-Mart in China," The Nation (November 20, 2003). an Id. 85 29U. S.C. §706etseq. 86 "Disabled Man Sues Wal-Mart," Business Journa/(Kansas City) (January 20, 2004). a7 Id. aa 29 II.S.C. § 651 etseq. a9 29 C.F.R. 1910.35 etseq. ~o Steven Greenhouse, "Work,s Assail Luek-Ins by Wal-Mart," New York Times 1 (January 18, 2004). 91 Id. 92 Id. 93 Id. 94 Id. ~ Walmartwateh.org, "Wal-Mart's War on Workers: Frontline Report from Texas and California," http://www.walmartwatch.com/info/intemal.cfm?subsection id=130&intemal id=351 (May 2, 2002). ~6 Greg Schneider, "Wal-Mart's Damage Control," Washington Post E 1 (January 24, 2004). 97 Gregory Freeman, Los Angeles Economic Development Corporation, Wal-Mart Supercenters: What's in Store for Southern California? 1-2 (January 2004). ~a Id. at 21. ~ See, e.g. http://www.wa~mart.c~m/cata~g~?a-t~ggsp?cat~=~-~:}~4~8~-h-=B&path=~%3A4~25%3A4~34(January 27, 2004). 100 ---, "Stone's Advice on Wal-Mart: You've Got to Change," Aurora News Register (Aurora, Nebraska), http://x~x~v, auroranewsregister, eom/128News 1.html (January 27, 2004). i0! Freeman, supra note 97 at 22. ~0~ Sottrce: Wall S~'eet Journal, "Too Valuable to Be Kept Employees Find that Success Leads to Higher Pay - and Vulne~bility when Companies Look to Cut Costs," Omaha World-HeraM (Nebraska) 1D (June 23, 2003). ~03 Simone Toth, "Retailers Stock Up for Another Slxong Year of Sales," San Diego Business Journal 14 (January 4, 1999); Bill Saporito, "A Week Aboard the Wal-Mart Express," Fortune 77 (August 24, 1992). ~o4 Freeman, supra note 97 at 23-24. ~o~ Miehae~ Hi~zik~ ``Wa~-Mart~ s C~sts Can~t A~ways Be Meast~ed~ Los Angeles Times (Febnmry 2~ 2~4). ~0~ Freeman, supra note 97 at 23-24. ~.: 107 Janet Adamy, "Wal-Mart's Bestirs Come Under Fi~," Contra Costa Times (Contra Costa, CA) ~tober 1~ 2003). :~.: WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 25 of 25 t~ Freeman, supra note 97 at 24. ~o9 Carl lngram, "Court OKs Health-Care Referendum," Los Angeles Times B6 (January 23, 2004). ~00pexmeerets.org, http ://~vww.opensecrets.org/softmone¥/sofleomp 1 .asp?lxtName=Wal-mart (January 26, 2004). m S~hneide~supran~te95;http://~vww.~pensecrets.~rg/~verview/topc~ntribs.asp?c¥c~e=2~4(February2~ 2004). Marian Karr From: linzwhy@avalon.net Sent: Tuesday, March 01,2005 4:14 PM To: cou ncil@iowa-city.org Subject: Vote NO on 05-70 Walmart purchase agreement To all Iowa City Council Members: As a local business owner, homeowner, taxpayer and Iowa City resident for the past 22 years, I urge you to vote against approving the purchase agreement between the city and Price Properties (Walmart's agents) described in RES. 05-70. While I applaud the Council's and other city boards' efforts to sell the commerical properties in question to help make the airport self-sustaining, the presence of a Walmart Supercenter in this space--a mere 1.25 miles from the center of our downtown--raises more problems than it could ever solve. Walmart's corrosive effects on our local economy need to be CONTAINED, not expanded. Walmart's questionable employment practices, low wages, poor benefits, corrupt manipulation of suppliers, and drains on the health of local small businesses and human services are all well documented and available in every form of media, and I would be happy to provide you with some sources. Hopefully, however, you will all have done enough research yourselves on this important consideration in order to make the best decision--and one that your community can live with for the forseeable future. It may take longer than we'd like, but there are thousands of corporations out there with far better track records on economic impact than Walmart, and with more time and creativity, we can eventually attract them. Meanwhile, If Walmart wants to be in Iowa City so badly, it should be forced to make do with the existing store that they wanted so badly years ago (and that so many of us NEVER wanted). In any case, they should not be given special treatment in order to further erode our local choices for grocery shopping and to bypass our carefully designed zoning requirements. Also, why should this already carefully developed land be wastefully torn up again for a business that doesn't fit the site? The negative environmental impact will be much less if we stick to our original design and sell only to businesses that are willing to adhere to OUR structures instead of usurping them. 1 See you at the meeting tonight! Sincerely, Lindsay ALan Park 401 Douglass St. Iowa City, IA 52240 Owner/Manager of The Framers' Intent 336 S. Clinton St. %11 Iowa City, IA 52240 fixingGetting 3.1 million from this bohemoth corporate empireWith a Walmart Supercenter already in existence just 5.5 miles away in Coralville, Iowa City would be unwise to go for the short term gain of 3.1 million dollars to allow a SECOND Supercenter EVERYDAY LOW WAGES: THE IllDDEN PRICE WE ALL PAY FOR WAL-MART A REPORT BY THE DEMOCRATIC STAFF OF THE COMMITTEE ON EDUCATION AND THE WORKFORCE U.S. HOUSE OF REPRESENTATIVES REPRESENTATIVE GEORGE MH,LER (D..CA), SENIOR DEMOCRAT FEBRUARY 16, 2004 WaI.Mart's Labor Record Report by Representative George Miller Februa~J 16, 2004 Page 2 of 25 TABLE OF CQNTENTS INTRODUCTION ......................................................................................................................... 33 WAI~MART'S LABOR PRACTICES ....................................................................................... WORKERS~ ORGANIZING RIGHTS .................................................................................. 3 LOW WAGES ........................................................................................................................... ~ UNEQUAL PAY AND TREATMENT ................................................................................... ~ OFF-TIt~~ WORK ..................................................................................................... ClHLD LABOR AND WORK BREAKS VIOLATIONS .................................................... 6 UNAFFORDABL~ OR UNAVAILABLE IIEALTH CARE ............................................... 7 LOW WAGES MEAN HIGH COSTS TO TAXPAVERS ................................................... 8 ILLEGAL USE OF UNDOCUMENTED WORKERS ....................................................... 10 TRADING AWAY JOBS ....................................................................................................... 11 14 DISABILITY DISCRIMINATION ....................................................................................... 14 WORKER SAFETY ............................................................................................................... WAL-MART'S RESPONSE ...................................................................................................... 19 CONGRESSIONAL RESPONSES ........................................................................................... LABOR LAW REFORM AND THE RIGHT TO ORGANIZE ........................................ 19 PROPOSALS TO INCREASE WAGES AND PROTECT OVERTIME ......................... 19 ...................................................................................................................... sw s.o s ....................................................................................................................... AFFORDABLE AND MEANINGFUL HEALTH INSURANCE ...................................... o FAIR TRADE AND THE FIGHT TO SAVE GOOD-PAYING JOBS ............................. 21 CONCLUSION ........................................................................................................................... 21 ENDNOTES ................................................................................................................................. 22 WaI.Marrs Labor Record Report by Representative George Miller February 16, 2004 p~e 3 of 25 The retail giant Wal-Mart has become the nation's largest private sector employer with an estimated 1.2 million employees.~ The ~mpany's annual revenues now amount to 2 perce~t of the U.S. Gross Domestic Product.2 Wal-Mart's success is aih-ibuted to its ability to charge low prices in mega-stores offering everything from toys and furniture to groceries. While charging low prices obviously has some consumer benefits, mounting evidence from across the country indicates that these benefits come at a steep price for American workers, U.S. labor laws, and community living Wal-Mart is undercutting labor standards at home and abroad, while those federal officials charged with protecting labor standards have been largely indifferent. Public outcry against Wal-Mart's labor practices has been answered by the company with a cosmetic response. Wal-Mart has attempted to offset its labor record with advertising campai~tyns utilizing employees (who are euphemistically called "associates") to attest to Wal-Mart's employment benefits and support of local comn~mities. Nevertheless - whether the issue is basic organizing rights of workers, or wages, or health benefits, or working conditions, or trade policy - Wal-Mart has come to represent the lowest common denominator in the treatment of working people. This report reviews Wal-Mart's labor practices across the country and around the world and provides an overview of how working Americans and their allies in Congress are seeking to address the gamut of issues raised by this new sta~aard-bem~ of American retail. WAL-MART'S LABOR PRACTICES WORK~RS' ORGANIZING RIGHTS The United States reco~nizes workers' right to organize unions. Government employers generally may not interfere with public sector employees' fireedom of association. In the private sector, workers' right to organize is protected by the National Labor Relations Act? · · 4 Internationally, this right is recognized as a core labor standard and a basic human right. Wal-Mart's record on the right to organize recently achieved international notoriety. On January 14, 2004, the International Confederation of Free Trade Unions (ICFTU), an sueda. . · · ' report on U.S. labor stanaards. Wal-tvlart s rampant wmauvu~ ~,~ prominently. In the last few years, well over 100 unfair labor practice charges have been lodged against Wal-Mart throughout the country, with 43 charges filed in 2002 alone. Since 1995, the U.S. government has been forced to issue at least 60 complaints against Wal-Mart at the National Labor Relations Board .s Wal-Mart's labor law violations range from illegally firing workers who attempt to organize a nnion to ~mlawful surveillance, threats, and intimidation of ~iiployees who aare to speak out. Wal.Marr$ Labor Record Report by Representative George Miller February 16, 2004 Page 4 of 25 With not a single Wal-Mart store in the United States represented by a union, the company takes a pro-active role in maintaining its union-free status. Wal-Mart has issued Manager's Toolbox to Rerl~aining Union Free;' which provides managers with lists of warning · ' ' homes" and signs that workers might be organizing, including '~requent meetings at essocmtes "associates who are never seen together start talking or associating with each other.'7 The "Toolbox" gives managers a hotline to call so that company specialists can respond rapidly and head off any attem~ by employees to organize. When employees have managed to obtain a union election and vote for a union, Wal- · · In 2000, when a small meatcutting depmhuent Mart has taken sweeping action m response, in Texas, Wal-Mart responded a week later successfully organized a union at a Wal-Mart store by announcing the phase-out of its meatcutfing departments entirely. Because of deficient labor laws, it took the meatcutters in Texas three years to win their jobs back with an order that Wal- · . · 8 Rather than comply, Wal-Mart is appealingthisdecisi°n'9 Mart bargain w~th thetr umon. Wal-Mart's aggressive anti-union activity, along with the nation's weak labor laws, have kept the largest private sector employer in the U.S. ~mion-free. Breo~king the law that guarantees workers' right to org~anize has material consequences for both the workers and the company. According to data released by the Bureau of Labor Statistics in January 2004, union workers earn $599 - a difference of over 26 percent. In the supormm .~,,~, union difference is ~-~ a0 nercent more than non-union workers. even morc p~, ~ · - ...... ~----"'~" For installce, 72 perccm ox ,an Union representation also corremtes yam mgncr o~x,t... . workers have guaranteed pensions with defined benefits, while only 15 percent of non-umon ' ecurit~ ~2 workers enjoy such retirement s ry. On the health care font, which will be explored in later, 60 percent of union workers have medical care benefits on the job, compared to more detail . only 44 percent ofnon-umon workers. For companies like Wal-Mart seeking to maintain low labor costs, these statistics obviously provide an incentive to remain union-free. Unfortunately, U.S. labor laws fail to provide a sufficient dis~centive against violating workers' rights. LOW WAGES By keeping unions at bay, Wal-Mart keeps its wages low -even by general industry standards. The average supermarket employee makes $10.35 per hour? Sales clerks at Wal- Some estimate that average "associate" salaries range ...... '---eek of 32 hours, many workers take home less than $1,000 per aveTage on-tHe-clOCK WOrltW ....... z^ ~ ,,__:1.. ~f three About one-third of Wal-Mart s employees are povorty line of $14,o3u lot a xaim~y u · These low wages, to say the least, complicate part-time, restricting their access to benefits? employees' ability to obtain essential benefits, such as health care coverage, which will be explored in a later section. "Our people make the The low pay stands in stark conlxast to Wal-Mart's slogan, people difference." Now-retired Senior Vice President Don Soderquist has explained: "'Our WaI-Mart'a Labor Record Report by RepresentaUve George hqlller February t6, 2004 Page 5of25 make the difference' is not a meaningless slogan - it's a reality at Wal-Mart. We are a group of dedicated, hardworking, ordinary people who have teamed together to accomplish extraordinary ,,~t~_~os ,a0 With 2002 comoany profits hitting $6.6 billion, Wal-Mart employees do indeed ~' ' ' xtcaordin ~in ,,21 But at poverty level wages, these workers are not sharing accomphsh e ary gs. in the company's success. UNEQUAL PAY AND TREATMENT Title VII of the Civil Rights Act prohibits discrimination in employment based on employees' race, color, religion, sex, or national origin.~ Additionally, the Equal Pay Act, an amendment to the Fair Labor Standards Act, prohibits uneq~3al pay for equal work on the basis of sex.z~ These basic labor and civil rights laws have become an issue at Wal-Mart. In 2001, six women sued Wal-Mart in California claiming the company discriminated against women by systematically denying them promotions and paying them less than men. The lawsuit has expanded to potentially the largest class action in U.S. history - on behalf of more than I million current and fomier feaiale employees. While two-thirds of the co~apany's hourly workers are female, women hold only one-third of managerial positions and constitute less than 15 percent of store managers,zn The suit also claims that women are pushed into '~female" depashaents and are demoted if they complain about uneq~ml treatment. One plaintiff, a single mother of four, started at Wal-Mart in 1990 at a mere $3.85 an hour. Even with her persistent requests for training and promotions, it took her eight years to reach $7.32 an hour and seven years to reach management, while her male counterparts were given raises and promotions much more quickly. For this~laintiff, annual pay increases were as little as 10 cents and never more than 35 cents per hour. OFF-T~K WORK While wages are low at Wal-Mart, too often employees are not paid at all. The Fair Labor Standards Act (FLSA), along with state wage and hour laws, requires hourly employees to be paid for all time actually worked at no less than a minimum wage and at time-and-a-half for all hours worked over 40 in a week? These labor laws have posed a particular obstacle for Wal- Mart. As of December 2002, there were thirty-nine class-action lawsuits against the company in thirty states, cl' ~a~7' g tens of millions of dollars in back pay for hundreds of thousands of Wal- Mart employees. In 2001, Wal-Mart forked over $50 million in unpaid wages to 69,000 workers in Colorado. These wages were paid only after the workers filed a class action lawsuit. Wal-Mart had been working the employees off-the-clock. The company also paid $500,000 to 120 workers in Gallup, New Mexico, who filed a lawsuit over unpaid work.2S In a Texas class-action certified in 2002 on behalf of 200,000 former and cun'ent Wal- Mart employees, statisticians estimated that the company shortchanged its workers $150 million over four year~. - just based on the frequency of employees working through their daily 15 minute break.n.29 Wal-,Mart'~ Labor Reoord Report by Representative George Miller February 16, 2004 Page 6 of 25 In Oregon, 400 employees in 27 stores sued the company for unpaid, off-the-clock overtime. In their suit, the workers explained that managers would delete hours from their time records and tell employees to clean the store after they clocked out. In December 2002, a jury found in favor of the workers?° One personnel manager claimed that, for six years, she was forced to delete hours from employee time sheets?1 In the latest class-action, filed in November 2003, noting evidence of systematic violations of the wage-and-hour law, a judge certified a lawsuit for 65,000 Wal-Mart employees in Minnesota. Reacting to the certification, a Wal-Mart spokesperson told the Minneapolis Star Tribune: "We have no reason to believe these isolated situations.., represent a widespread problem with off-the-clock work. ,32 Many observers blame the wage-and-hour problems at Wal-Mart on p~ssure placed on managers to keep labor costs down. In 2002, oper~tting costs for Wal-Mart were just 16.6 percent of total sales, com.n~d to a 20.7 percent average for the retail industry as a whole? Wal-Mart reportedly awards bonuses to its employees based on earnings. With other operating and inventory costs set by higher level management, store managers must turn to wages to increase profitsl While Wal-Mart expects those managers to increase sales each year, it expects the labor costs to be cut by two-tenths of a percentage point each year as well? Reports from former Wal-Mart managers seem to corroborate this dymtmic. Joyee Moody, a former manager in Alabama and Mississippi, told the New York Times that Wal-Mart "threatened to write up managers if they didn't bring the payroll in low enough." Depositions in wage and hour lawsuits reveal thai co~;~-,any headq-~rters leaned on management to keep their labor costs at 8 percent of sales or less, and managers in turn leaned on assistant managers to work their employees off-the-clock or simply delete time from employee time sheets? CHII.I) LABOR AND WORK BREAKS VIOLATIONS The Fair Labor Standards Act and state wage and hour laws also govern child labor and work breaks. These work time regulations have likewise posed a problem at Wal-Mart stores. In Jammry 2004, the New York Times reported on an int~aal Wal-Mart audit which found "extensive violations of child-labor laws and state regulations requiring time for breaks and meals.''36 One week of time records from 25,000 employees in July 2000 found 1,371 instances of minors working too late, during school hours, or for too many hours in a day. There were 60,767 missed breaks and 15,705 lost meal times? According to the New York Times report: "Verette Richardson, a fo~iuer Wal-Mart cashier in Kansas City, Mo., said it was sometimes so hard to get a break that some cashiers urinated on themselves. Bella Blaubergs, a diabetic who worked at a Wal-Mart in Washington State, said she sometimes nearly fainted from low blood sugar because managers often would not give breaks.''~s WaI-Mart'$ labor Record Report by Repre~nt~tlve George Miller February 16, 2004 Page 7 of 2~ A store manager in Kentucky told the New York TOnes that, after the audit was issued, he received no word from company executives to try harder to cut down on violations: "There was no follow-up to that audit, there was nothing sent out I was aware of saying, ',W~'re bad. We screwed up. This is the remedy we're going to follow to correct the situation.'''~ UNAFFORDABLE OR UNAVAHJABLE HEALTH CARE In 2002, 43 million non-elderly Americans lacked health insurance coverage - an increase of almost 2.5 million from the previous year. Most Americans receive their health in~qurance coverage through their employers. At the same time, most of the uninsured are working Americans and their families, with low to moderate incomes. Their e,:,£,loyers, however, either do not offer health insurance at all or the health insurance offered is simply unaffordable.40 Among these ~minsured working families are a si~gnificant nnmber of Wal-Mart employees, many of whom instead secure their health care from publicly subsidized programs. Fewer than half- between 41 and 46 percent- of Wal-Mart's employees are in.qured by the company's health care plan, compared nationally to 66 percent of eJ~ployees at large firms like Wal-Mart who receive health benefits from their employer.4~ In recent years, the company increased obstacles for its workers to access its health care plan. In 2002, Wal-Mart increased the waiting period for enrollment eligibility from 90 days to 6 months for full-time employees. Part-time e~ployees must wait 2 years before they may enroll in the plan, and they may not purchase coverage for their spouses or children. The definition of part-time was changed fxom 28 hours or less per week to less than 34 hours per week. At the time, approximately one-third of Wal-Mart's workforce was part-time. By comparison, nationally, the average wailing period for health coverage for employees at large firms like Wal- Mart was 1.3 months? The Wal-Mart plan itself shifts much of the health care costs onto employees. In 1999, employees paid 36 percent of the costs. In 2001, the employee burden rose to 42 percent. Nationally, large-faa~ ~loyees pay on average 136 percent of the ?remi_ 'u~. for ..heal? ~.msu~. ce. Unionized grocery workers typically pay nothing. Studies show tlmt much otme aecnne tn employer-based health coverage is due to shifts ofprcmium costs from employers to employees? Moreover, Wal-Mart employees who utilize their health cam confront high deductibles and co-payments. A single worker could end up spending around $6,400 out-of-pocket- about 45 percent of her annual full-time salary- before seeing a single benefit from the health plan.4~ According to an AFL-CIO report issued in October 2003, the eJ~ployees' low wages and Wal-Mart's cost-shiffing render health insurance unaffordable, particularly for those employees with families. Even under the Wal-Mart plan with the highest deductible ($1,000) - and Wal.l~lart'a Labor Record Report by Repre~ntative George Miller February 16, 2004 therefore with the lowest employee ptoaiium contribution - it would take an $8 per hour employee, working 34 hours per week, almost one-and-a-half months of pre-tax earnings to pay · e46 for one year of family coverag. Wal-Mart's spending on health care for its employees falls well below industry and national employer-spending averages. A Harvard Business School case study on Wal-Mart found that, in 2002, Wal-Mart spent an average of $3,500 per employee. By comparison, the average spending per employee in the wholesale/retailing sector was $4,800. For U.S. employers in general, the average was $5,600 per employee.47 In the end, because they cannot afford the company health plan, many Wal-Mart workers must turn to public assistance for health care or forego their health care needs altogether. Effectively, Wal-Mart forces taxpayers to subsidize what should be a company-funded health plan. According to a study by the Institute for Labor and Employment at the University of California-Berkeley, California taxpayers snbsidiT~l $20,5 million worth of medical care for Wal-Mart in that state alone.~ In fact, Wal-Mart personnel offices, knowing employees cannot afford the company health plan, actually encourage employees to apply for charitable and public assistance, accor0i_'ng to a recent report by the PBS news program Now With Bill Meyers? When a giant like Wal-Mart shifts health insurance costs to employees, its competitors invariably come under pressure to do the same. Currently engaged in the largest ongoing labor dispute in the nation, unionized grocery workers in southern California have refused to accept higher health care costs resulting flora cost-shit~dng on health insurance premmms by their grocery chain employers -cost-shifting, the grocers say, inspired by the threat of Wal-Mart competition. Be~nning on October 11, 2003, 70,000 grocery employees of Vous, Pavilions, Ralphs, and Albertsons have either been on strike or locked ouL The com?anies want to dramatically increase workers' share of health costs, claiming that the change is necessary in order to compete with Wal-Mart's incursion in the southern California market E. Richard Brown, the director of the Center for Health Policy at the University of California, Los Angeles, told the Sacramento Bee that, if the grocery chains drasti~ly reduce health benefits, the trends toward cost shifting and el~ralnation of health coverage will accelerate. Following the grocers' lead, more employers would offer fewer benefits, would require their workers to pay more, and may even drop health benefits altogether,s° Whether the cun~t pressure bom Wal-Mart is real or imagined or merely a convenient excuse for the grocers' cost-cutting bargoining position, Wal-Mart has sparked a new race to the bottom among American retail employers. Undeniably, such a race threatens to undermine the employer-based health insurance systerm LOW WAGES MEAN HIGH COSTS TO TAXPAYERS Because Wal-Mart wages are generally not living wages, the company uses taxpayers to subsi~i~.e its labor costs. While the California study showed how much ~xpayers were subsidizing Wal-Mart on health care alone, the total costs to taxpayers for Wal-Mart's labor policies are much greater. W~l-M~rt'$ L~bor R~ord Report by RepresentMive George Miller February 16, 2004 Page 9 of 25 Tho 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- about $2,103 per employee. 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, assr_lining 50 Wal-Mart families q~_mlify 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 (S-CHIP), assuming 30 employees with an average of two · $9,750 a year for the additional costs for low income energy assistance. Among Wal-Mart employees, some single workers may be able to make ends meet. Others may be forced to take on two or three jobs. Others may have a spouse with a better job. And others simply cannot make ends meet. Because Wal-Mart fails to pay sufficient wages, U.S. taxpayers are forced to pick up the tab. In this sense, Wal-Mart's profits are not made only on the backs of its ei~ployees - but on the backs of every U.S. taxpayer. The ultimate costs are not limited to subsidies for underpaid Wal-Mart workers. When a Wal-Mart comes to town, the new competition has a ripple effect throughout the community. Other stores are forced out of business or forced to cut employees' wages and benefits in order to compete with Wal-Mart. The Los Angeles City Council commissioned a report in 2003 on the effects of allowing Wal-Mart Supercenters into their communities. The report, prepared by consulting firm Rodino and Associates, found that Supercenters drive down wages in the local retail industry, place a strain on public services, and damage small businesses. It recommended that the City Council refuse to allow any Supercenters to be built in Los Angeles without a promise fxom Wal-Mart to increase wages and benefits for its employees,fl The fiodings of the Rodino report arc alarming. The labor impacts of a Wal-Mart Supercenter on low-income comm, nlties include: · '~Big box retailers and supcrstor~ may negatively impact the labor market in an area by the conversion of higher paying retail jobs to a fewer number of lower paying retail jobs. The difference in overall compensation (wages and benefits) may be as much as $8.00." · "Lack of health care benefits of many big box and superstore employees c~ result in a greater public financial burden as workers utilize emergency rooms as a major component of their health care." · "A study conducted by the San Diego Taxpayers Association (SDCTA), a nonprofit, nonpartisan organization, found that an influx of big-box stores into San Diego would WaI.Ma~ labor Record Report by Repre~entaUve George Miller February t6, 2004 Page 10 of 25 result in an ann,RI decline in wages and benefits between $105 million and $221 million, and an increase of $9 million in public health costs. SDCTA also estimated that the re~ion would lose pensions and x~eti~aent benefits valued between $89 million and $1 ?0 million per year and that even increased sales and property tax revenues would not cover the extra costs of necessary public services." · "[The threat of Wal-Mart's incursion into the southem California grocery market] is already triggering a dynamic in which the grocery stores are negotiating with workers for lowered compensation, in an att~,~t to re-level the 'playing field.'" · "One study of superstores and their potential impact on grocery industry employees found that the entry of such stores into the Southem California regional grocery business was expected to depress industry wages and benefits at an estimated range from a low of $500 million to a high of almost $1.4 billion annually, potentially affecting 250,000 grocery industry employees... IT]he full impact of lost ~w,~ages and benefits throughout Southern California could approach $2.$ billion per year.TM Reports such as these have provided supporting evidence to localities which seek to pass ordinances re~Uicting "big box" or supercenter stores. Such ordinances were recently passed in Alameda and Contra Costa counties in Califomia. Wal-Mart, however, has moved to overturn those orrlinanc~s. In Contra Costa, Wal-Mart launched a petition drive to challenge that county's an olx~inance passed by the Board of Supervisors in january One of the most cited studies on Wal-Mart's impact on local comm.nities was performed by economist Kenneth Stone a~ Iowa State University in 1993. Stone looked at the impact of Wal-Mart on small towns in Iowa~ He found a 3 percent spike in to~al retail sales in com~lunities immediately after a Wal-Mart opened. But the longer t~ effec~ of Wal-Mart were disastrous for nearby independent businesses. Over the course of the next several years, retailers' sales of mens' and boys' apparel dropped 44 percent on average, hardware sales fell by 31 percent, and lawn and garden sales fell by 26 pereenC Likewise, a Congressional Research Service report in 1994 explained that Wal-Mart uses a saturation stl~tegy with store development. In other words, it builds stores in healey connected markets in order to stifle any competition in the ~argeted area by the size of its presence? By all accounts, Wal-Mart's development strategy has been working. Currently, Wal- Mart operates around 3,000 total stores and clo~e to 1,400 Supercenter~ It is the largest grocer in the U.S., with a 19 percent market share, and the third-largest pharmacy, with a 16 percent market share. According to Re~,il Forward, a global manag~f,~ent consulting and research for every one Supercenter that will open, two supermarkets will close? Since 1992, the supermarket industry has experienced a net loss of 13,500 stores? Over the next five years, Wal-Mart plang to open 1,000 more Supercenters in the U.S? By 2007, Wal-Mart is expected ~ to control 35 percent of food and drag sales in the ~LEGAL USE OF UNDOCUMENTED WORKERS WaI-Mart's Labor Record Repor~ by Representative George Miller Februaw 16, 2004 Among the lowest paid workers in the U.S. economy are undocumented immigrants. As was reported in the fall of 2003, these workers are not foreign to the floors of Wal-Mart stores. On October 23, 2003, federal agents raided 61 Wal-Mart stores in 21 states. When they left, the agents had arrested 250 nightshift janitors who were undocumented workers? Following the arrests, a grand jury convened to consider chafing Wal-Mart executives with labor racketeering crimes for knowingly allowing undocumented workors to work at their stores. The workers themselves were employed by agencies Wal-Mart contracted with for cheap cleaning services. While Wal-Maxt executives have tried to lay the blame sq~arely with the contractors, federal investigators point to ~ conversations showing that executives knew the workers were undocumented? Additionally, some of the janitors have filed a class-action lawsuit against Wal-Mart alleging both racketeering and wage-and-hour violations. Acco~ing to the janitors, Wal-Mart and its contractors failed to pay thom overtime totaling, along with other damages, $200,000. One of the plaintiffs told the New York Times that he worked seven days ~ week for eight months, earning $325 for 60-hour weeks, and he never received overtime.61 A legal question now being raised is whether these undocumented workers even have the right to sue their amployers.62 Not surprisingly, this recent raid was not the first time Wal-Mart was caught using undocumented workors. In 1998 and 2001, federal agents arrested 102 undocumented workers at Wal-Marts around the country? President Bush's newly proposed tempoxaty foreign worker plan would legali:,~ such undocumented workers without granting thom an opportunity for citizenship, creating a new class of indentured servants and a safer source of cheap labor for companies like Wal-Mart. TRADING AWAY .lOBS Since the recession began in March 2001, the United States has lost 2.4 million jobs. In every recession, since the Great Depression, jobs were recovered within the first 31 months after the recession began - until now. The latest recession began 34 months ago and officially ended in November 2001, but the jobs have not been recovered. For American working families, by all accounts, the "jobloss recovery" has been of little benefit to them. While GDP growth was strong or solid in the third and fourth q~_~arters of 2003, real wages for workers remained stagnant and even declined-ca Indeed, of the jobs that remain, the pay is low. The country has seen a dramatic shift fxom high-paying jobs to low-paying jobs. For instance, in New Hampshire, which still has not recovered the ri, tuber ofjobs it lost in the recession, new jobs pay 35 peicent lower wages than lost jobs. In Delaware, those wages are 43 percent lower; in Colorado, 35 percent lower; in West Virginia, 33 percent lower. In fact, the low-pay shift has hit all but two of the fifty states? W,l-I~t'. I..bor Record Report by Repre~entetive George Miller February t6, 2004 Page 12 of 25 Moreover, these changes in the labor market reveal themselves in a marked decline in living standards for low- and middle-income workers. The real weekly earnings for full-time workers age 25 and older fell for the bottom half of the workforce between the fourth q, arters of · · ~ ' their weckl earnin s fall 1 2 2002 and 2003 In articular, workers m the 10 perce.nt~le saw y ~n~ . ~cent' in the ~0t~ ~centile, by 0.5 percent, in the 50*h percentile, b~ 0.1 percent?° Conversely, ~,w ~ . . . m ' ' Ce earners in the top percentiles of income experienced growth. The 90 percentile, for mstan , saw a 1.1 percent increase in weekly earnings. As the Economic Policy Institute points out: "This patte~ of earnings growth suggests that while the economy is expanding, the benefits of growth are flowing to those at the top of the wage seale.'67 These lower-paying jobs are largely service sector jobs, like retail, replacing traditionally higher-paying and ,nioni~t manufacturing jobs· Between ]an~_~_ory 1998 and August 2003, the · ' ' ' S 68 nation experienced a net loss of 3 rmlhon manufacturing job. During the "recover," 1.3 million manufacturing jobs disappeared.~ American manufacturers find it increasingly difficult to keep jobs in the U.S., given the availability of cheap labor abroad. In 2003, the U.S. trade deficit hit a record high of $551 billion, increasing 15 percent from 2002 and exceeding 5 percent of GDP.TM Wal-Mart plays a curiously illustrative role in this jobs phenomenon - not just in the creation of low-paying jobs and the downward pressure on wages and benefits, but also in the export of existing manufacturing jobs to foreign countries offering cheap labor. Wal-Mart markets itself with a patriotic, small-town, red-white-and-blue advertising motif. But Wal- Mart's trade practices are anything but small-town. Indeed, Wal-Mart conducts international trade in manufactured goods on a scale that can bring down entire nations' economies. While the red-white-and-blue banners ~e~ain, long-gone are the days when Wal-Mart abided by the mottos of'~Buy American" and "Bring It Home to the USA." In 1995, Wal-Mart claimed only 6 percent of i~s merchandise was importocL Today an estimated 50-60 percent of its products come from overseas? In the past five years, Wal-Mart has doubled its imports fi-om China. In 2002, the company bought 14 percent of the $1.9 billion of clothes exported by Bangladesh to the United States. Also in 2002, the co ~mpany purchased $12 billion in merchandise from China, or 10 percent of China's total U.S.-bound exports, a 20 percent increase from the previous year. In 2003, these Chinese purchases jumped to $15 billion, or almost one-eighth of all Chinese exports to the United States? Today, more than 3,000 supplier factories in China produce for Wal-Mart? Wal-Mart main~ins an extensive global network of 10,000 suppliers?4 Whether American, Bangladeshi, Chinese, or Honduran, Wal-Mart plays these producers against one another in search of lower and lower prices. American s_u~liers have been forced to relo~c~ate · their businesses overseas to maintain Wal-Mart coHi~v,,--ts. Overseas ma~~ are to engage in cutthroat competition that further erodes wages and working conditions of what often already are swea, shops. To keep up with the pressure to produce ever cheaper goods, factories force employees to work overtime or work for weeks without a day off. A Bangladeshi factory worker told the Los/ingeles Time~ that employees at her factory worked flora 8 a.m. to 3 a.m. for 10 and 15 day stretches just to meet Wal-Mart price demands. And still, Wal-Mart's Wal.,qilar~s labor R~ord Rq~ort by Reprmm~ve ~ 4~lller February t6, 2004 Page 13 of 25 general manager for Bangladesh complained of his country's factories, telling the Los ~4ngeles T/roes, "I think they need to improve. When I entered a factory in China, it seemed they are very fagt. ,,76 While low-wage jobs displace higher-paid manufacturing jobs in the United States, undercutting living standards at home, living stanasrds abroad are not reaping the benefits one might expect. Reports indicate that Wal-Mart's bargaining power is able to maintain low wages and poor working conditions among its foreign suppliers. The gg'ashington Po~t has explained: "As capital scours the globe for cheaper and more malleable workers, and as poor countries seek multinational companies to provide jobs, lift production, and open export markets, Wal-Mart and t~jmg of labor and consumption the world over." Thanks ~o a ~n on maepenoent and a lack of other basic human rights, China offers Wal-Mart a highly-disciplined and cheap workforce. A Chinese labor official who asked to remain anonymous for fear of p, nishment told the ff~ashington Post that "Wal-Mart pressures the factory to cut its price, and the factory responds with longer hours or lower pay. And the workers have no options.'?s One employee of a Chinese supplier described the difficulties of surviving on $'/5 per month. She could rarely afford to buy meat, and her family la~gely subsisted on vegetables. Over four years, she had not received a single salary increase. Wal-Mart has countered that it insists that its suppliers enforce labor standards and comply with Chinese law. One-hundred Wal-Mart auditors inspect Chinese plants, and the company has suspended con4xacts with about 400 suppliers, mainly for violating overtime limits. An additional 72 factories w~e permanently blacklisted in 2003 for violating child labor standards. Still, critics point out that the Wal-Mart does not regularly inspect smaller factories that use middlemen to sell to the company. Nor does it inspect the factories of subcontractors. A Chinese labor organizer explained that the inspections are "ineffective," since Wal-Mart us~mlly notifies the factories in advance. The factories "often prepare by cleaning up, creating fake time sheets and briefing workers on what to say?° The factories themselves corn?]sin that, because Wal-Mart demands such low prices, they have slim profit marina - if any. A manager of one Chinese supplier told the PZashington Po~t, "In the be~nning, we made money ... But when Wal-Mart started to launch nationwide distribution, they pressured us for a special price below our cost. Now, we're losing money on every box, while Wal-Mart is making more money.'~l Obviously, one way to regain a profit for such suppliers would be to be~n cutting back on labor costs. Finally, as testament to Wal-Mart's stalwart anti-,nion policy, none of its 31 stores in the company that it would not help workers fight tor mgner pay. ~omy enOUgh, China's Trade Union Law requires that any establishment with 25 or more workers must have a ,nion. Wal-Mart, however, claims that it has received assurances from the central government that it need not allow unions in any of its stores,s3 As one reporter has explained, "The explanation for the apparent contradiction may be that the government's desire for foreign Wal-Mart'$ Labor Record Report by Representative George Miller February t6, 2004 Page 14 of 25 investment and jobs trumps any concera for workers' rights. That wouldn't be surprising in the in environment, where ~l~ikes are forbidden and the official labor gro~u~ing actively Ch ese · · · ,,~ ' Chin an supports the government's efforts to block the rise of independent ~m~ons. With a, y company in search of pliant and cheap labor has found a perfect mix of cooperative government officials and workers made submissive through fear. DISABILITY DISCRIMINATION The Americans with Disabilities Act (ADA) prohibits disc~i,-~ination again~ persons with disabilities in employment matters. In particular, an employer may not discriminate against an employee or prospective employee who is otherwise qualified to perform the job if given TH J-*:Ol~ 85 reasonable accom oaau In addition to lawsuits over lost wages or uneq-al pay, Wal-Mart has faced a ban'age of lawsuits alleging that the company discriminates against workers with disabilities. In 2001, Wal- Mart paid over $6 THillion to settle 13 such lawsuits. These cases were brought by the U.S. Eq, al Employment Opport~mity Coll~aission (EEOC) on behalf of disabled persons whom Wal-Mart failed to hire. The settlement also required Wal-Mart to change its procedures in dealing with disabled job applicants and provide more training for its eJ~ployees on anti-discrimination laws.s6 Yet, on Jan-ary 20, 2004, the EEOC filed another lawsuit against the retail giant on behalf of a job applicant who claims he was not hired because he needed a wheelchair. The lawsuit was filed in Kansas City after the EEOC failed to obtain a settlement with Wal-Mart.87 WORKER SAFETY workplace injuries and illnesses.°° OSHA is entbrcocl oy me uepmi~ent ox Laoor a o up o, al and A. .tions. by agency out rules for such safety matters as the prowslon oxeya~s xor employ . The latest Wal-Mart sean~__al to hit the news is its reported lockdown of its nighttime shift various stores around the country. According to a January 18, 2004, New York Times report, the company institutes a "lock-in" policy at some of its Wal-Mart and Sam's Club stores?° The stores lock their doors at night so that no one can enter or leave the buil¢ling, leaving workers inside trapped. Some workers are then threatened that, if they ever use the fire exit to leave the building, they will be fired. Instead, a manager is supposed to have a key that will ,nlock doors to allow employees to escape. Many workers have found themselves locked in without a manager who has a key, as the New York Times story detailed? The company has claimed that the policy is designed to protect stores and employees from crime. Former store managers, however, have claimed the real reason behind the lockdown is to prevent "~hrinkage" - i.e., theft by either employees or outsiders. It is also designed to e~iTHinate unauthorized cigarette breaks or quick trips hor~.9~ WaI.Mart's Labor Record Repo~ by RepresentaUve Morge Miller February t6, 2004 Page t5 of 25 Locked-in workers have had to wait for hours off-the-clock for a manager to show up to let them go home after they completed their shift. One worker claims to have broken hi~ foot on the job and had to wait four hours for someone to open the door. Another worker alleges she cut her hand with box cutters one night and was forced to wait until morning to go to the hospital, where she received thirteen stitches.~ In the history of American worker safety, some of the worst tragedies have involved employees locked in their workplaces in an emergency, including the Triangle Waist Company fire of 1911 in which 146 women died in a fire because the g~,ument factory's doors were locked. As recently as 1991, 25 workers perished in a fire at a chicken processing plant in North Carolina. The plant's owner had locked the doors for fear of employee theft and unauthorized breaks. According to recent reports, ten percent of Wal-Mart's stores are subjected to the nighttime lockdown.~ In 2002, in a telling junction of alleged labor law violations, the National Labor Relations Board (NLRB) issued a com?lalnt against a Wal-Mart in Texas regarding health and safety threats made by management against employees. According to the complaint, a company official told workers that, after a worker filed complaints regarding unsafe conditions with the Occupational Safety and Health Administration (OSHA), any fines imposed upon the company would come out of employee bonuses?s WAL-MART'S RESPONSE Wal-Mart's response to this extensive list of labor probler~ has been to treat the charges as a public-relations matter and not a substantive issue of workplace fairness. Seemingly, Wal- Mart believes only its image - not its behavior- needs to be adjusted. In that regard, Wal-Mart has undertaken aggressive advertising campaigns, has financed its own economic-ira?act studies to counter those that show the costs of Wal-Mart to local comnmnifies, and has become a major political campaign contributor. On the advertising front, Wal-Mart launched a television ad series called "Good Jobs" in early 2004. The ads feature Wal-Mart em?loyees talking about how ~eat it is to work at Wal- Marl Spots also show Wal-Mart's community involvement. One ad features a Wal-Mart employee who attests that Wal-Mart health insurance made it possible to lreat his 7-year-old son for liver disease.96 It is not known what the total cost of the ad series will be in the end. Wal-Mart has also financed its own studies, to counter publicly commissioned reports which detail the burden that Wal-Mart inmoses on communities. After the Rodino report was commissioned by Los Angeles City CounCil members, the Los Angeles Economic Development Corporation (LAEDC), a private non-profit corporation, released its own study. The LAP. DC study was commissioned and financed by Wal-Mart Stores, Inc. Unsurprisingly, it claimed that Wal-Mart Supercenters would provide extraordinary benefits for the Los Angeles economy. Wal~lart'8 Labor Record Report by Representative George Miller February 16, 2004 Page 16 of 25 Because Wal-Mart would be char~ng lower prices, according to the report, households would experience greater savings. If Wal-Mart penetrates 20 percent of the market in the seven Southland counties, the savings, an estimated $3.6 billion, would then translate into the creation of an ineredi~ole 36,400 jobs ano~_~_ally. That is, while the study estimates that 3,000 to 5,000 jobs would be lost in the grocery business, consumer savings on food prices would turn into more consumer spending on non-grocery goods, creating more jobs in those sectors.97 Of course, it is not at all clear why job loss would be limited to the grocery business, since Supercenters, by their very nature, sell virtually any consumer good, except for durables like automobiles. According to the study, California consumers '¥aay opt to spend their savings on sports equipment, continuing education classes, or restaurant meals.''gs The study failed to mention that Wal-Mart already offers an extensive line of"sports equipment.''~ The "continuing education classes" were presumably listed because they may constitute job training for better jobs. And where would those better jobs be? It can only be assumed, as more people spend their grocery savings for "restaurant meals," much of the claimed job creation would be in restaurants and similar low-paying service sector businesses, for which conti~-ing education classes offer little advantage. The ultimate household savings projections by the LAEDC study should also be questioned. First, downward pressure on wages and benefits, spurred by the giant employer, would cause people to have less money to spend. Thus, while they may spend less on groceries, they also make less or may be spending more on former benefits like health care. Indeed, the study appears to not take into account the loss of such benefits as health care and pensions that workers are likely to experience. Second, when Wal-Mart has successfully reduced the number of surrotmding competitors, there is less pressure on the company to keep its prices low. Third, the claim that Wal-Mart does in fact charge cons~mers less is open to question. Economist Kenneth Stone has found that Wal-Mart lowers the prices of'~rice sensitive" items such as milk and bread. Consumers pay attention to the prices of these items - the kind of everyday items consumers buy most often - and less attention to the prices of other items such as light bulbs - which are not reduced and may be more expensive at Wal-Mart than at other retailers. The lower-priced items are displayed proyninently, grabbing customers' attention and leading them to mistakenly believe that they are getting similarly low prices on other items throughout the The LAEDC study also disputed the extent of wage and benefit differences between Wal- Mart employees and other retail or grocery workers. According to the LAEDC, wage comparisons are often skewed for two reasons. First, most Wal-Mart Supercenters have not been open long enough to allow employees to aco~mulate seniority and, therefore, higher rates of pay. S ond, Wal- . promo to m gement thi. its ow.. with the greatest longevity are u~_~_~lly no longer counted as hourly empioyees. The first reason does not appear to sq,,are with prolific reports about the intense pressure on stores to keep labor costs down. This story first appeared in the Wall Street Journal: At Wal-Mart Stores Inc., managers are judged in part on their ability to keep payroll costs at a s~ict percentage of sales, according to former managers. Some WaI-Mart'$ Labor Record Report by Representative George Miller February t6, 2004 Page 17 of 25 say that puts exh~ pressure on higher-paid workers to be more productive. "You keep people making $10 an hour to a high standard," putting more pressure on them for ~;ulll mistakes, said Lyndol Jackson, a Wal-Mart manager u~til he left for another job in 1998. Often, those workers quit and c. an be replaced less expensively, added Jackson, who lives in Memphis, Tenn. Former Wal-Mart cashier Dana Mailloux, 33, worked for eight years at a store in Fort Myers, Fla., moving up to $ 9.15 an hour. Last fall, her manager called her and more than a dozen other longtime employees into his office and told them he had to lay them off because of lack of work. That same day, Mailloux said, she passed a room with six new hires, red vests in hand, filling out paperwork. Returning to the store that weekend, she said, she saw newly advertised positions listed on a bulletin board. "Basically, I was thrown out like apiece of trash," said Mailloux. Wal-Mart spokeswoman Sarah Clark said the company continoally lays off and hires workers as sales rise and fall. She said that if"labor adju~iiiients are necessary," the coiiipany before making cuts asks for volunteers to take time off and carefully controls hours. "It is ludicrous and coai~aty to our business model to think the c. ompany would benefit from replacing experienced associates with new, lower-paid ones," Clark said in a statement. "It's clear that experienced associates are golden with us." Clark declined to discuss Mailloux's dismissal, citing employee privacy?a In other words, there may be other reasons for the wage difference than just the frequency of store openings. Nor does the lack-of-longevity reason for the wage differences square with previously-mentioned accounts of actual pay raises ofjust a few cents per year. The second reason claimed for wage differences - that Wal-Mart promotes its best employees to management - would appear to be exaggerated. To the extent that such promotions do happen, their effect on the average Wal-Mart wage must be minimal. Wal-Mart is not promoting half of its workforce. The average Wal-Mart store has one manager, one-to-three assistant managers, and 15 depmiiuent heads (who may or may not be counted as hourly), compared to 300 to 350 "associates.'1°3 WaI-Mart's Labor Record Report by Representative George Miller Februa~J t6, 2004 Page 18 of 25 Moreover, according to the study, Wal-Maxt's health care benefits are better than ellen porlrayed. The authors acknowledge that the Wal-Mart health insurance plan is not as coml:,~¢hcnsive as the uxlionized grocery store plans in Southern California and that Wal-Mart employees must pay part of the pr~afium while !mien workers pay nothing. However, the authors note, the Wal-Mart plan does not include a cap on medical expenses, thereby protexcfing participating employees from the bankrupting costs of c~astrophic illnesses. The unionized store plans do have a cap, according to the LAEDC study.~°4 The relative worth of a catastrophic plan versus a more comprehensive health plan comes into focus when considering the frequency with which workers utilize various services. While childrens' vaccinations are covered by the union plans, such routine medical needs are excluded from Wal-Mart's coverge. Such out-of-pocket costs for these low-wage employees might be $75 per shot at a private clflfic. On the other hand, Wal-Mart touts the 60 transplants it covers per year at a cost of $1 million each. As one commentator has noted, 60 hT,~splants amounts to · 105 slightly over one-hundredth of one percent of Wal-Mart's 500,000 insured workers. On the issue of health care coverage, the LAEDC study explained: Since they must pay some of the upfront costs of medical care, many Wal-Mart employees who are eligible for the coverage choose not to participate. This leads to much lower participation rates among Wal-Mart employees than among ~mion workers, virtually all of whom participate since their up front costs are paid by their employer. It is worth noting that more than 90 percent of all Wal-Mart em lo ecs have health coverage from some source, including the company its?~f, P Y . ' a covered spouse, parents, through retirement benefits (from another job), etc.'w According to the LAEDC, low participation rates in Wal-Mart's health plan are a matter of mere "choice," not affordability. Nevertheless, most Wal-Mart employees, according to the study, have health care fxom "some source," including "a covered spouse" - that is, a spouse at another company with better health care benefits, now subsidizing what should be Wal-Mart's labor cost. The study did not go into any further detail on what these Unnamed other sources of coverage might be, but did not rule out public assistance programs. In July 2003, California Assemblywoman Sandy Lieber (D-San Jose) released copies of employee handouts from Wal- Mart which explained how to use an employment verification service when applying for Medicaid, food stamps, and other public services.~°7 The LAF~DC study continued on the topic of health care coverage: "The issue of participation rates may become moot in California, however. In October, Governor Davis signed SB2 - Health Care for Working Families that mandates large employers to provide health coverage to all of their employees.'l°s While Wal-Mart currently covers about two-thirds of the costs of ~aployee health care, SB2 would require Wal-Mart to cover 80 percent. The long waiting periods for Wal-Mart coverage would also have to be cut by 3 months for full-6me workers and one-year and nine months for part-time workers. While the study claimed SB2 might render the debate over participation rates moot, it failed to mention that Wal-Mart has helped finance an employer-backed campaign for a referendum to repeal SB2?9 WaI-Mart's Labor Record Report by Repre~entative George Miller February 16, 2004 Page 19 of 25 On the political front, Wal-Mart has stepped up its campaign donations. The company contributed about $475,000 in soft money to the Republicans in the 2000 and 2002 election cycles, compared to $50,000 for Democrats in the same time period,il° In 2003, Wal-Mart contributed over $1 million to federal campaigns - 85 percent to Republicans and 15 percent to Democrats - jumping from the 71 ~ biggest campaign contributor in 2002 to the second biggest single contributor in 20037u These contn'butious come at a time when the public outcry again~ Wal-Mart's behavior is louder than ever. CONGI~,~$1ONAL RESPONSES Wal-Mart is certainly emblematic of ~l~actural changes within the U.S. economy. Unfortunately, as a rising standard-bearer of those changes, its employment practices pose a real and growing threat to U.S. labor st~mdnrds. Indeed, Wal-Mart's sheer size and market power render it more than just an emblem but a leading agent of these changes. While Congress has failed to address the issues posed by Wal-Mart's ascension, Congressional Democrats advocate a legislative program that tackles issues such as growing income disparities, the plight of the working poor, the lack of health care, unem?loyment and the shift from high-paying to low-paying jobs, the exodus of manufacturing jobs from the country, and the lack of effective enforcement of workers' rights. LABOR LAW REFORM AND THE RIGHT TO ORGANIZE Representative George Miller (D-CA) and Senator Ted Kennedy (D-MA), along with over 130 cosponsors, have introduced HR 3619 '~he Employee Free Choice Act." This bill consists of comprehensive reform of the nation's labor laws in order to give meaningful effect to workers' right to organize - an internationaily-recognized human right. The Employee Free Choice Act proposes triple damages for unlawful firings of pro-union workers during organizing drives, instead of the meager straight backpay remedy which allows e~-aployers to violate rights and destroy organizing drives at very little cost to them; imposes civil fines on employers who commit serious or repeated violations of the right to organize, instead of often meaningless and ineffective notice postings; provides for a card check system for choosing a nnion, rather than the easily-manipulated NLRB election process; and provides for first-contract mediation and binding arbitration, so that employers cannot stall bargaining until workers give up and abandon their union. PROPOSALS TO INCREASE WAGES AND PROTECT OVERTIME Democratic Members of Congress and Senators continue to fight for a higher minimum wage so that one day no one working full-time will be forced to live in poverty. While Wal-Mart typically pays more than the minimum wage, its average hourly rate still puts many working families below the poverty line. Additionally, Dvi~ocratic Moaibers of Congress and Senators are fighting the Bush Administration's atten~ t to gut the nation's overtime laws. Under the Bush Ad~:~inistration's Wal-Mart'~ labor Record Report by Repr~entatlve George Miller February 16, 2004 Page 20 of 25 proposed rule, 8 million working Americans will lose their overti_'me pay. In exchange, the Bush Administration claims 1.3 million Americans will gain the fight to overtime pay; the real number is actually much less, according to analysts at the Economic Policy Institute. President Bush's Depmi~ent of Labor has issued public advice to employers on how to skirt the law and avoid paying even those additional workers any overtime pay. Other proposals aimed at improving workers' living s~ana~rds include tax cuts targeted to working families and making higher education more affordable by boosting funding to Peil grants and increasing the HOPE Scholarship tax credit. Cong~ssmembers and Senators have fought the Bush AdminisU~tion's efforts to privatize Social Security and have worked to shore up the private pension system of employer-based retirement plans with proposals to protect the pensions of older employees and give workers greater control over their pension savings. CltlLD LABOR Representative Tom Lantos (D-CA), along with over 40 cosponsors, has introduced HR 3139, '~he Youth Worker Protection Act,' which imposes limits on the amount of hours teenagers - who should be focused on their education - may work. Wal-Mart's internal audit in 2000 poinied to extensive child labor violations. Longstanalng research has established the detrimental i .m~mcts of excessive work on school perfo,~oance. SWEATSHOPS Democrats, led by Representative George Miller (D-CA), have introduced HR 3550, '~he Recruiter Accountability AcC" This hill holds labor recmit~ and employers accountable for the promises they make to foreign workers when they lure them to the U.S. Recruited workers often find that, despite promises of good pay and healthy working conditions, their new jobs provide poverty wages - if any wages, at all - and no benefits such as basic health insurance. Additionally, workers are kept in debt to their recruiter for brining them to the U.S. Democrats will put an end to this practice - which not only amounts to exploitation of foreign workers but undercuts the wages and benefits of working Americans. Democrats are also introducing a bill to prevent federal agencies from contracting with anyone who operates or does business with a sweatshop. Taxpayer dollars should no longer be used to enrich those who violate basic human rights at home or overseas. AffORDABLE AND MEANINGFUL HEALTH INSURANCE Congress continues to look for solutions to the health care crisis in this country. Democrats have offered mixes of public and employer-sponsored plans to achieve ,niversal care - a key policy goal of the party. They have also focused on the cost of health care. As Wal-Mart d~i~onsixates, offering a health care plan to ~mployees is not enough if employees cannot afford to participate. Proposals include providing tax credits to small businesses to assist them in providing a health plan, reducing the prescription drug prices by making it easier for generic WaI-Mart's Labor Record Report by Repre~entative George IIIIler February 16, 2004 Page 21 of 25 drags to be sold, and ensuring a Medicare prescription drug benefit that obtains the best prices for seniors. I*~IR TRAI}E ANI) TIlE FIGitT TO SAVE GOO1)-PAYING JOi~ Democrats have led the call for fair trade agr~m~nt~ - with anvironmental antilabor standard protections. American manufactttmm simply cannot compete with foreign workforces that are paid l~mnies l~r hour, utilize child and slave labor, and do not enjoy basic human rights. Dolno~mls ere oxploring ways to ~nd sweatshop practices around the world; to ousure basic human fights at home and abroad for all workers; and to ultimately stop the exodus ofjobs out of the country. Proposals include tltx deductions for manufac~ who expand th~q_r U.S. Oly~mltions and fully funding job training and mal~ufltctufing davelopmcnt programs. CONCLUSION Wal-Mart's success ha~ m~mt downward pressur~ on wages and I~mefits, rampant xa'olations ofbs~ic workers' rights, and threats to the standard of living in comm~mities ll~rnss the country. The succe~q of a busine&q need not come at the expe~e of work, rs and tho families. Such short-sighted profit-malting strategies ultimately undermine our economy. In the past few yearn, Wal-Mart has been subjected to dozens of class-action suits seeking backpay for hundr~kq of thousands of shortchange! workers, dozc~ns of ~mfalr labor practice complaints by the U.S. government for violations of workers' right to organize, and other legal aotious stemming from the company's ~mployment practices. At the 8anlo time, it ha.q mallaged to keep its wages low and put suppliers on a downward spiral to cut their own wages. To k~ up with Wal-Mart's low-eom demands, U.S. manufactures have found it incre~in~y difficult to remain in the U.S. Cuts in health care benefits to Wal-Mart employoes ~ pushing other U.S. groc~s to do the same. Wal-Mart's current behavior must not be allowed to set the standard for American labor pr0xltices. Standing togothcr, Adnefica's working fitmilies, including Wal-Mart omployoes, and their allies in Congress oen reverse this raoe to the bottom in the fast-oxpllllding servi~o indll~try. The promise that evea'y American can work an honest day's work, receive an honest day's wages, raise a family, own a home, have decent health care, and send their children to college is a promise that is not easily abtmdoned. It is, in shot1, the American Dream. WaI-Mari'$ labor Record Report by Representative George Miller February 16, 2004 I Anthony Bianco and Wendy Zellner, "Is Wal-Mart Too Powerful?" Business Week 100 (October 6, 2003). 2 Charles Stein, "Wal-Mart Finds Success, Image Breed Contempt," Boston Globe HI (November 30, 2003). 3 29U.S.C. § 141 etseq. ~ International Labor Organi~,ation, Convention No. 87, Freedom of Association and Protection of the Right to Organize (1948), and No. 98, Right to Orgnmize and Collective Bargaining (1949). ~ Inl~mational Confed~tion of Free Trade Unions (ICFTU), Internationally Recognised Core Labour Standards in the United States: Report for the IWI'O General Council Review of the ~rade Poh~ies of the United States IG-eneva, January 14-16, 2004). Id~ at 3-4. 7 Wal-Mart, A Manager's Toolbox to Remaining Union Free at 20-21 (no d~to). Available online at shttp://www.ufcw.ow,/issues and actions/walmart_workers_cam.~gn_info/relevant_links/anfi_union manuals.cfm. Pan Demetrakakes, "Is Wal-Mart Wrapped in Union Phobia?" Food & Pac~ging 76 (August 1, 2~)3). 9 Dan Kasler, "Labor Dispute Has Historical Precedent," Scripps Howard News Serv/ce (November 3, 2003). l0 Bureau of Labor Statistics, Department of Labor, "Union Members in 2003," Table 1 (January 21, 2004). u Stephen Franklin and Delroy Alexander, "Grocery Walkouts Have Broad Reach," Chicago Tribune CI (November 12, 2003). ~2 Bureau of Labor Stalistics, Depadm~t of Labor, "g. mpIoyee Benefits in Private IndusU3r, 2003," Table 1 ~ Charles Williams, "Supermarket Sweepstakes: Traditional Grocery Chains Mull Responses to Wal-Mart's Crowing Dominance," ~ Post and Cour/er (Charleaton, SC) 16E (November 10, 2003). ~6 "Unaffor,~_a_ble Health Care, Low Wages, Sexual Diac~minafion- the Wal-Mart Way of Life," http://www.ufcw.org/workplace connections/retail/industrv_news/index.cfm (January 26, 2004). ~? Doug Dority, "Thc People's Campaign: Jnstice(~Wal-Mart," Air Line Pilot 55 (February 2003). ~8 Bianeo and Zeliner, supra note 1. ~ PBS, "Store Wars: When Wal-Mart Comes to Town," http://www.pbs.org/itvs/storewars/stores3.html (February 2, 2004). Thia p0rcentagc of part'me ~loyees was based on the ea~lie~ Wal-Mart definition of part-time as working 28 houra or less per week. In 2002, Wal-Mart changed the doi'~ition to less than 34 hours per week, which likely increased the company's number of pa~-t~me workers. ~0 Wal-Mart.corn, "3 Basic Beliefs," http://www.walmartstores.com/wmstore/wmstores/M~nabout.isp?~a~etwe=about&categ°rvOID=-82 42&ca~- 8242&template=ContentLanding.isp (January 26, 2004). 2~ Karen Olsson, "Up Againnt Wal-Mm't," Mother Jones 54 (March/April 2003). zz 42U.S.C. §2000ee~seq. ~ 29 U.S.C. § 206. ~4 Neil Buckley and Caroline Daniel, "Wal-Mart vs. the Workers: I _-~hour Grievances Are Stacking Up Against the World's Biggest Company," Financial T/roes 11 (November 20, 2003). ~ Shcryl McCarthy, "Wal-Mart- Always Low Wages for Women!" Newsday (May 1, 2003). ~ 29U.S.C. § 201 etseq. z~ Associated Press, "Federal Jury Finds Wal-Mart Guilty in Overtime Pay Case;' Chicago Tribune, Business 3 ~(~ce~ 20, 2003). ~ Stm, en Gree~hon~e, "Snits Say Wal-Mart Forces Worke~ to Toil Offthe Clock," New York Tirnes Al (June 25, 2002). ~o Asaociatod pre~a, supra not~ 27. ~t Kristian Foden-Vencil, "Multiple Lawsuits Accuse Wal-Mart of Violating Workplace Regulations," NPR Morning Edition (Janum3r 14, 2004). ~ Gwendolyn Freed and John Reenan, "Wal-Mart Suit Get~ Class Status," Star Tribune 1D (NOVember 6, 2003). WaI-Mart'~ Labor Record Repo~ by Representative Oeorge 14111er February 16, 2004 Page 23 of 25 ~ Greenhouse, supra note 29. ~ United Food & Commercial Workers (UFCW), "Wal-Mart's War on Workers' Wages and Overtime Pay," http://www.ufcw.org/press_room/faet sheets and backgrounder/walmart/wages.cfra (January 26, 2004). ~ ~house, supra note 29. ~6 Stevan Greenhouse, "In-House Audit Says Wal-Mart Violated Labor Laws," New York T/me.s 16A (January 13, ~-004). s7 Id. 4o Kaiser Family Foundation, The U~: /i Primer- Key Facts/ibout/itncricans Without Health Insurance, at I (December 2003). 4~ AFL-CIO, ~zal-Mart: ~In l~.,;~_,nple of~f'hy Workers Remain Uninsured and Underinsured, at 1 (October 2003). 4a Id. at Il. 44 John Holahan, '%'Smnges in gmployer-Sponsored Health Insurance Coverage," Snapshots of/imerica's Families 17/, Urban Institute (September 17, 2003). 4s AFL-CIO, supra note 41, at 16. 4~ Id. at 12. 47 Panjak Gbemawat, Ken Mark, and Stephen Bradley, "Wal-Mart Stores in 2003," case study, Harvard Business School (revised January 30, 2004). 4s Sylvia Chase, "The True Cost of Shopping at Wal-Mart," Nowwith B///Moyers, Transcript (December 19, 2003). ~0 Laura Mecoy, "Health Beaefits Fight Heats Up: South S_m_t_e_. Grocery Strike Spotlights a Contentious Trend in Contract Talks," Sacramento Bec Al (January 19, 2004). si Nancy Cleeland,"City Report is Critical of Wal-Mart $opercenters," Los/inge/es ~r/mes CI (December 6, 2003). a Rodino Asso~ates, Final Report on Researchfor Big Bax Retail/Superstore Ordinance, prepared for In~ and CoJ~,i-,~cial Development Division, Community Development Departmant, at 18-20 (October 28, 2003). ~ Michelle Maitre, "Wal-Mart is Suing Alameda County: Retail Giant Challenges Law that Bars Supercenters in Uaincorpor~ed Areas,"/i/ameda T/me.s-St~r (Alameda, CA) at More Local News (January 27, 2004). s4 Jessica HaH and Jun Troy, "Wal-Mart Go Home! Wal-Ma~'s Expansion Juggea~ant Stmnhles as Towns Turn Ttmmhs Down and Noses Up," Warfield's Business Record I (July 22, 1994). ~ Bianco and Zellner, supra note 1. ~6 Matthew Swibel, '`How to Oatsaiart Wal-Mart," Forbes. corn(November 24, 2003). ~ Bianco and Zeliner, supra note 1. ~ Williams, supranote 14. ~ 5teven Greenhouse, "Suit by Wal-Mart Cleaners Asses'ts Rackets Violation," New York T/me.s, 12A (November 11, 2003). ~0 Greg Schneider and Dina EIBoghdnt~y, "Wal-lvlaR Com%tiis Probe of Hiring," ~Fas/tington Post El (November 5, 2003). ~l Greenhouse, supra note 59. ~2 Sarah Paoletti, "Q: Should illegal aliens be able to sue U.S. employers for labor raclmteet~g?; Yes: Employees who have suffet'~d discrimination or e~tploitation in the workplace are entitled go sue, regardless of their immigtnltion status," In.~ght Maga~ne 46 (January 19, 2004). 6s Steres Greenho~, "Illegally in the U.S., and Neve~ a Day Off at Wal-Mart," International Herald Tribune 2 ~Novzmber 6, 2003). Jobwatch.org, Economic Policy Institute, http://www.jobwatch.org/(January 26, 2004). 6~ Economic Policy Institute, "Jobs 5hilt fzom Higher-Paying to Lower-Paying Industries," Econom/c ~apshots ~anuaty 2 ~, 2004). Economic Policy Institu~, '~momic Growth Not Reaching Middi~- and Lowe~ Wage Earners," Economic Snapshots (January 28, 2004). Wal-Illart's I.~bor Record Repo[t by Representative George Miller February t6, 2004 Page 24 of 25 ss Josh Bive~s, Robert Scol~, and Christian Weller, "Mending Manufacturing: Reversing poor policy decisions is the only way ~o e~d current crisis," EPI Briefing Paper ~44 (Seplm~aber 2003). ~ Economic Policy Institute, "Job (~row~h Up, Job Qaality Dowlt,' geo~gmie ~]g~ty ~be~ 17, 2003). ~ Economic Policy Institute, '~ouring Trade Deficit Tin. tens to Destabilize U.S. Fin~cial Markets," Economic Snapshots (January 7, 2004). ?t Nancy Cieeland, Evolyn Irltani, and Tyler Marshall, "l~he Wal-Ma~ Effect: Scom~g the Globe to Give Shoppe~ an $8.63 Polo Shirt," Los.4ngeles Times A1 (November 24, 2003). r~ Peter S. Goodman and phil¥ P. Pan, "Chinese Workers Pay for Wal-Mart's Low Prices," Washington Post A1 Cleeland, I~mnl, and Ivial~aall, s~pra noto 71. 7s Abigail Goodman and Nancy Cleeland, "The Wal-Mart Effect: An g. mpire Built on Bargains Remakes the Wor!dng World," L.4. T/roes I (November 23, 2003); Charles Fiahman, "The Wal-Mart You Don't Know," Fast Company 68 (De~mlber 2003). 76 Cleeland, Iritani, and Marshall,supra note 71. ~ Goodman and Pan, supra note 72. si Id. mid. ~ Carl Goldatein, "Wal-Mart in China," The Nation (Noveanber 20, 2003). ~ 29 U.S.C. § 706 et seq. ~6 "Disabled Man Sues WaI-Ma~,' Business Journal 0Can~ City) (January 20, 2004). ~ 29U.S.C. § 651 etseq. ~ 29C.FAL 1910.35 etseq. 9o Stevon Greenhouse, "Workers Assail Lock-Ins by Wal-Mart," New York Times I (January 18, 2004). 9~ Id. ~Id. ~ Walmartwateh.org, "Wal-Mart's War on Workers: Frontline Report f~om Texas and California," http://www.walmartwatch.com/info/internal.cfm?subsection id=130&intemal id=351 (May2,2002). 96 C_n'eg Schneider, "Wal-Matt's Damage Control," Washington Post E1 (January 24, 2004). v Grogery Fr~num, Loa Angeles Economic Development Corporation, Wal-Mart Supercenters: What's in ~tore for Southern California? 1-2 (January 2004). ~ Id. at21. 99 Se~ e.g., http.//www.walmart-com/catalo~/catal°~ ~sl~?cat--4134&lr=B&path=0%3A4125%3A4134(January 27, 2004). ~0o ~, "S~one's Advice on Wal-Mart: You've Gotto Change,"-4urora News Register(Aurora, Nebraska), http://www.auroranewsregister.com/128News I .ht~nl (January 27, 2004). ~ot Freeman, supra note 97 at 22. t0~ Sonr~: Wall Sm~ Journal, "Ton Vab~ahl¢ to Be Kept gmployees Find that Success Leads to Higher Pay- and Vulnerability when Companies Look to Cut Costa," Omaha World-Herald (Nebnmka) ID (hme 23, 2003). to~ Simone Toth, "Retailers Stock Up for Another Strong Year of Sales," San D/ego Bus/ness Journa/14 (January 4, 1999); Bill Saporito, "A Week Aboard the Wal-Mart Express," Fortune 77 (August 24, 1992). ~o~ Freeman, supra note 97 at 23-24. to~ Michael I-Iiltzik, "Wal-Mart's Cesta Can't Always Be Measured," Los ~ngeles Times (February 2, 2004). ~o6 Fr,.man, supra note 97 at 23-24. ~o~ Janet Adamy, "Wal-Mart's Benefits Come Under Fire," Contra Costa Times (Contra Costa, CA) (October 19, :003). ~o~ Freeraan~ supra note 97 at 24. ~o~ Carl Ingrain: "Court OKs Health-Care Referenchnn? Los Angeles Times B6 (.lanua~ 23, 2004). uo ~pense~rets~rg~http://www~p¢nsecrets~rg/s~ne¥/s~f~c~mp~asp?txtName=Wa~mar~(Jm~uary26~2~4)· m Schneider~supran~te95;http://www~p¢ns~crets~r~/~vervi~w/t~pc~ntn~s~asp?c~c~¢=2~4(February2,