Here’s an interesing blog post on the differnce in dynamics when cities deal with Wal-Mart as opposed to smaller, rural communities: http://www.theatlanticcities.com/jobs-and-economy/2013/07/exactly-when-city-strong-enough-spar-walmart/6176/
I’m fine with Wal-Mart moving on to Mexico, or somewhere in the developing world, because, to be honest, I think that is a better fit for who their customers are.
You guys talk about wages like an employer is a government and the wage is an entitlement. Instead, the employer has needs. The employer needs labor to run their business. The laborer needs wages in order to live their lives and buy things. There is no entitlement either way. The laborer is not entitled to wages nor is the employer entitled to labor. Which means the wages the employer pays reflects the collective valuation of those wages as set by the laborers who choose to accept employment. If the wages were patently unreasonable, they would have no labor and would go out of business.
Whatever the merits of the arguments against Walmart, this one doesn’t hold up. Any Walmart employee who is collecting public assistance would be doing so if Walmart weren’t there. It’s not like Walmart is somehow poaching employees who would otherwise be working for Nordstrom and forcing them to take a crap wage. And it’s not like Nordstrom has been clamoring to move into these areas.
It’s the classic battle over Walmart that’s happened all over the country. The DC Council has crafted the legislation narrowly to exempt its existing constituents, the small local retailers who are the true intended beneficiaries. Like Walmart, they pay crap wages, but they contribute to local campaigns, maintain connections with council staff, etc.
Yeah, this was something people overly complained about in the Wal-Mart documentary. There is a really long history of all types of communities essentially giving public subsidies to business. I don’t know the history of D.C. but if Ravenman is correct, substantial business growth in D.C. has already occurred with substantial public monies going toward it. Cities have traditionally subsidized shopping malls, old style department stores and etc. Rural and more suburban areas are much more likely to have big box stores than traditional shopping malls or department stores, or “main street” style stores, so that is where their public subsidies have tended to go. Even many small businesses receive some form of subsidy. I know of very few major cities in America these days that haven’t made special tax arrangements with “downtown business districts” usually populated primarily by small storefront businesses.
Wal-Mart is not inherently Mexican or anything, that doesn’t make sense. There is a huge market for Wal-Mart and Target (basically same store with a different coat of paint), that market may not be the less than 15% of Americans who live in a highly urbanized area, but for the rest of the country Wal-Mart is pretty in line with what people want.
So if a business is going to receive financial support from the city, wouldn’t it the duty of DC elected officials to see that those funds are put to good use and that the city got the best deal for the community? The 8 elected officals who passed this legislation clearly thought it was in the city’s interest to pass it. If their constituents disagree, they can let them know at the ballot box.
To me, Wal-Mart sends the message that this is a Wal-Mart kind of community: down scale and low rent. It’s like when you see a street with a lot of pawn shops and check cashing places, it sends the message that the community is not vibrant.
That’s all well and good if the business exists in a pure free market, but the OP already includes an example of why it doesn’t. If Wal-Mart has figured out how to game the public assistance network by paying employees less and shifting their economic burden to taxpayers, it’s certainly within the taxpayers’ rights to make them stop doing that.
Furthermore, just because Wal-Mart can get away with paying $8 an hour, doesn’t mean it’s best for the community. Low wages in a higher-income area mean either people living in squalor (and I’d rather not have neighbors living in squalor), or people commuting long distances for those low-paying jobs. If forcing a higher wage eases the burden on (subsidized) public transportation and/or roadway congestion, then isn’t that a good reason for taxpayers to step in?
That might be true in a stagnant economy such as found in many rural areas. But DC is a growing economy, and it is geographically well positioned to push out the poor to areas where they become some other state’s problem.
I asked this earlier in the thread, and I really am interested in an answer. When you say costs are being “shifted” to the taxpayer, are you saying that taxpayers will pay more in public assistance once a Walmart moves in? How is this possible?
See my question about the underemployed person and Mediciad, posted around noon today.
In Minnesota, there is a very large percentage of part (and full) time associates availing themselves of federal and state funded welfare programs: SNAP, some family cash, a LOT of childcare subsidies, and many, many mor availing themselves of Medicaid and state-funded MinnesotaCare. Wal-Mart health insurance is not deemed cost effective to most associates.
So what is really interesting is that we have this giant big box conglomerate availing itself of every tax advantage, and taxpayers are ALSO funding many of their associates because Wal-Mart refuses to pay anywhere close to an actual livable wage. My brother works the night shift at Wal-Mart. He has been there for two and a half years. Shows up every day. I do not believe he has ever even used a sick day. Gets great evaluations. Has been passed over for promotion, or even getting of the graveyard shift, half a dozen times. He’a not looking for promotion to management, just moving from stocking shelves to perhaps customer service or cashier or loss prevention. He makes $10/hr WITH night differential AND after having been there for several years. It is where people who have few choices, and yet do NOT want the shame and stigma of completely or even partially relying on welfare go to work. There is a heavy element of exploitation.
I agree with the notion of big box being forced to pay a means-tested livable wage. They are HARDLY going to go out of business. They will parlay that to higher prices (hey, maybe they will destroy fewer local businesses as an added bonus!) or they will cut thei own shareholder profit margins from wildly and obscenely wealthy to merely obscenely so.
It’s possible if Wal-Mart pays less than the competition. Consider an employee at Cares-a-Lot making just enough money to be ineligible for public assistance. Wal-Mart offers him less money, which will bring him under the maximum income level and get him taxpayer dollars to make up the difference. The employee doesn’t care because he’s making the same as before. Wal-Mart wins because they force taxpayers to pay their employees. Cares-a-Lot either goes out of business because they can’t compete with Wal-Mart, or they adopt Wal-Mart’s strategy of mooching off the taxpayers. Taxpayers who shop at Wal-Mart probably come out ahead. Taxpayers who don’t get screwed.
To be fair, I have no idea if this scenario is realistic.
I understand that many people working crappy jobs get public assistance. I’m sure there’s a lot of McDonald’s workers who get Medicaid, too. However, several times people have implied, if not said, that Walmart stores raise costs to local government (there was a reference to $1 million per store in an earlier post).
I just don’t see how a Walmart would raise costs, if they’re hiring people who are un- or under-employed, who would have been eligible for public assistance anyway. It’s not like architects and civil engineers are quitting higher paying jobs with good health benefits to work at Walmart.
Do I support Walmart’s low wages? No. I go into a Walmart like maybe once a year, mostly because I think the stuff they sell is mostly junk, and the name-brand stuff (cat food or whatnot) I buy at the grocery store or elsewhere. But I just don’t follow this line of argument that Walmart is costing taxpayers money.
There have been a number of studies on the impact of Wal-Mart on communities. This article reports on Wal-Mart’s estimated impact in one neighborhood of DC:
Thank you, I will read that.
I agree it’s not inevitable in any case, but the trend lines are pretty clear. Given that the government is not moving anytime soon, those areas will see investment as other areas become more expensive. Government can provide a catalyst in the form of subsidies, but it’s not necessary in most cases.
I believe the government greased the wheels and incentivized some of the land acquisition, but by and large, Walmart has not asked for too much, which is fairly admirable.
Usually, but in this case, “fairly close” includes two other states.
It does in terms of jobs, which is the main reason people are supposing Walmart coming.
I don’t think they should. But, I think that has to be part of the consideration when cities make decisions.
In short, because a store with a large footprint, and to be honest, lower income clientele, requires government to spend more money; sometimes more than it takes in in taxes. Take for example the proposed Walmart on Georgia Ave. That area already has terrible traffic as it handles cars leaving the Rock Creek going to various parts of MD. The congestion and resultant accidents have costs. The store also will require a larger police presence in the area. Even minor things like snow removal have costs. Factor in other things like increased likelihood of injury on the job, Walmart lowering property values, and Walmart driving down other wages, and it becomes clear that in some cases, their presence can cost a city money.
I would think most of the time, it works out how you suggest. However, in a significant portion of time, these people get stuck in this economic purgatory where they never progress past this point. The alternative might be that rather than subsisting on poverty wages, they might take advantage of government loans for school or job training they may not be able to get or use if they have a full time job. Even if they are not bettering themselves, the benefit of them staying home to raise their kids properly might be better for society in the long run. Either way, it’s not a guarantee, but there are studies that say Walmart tends to increase government outlays.
I doubt they can. With a few exceptions, over the border is some of the most expensive and developed land in the country.
I don’t think either’s survival is dependent upon this decision, but I am not sure Walmart has less to lose.
Should there be no minimum wage? How far to do you want to take this argument? Furthermore, you don’t have a choice to sell your labor in an absolute sense. You generally can’t prostitute yourself for example.
The safety net screws with wages. Living wage laws attempt to counteract that. Not saying it is always a good idea, but it’s attempting to fix a problem created in part by the safety net.
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I don’t think either’s survival is dependent upon this decision, but I am not sure Walmart has less to lose.
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I didn’t say anything about survival, just my own opinion that DC needs this more than Wal-Mart does. 4 stores aren’t going to do much to Wal-Marts bottom line, while jobs are always a help, especially in distressed areas, which I believe the areas where these stores are being proposed are.
No, I don’t think there should be a minimum wage, but it’s a minor distortion of the market so it causes little harm. IMHO it does little good either, but that’s another story and just my opinion.
Of course you can sell your labor, and of course you can prostitute yourself. Go to any major city and you will see it happening all the time. That it’s illegal doesn’t negate the fact that you can do it if you really want too. You just have to pay the consequences if you are caught, as with many other things you could sell your labor to do.
No, safety nets don’t screw with wages. And they cause less distortion in the market by giving aid through direct taxation instead of back door taxes that generally the poor and middle class would have to pay in the form of higher prices for low end goods and services. I realize that the folks proposing this (mainly) have good intentions, but you realize that this paves the road to hell, right? 
People should be compensated exactly what their labor is worth, without distortion. If we, as a society, want to ensure that people don’t fall below some yard stick wrt standards of living and basic necessities such as food, then the right way to do that is through general taxes and the various safety net programs we already have. Distorting the labor market basically either drives up the price for goods and services and/or forces industry to relocate/offshore/outsource to cheaper labor markets either in the country or in another country…which then throws the problem back on general taxes ANYWAY, but without the jobs. Thus, it puts MORE pressure on our safety net system, instead of alleviating it, since not only do we have to pay for basic services for the folks who would have worked at Wal-Mart, but now we have to pay even more since they don’t have even a basic job. Plus, the folks who could have taken advantage of shopping at Wal-Mart for lower priced goods and services now can’t, or they have to travel further, thus costing them more. It’s a lose/lose trying to do it this way…IMHO anyway, FWIW. I’m no economist, nor do I play one on the SDMB. I DID stay at a Holiday Inn Express last week though…
One cost: Wal-mart moves into town, opens a ginormous Super Store, and all sorts of jobs suddenly become available. Exciting times for all. Many people who weren’t gainfully employed (perhaps it’s a small town with limited employment access; perhaps it’s a booming city in suburbia – notably more impact on a small farming community, but an impact there is for both, since the number of jobs available suddenly explodes). Only, Wal-Mart doesn’t pay its associates anywhere close to prevailing wage in that area. It doesn’t have to. There will always be many people for whom Wal-mart is a better alternative than unemployment: the elderly, looking to supplement social security … college students, seeking the flexibility of part-time hours … people who simply do not have a skill-set that is attractive to other employers. Let’s say prevailing wage was $9/hr before Wal-Mart came to town. They offer $7.75 or whatever federal minimum wage is. What do you think will immediately happen when other employers realize that the “Big Box across town” is offering $1.25 less per hour? More importantly, what will happen to that community when Wal-Mart begins an aggressive campaign of lowering costs – sometimes at a loss to that store – so that they can undercut ma & pa hardware, Friendly Joe’s grocery store, and even Farmer John’s Grain 'n Seed? How long until they’ve eliminated the competition-- thus, other jobs in the community (never mind; they’ll all come apply at Wal-Mart for a pay cut!)? And how soon do you think they’ll then raise those prices to match what they’re selling mops and brooms and pork chops for in markets that are already heavily saturated, with multiple competitors?
Just a note – a lot of those quotes were attributed to DrCube when I was the one who was actually quoted.
FWIW it appears the study that “estimates” a Wal-Mart costs the taxpayers $900,000 per year is based on a situation unique to Wisconsin and it also makes the leaping assumption that somehow all the costs involved from low income workers would not exist if those same workers did not work at Wal-Mart. But if the alternatives are that they work at Wal-Mart, do not work, or work somewhere else for better pay it seems highly likely to conclude a substantial portion of those Wal-Mart employees would either work somewhere else for no better pay, or not work at all. The idea that taking someone off the unemployment rolls represents Wal-Mart raising the costs for taxpayers is highly disingenuous.
Further, this report was released by congressional Democrats, direct to the Huffington Post. It ignores large parts of the bigger picture and to me seems most likely to be a directed effort on behalf of Big Labor (which hates Wal-Mart) to somehow create a public perception that providing jobs actually is the same thing as making taxpayers pay for things.
I also question the theory that Wal-Mart, by lowering prevailing wages or putting smaller businesses out of business is having a substantial impact on taxpayer costs. I doubt there is a substantial difference in hourly pay between a cashier at a family owned supermarket and a cashier at Wal-Mart. “The High Cost of Low Prices” highlighted supermarket employees who had health insurance and etc, but mom and pop supermarkets offering any form of health insurance to non-management employees would generally be the exception to the rule. Further, even when offered it tends to be the high cost / low benefit plan typical of what most other employers of unskilled low-wage labor provides.
So even if someone loses their job making $11.00/hr because Wal-Mart put their employer out of business and has to take a job at Wal-Mart making $9.50/hr, I doubt that there are enough people who fit that scenario who you can directly blame on Wal-Mart to equal a huge cost to taxpayers. Not to mention, this equation ignores the fact that lower prices means greater disposable income in the pockets of consumers, which has nothing but positive effects for the economy, laborers, and the taxpayers.
I’ve yet to seen any non-partisan, compelling research suggesting that Wal-Mart has the ability to lower wages where it operates or that every Wal-Mart employee hired increases the nominal cost to taxpayers (which appears to be the core assumption of the report released by Congressional Democrats.)
I didn’t say you did.
Not all of the stores are in distressed areas. More importantly, the people working at Walmart may not necessarily be the ones living in the areas where the Walmarts are.
The point is that there is not absolute right to sell your labor without any consequences or restrictions.
Of course they do. Fewer people would work at places like Walmart for the wages they pay if they didn’t have SNAP and other programs.
That can never happen though. There will always be distortion.
Not in the case of a company that sells physical goods. Walmart can’t necessarily just offshore their operation. More importantly, you are ignoring another outcome: Walmart just makes less money in profit. If you are going to pretend we are all purely rational economically speaking, so long as Walmart doesn’t literally lose money paying $12.50/hour (which I doubt they would), they will continue to build the stores. Either way, I am not sure why you think it more efficient to collect money from everyone via taxation, pass it through the government, then give it back to some people who are often only failing to get by because certain companies don’t pay “enough”.
This doesn’t actually turn out that way in reality. See the linked article a few posts above.
My apologies.
Because I am a yuppie looking for a 2 bedroom home with metro access in an urban area within the $250-$350k range? Young families who desire are prices out of progressively sketchier and sketchier areas, and the days of moving to NOMA or Petworth or Eckington are long gone.
If there is metro or even a decent bus the yuppies will come.