Op-ed: A Walmart in Midtown will hurt job growth, local businesses

By | January 30th, 2012 | 8 Comments

A Miami blogger weighs in on the prospect of a Walmart opening in Midtown. -- photo from Wikimedia Commons

This opinion piece is part of an ongoing Open Media Miami series about the proposed Walmart in Midtown. Open Media Miami is a community news partner of Beached Miami for coverage of Wynwood, Midtown, and the Biscayne Corridor.

In the past couple of weeks, there has been a lot of conversation regarding the opening of a Walmart in Midtown, and I have been very vocal in my anti-Walmart stance. Everyone is entitled to their opinion. But you can’t build a biased and misinformed argument for your cause in a public forum. At a time when we are discussing the welfare of our community, there is a lot of danger in ignorance and misinformation.

Bringing a Walmart to the the center of a thriving community is a horrible idea. But to say that it is only a horrible idea because of its lack of aesthetic value or who the potential customers are going to be is an incredibly simplistic line of reasoning. Opening a Walmart in Midtown is a bad idea because Walmart eliminates more jobs than it creates, drives out competitors, lowers wages for the rest of the industry, and costs taxpayers money.

Some argue that a Walmart would create jobs when the reality is that within a year, a Walmart in Midtown is more likely to result in a net loss of jobs and undermine wages in the displacement. It is very risky to believe that all jobs are created equal. Walmart jobs are created at the expense of higher-paying jobs from active players within communities.

In his op-ed (originally published on Jan. 18), Kareem Zarwi told a story about driving 20 miles away to the Walmart in Doral to buy a bike. He took away his business from one of the three locally owned bicycle shops in the Midtown area to go enjoy Walmart’s low prices.

Walmart is not even here and already it wins.

In any case, Mr. Zarwi wrote his article as a rebuttal to Grant Stern’s article (originally published on Jan. 10), which, although impassioned and on the right side of the issue, lacked facts beyond the commonsensical. I am going to point out a few facts worth mentioning.

According to a Walmart financial report, in 2010 the company had revenue of 408.2 billion dollars. That is more than the Gross National Product of more than half of all the countries in the world. In the United States, it employs 1.4 million people — one percent of the U.S.’s 140 million total workers.

The salary for full-time employees is on average $8.81 an hour for 28 to 40 hours a week. This pay scale places employees with families below the federal poverty line, which as you may know opens the door to public assistance. Someone said to me that it doesn’t make a difference if Walmart employees get public assistance, considering they’d get it anyway if they are unemployed. It is my belief that people working full time should be able to cover their basic needs. A decent day’s wages for an honest day’s work.

The Democratic Staff of the Committee on Education and the Workforce estimated that one 200-person Walmart store may result in a cost to federal taxpayers of $420,750 per year. 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 Walmart 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, assuming 50 Walmart 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, assuming 30 employees with an average of two children qualify
— $9,750 a year for the additional costs for low income energy assistance

According to the St. Petersburg Times, in 2005 Wal-Mart Corp. had more employees and family members enrolled in Medicaid than any other company in Florida. From the 91,000 full-time and part-time employees Walmart had in Florida at that time, 12,300 workers or dependents were eligible for Medicaid and 3,342 children qualified for Florida Healthy Kids and KidCare.

An excerpt of a Walmart internal memo posted by the New York Times illustrates that this is something they are aware of, if not part of their business plan: “We also have a significant number of Associates and their children who receive health insurance through public-assistance programs… In total, 46 percent of Associates’ children are either on Medicaid or are uninsured.”

Since the ‘80s, Walmart has collected more than a billion dollars in tax breaks and subsidies, which have deprived communities of income and reallocated funds that could have been used for schools, police, public works, or even to help pay for the same public programs their employees require for survival. Still, taxpayers are also stuck with paying a good portion of the health care bill. Walmart doesn’t bring any kind of long term value to the communities it serves.

A 2004 paper by two professors at Penn State University found that U.S. counties with Walmart stores suffered increased poverty compared with counties without Walmarts. As the world’s largest retailer, it sets standards for wages, benefits, and corporate responsibility, which impact millions of retail workers and their communities. A study by UC Berkley’s Labor Center found that Walmart reduces the take-home pay of retail workers by $4.7 billion dollars annually.

The company is also strongly anti-union and has opposed the Employee Free Choice Act. Whereas Walmart employees start at the same salary as unionized employees in similar lines of work, they make 25 percent less than their unionized counterparts after two years at the job.

Walmart has a long history of labor violations, from failing to pay workers for overtime hours, violating child labor laws, discrimination, and locking workers in stores at night. In February 2011, in a hearing before the NYC Council, Annette Bernhardt, policy co-director of the National Employment Law Project, said the following about Walmart:

“The right to be paid at least the minimum wage and the right to be paid overtime, are being violated at alarming rates. The sheer breadth of the problem, as well as its profound impact on both workers and their communities, demand urgent attention”

Social responsibility and good corporate citizenship are necessary for a business to thrive in a community and to allow the community to thrive with it. Walmart has neither. And I am not the only one who thinks so. On Jan. 3, the largest pension fund in the Netherlands divested itself of all shares in Walmart as a result of the company’s anti-union position and poor labor standards.

It is a mistake to bring Walmart to the Midtown/Wynwood area, which has become the artistic center of the City of Miami. To expose this still fragile area to the life-sucking force that is a Walmart might irreparably damage the community. We need our local businesses to be able to thrive so that we can ensure that the full time workers in our community can earn decent wages that will keep them from being a burden on taxpayers.

Despite what Walmart may think, struggling for survival shouldn’t have to be some people’s American dream. If you haven’t already, I encourage you to go sign the petition to keep Walmart out of Midtown!

A.C. Fernandez is a Miami Beach resident from New Jersey who works in technology and communications. She holds a BS in Social Psychology and a BA in Government from the University of Maryland and an MBA from Florida International University. She writes a lifestyle blog called Annush on the Causeway, where this article was originally posted. You can follow her on Twitter @annush1.

8 Comments on “Op-ed: A Walmart in Midtown will hurt job growth, local businesses”

  1. 1 Craig Chester said at 10:47 am on January 31st, 2012:

    Right on, A.C – well articulated and reasoned.

    The story about Mr. Zarwi going to buy a bike at Wal Mart was a great example of a story I’d like to share.

    A few weeks ago, someone came to play bike polo at Riverside Park with the Miami Bike Polo group. He had just bought his bike for $100 at Wal-Mart. In the first game, he was involved in a routine collision of wheels that happens quite frequently. Only this time, his wheel was immediately ‘taco-ed’ and terribly bent out of shape, rendering the bike unrideable. In fact, one of the other players was actually able to bend the wheel back with his hands and feet to somewhat center it! Hardly a sign of quality.

    Economic negatives aside, a core argument against Wal Mart is nothing there is built to last. Nothing. You get what you pay for. Junk.

  2. 2 Zach said at 2:32 pm on January 31st, 2012:

    A while back I wrote a post about Walmart. I don’t have much love for them, but one person I spoke with opened my eyes to a different side of the company. With unemployment still high and stagnating wages, Walmart may be the most affordable place for many struggling families. Read all my nonsense HERE.

  3. 3 Jordan Melnick said at 3:40 pm on January 31st, 2012:

    An excerpt from Zach’s piece: “There are a million reasons to be against this thing, and I support them all. But as I run through them in my head and spout them off to friends and family, there’s a deepening pit in my stomach because I know there are people out there who this would help. Of course an organically developed, blocks-long strip of locally owned shops and eateries frequented by locals and international visitors would do the same.” Therein lies the rub.

  4. 4 Zach said at 5:57 pm on January 31st, 2012:

    Thanks for fixing my terrible link. The ‘rub’ as you so eloquently put it is the same rub that got us the stadium we around during Critical Mass. It’s the same thing that has people standing behind this casino. When you’re hungry you need a meal that day, you don’t care if it’s mechanically separated chicken. When you’re cold you need a jacket, and you don’t care if it’s made out of polyester in a sweatshop in Chengdu.

    We need entrepreneurs, people with testicular fortitude to say “you know what, we got this,” and open small groceries, pharmacies, clothing stores, hardware stores and so on. But really how’s some guy with business degree from FIU, a non-paying marketing internship (that he’s working after graduation), and a part time job at Starbuck’s going to get $50,000 from a bank to do that?

    The big issue is how do we get Miami as a whole to, at least for a little while, think long term and cut the feet off of the developers and politicians that runs this place.

  5. 5 Roscoe Jeneer said at 8:10 pm on January 31st, 2012:

    Being a lifelong New Yorker, in the lower Eastside of Manhattan. This us(RICH, WELL OFF), vs them (POOR,NOT EDUCATED) thing occured there too. The poor living in my area got pushed out because they could no longer afford to live there. For the simple fact that the artist, and the preppy styled people, wanted, and started opening up stores and restaurants, that only a well off, person could afford. A Walmart in mditown Miami, (Why can’t Miami STOP BEING LIKE NY!!!It isn’t going to happen..Midtown Miami, what a joke) will bring in people that the surrounding neighborhood WANTS to avoid. The POOR and Uneducate!!

  6. 6 what's wrong with wm? said at 11:49 pm on February 1st, 2012:

    walmart is like a large target. but no one complains about target. what else in that neighborhood? mostly clothing, pharmacy + grocery chains. they are the ones that are going to take a hit.

  7. 7 Monturan said at 5:16 pm on February 2nd, 2012:

    One of the reason that Walmart wants to open a Walmart in Midtown is because Midtown is developed in a Brownfield site and the day they open they get $2,000 per job they create; so they would get $800,000 CASH from the Government the day they open. “Look it Up” These is one of many tricks you learn when your business plan is to Milk the System.

    Walmart has engaged Gensler a top architecture firm so they can use that card for PR. They she at least hire a local Architect

    And last but not least, Walmart is trying to design the parking garage entrance on Midtown Blvd which is a primary road, this is not to code under Miami 21 or SD27.2

    Question: If you were Walmart would you hire Public Relations companies or even an IT guy in India to post positive comments on negative articles?

  8. 8 Cesar Barroso said at 9:02 pm on February 3rd, 2012:

    When I think Walmart I think about the poor people who live in Wynwood or around it, who need to stretch every cent in their pockets to buy groceries. People who have no place nearby to buy fruits and vegetables to avoid the killing circle of fast food joints.
    Isn´t this a free country? Or is it a free country only for the rich?

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