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walmart subsidy watch.org

WALMART ALERT


Wal-Mart's Healthcare Cost To Taxpayers By State


wakeupwalmart.com

 
walmartwatch.com

sprawl-busters.com

walmartworkersrights.org

warnwalmart.org

walmartwork.org

walmartsurvivors.com

indiafdiwatch.org

lawmall.com/wal-mart

livingeconomies.org

amiba.net

newrules.org

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VIDEOS


Wal-Mart: The High Cost of Low Prices

(walmartmovie.com)

Independent America:
The Two Lane Search
for Mom & Pop
(independentamerica.net)

Big Box Mart
(jibjab.com

Garth Brooks Parody (walmartworkersrights.org)

"Is Wal-Mart Good for America?"
Frontline, PBS Video,
www.pbs.org

The Labor Video Project Fighting Wal-Martization

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BOOKS

The Case Against Wal-Mart
By Al Norman Raphel Marketing ruth@raphael.com:

Wal-Mart: The Face Of Twenty-First Century Capitalism
Edited By Nelson Lichtenstein
The New Press www.thenewpress.com

The Great Risk Shift:
The Assault on American Jobs, Families, Health Care and Retirement
By Jacob S. Hacker
Oxford University Press www.oup.com

War On The Middle Class:
How the Government, Big Business, and Special Interest Groups Are Waging War on the American Dream and How to Fight Back
By Lou Dobbs Viking,
a member of Penguin Group www.penguin.com

Momentum: Igniting Social Change in the Connected Age
By Allison H. Fine Jossey-Bass www.joseybass.com:

Big-Box Swindle:
The True Cost of Mega-Retailers and the Fight for America's Independent Businesses
By Stacy Mitchell,
www.beacon.org
 www.newrules.org

Wal-Mart: The Face Of the Twenty-First-Century Capitalism Edited by Nelson Lichtenstein 
by The New Press www.thenewpress.com

The Bully Of Bentonville
How the high cost of Wal-Mart's Everyday Low Prices is Hurting America
By Anthony Bianco
by Doubleday  specialmarkets@randomhouse.com

How Wal-Mart Is Destroying America (and the World),
By Bill Quinn,
www.tenspeed.com

The United States of
Wal-Mart,
By John Dicker,
www.penguin.com

 Slam-Dunking Wal-Mart,
By Al Norman,
www.sprawl-busters.com

Nickel and Dimed,
By Barbara Ehrenreich, 
www.henryholt.com

Death By Discount,
By Mary Vermillion, 
www.maryvermillion.com

The Wal-Mart Effect
By Charles Fishman www.penguin.com

Megamall On The Hudson
By David Porter and
Chester L. Mirsky
www.trafford.com

«
STUDIES

Big Box Backlash
«
Alachua County Commission
«
Trip Generation Characteristics of Free-Standing Discount Supercenters
«
Shameless: How
Wal-Mart Bullies Its Way Into Communities Across America Study

«
What Do We Know About Wal-Mart? 
«
The Wal-Mart Game
«
The Shils Report
«
PBS Frontline Report
Is WalMart Good For America?

«
Bakersfield Ruling
«
Bakersfield Report
«
momandpopnyc.com
momandpopnyc.blogspot
«
UC Berkeley Labor Center
The Hidden Cost of WalMart Jobs

«
Northern California Big Box Studies 
«
Radio Broadcast
Past Radio Shows
«
The EEOC will hold the companies like Wal-Mart accountable for violating
the Americans With Disability Act. 

read more

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Contact Us
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«ARTICLES FROM JANUARY 2004 TO MARCH 2004
 
Article Date Published Newsource

Joining the PAC: Wal-Mart Opens for Business In a Tough Market: Washington -Famously Apolitical Retailer Plunges Into Lobbying And Becomes Top Donor -A Big Defeat On Banking

March 24, 2004

 

By Jeanne Cummings
The Wall Street Journal
 

Knoxville Wal-Mart, Pepsi feud over pricing

March 22, 2004

By HAL HATFIELD Knoxville, IA, Journal-Express

Wal-Mart going urban - Retailer sets its sights on urban areas eager for retail March 22, 2004

BY HEATHER LANDY - Fort Worth (Texas) Star-Telegram

Mediation Settles Workers Compensation Suit Against Wal-Mart

March 22, 2004

Associated Press
 

From the homeland... California communities, labor union go to battle against influx of grocery-selling Wal-Mart stores. : Super fight on supercenters

March 14, 2004

BY ALEX DANIELS - ARKANSAS DEMOCRAT-GAZETTE
 

County rolls back Wal-Mart gift Albany

March 9, 2004

By CATHY WOODRUFF
Albany GA

Wal-Mart's impact far-reaching

March 8, 2004

By JEFFREY RUBIN - The Globe and Mail, CanadaMonday,

Towns can expect more - even from Wal-Mart

March 8, 2004

Whitney Gould - Milwaukee Journal-Sentinel       

Wal-Mart draws Capitol Hill fire - Labor practices nettle lawmakers March 7, 2004   BY PAUL BARTON
ARKANSAS DEMOCRAT-GAZETTE

Wal-Mart targeted by official - Labor unions pay W. Sac councilman to lead fight.

March 6, 2004

By Melanie Payne -- Bee Staff Writer

Deptford [NJ] rejects Wal-Mart store - Planning board's 7-2 vote baffles Mayor Bain

March 6, 2004

By GENE VERNACCHIO
Courier-Post Staff

Cities vow to oppose Wal-Mart

March 5, 2004

By Peter Felsenfeld - CONTRA COSTA TIMES

Wal-Mart to Convene Board Meeting in China

March 4, 2004 www.chinaview.cn
SHENZHEN,  (Xinhuanet)

Wal-Mart needs to tell its side: analyst Shares rise on dividend lift; analyst questions practices

March 3, 2004

 

By Jennifer Waters, CBS.MarketWatch.com

California tries to slam lid on big-boxed Wal-Mart March 2, 2004

By John Ritter,
USA TODAY

Trial Ordered In Wal-Mart Case

February 27, 2004

 

By Rob Moritz - Arkansas News Bureau

Wal-Mart stands out on rolls of PeachCare Retailer's sign-up ratio far exceeds other firms'

Published on: 02/27/04

By ANDY MILLER - The Atlanta Journal-Constitution

Working: Wal-Mart practices lead race to bottom

February 25, 2004

By Mary Conroy - Madison Capital Times

A better way to control growth

February 25, 2004

 

Greg Feere, Tim Frank
San Francisco Chronicle

Workers' Rights Are Being Rolled Back

February 25, 2004

By Steven Pearlstein Washington Post

General delivery; Retired Marine Jarvis Lynch Jr. directs battle against Wal-Mart

February 24, 2004

NICK MASON - The Bradenton Herald

Wal-Mart the largest corporate donor in US election

February 24, 2004

By Edward Alden and Neil Buckley - FINANCIAL TIMES 

Our view: Wrong place for a Wal-Mart....

February 23, 2004

By: North County Times - Editorial

Faced with opposition, Wal-Mart can play hard ball

February 23, 2004

By Greg Kane -
Lodi News-Sentinel Business Editor

WHY EVERYONE DOESN'T LOVE WAL-MART

February 22, 2004

by Ann Woolner
Pittsburgh Post-Gazette

Wal-Mart vs. Contra Costa County

February 22, 2004

Ruth Rosen -
San Francisco Chronicle

Wal-Mart hours case goes ahead

February 20, 2004

BY JULIE FORSTER - St. Paul Pioneer Press

Immigrant seized in Wal-Mart raid gets a reprieve - Janitor can temporarily stay in U.S. to testify in labor case

February 20, 2004

BY BRIAN DONOHUE - Star-Ledger Staff

Jury: Wal-Mart must pay 83 for overtime

February 18, 2004

Associated Press

Wal-Mart nation: the race to the bottom

February 18, 2004

By Floyd J. McKay - Special to The Times

Miller supports 'big-box' Measure L Congressman's report says Wal-Mart has hidden taxpayer costs, which company disputes February 17, 2004  By Matt Carter, Staff Writer -Valley Herald
 

Wal-Mart plans to do away with bar codes

February 15, 2004

The Dallas Morning News - Charleston Gazette

What if Wal-Mart took over the world?

February 15, 2004

Bob Mook - Fort Collins Coloradoan

Wal-Mart's low prices carry a high price tag here and abroad When you think about it, the price you pay at Wal-Mart isn't so low after all.

February 15, 2004

 
RICHARD AMRHINE - The Free Lance-Star.
 

Ukiah protesters win right to sue Wal-Mart State appeals court overturns Mendocino judge's upholding of arrests of 8 demonstrators

February 14, 2004

 

By STEVE HART -
THE PRESS DEMOCRAT

Wal-Mart files against Turlock; Lawsuit stems over supercenter law

February 12, 2004

By Karen Gullo, Bloomberg News - The Oakland Tribune

Toymakers, Wal-Mart battle over prices

February 12, 2004

By ANNE D'INNOCENZIO AP BUSINESS WRITER

Police Say $30 Million in Cocaine Found Amid Toys in Truck

February 11, 2004

Channel 11 ABC News, Raleigh, NC

Wal-Mart Model Misuses Women

February 10, 2004

Report Jim Lobe - InterPress Service News Agency

Group asks Wal-Mart to help protect river. It wants to change how retailer stores chemicals

February 10, 2004

SHARON E. WHITE - Charlotte Observer Staff Writer

U.S. groups accuse Wal-Mart over Chinese factory

February 9, 2004 Reuters

Chinese Workers Pay for Wal-Mart's Low Prices. Retailer Squeezes Its Asian Suppliers to Cut Costs

February 8, 2004

By Peter S. Goodman and Philip P. Pan -
Washington Post Foreign Service

Wal-Mart controversy nears vote in East Bay - Measure L enacts ban on supercenters

February 8, 2004

Erin Hallissy,
Chronicle Staff Writer, SF Chronicle

Jurors begin Wal-Mart pay deliberations

February 7, 2004

BRENT HUNSBERGER - The Oregonian - Business News

THE SAFEWAY STRIKE in Southern CalifornIA

February 5, 2004

By Tony Martarella - Walnut Creek Journal

Wal-Mart may convert store in Fresno into a supercenter

February 5, 2004

Sanford Nax -
THE FRESNO BEE

Wal-Mart leads D-FW grocery sales It's the discount retailer's first top 10 market

February 5, 2004

By MARIA HALKIAS - The Dallas Morning News

City hangs onto Wal-Mart's $1.5m

February 4, 2004

By JEFF NAGEL

Wal-Mart locked in janitors, lawsuit alleges

February 3, 2004

Minneapolis Tribune - Associated Press

Wal-Mart's Costs Can't Always Be Measured

February 2, 2004

Michael Hiltzik: Golden State - Los Angeles Times

Price of doing business with Wal-Mart is high February 1, 2004 By Dan Gillmor - Mercury News Technology Columnist

The Two Faces of Wal-Mart

January 29, 2004

By Amy Tsao - Business Week Online STREET WISE

UNION TAKES ON QUEBEC WAL-MART; MORE THAN HALF THE STAFF HAVE SIGNED UNION CARDS BUT THE COMPANY IS CONTESTING THE ATTEMPT.

January 28, 2004

London Free Press (Ontario, Canada) 
 

Wal-Mart Battles Unions With Spying and Training, Workers Say

January 28, 2004

Published in Bloomberg Markets magazine

Wal-Mart tests slimmer supercenter

January 27, 2004

MARK ALBRIGHT and LOUIS HAU -
St. Petersburg Times

Judge allows suit against Wal-Mart to go forward

January 26, 2004

Portland Maine Press Herald

Wal-Mart challenges county's ban on big stores

January 26, 2004

NEW YORK, (Reuters)

Wal-Mart's Damage Control - Longtime Price Message Takes a Back Seat To Blitz Designed to Mend Reputation

January 24, 2004

By Greg Schneider - Washington Post Staff Writer 

Wal-Mart loses out to inventor

January 23, 2004

Lyn Berry-Helmlinger - Denver Business Journal

Some officials back Wal-Mart against county

January 23, 2004

Chip Johnson -
San Francisco Chronicle

Wal-Mart agrees to pay fine, stop selling refrigerants

January 22, 2004

Miami Herald

Wal-Mart settles lawsuit on item-pricing for $7.35m - Several groups to receive grants

January 22, 2004

By Bruce Moh - Boston Globe

Shopping for Values At Wal-Mart, Low Prices Don't Come Cheap

January 21, 2004

By LAURA LONGHINE - Columbia, SC, Free-Times

EEOC files disability discrimination suit against Wal-Mart January 21, 2004 St. Louis Business Journal
Wal-Mart Suit Gets Class-Action Status In Massachusetts January 19, 2004 The Wall Street Journal
Wal-Mart beefs up federal presence

January 18, 2004

By Alison Vekshin - Stephens Washington Bureau

Workers Assail Night Lock-Ins by Wal-Mart

January 18, 2004

By STEVEN GREENHOUSE -
New York Times

UFCW: Millions in Bonuses for Wal-Mart Execs; Thousands of Unpaid Hours for Wal-Mart Workers

January 16, 2004

 

PR Newswire

Calif. Lawsuit Targets Wal-Mart for Unpaid Overtime

January 16, 2004

By Michael Kahn - Reuters

Wal-Mart is not inevitable

January 15, 2004

Editorial from the Daily Astorian, Astoria

Iowa Company Blames Wal-Mart For Layoffs Former World's Largest Bible Wholesaler Closing

January 15, 2004

Associated Press

Wal-Mart spends big bucks $500,000 used in campaign against proposal to ban

January 14, 2004

Tri-Valley Herald
By Tamara Grippi - STAFF WRITER

Powerful Wal-Mart toys with rivals

January 14, 2004

THE WASHINGTON TIMES
By Donna De Marco

WAL-MART INSURANCE SETTLEMENT TOTALS $10.4 MILLION

January 14, 2004

By L.M. SIXEL Copyright 2004 Houston Chronicle

2nd Phase of Wal-Mart Trial Opens in Oregon

January 14, 2004 WILLIAM McCALL Associated Press

In-House Audit Says Wal-Mart Violated Labor Laws

January 13, 2004

By Steven Greenhouse
The New York Times

Wal-Mart's America

January 12, 2004

Salt Lake Tribune- Editorial

Wal-Mart is the largest retail corporation in the world.

January 10, 2004

The Capital Times Editorial: Set limits on Wal-Mart An editorial

Link between Syria and Spider-Man and Wal-Mart?

January 7, 2004

By J.R. Labbe Jewish World Review -

Wal-Mart workers and union backers square off at a Los Angeles City Hall hearing on a mega-store zoning law January 4, 2004

By Nancy Cleeland and Abigail Goldman  Los Angeles Times

It's Wal-Mart's way, or no way, the world over

January 3, 2004

By Nancy Cleeland, Evelyn Iritani and Tyler Marshall
Los Angeles Times

Unions seeing new benefits in 'smart growth'

January 2, 2004

By John Ritter
USA TODAY

Joining the PAC: Wal-Mart Opens for Business In a Tough Market: Washington --- Famously Apolitical Retailer Plunges Into Lobbying And Becomes Top Donor --- A Big Defeat On Banking

By Jeanne Cummings - The Wall Street Journal                     [back to top]      
March 24, 2004

WASHINGTON -- China's entry into the World Trade Organization was essentially a done deal in the late 1990s when Wal-Mart Stores Inc. executives discovered a problem: U.S. negotiators had agreed to a 30-store limit on foreign retailers operating in China, an insufficient figure for the ambitious Arkansas retailer.

Worse, executives at Wal-Mart headquarters in Bentonville, Ark., realized they couldn't do anything about it because they didn't know the right people in Washington. The company spent literally nothing on lobbying. "We weren't there," says Wal-Mart Senior Vice President Jay Allen, throwing up his hands.

The incident brought home a lesson that had been nagging at Wal-Mart for years. After decades of explosive growth, the retailer couldn't continue to expand its empire without abandoning founder Sam Walton's policy of shunning politics. So, in 1998, the retailer hired its first lobbyist -- a retired Air Force lieutenant general -- and set out to transform itself from a company without a Washington presence to one that could bend public policy to suit its business needs.

As it tried to flex its political muscles, Wal-Mart got a painful education in the ways of Washington. It has endured setbacks, most recently at the hands of community bankers who dashed Wal-Mart's plans to expand into lending. Still, the retailer is beginning to notch significant wins on global-trade issues and shows signs it may emerge as a political powerhouse. Since the WTO deal was struck, Wal-Mart has negotiated with Chinese government officials to increase its store count there to 35, with plans for more. It is also building up a state and local government lobbying shop in the U.S. assigned to clear any roadblocks to new domestic store openings.

In Washington, Wal-Mart has five lobbyists on its payroll, and a bench of hired guns led by Thomas Hale Boggs Jr., one of Capitol Hill's best-known lawyer-lobbyists. The company's political action committee was the biggest corporate donor to federal parties and candidates in 2003, with more than $1 million in contributions -- up from $182,000 during the 1997-98 election cycle, according to Federal Election Commission disclosure reports. Wal-Mart's PAC ranks as the second-largest in Washington, according to the Center for Responsive Politics, a nonpartisan organization that tracks political giving.

"It's hard to go to a fund-raiser in Washington for a member of the [House] Financial Services Committee without running into one or two or three Wal-Mart lobbyists," says Ron Ence, a lobbyist for community bankers.

Unlike most corporations, which contribute to both parties in rough proportion to Congress's partisan split, about 85% of Wal-Mart's checks go to Republicans. And recently Mr. Allen was named a "Pioneer" by the Bush campaign, meaning he has raised at least $100,000 by getting friends and colleagues to make contributions of up to $2,000 each.

The partisan giving is a nod to Wal-Mart's hostile relationship with organized labor and its dependence on free-trade agreements. Wal-Mart defends its lopsided support, saying it's supporting pro-business candidates. But sometimes it can get personal. Several Democratic presidential candidates -- including presumed nominee Sen. John Kerry -- have criticized Wal-Mart's labor practices. At the company's managers meeting in Kansas City in January, Wal-Mart executives showed footage of former Democratic presidential candidates Howard Dean and Richard Gephardt criticizing the company's health benefits. Managers booed and hissed.

The footage, says Mr. Allen, shows that Wal-Mart "had become an issue in the presidential campaign, and we needed to engage at this level" by donating to candidates who share the company's priorities.

Wal-Mart's pivot toward politics coincided with its rise to become the nation's largest retailer, one with enough market clout to drive down consumer prices, bust through trade barriers and force competitors to demand cost-saving concessions from labor unions.

But its growth introduced challenges that couldn't be solved without government help. The company, once celebrated as an entrepreneurial success story, typified by the late Mr. Walton's down-home style, found itself fighting off legal challenges from unions, workers' lawyers and federal investigators.

Throughout the same period, friendly lawmakers warned Wal-Mart executives to guard against the fate that had befallen Microsoft Corp. The technology giant's courtship of Washington didn't start until the Justice Department had filed an antitrust lawsuit -- leading to years of costly litigation and damage control. So Wal-Mart executives directed Mr. Allen to hire the company's first full-time lobbyist. The trick: finding someone who would remain true to Wal-Mart's practical, no-frills culture, says Mr. Allen.

Norm Lezy was an Air Force lieutenant general with Pentagon lobbying experience when he got a call from Wal-Mart. An old Air Force buddy working for the retailer recommended him. Headed for retirement, Mr. Lezy says he wasn't interested but agreed to be interviewed to spare his friend embarrassment.

"What's the first thing you'd do if you got the job?" Mr. Allen asked him. Mr. Lezy replied: "I'd like to drive around with a Wal-Mart truck driver." Bentonville executives were sold. They put on a hard press, and Mr. Lezy was won over.

Not long after, a man with silvery, shoulder-length hair and a striking resemblance to Buffalo Bill showed up at Mr. Lezy's cubicle in Bentonville. "I wanted you to see me before you got into my rig," said Carl Mayes, then a 17-year Wal-Mart truck driver, according to Mr. Lezy.

The next morning, the two climbed into Mr. Mayes's rig to deliver 80,000 pounds of Wal Mart's Ol' Roy Dog Food to six stores in four states. Over the miles, Mr. Lezy learned about the company's rise, old timers' reverence for Mr. Walton -- known as "Mr. Sam" -- and how drivers serve as executives' eyes and ears by talking to customers.

Mr. Lezy headed to Washington in March 1999, and set up shop in a small borrowed office at the Retail Industry Leaders Association. At the time, lawmakers were hammering out a complex bill on banking, a business Wal-Mart was keen to explore. Customers wanted the convenience of in-store banks, and company officials figured Wal-Mart could save millions of dollars in credit-card transaction fees alone. Three months after Mr. Lezy arrived, Bentonville executives asked federal regulators for permission to buy a small thrift in Broken Arrow, Okla. They saw it as the first step in creating a national banking chain in their stores.

Small bankers pleaded with Congress to spare them the fate of mom-and-pop hardware and variety stores, which, they said, were strangled by Wal-Mart. "It totally moved the ball into our court," recalls Bill McQuillan, president and chief executive of City National Bank of Greeley, Neb., who testified on behalf of the community bankers.

Lawmakers inserted a clause in the banking bill barring retailers from buying thrifts. It was retroactive to May 4, 1999, and killed Wal-Mart's thrift application. (Another blow came this month, when the House passed a bill that would make it hard for a retailer to expand into banking through the purchase of an industrial-loan company.)

Mr. Lezy figured he was about to be fired when he got a call from David Glass, then Wal-Mart's chief executive. But Mr. Glass gave Mr. Lezy a pep talk and said he was committed to Wal-Mart's Washington experiment.

Congressional allies rushed to offer advice, including Trent Lott, then Senate majority leader. Mr. Lott arrived in Bentonville in late 1999 with a simple message, according to a congressman who attended the meeting: Increase your profile and open your wallet.

So Wal-Mart executives set out to beef up their political action committee -- an account made up of voluntary employee contributions that executives use to make political donations. (Federal law prohibits direct corporate contributions to party committees and candidates.) At an August 2000 meeting attended by thousands of Wal-Mart managers, buckets were passed around for donations, as well as forms authorizing automatic paycheck deductions for the PAC.

For some employees, the pressure to contribute became a point of contention. "With my district manager sitting 3 inches over my shoulder, you think I didn't sign up?" recalls Jon Lehman, a Wal-Mart manager who quit in November 2001 and is now working with union organizers to enlist Wal-Mart workers. Current Wal-Mart employees, who asked not to be named, also report feeling pressured to give to the PAC.

Mr. Allen says Wal-Mart doesn't force workers to give to a PAC; such an action would be illegal. "I regret" that employees felt pressured, says Mr. Allen. "That is not the intent at all."

Wal-Mart managers boosted PAC contributions to $703,500 in the 1999-2000 election cycle from $230,800 in 1997-98. When Sen. Lott issued a call for help for Republican candidates in the late summer of 2002, Wal-Mart's PAC donated $50,000 in September and $101,000 a month later -- mostly to Republicans. "They came through, and people knew it," recalls a former Republican senatorial aide.

The support brought its own rewards -- including free publicity. In November 2002 the Bush administration proposed the removal of all tariffs on manufactured goods imported to the U.S. by 2015. U.S. Trade Representative Robert Zoellick stood on a stage before the news media with two identical baskets of baby goods, prominently marked as having come from Wal-Mart. The one without tariffs was $32 cheaper.

Wal-Mart's PAC today has swelled to nearly $1.5 million, according to its March 2004 report. Nearly 19% of the company's more than 60,000 domestic managers contribute, most through payroll deductions that average $8.60 a month, says Mr. Allen.

Labor problems have deepened Wal-Mart's involvement in politics. In the late 1990s, the United Food and Commercial Workers International Union stepped up efforts to organize Wal-Mart workers. It helped employees file a series of complaints about the company's overtime, health-care and other policies with the National Labor Relations Board. Dozens of class-action lawsuits were filed on behalf of workers.

Wal-Mart responded by pouring millions of dollars into the U.S. Chamber of Commerce's Institute for Legal Reform, which presses for limits on awards in class-action suits. It also backed then-Sen. Tim Hutchinson, an Arkansas Republican, when he introduced legislation to bar unions from soliciting outside retail stores. Wal-Mart says the legislation was intended to clear room for charitable groups making solicitations, not to restrict labor activity. But labor's congressional allies decried the "Wal-Mart" bill, which was soundly defeated. In the fall of 2002, labor-backed Democrat Mark L. Pryor defeated Mr. Hutchinson.

The company's labor problems reached a peak late last year, when Immigration and Customs Enforcement agents raided several stores, rounding up more than 200 undocumented workers hired by Wal-Mart subcontractors to clean the stores. Wal-Mart hired Martin J. Weinstein, a former federal prosecutor, to conduct an internal audit. Mr. Lezy took advantage of Wal-Mart's improved access in Washington, dispatching a lobbyist to Congress and the White House to describe Mr. Weinstein's conclusions, which laid the blame on the subcontractors. Wal-Mart also urged policy makers to make immigration reform a bigger part of the national debate.

A grand jury is still investigating the immigration case.

In 2003, Mr. Lezy began paving the way for his retirement. His heir apparent: Erik Winborn, a former Air Force colonel he'd met at the Pentagon and hired at Wal-Mart in 2000. At Mr. Lezy's urging, Mr. Winborn took his own trip with a Wal-Mart driver -- and wound up stuck on the highway in a blizzard.

Mr. Winborn's emergence as Wal-Mart's chief lobbyist wasn't much easier then Mr. Lezy's. During last year's debate over legislation to add a prescription-drug benefit to Medicare, Congress wanted to encourage seniors to use mail-order prescriptions to control costs. Wal-Mart saw mail orders as a threat to its in-store pharmacy business, and mobilized thousands of pharmacists to deluge Capitol Hill with letters and telephone calls urging Congress to restrict mail-order prescriptions for Medicare patients.

Lawmakers rejected Wal-Mart's appeal and passed the bill. But they also offered Wal-Mart an olive branch, directing the Federal Trade Commission to study potential conflicts of interest within mail-order companies.

At the same time, Wal-Mart was winning some big global battles. In 2002, the retailer hired Angela Marshall Hofmann, a Democratic trade expert, who promptly used her connections to get Wal-Mart a seat on a Department of Commerce advisory committee on the retail industry.

As a committee member, Ms. Hofmann last September traveled to Cancun, Mexico, to track talks on the Central American Free Trade Agreement, which is designed to boost trade by eliminating tariffs between the U.S. and Guatemala, El Salvador, Costa Rica, Nicaragua and Honduras. Many jeans, polo shirts, and other clothing sold in the U.S. are stitched together in the region.

In the CAFTA agreement, Ms. Hofmann and her allies won language allowing Central American manufacturers to use some less-expensive cloth, including denim, from Mexico. That means those manufacturers can send duty-free products into the U.S. market even though they are produced in part with Mexican materials, which would otherwise have been excluded from the pact. U.S. textile mills will lose business, and retailers such as Wal-Mart will get cheaper wholesale products to sell.

Over lunch in a cafeteria-style restaurant a good distance from Washington's K Street lobbying corridor, Mr. Allen feels Wal-Mart is making progress but still sees room for improvement. He'd like to extend the company's network in Washington's political and regulatory circles, including leveling out its lopsided campaign contributions, so the next time its "enemies and critics" come calling, the company has even more allies.

[back to top]


Knoxville Wal-Mart, Pepsi feud over pricing

By HAL HATFIELD -Knoxville, IA, Journal-Express      [back to top]
March 22, 2004

Mountain Dew lovers in Knoxville will have to go somewhere other than Wal-Mart to find their favorite drink. A sign in the soft-drink aisle at the Knoxville Wal-Mart Super Center announces: "We are sorry. Pepsi products are not available at this location."

But Wal-Mart is not saying why Pepsi products are not available in its Knoxville or Newton stores, but can be bought at Wal-Mart stores in Pella, Oskaloosa, Indianola, Des Moines and other Iowa locations.

A representative of the Mahaska Bottling Co. in Oskaloosa, which distributes Pepsi products in several south-central Iowa counties, including Marion County, said the dispute with some Wal-Mart stores began when Wal-Mart demanded that Pepsi lower its wholesale prices for Wal-Mart only.

"We are not going to going to sell any cheaper to Wal-Mart than to others," he said. "We are not going to give them any special preference over our other customers."

Angie Hobbs, one of the Knoxville Wal-Mart's managers, would not comment Monday on the nature of the dispute, other than to confirm than it was about pricing. She said that the decision to pull Pepsi-Cola, Mountain Dew, Code Red and other Pepsi products from Knoxville Wal-Mart's shelves had nothing to do with quality of Pepsi products or service from the Oskaloosa distributor.

"We want to carry Pepsi products," she said, and indicated that negotiations with Pepsi were underway. The Oskaloosa Pepsi official said he was not aware of any negotiations.

When told of the Pepsi representative's assertion that Wal-Mart wanted special pricing, Hobbs said, "Just remember that you don't have the whole story." She would not say what the "whole story" is - "I wish I could but I can't," she said - and referred further questions to Wal-Mart's corporate headquarters in Bentonville, Ark. She added that it was not a local decision to pull Pepsi products. "Customers trust us to provide them products at everyday low prices," Karen Burke of Wal-Mart's public relations office in Bentonville said Monday in a prepared statement. She could not explain why "everyday low prices" could differ from community to community and why it could lead to pulling Pepsi from one store and not another.

"We don't discuss our relationship with our suppliers," she repeated several times.

Another spokeswoman from the Knoxville Wal-Mart called on Tuesday to ask the Journal-Express for a copy of this story before it was published. The newspaper refused, but said it would give the spokeswoman the same opportunity to respond to questions as Hobbs and Burke had had.

The woman said she just wanted to give the reporter the chance to stop the story before he "sawed the limb off " behind himself.

Burke called again late Wednesday with a further statement: "Wal-Mart has had a long and successfull relationship with Pepsi as one of our valued suppliers, and we respect and appreciate their right to privacy and know that our customers will understand our decision not to publically discuss our business relatiionaship with them."

She would not comment further.

Although Wal-Mart representatives will not talk, other Knoxville grocery and convenience stores are delighted about the dispute.

They say that it is the result of Wal-Mart's aggressive marketing activities and attempts to obtain lower wholesale costs than those charged other retailers.

Knoxville's Hy-Vee supermarket is capitalizing on Wal-Mart's refusal to carry Pepsi products with a special on 24-packs and 12-packs. The Hy-Vee sign along Highway 14 carries a Pepsi banner, and Hy-Vee customers are greeted with a large display of Pepsi products just inside the front door. There are two more Pepsi displays in the store, one just across from the check-out counters.

Hy-Vee stores in Pella and Oskaloosa also have prominent displays of Pepsi products, and Fareway in Knoxville is advertising Pepsi. Convenience stores also have Pepsi products out front.

"Absolutely. I'm not stupid," said Knoxville Hy-Vee store director Jeff Killam when asked if he was capitalizing on the Pepsi-Wal-Mart dispute. He said that the packaging in his displays was designed for Wal-Mart, and that when the battle erupted he told Pepsi to bring the package to him.

"Hy-Vee is always sensitive to what the consumer wants," Killam said.

Managers of Fareway and Casey's, Kum & Go and Our Town Convenience Stores were unanimous in their praise for Pepsi's performance. Fareway also has a banner along Highway 14 advertising Pepsi and the Knoxville Pamida Discount Center has a Pepsi display just inside its entrance. "Pepsi treats us awful, awful good," said Jim Darnell, owner of the Our Town Convenience Store on Highway 14 North. "I'm so glad they stood up to the big boys. I'm so glad they put their foot down."

Darnell said he switched from Coca-Cola to Pepsi-Cola for his personal soft drink when he heard of Pepsi's stand against Wal-Mart.

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Wal-Mart going urban - Retailer sets its sights on urban areas eager for retail

BY HEATHER LANDY - Fort Worth (Texas) Star-Telegram              [back to top] 
March 22, 2004

FORT WORTH - After conquering rural America, then making itself a familiar anchor in suburban shopping districts, Wal-Mart has reached the final frontier of its domestic expansion: the urban market. From Baltimore to Milwaukee to Los Angeles, the Arkansas-based retailing giant is courting city dwellers, bringing low prices and an unmatched breadth of merchandise to neighborhoods long ignored by big-box chains.

In Fort Worth, the company is making its boldest move yet toward the downtown area, with plans for a Wal-Mart Supercenter at Texas 121 and Beach Street.

When Wal-Mart knocks on a city's door, it often brings the promise of revitalization, hundreds of jobs, a big source of sales-tax revenue and savings for shoppers. But Wal-Mart also is frequently seen as a threat to local merchants and to the character of established neighborhoods.

Regardless of the perception, the expansion path of the world's largest retailer indicates that businesses are finding opportunities in urban settings. Among the other signals locally is a proposal to redevelop the former Montgomery Ward store and warehouse on West Seventh Street with a mix of offices, apartments and stores, including Home Depot and SuperTarget.

The phenomenon is a twist on the revolution that Sam Walton ignited in the 1960s when he opened the first Wal-Mart and began branching out to under-served communities, which at that time mostly meant rural areas.

"Wal-Mart started out with a format that was very much about inexpensive land on the periphery of metro areas, with huge parking lots," said former Milwaukee Mayor John Norquist, who helped Wal-Mart settle into several blighted neighborhoods in that city during his term. "That worked up to a point, but there are a lot of people that don't live out there."

Expansion is crucial to Wal-Mart's ability to give investors the sales and earnings growth they demand, a task that seems nearly impossible for a company with more than 4,900 stores worldwide and annual sales of $256 billion. But the law of large numbers has yet to change the company's long-term financial outlook. What has changed is the way that Wal-Mart goes about gaining entry to the shrinking number of new markets available.

Space constraints, along with public opposition to cookie-cutter stores with drab exteriors and enormous asphalt lots, have forced Wal-Mart to design new store layouts and make other concessions to blend in with local tastes.

In South Los Angeles, the company opened a three-level store in an enclosed mall, utilizing a former department store space left vacant for several years. At the redeveloped Capital Court mall in Milwaukee, city streets were extended to run through the shopping area, and the entrance to the Wal-Mart is flush with the sidewalk, instead of set back behind a large parking lot.

"We've learned that there is not just one approach to an urban market," Wal-Mart spokeswoman Daphne Moore said. "What that has meant to us is finding different ways to become a part of each different community."

'Pact with the devil'

Wal-Mart still faces significant obstacles in its quest for a bigger urban store base. Inadequate parking and strict zoning regulations may keep the chain out of some city neighborhoods. There is also a groundswell of opposition to Wal-Mart's labor and trade practices.

Critics of the chain say Wal-Mart keeps many employees below the poverty line, with low hourly wages that drag down the pay scale at rival businesses as they try to keep up with Wal-Mart's focus on costs. The company has also been accused of forcing suppliers to find cheaper labor overseas at the expense of American jobs as they try to meet Wal-Mart's demands for low-price goods. Wal-Mart Chief Executive Officer Lee Scott has said that the company uses American suppliers when possible, and that tight expense controls help the chain keep prices low.

Cities must consider all of the consequences, positive and negative, of a Wal-Mart development, especially in blighted areas where the arrival of Wal-Mart could be a springboard for additional redevelopment, said Mark Muro, a senior analyst with the Center on Urban and Metropolitan Policy at the Brookings Institution think tank in Washington.

"You may be making a pact with the devil to sign on with something that is probably going to lower the price point and wage and benefit structure of a large zone of your potential retail environment," Muro said.

Weighing these issues -- a process that has divided communities of all sizes across the country -- has been especially difficult in urban areas.

In New Orleans, a proposal to build a Wal-Mart store in the historic Lower Garden District sparked an emotional battle over land use and architectural preservation policies.

City officials approved the construction, which will be part of a shopping and mixed-income residential development at a former public housing site. But Wal-Mart had to agree to build the store in the style of the district's old warehouses. There is another unique aspect to this Wal-Mart location: The city sales tax generated at the store will be used to plug a gap in financing needed for the redevelopment project.

Metroplex trends

In some cities, public sentiment about Wal-Mart's arrival has been drawn along class or racial lines.

In 2002, the Dallas City Council blocked a proposed Wal-Mart near Dallas Love Field, ending a debate that pitted many of the black, working-class residents nearest the airport against white residents of more affluent areas nearby.

Weeks later, the council approved construction of a Wal-Mart at Interstate 30 and Cockrell Hill Road, near the retail-starved neighborhoods of north Oak Cliff and West Dallas.

Wal-Mart got a warm reception west of downtown Dallas, just as it has in the equally retail-deprived Carter-Riverside area of Fort Worth. Neighborhood associations organized a ceremony for last month's groundbreaking along Texas 121, where a Wal-Mart Supercenter will open this year with 450 jobs and special departments for groceries, portraits, gardening needs, vision care, and tire and lube services.

"It's going to be a convenience for people who live in this community," Fort Worth Mayor Mike Moncrief said on the day of the groundbreaking. "It's one of the older neighborhoods in our city; there's not a lot of young blood here. That's why I think this project is so important."

Migration to the suburbs has chipped away at America's urban retail base over the course of several decades as merchants chased after shoppers.

Fort Worth, Dallas, San Antonio and Houston, which accounted for more than 34 percent of retail sales in Texas in 1972, generated less than 27 percent of the state's total in 1997, according to Census Bureau data.

Meanwhile, the suburbs have boomed. By 1997, Arlington, Bedford, Euless, Grapevine, Hurst, Keller and North Richland Hills generated a combined $6.7 billion in retail sales. The 1972 data did not provide figures for those cities, with the exception of Arlington and Hurst, because the statistical abstracts did not break out sales for areas with fewer than 25,000 residents.

For city neighborhoods such as Carter-Riverside, the shift to suburban living meant fewer shopping options for the residents who stayed behind. The same holds for those who moved back to the downtown area as new urban residences were built.

Janice Michel, an Oakhurst Neighborhood Association member who sits on the Fort Worth Board of Adjustment and lives near Wal-Mart's new site in the Riverside area, said she welcomes the chain's forthcoming arrival.

"Right now we either drive 10 miles to the North East Mall area or to the Wal-Mart and Home Depot in North Richland Hills -- and we hate spending our tax dollars there -- or we get in our cars and drive all the way across town to the Hulen area," Michel said. "It is a commute just to get basics."

The Carter-Riverside store should address some of those needs, as would a proposed SuperTarget at the old Montgomery Ward property about 1.5 miles west of downtown. Supercenters and SuperTargets sell groceries along with general discount merchandise, in stores often larger than 200,000 square feet.

Target, which built stores in urban areas years ahead of Wal-Mart, has also had to reconfigure its stores in some markets. The Minneapolis-based company has 27 multi-level stores in 19 states. Two sets of escalators, one for people and the other for shopping carts, help customers move from floor to floor.

Urban retail challenges

Moving suburban retail into urban spaces requires more than just a store layout change. Apparel sizes, clothing tastes and grocery needs can vary significantly depending on the ethnic makeup of a neighborhood, said retail consultant Britt Beemer, chairman of America's Research Group. Theft-prevention measures may also need to be beefed up or tweaked, he noted.

"Urban merchandising is a much more difficult strategy to implement, as Kmart can tell you," Beemer said. Kmart, which has a higher concentration of urban locations than Wal-Mart or Target, filed for bankruptcy protection in 2002.

Other challenges in urban markets are tougher to predict, as Wal-Mart learned at the Baldwin Hills Crenshaw Plaza mall in South Los Angeles. For several weeks in late 2003, a bus strike took away the primary mode of transportation for many of the mall's shoppers and employees.

But under more normal circumstances, Wal-Mart has had few problems drawing customers to the property, which also houses a Sears, an Albertson's, a movie theater and specialty retailers. Since Wal-Mart's opening in January 2003 in a three-level space formerly occupied by a department store, the mix of customers has broadened dramatically, with Asian and Hispanic shoppers joining the mall's existing base of mainly black shoppers.

"It has changed the demographics for the property," said Jeanne Mesh, vice president of retail real estate at Hager Pacific Properties, which owns Baldwin Hills Crenshaw Plaza. "It's drawing from quite a distance away, since there is no other Wal-Mart within a certain radius."

Supporters of urban expansion by big-box chains argue that Wal-Mart and other large retailers can help cities by revitalizing old buildings or even entire blocks that have seen better days.

Capital Court in Milwaukee was "a dead mall" before it was redeveloped with Wal-Mart as an anchor, said Norquist, the former mayor, who now leads a nonprofit group that works with architects, developers and planners involved in the restoration of urban areas.

Wal-Mart's effect on cities resembles the impact that the company had on rural areas in the early 1960s. The chain opened its first stores in rural areas because it did not have the financing for a big-city expansion. It stayed because it found a niche not yet tapped by other retailers.

"It turned out that the first big lesson we learned was that there was much, much more business out there in small-town America than anybody, including me, had ever dreamed," Walton wrote in his 1992 autobiography.

Forty years after Wal-Mart's start, America's cities may hold a similar promise.

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Mediation Settles Workers Compensation Suit Against Wal-Mart

Associated Press      [back to top]    
March 22, 2004

A Raceland woman has settled a lawsuit that alleged a Wal-Mart subsidiary hired a private investigator to break into her home in an attempt to discredit her worker's compensation claim.

Mediation between 37-year-old Tina Hall and Claims Management Incorporated of Bentonville, Arkanas, began January 29th.

It ended in a settlement Friday.

Hall's attorney would not discuss the terms of the settlement, saying they were confidential.

Hall first filed suit in 2000 against Claims Management, a wholly owned subsidiary of Wal-Mart.

Claims Management handles the corporate giant's workers compensation insurance.

The suit says Claims Management had refused to pay all of her medical costs involved in a 1993 work-related injury at the Wal-Mart store in Ashland.

Hall underwent back surgery in 2000 and 2003.

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From the homeland... California communities, labor union go to battle against influx of grocery-selling Wal-Mart stores. : Super fight on supercenters

BY ALEX DANIELS - ARKANSAS DEMOCRAT-GAZETTE      [back to top]
Sunday, March 14, 2004

MARTINEZ, Calif. Fierce battles pitting Wal-Mart Stores Inc. against California unions, competitors and elected leaders probably won't stop the retail giant from gaining market share in the state, the company's opponents said. But local resistance to the retailer could slow Wal-Mart's growth and sully its image beyond California?s borders.

Though the company has butted heads with foes in other areas of the country as it tries to build new supercenters, opposition in California termed a "hostile environment" by Wal-Mart executives, is especially vocal.

Wal-Mart Stores Inc. scored two key victories this month in the state.

On March 3, Wal-Mart opened a supercenter in La Quinta, a desert community of 24,000 about two hours east of Los Angeles. The same week, the company garnered enough voter support to reverse a ban on the stores in Contra Costa County, in the San Francisco Bay area.

Supercenters have played a huge part in generating profits for the Bentonville, Ark.-based chain. The stores offer both groceries and general merchandise items. By placing more than 100,000 kinds of products in one location, the company can attract people to make frequent trips to buy groceries, which provide low margins, and score a profit on other goods, such as electronic devices or apparel that shoppers buy on impulse.

Over the past few years, several city and county governments in California have blocked the construction of the megastores. Voicing the fear the discount chain will price competing grocery stores out of business, local leaders, backed in many cases by union money, have sought to keep Wal-Mart from offering groceries.

In the next four years, the company plans to open 40 stores in the Golden State. That?s a small share of the 1,000 stores planned nationally during the same time.

But some observers said fights on supercenters could not only cost the chain money but also could damage the global company's image elsewhere. Moves to block Wal-Mart in California could embolden communities in other states to take similar action, predicted Harley Shaiken, a professor at the University of California-Berkeley.

"What happens in California tends to be highly visible and if often sets trends," he said.

Wal-Mart, which organized and funded a petition drive for the election in Contra Costa County, is suing adjoining Alameda County for enacting a similar ordinance. And lawsuits are pending in the city of Turlock, about 100 miles inland, where officials voted to ban supercenters in January.

Wal-Mart promised more legal action, if necessary. The cities of Gilroy, Los Angeles and San Diego are considering proposals to block the megastores.

Since opening its first supercenter in 1988, Wal-Mart has avoided putting the giant stores in California. Part of the reason is simple, according to analysts: The company is still building its network of distribution centers that are equipped to warehouse perishable goods.

But the chain has also found it difficult to put supercenters in California because of local-level opposition. Union leaders and others see Wal-Mart, which said it imports $15 billion of goods a year from China, as an emblem for lost jobs in the United States.

Because Wal-Mart has strenuously resisted unionization in its stores, the company has stimulated vocal opposition in California, a state where organized labor plays a large role in politics.

About 18 percent of the state's work force belongs to a union, compared with 12 percent nationally, according to Shaiken. But when contemplating why many Californians oppose what other U.S. residents have accepted calmly, he cites what he calls Californians? strong independent streak.

"That mindset tends to clash with companies moving into a new area that are very large and powerful," he said.

Wal-Mart is already the No. 1 grocery chain in the country. The company controls 5 percent of the market for grocery sales, according to a 2003 survey by M+M Planet retail. The next competitor, Kroger, has a 4.6 percent share.

Now, Wal-Mart is bringing more competition to the California grocery market.

"Wal-Mart has achieved the reputation of being kind of a corporate bugaboo" in California, said A.G. Block, publisher of California Journal, a politics and policy magazine. Block said even though Wal-Mart has just made its first attempt to crack the grocery market in California with its La Quinta store, the prospect of a full-scale entry played a large part in a protracted grocery market work stoppage that recently ended in Southern California.

GROCERY WARS

The work stoppage, a combination of strikes and lockouts, was settled Feb. 27 after five months of tense negotiations. Workers from Kroger Co., Safeway Inc., Albertsons Inc. and other chains agreed to a two-tiered system of conferring benefits to members of the Food and Commercial Workers union. The settlement makes health benefits more expensive for newer members of the union.

"Clearly Safeway and the other food retailers are using Wal-Mart as an excuse for trying to take away health benefits and other conditions away from our members," said Ron Lind, secretary-treasurer of the union's Local 428 in San Jose.

The problem, according to Teena Massingill, a spokesman for Safeway, is that Wal-Mart pays its workers at a lower rate than its union competitors. To stay competitive, Safeway and other grocery chains successfully negotiated to lower the cost of their benefit expenses so they could remain competitive with Wal-Mart, which regularly offers goods priced up to 30 percent lower than union chains, according to several studies.

"We don't like competitors that unfairly can affect wages in the industry and the stability of union jobs," Massingill said. And though Wal-Mart's initial thrust into California is small, she said the potential for growth is worrisome to grocery chains.

The union's Northern California grocery workers' contracts expire in September. And as negotiations get under way, the fear of Wal-Mart taking a big chunk of market share worries union negotiators, who vow to fight the company's efforts to expand.

"The unions see the trends going backwards," Block said. "They're losing the things that were hard-won for their members."

In the coming battles, Wal-Mart has partisans in Northern California and throughout the state. Robert McAdam, Wal-Mart's vice president for state and local government relations, noted the company's regular discount stores in California are profitable.

"Not a single location is suffering," he said. "People still seem to like us out there in what is a particularly hostile environment for us."

McAdam said that in the past when California voters have been asked to decide whether to allow supercenters, they have sided with Wal-Mart. Over the past few years, in ballots in Calexico and Glendora, voters sided with the retail giant.

In Contra Costa County, voters on March 2 elected by 53.8 percent to 46.2 percent to rescind an anti-supercenter ordinance passed last year by the county's Board of Supervisors.

The ordinance would have made it illegal for a store larger than 90,000 square feet to dedicate more than 5 percent of its floor space to grocery sales.

About 50 percent of the county's registered voters showed up at the polls. The Democratic presidential primary and a successful $15 billion state bond issue also drew voters. Even so, last year more than 70 percent of the county?s voters took part in the state's gubernatorial recall vote.

"It was a decisive victory for Wal-Mart," Shaiken said of the election. But he maintained that the ballot not only cost Wal-Mart a lot of money, but it gave opponents a forum for expressing their hostility toward the company.

Wal-Mart spent about $1 million on the ballot measure. The union spent about $100,000 and was helped by a $300,000 donation from Safeway, given even as the union and the grocery chain were locked in a debilitating strike.

AGAINST THE GIANT

Both Wal-Mart supporters and the opponents expected victory in the days preceding the election.

In Martinez, Contra Costa County seat, a week before the ballot, clouds rolling off the water floated over the town of about 36,000 and disappeared into the steep green hills that ring the city.

County government workers strolled the downtown sidewalks, where municipal buildings bolster a streetscape full of antique shops and liquor stores. The biggest employer in Martinez, aside from county government and a local hospital, is the Shell oil refinery which employs about 1,000 workers at its facility on the bay.

The city is the birthplace of baseball slugger Joe Di Maggio, whose father was a fisherman who worked in the bay. Martinez was also home to John Muir, the famed conservationist, from 1890 until his death in 1914. Muir was a champion of preserving open space. His legacy is conjured by Wal-Mart opponents in Contra Costa.

They fear the county, an outer-ring suburb of San Francisco and Oakland, is losing green space too quickly. A supercenter, they argue, would generate more traffic than a regular Wal-Mart because people make more trips each month to buy groceries than they do for general merchandise. And more trips could mean more roads.

Wal-Mart argues that a supercenter would actually reduce congestion because shopping for many items in a single store reduces trips to other outlets.

Data compiled by the Institute of Transportation Engineers in Washington suggests a supercenter generates nearly twice the daily traffic as a supermarket.

The institute stressed that traffic loads can widely vary depending on location. But the average number of weekday trips to and from supercenter format stores was 49.21 trips per 1,000 square feet. For a 200,000-square-foot store, that means 9,842 daily trips.

A 55,000-square-foot supermarket averaged 5,623 trips, while a regular discount store generated 6,722 vehicle trips, the institute found.

The center of Wal-Mart resistance in Contra Costa County is about 20 miles outside of Martinez in the town of Bay Point, population 22,000. There, a few days before the vote, members of the county chapter of ACORN (Association of Community Organizations for Reform Now), a union-backed organization working for local control on development issues, made plans to defeat the world's biggest corporation from a modest bungalow.

The ACORN headquarters in Bay Point is indistinguishable from other houses in the neighborhood except for the parade of volunteers walking in and out the front door and the red ACORN flag hanging on the front window.

Anthony Panarese, ACORN's campaign manager for the ballot measure, wandered off from a scheduled interview without explanation, leaving Vicki Proctor-Marshall, another member of the organization to answer questions about the coming vote.

"We have a real bad traffic problem here," said Proctor-Marshall, 53, who is studying to be a nurse. A supercenter would only cause worse headaches she said.

More important, Proctor-Marshall said, Wal-Mart pays its workers less than the negotiated wage at union chains. Workers, she said, aren?t able to support themselves on Wal-Mart pay.

"It just brings death," she said of the Bentonville chain.

In Martinez, plenty of shoppers in a Safeway parking lot agreed with Proctor-Marshall.

"I'm not a fan of letting Wal-Mart take over the world," said Sherry Wilcoxson, a retired nurse. "I don't like the way they treat their employees."

Ken Subia, a burly 25-year-old, paused while unloading a delivery of sweets from his Sara Lee truck. His wife works as a clerk at a nearby Albertsons. "I don't support Wal-Mart at all," he said.

LURE OF LOW PRICES

Flo Curry, 73, who works for a geologist in Martinez, said she "wasn't crazy," about Wal-Mart because it is nonunion. But she noted a lot of low-income shoppers depend on the chain because of its low prices.

"It's good and it's bad," she said.

But a few miles away, at the town's Wal-Mart discount store, shoppers focused on the low prices they paid for merchandise.

"If I can do one-stop shopping, I'm good," said Larthatta Johnson, a hospital worker from nearby Concord who was at the store to buy vitamins and batteries.

Johnson, who said she drives to the Wal-Mart at least three times a week, said she was looking forward to a Wal-Mart supercenter coming to the county. "It?ll bring more jobs, and the economy will go up," she said.

Brenda Dalton, who used to work for the local school district, was at the store, shopping with her daughter, Kim Campbell. Dalton was a union member, as was her father, a plumber. That didn?t matter, though. Dalton and her daughter frequent Wal-Mart for one reason: "We're addicted to the prices," she said.

For Pedro Babiak, a computer gear salesman and vice president of the county's Hispanic Chamber of Commerce, the attempt to ban supercenters represented drastic meddling by government into how businesses operate. The chamber claims 180 business members.

He said he knows he will never compete with Wal-Mart on prices for computer parts, but predicted he?ll succeed by offering highly specialized services to small businesses.

"These labor folks, I appreciate their concern, but this is the United States of America," Babiak said. "Things change over time. It wasn't that long ago that Safeway threw out all the mom and pop grocery stores in California because they brought in the bigger store. This is just another evolution of that," he said. "You can't be afraid of progress, because it's going to kick you in the butt."

WAL-MART ON TOP

Wal-Mart won at the Contra Costa County polls. But the fight against the retail giant continues in the courts. In January, after Alameda County supervisors unanimously voted for an ordinance to limit supercenters, Wal-Mart sued the county.

In its brief to the Superior Court of California, Alameda County, Wal-Mart alleged the county did not hold proper environmental and zoning reviews of the new ordinance, a twist for Wal-Mart, which spends a great deal of time bogged down by reviews as it tries to expand its store base.

Alameda County Attorney Richard Winnie denied that public hearings weren't made in advance of the Board of Supervisors' vote. Winnie, noting Wal-Mart doesn't have immediate plans to build a supercenter in the county, called the lawsuit political.

"Most litigants attempt to work with a government in a fair and open way," he said. "They haven't done that with us. They could have called me," before filing the suit. "They have not treated us with respect and have not attempted to work with us."

In Turlock, city officials enacted an anti-supercenter ordinance in January. They, too, were then sued by Wal-Mart in both state and federal courts. The company claimed the city did not hold zoning and environmental impact hearings when making the decision and that blocking supercenters was an illegal restriction of interstate commerce.

Turlock, about 100 miles east of San Francisco, is home to corporate offices of the Save Mart grocery chain. Save Mart executives declined to discuss the ordinance, citing the pending court cases.

In Gilroy, a city just south of San Jose, city council members are expected Monday to vote down a measure that would limit supercenter development.

"We tried unsuccessfully last year to elect a majority of the city council that would be anti-Wal-Mart" in Gilroy, said Lind, the union official.

Depending on who's doing the talking, studies on Wal-Mart's impact on local economies and the salaries of its workers also present starkly opposing viewpoints.

A Wal-Mart-funded Los Angeles County Economic Development Corp. study on the possible impact of Wal-Mart supercenters in that area, estimated families in Los Angeles would save $524 a year. Total annual savings for shoppers in the city were pegged at $668 million.

Instead of spending that $524 a year on groceries, families would spend the money on other things, such as housing, entertainment or transportation, the study predicted. The development agency forecasted the redirected grocery savings would create 6,500 additional jobs.

While unionized workers in California on average make between $3 and $3.50 an hour more than Wal-Mart's hourly workers, the study argued that Wal-Mart attracts managerial talent from its rank and file. That means there is a heavy turnover in hourly positions, unlike union jobs, where clerks tend to remain in nonmanagerial jobs for a longer period of time, according to the study.

In addition, the study stated Wal-Mart offers workers discounts on both company stock and store discounts, as well as contributions to staff 401(k) retirement plans.

A February report prepared by the staff of U.S. Rep. George Miller, a Democrat from Contra Costa County, presents a sharply contrary view. The study said that the average annual worker salary at Wal-Mart is $13,861, below the federal poverty line for a family of three. Wal-Mart does not provide figures for its workers' annual wages.

Miller's report castigated Wal-Mart for not providing affordable health care for its employees. According to the report, workers pay for 42 percent of their healthcare costs, higher than the national average of 16 percent.

The report said that less than half of the company's employees are insured by the corporate health plan, and cites a University of California-Berkeley report that said California taxpayers subsidized $20.5 million of medical care a year for Wal-Mart employees seeking public health assistance.

Wal-Mart says 90 percent of its employees have health insurance. Many employees, including college students or personnel coming into the work force after retirement, are covered on parents' or spouses plans. And the Los Angeles study said that while union health care plans have spending caps, the Wal-Mart health plan does not have single incident or lifetime limits on coverage.

ONLY ROUND ONE

Local pressures in California not only increase the retailer's legal and lobbying bills, but the company's real estate department is affected as well. Wal-Mart's chief executive officer, H. Lee Scott, recently said Wal-Mart normally scouts out 300 sites for every 200 supercenters it builds. But in California, Scott said, that number could jump to 600 or even 800, because of local opposition.

Wal-Mart's McAdam called such expenses "costly, but not cost-prohibitive," for the retailer, which chalked up an $8.9 billion profit last year.

But there could be hidden costs, according to some analysts.

If Wal-Mart does not "assuage concerns it is potentially too big and too far-reaching for its own good," mounting criticism may force changes in the way the company does business, Michael Exstein, a retail equity analyst for brokerage house Credit Suisse First Boston in New York, stated in a report released March 3.

"Over time many notable growth stories in U.S. history have reached inflection points in their corporate existence where size and public opinion have conspired to force major operating changes," Exstein stated.

Exstein wrote the "corporate landscape is littered with companies that have mistaken leading market share for dominant market share." For instance, he noted film giant Kodak had to reconsider how to do business when an aggressive competitor, Fuji, and the advent of digital photography unexpectedly changed the competitive landscape.

"Wal-Mart may well be at one of those inflection points," he stated. "The end result for shareholders could be a stock that may not reflect the positive near term economic performance, but instead focuses on an increasingly hostile public environment."

When contacted for this story, Exstein declined to comment beyond what he said in the report, through a spokesman.

A protracted fight will be expensive for the union, as well.

Even as the Southern California strike was being settled, the fight moved north. Carlos Garcia and Danette Baltazar, clerks at Vons supermarkets in Thousand Oaks and Fillmore in the southern part of the state, picketed the Martinez Safeway. Vons is owned by the Safeway chain. They were part of a team of 27 union members sent from Southern California to spread word of the union?s fortunes in the Bay Area.

The union is wary of antagonizing grocery chains while it tries to block Wal-Mart from opening supercenters. After all, Safeway chipped in $300,000 to fight Wal-Mart in Contra Costa County, on top of the more than $100,000 provided by the union.

"We're a little schizophrenic," union official Lind said. "We've been partnering with Safeway to go against Wal-Mart, and now it looks like Safeway?s the real enemy."

And the union can't go it alone.

"We have to think of other groups to partner with if we're going to continue this fight because we just don't have the monetary resources," especially after the costly strike in Southern California, Lind said.

Asked if the union can stop Wal-Mart from building more superstores in California, Lind chuckled.

Above his desk hangs a framed picture parodying Wal-Mart's "Everyday Low Prices" motto. It says: "Everyday Low Wages."

"We can slow them down, but I don't think we're going to stop them," he admitted. "They're going to get into some communities. My goal is at least not to have the shovel in the ground when we start negotiating with Safeway later this fall."

The Wal-Mart race: low prices, low wages - GROCERY STORE JOBS ARE LIKELY TO DECLINE IN THE AREA

Mercury News Editorial

Shoppers, start your engines. The race to the bottom, for prices and wages, is on: the first Wal-Mart Supercenter appears to be headed to the Bay Area.

As the world's largest corporation -- with sales far exceeding those of General Electric and even Microsoft -- Wal-Mart sets a standard that competitors must match or be crushed. That standard is low: low prices, low wages, low payments to suppliers who in turn must cut their own costs.

Silicon Valley communities need to consider how they'll react as more supercenters are proposed here. Are low prices worth the cost if they mean fewer good jobs, fewer families with medical coverage and more empty stores in neighborhood shopping centers?

Wal-Mart's supercenters include full-service groceries. Various studies indicate a supercenter causes a loss of jobs at other grocery stores in the area, often from store closings -- and the Wal-Mart jobs that remain pay much less. The Bay Area Economic Forum says grocery workers in the Bay Area now earn $1.5 billion a year plus benefits -- but if big box stores such as Wal-Mart move in as they have in other urban areas, ``this wage-benefit payroll is estimated to fall by between $353 million and $677 million.''

In San Jose, labor activists look to living wage laws and community benefit requirements to resolve the problem -- primarily by pushing companies to accept unions. But a one-size-fits-all approach to businesses is not the answer. Some non-union, low-paying companies can be beneficial to a community.

City councils and county supervisors already have discretion to look at applicants on a case-by-case basis. And Wal-Mart should get careful scrutiny.

Wal-Mart's aggressive anti-union practices are legendary. It is accused of violating labor laws by forcing employees to work overtime, off the clock. The company also is under investigation by a federal grand jury for its role in hiring some 250 illegal immigrants to work on contractor cleaning crews at its stores.

Wal-Mart's sheer size means its policies affect the whole economy. Its drive for low costs from suppliers has accelerated the flow of manufacturing jobs to third-world countries, where the company continues to press for even lower costs. This is not illegal, nor should it be. But it can inform shoppers' choices and community decisions.

Companies should not automatically be excluded from communities because of their wage scales and policies -- but neither should they get the green light just because they offer bargains.

People need to understand the cost of low prices -- and be ready with the right questions when Wal-Mart comes calling.

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Towns can expect more - even from Wal-Mart

Whitney Gould - Milwaukee Journal-Sentinel      [back to top]      
March 8, 2004

Stoughton - I have a dream. In search of cheap pantyhose, I stumble upon a Wal-Mart. This fantasy Wal-Mart is a shimmering, glassy presence, its vastness broken up by luminous bays. There are no cars in sight; they're all underground.

Well, I told you it was a dream. Real-life Wal-Marts, as we all know, tend to be faceless behemoths in a sea of asphalt. As these look-alike stores multiply, thus does one community after another lose its sense of place.

Three cheers to Stoughton for bucking the trend. When Wal-Mart announced plans for a 180,000-square-foot "supercenter" in a cornfield on the edge of town, this community of about 13,000 south of Madison said, in effect: Wait a minute. Prodded by an activist group called Uff-Da (that's the Norwegian version of Homer Simpson's "D'oh!"), the city in January enacted an ordinance capping the size of big-box stores at 110,000 square feet. (By that benchmark, Stoughton's existing Wal-Mart, at 45,000 square feet, is almost a boutique.)

The city also imposed strict design standards. These won't turn Wal-Marts into the airy concoctions of my fantasy, but they do require, among other things, varying heights and roof treatments, to break up the overall mass; street-facing arcades; windows; diversity in surface texture; clearly defined entrances; landscaped parking and a plan for green space. Even with smaller projects, retailers must submit studies of the impact on traffic, infrastructure, the labor market and commercial vacancy rates.

(You can find the Stoughton ordinance on the Dane County Planning and Development Web site: www.co.dane.wi.us/plandev/build/bigboxesmeeting.shtml).

"It's a great set of tools," says Stoughton's city planner, Rodney Scheel. "The ordinance makes it easy to evaluate a development proposal, and it's going to strengthen the architecture and landscaping" of big-box stores.

Larry Peterson agrees. The soft-spoken Peterson, 37, a lawyer with the public defender's office in nearby Janesville, helped launch Uff-Da and is running for Common Council on a pro-planning platform. He moved to Stoughton with his family three years ago from suburban Chicago, weary of placelessness, congestion and long commutes.

It's easy to see why he wants to preserve the homey feel of his adopted community, a Norwegian farming settlement that is becoming a bedroom suburb because of its proximity to Madison and Janesville. Stoughton has an impressively revitalized downtown and walkable neighborhoods full of beautiful, century-old houses.

"I think there's room for larger retailers like Wal-Mart as we grow," Peterson says, "but we have to guide that growth so that we can remain livable. I'd like to see us grow slow and strong like an oak, rather than a weed."

Wal-Mart loyalists are impatient with such talk. "It would be nice if we had little grocery stores and neighborhood hardware stores, but that's not to be anymore," says Bob Burull, a retired cable TV executive. He helped organize a pro-Wal-Mart group, Recapture Stoughton, that hopes the April election will usher in a new Common Council open to lifting the 110,000-square-foot cap. Otherwise, he fears, Wal-Mart will close its existing store and build a new one elsewhere. "And we'll all be driving to the Wal-Mart in Madison."

To some extent that's already happening. Wal-Mart spokesman John Bisio told me that while the Stoughton store earned $20 million in sales last year, it "leaked" at least that much to its bigger counterparts in Madison and Janesville. Wal-Mart can live with most of Stoughton's new design standards, Bisio said, and it has reduced the size of the proposed store to 155,000 square feet. But the company, he warned, will build elsewhere in the area if the city sticks with the smaller size cap, which would "underserve our customers there."

Playing off one community against another, however, may get harder: Ordinances to regulate big-box design are cropping up all over the place, from Delavan and Watertown to Plymouth and Baraboo, says Mike Slavney, a planner with Vandewalle & Associates of Madison, who has had a hand in some of those rules. Nearby Oregon, a fallback if Wal-Mart gives up on Stoughton, is already talking about such an ordinance.

Moreover, Slavney says, the state's spread-the-wealth formula for revenue-sharing means that a community's tax-base gains from a big-box store are "at best a wash." All the more reason, he says, for localities to do some soul-searching about what they value and get meaningful regulations in place "before the wolf is at the door."

"Stoughton's approach is quite replicable. It shows you don't have to roll over and play dead," says Kevin Pomeroy, an Uff-Da member who is planning director for the land-use reform group 1,000 Friends of Wisconsin. "It's up to each community to set the bar for what it wants."

Exactly. Small-town residents can't do much to hold back the tide of globalism that brings Americans both cheap goods and depressed wages; love it or hate it, Wal-Mart isn't going away anytime soon. But through their zoning powers, communities can at least control what big-box stores will look like. And that, in turn, is one way to prevent engaging little places like Stoughton from turning into Anywhere USA.

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Wal-Mart draws Capitol Hill fire - Labor practices nettle lawmakers

BY PAUL BARTON - ARKANSAS DEMOCRAT-GAZETTE      [back to top]
March 7, 2004

WASHINGTON — Rep. Sherrod Brown, an Ohio Democrat, vows that he will never shop at a Wal-Mart.

Rep. Bernie Sanders, an independent from Vermont, said he could "go on for a few hours" about why he doesn't like Wal-Mart.

And Rep. George Miller of California, the ranking Democrat on the House Committee on Education and the Workforce, vows that if his party ever regains control of Congress, "you bet there will be hearings on Wal-Mart."

Wal-Mart Stores Inc., the nation's largest company in terms of revenue and employees, is drawing a lot of fire these days from pro-labor members on Capitol Hill.

More than ever before, antagonistic lawmakers are trying to prove that the Bentonville company's obsession with cutting costs results in shoddy treatment of its employees and international trade practices that cost American jobs. The company puts the "squeeze" on suppliers, they charge, forcing them to relocate to cheaper business climates overseas if they want to continue supplying Wal-Mart.

Even presumptive Democratic presidential nominee John Kerry is getting into the act, despite recent financial-disclosure reports showing he owns many shares of Wal-Mart stock. Kerry said while campaigning in New Hampshire that Wal-Mart's treatment of its workers is "disgraceful."

But the latest fusillade comes from Miller. From his position on the Education and Workforce Committee, he recently released a report entitled "Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart."

In it, the Democratic staff of the committee charges that Wal-Mart's wages and benefits are so low that it forces workers to turn to public assistance to make ends meet, and thereby forces costs onto taxpayers both nationwide and locally.

Wal-Mart responds that their congressional critics often don't know what they are talking about. "Congressman Miller seemed to pull information from every headline he has read without taking time to do his homework. One would expect higher standards from a public official," said Mona Williams, Wal-Mart vice president for corporate communications.

Williams said the company has moved aggressively to address a number of concerns raised in recent news coverage. For example, the school hours and activities of teenage workers are now incorporated into store schedules to make sure young workers are not kept on the job when they should be learning.

And she said that, far from being a drain on a community, Wal-Mart stores and their "everyday low prices" are an asset, helping meet the needs of low-income workers who have to live paycheck to paycheck.

'CHASING CHEAP LABOR' These are sensitive times for Wal-Mart on Capitol Hill. The company needs congressional help to realize some of its biggest goals, such as getting into consumer banking. It has been continually expanding its Washington lobbying in recent years, and its corporate political-action committee is now the second most active when it comes to helping lawmakers finance their re-election campaigns.

To counter a wave of negative press coverage, Wal-Mart recently began sending its executives forth to vigorously defend the company in civic-club appearances and other settings.

But members of Congress aligned with labor are unswayed. Labor unions have long disliked Wal-Mart, because the company aggressively discourages workers from organizing.

Sen. Richard Durbin of Illinois, a Democrat, pointed to Wal-Mart in a floor speech Thursday. He said the company's imports from China have grown so large — $13 billion — that Wal-Mart is putting American factories out of business.

"This is no longer a U.S. flagwaving company," Durbin said. "This is a company which sells Chinese goods because they are cheap, because they [the Chinese] manipulate currency to the disadvantage of American producers."

In an interview, Rep. Peter De-Fazio, an Oregon Democrat, said, "Sam Walton would roll over in his grave" if he knew how dependent the company has become on China and how it is "chasing cheap labor all over the globe."

"In the end, it is going to bite them," DeFazio said. "If no one in America is working, they can't buy the cheap junk they get from China."

Williams, the Wal-Mart spokesman, said Durbin and DeFazio are mistaken. She said the company imports about $7.5 billion in goods a year directly from China, not $13 billion. But she added that American companies that sell to Wal-Mart import another $7.5 billion in Chinese goods.

Meanwhile, the company is doing its best to improve the foreign trade balance, she said. "One of the things Wal-Mart concentrates on is developing markets for U.S.-made products."

The company sold more than $500 million in U.S.-made goods overseas in 2002, she said.

EFFECT ON THE COMMUNITY While DeFazio and Durbin focus on trade issues, others contend Wal-Mart has an unhealthy affect on the communities in which it settles.

Brown, the Ohio representative, told The (Cleveland) Plain Dealer that Wal-Mart managers "treat their workers only slightly better than the workers [overseas] are treated making the products that they sell."

Sanders, the independent House member from Vermont, says it is common knowledge that Wal-Mart workers have to rely on public assistance. "Why do taxpayers in this country have to subsidize Wal-Mart? Because Wal-Mart is not paying them [employees] a living wage," Sanders said in an interview.

The Atlanta Journal Constitution recently reported that Wal-Mart had more employees depending on state health-insurance assistance than any other major employer in Georgia.

And Miller's report attempted to estimate just how much the opening of a new supercenter with 200 employees could cost taxpayers. But he and Wal-Mart disagree on the number that serves as the basis for the report's calculations.

The report says the average supercenter worker makes $8.23 an hour. Williams said a recent internal audit shows the company pays its more than 1 million employees an average of $9.64 an hour. Without citing a source, the report goes on to estimate that: The supercenter's 200 employees will qualify for $125,000 a year in federal tax credits and $42,000 in federal housing assistance.

The children of one out of four employees will qualify for free or reduced-price school lunches — at a cost of $36,000 a year. They also will receive more than $200,000 a year in federal or state education and health-insurance aid.

"More and more jurisdictions are looking at what are the real costs of one of these supercenters," Miller said.

Working through the powerful Washington public-relations firm of Fleishman-Hilliard, Wal-Mart got University of Missouri economist Kenneth Troske to review the report.

Acknowledging that he was paid for his work, Troske said in a telephone interview that Miller's report "was a very poor piece of analysis based on some very faulty assumptions."

For one thing, he said, the report assumes that Wal-Mart's workers could be making more somewhere else, which is often not the case.

"Wal-Mart hires a certain type of worker," the economist said, saying many of them are retired and don't have kids while others are using Wal-Mart for a second job. "Wal-Mart has never held a gun to anyone's head and forced them to work there."

Troske also questioned the report's "extraordinarily speculative" estimate of how much public assistance the workers would need.

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Cities vow to oppose Wal-Mart

By Peter Felsenfeld - CONTRA COSTA TIMES     [back to top]
March 5, 2004

Despite Wal-Mart's successful campaign that killed a restrictive Contra Costa ordinance, communities statewide are still girding for battle against the retail colossus.

Wal-Mart had hoped an electoral win Tuesday would strike fear in the hearts of elected officials considering similar legislation. The company spent more than $1 million to make its point.

The investment paid off in Contra Costa. County voters overturned the controversial ordinance, which would have banned many super-sized stores in unincorporated areas.

"I would hope now that local governments take a lot longer to look at what this kind of ordinance means," said Wal-Mart spokeswoman Amy Halley Hill. "All sides need to be considered before entering any rash decisions."

But Wal-Mart's enemies haven't surrendered.

Grocery chains and unions typically lobby elected officials for the anti-Wal-Mart measures, said Steven B. Frates, a senior fellow at the Rose Institute of State and Local Government at Claremont McKenna College. Those groups, he said, remain committed to protecting their turf against the low-priced, nonunion competitors.

"The true believers are willing to bash away at their campaigns hither and yon," he said. "The acrimony isn't going to stop anytime soon on either side."

Wal-Mart plans to build 40 so-called "supercenters" statewide over the next four to six years. The behemoths average 200,000 square feet and, most threatening to grocers and unions, dedicate around one-third of shelf space to cut-rate groceries.

The first such store opened Wednesday in La Quinta in Southern California.

Wal-Mart supporters say the retailer provides affordable products, creates jobs and boosts tax revenue. Opponents counter it contributes to traffic congestion, forces mom-and-pop retailers out of business and drives down wages by replacing living-wage jobs with low-wage ones.

Foes of the chain are continuing their campaign to block supercenters in spite of the chain's Contra Costa win.

• In Inglewood, Wal-Mart is hoping to bypass the City Council approval process by asking voters to approve a supercenter at the ballot. The community will decide the fate of the store at a special election April 6.

The Rev. Altagracia Perez, an anti-Wal-Mart activist, said she is not discouraged by the Contra Costa results. "Might doesn't make right, and having a lot of money doesn't make right," she said. "People need to understand the negative ripple effect of Wal-Mart."

• The Los Angeles City Council has directed its legal staff to draft an ordinance banning supercenters. The legislation will protect the small businesses that form the backbone of the city's economy, said City Councilman Ed Reyes.

"Los Angeles isn't Contra Costa," he said. "Voters here will understand the cold-heartedness of Wal-Mart's corporate culture."

• Alameda County last year passed an ordinance prohibiting supercenters. Wal-Mart has challenged the measure in court. Supervisor Alice Lai-Bitker said the county has no intention of abandoning the fight.

Passed by supervisors in June, Contra Costa's ordinance would have prohibited stores larger than 90,000 square feet that dedicate more than 5 percent of shelf space to nontaxable items, such as groceries.

Wal-Mart gathered enough signatures to force the board to rescind the ordinance or place it before voters. Supervisors chose the latter option.

Contra Costa voters struck down the ordinance by a 54 percent to 46 percent margin.

"I think voters saw through the intent of this discriminatory ordinance," said Wal-Mart's Hill. "They felt it was an inappropriate use of legislation."

Contra Costa Supervisor John Gioia said the outcome could have more to do with Wal-Mart's prodigious spending. The company dumped almost twice as much money into the campaign as the pro-ordinance group did.

Also, Gioia said, voters may have found the controversy abstract because Wal-Mart has no plans to build a supercenter in Contra Costa. "The issues were a little hypothetical," he said. "It's easier to convey what's at stake when you can point to a specific proposal."

If nothing else, the Contra Costa vote demonstrated the ballot box is not the best place to challenge Wal-Mart, said Rob Wassmer, professor of public policy and economics at Sacramento State. Shoppers, he said, are loath to vote against great bargains.

"In the end," he said, "people's pocketbook will usually win out."

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County rolls back Wal-Mart gift Albany

In rebuke of retail giant's policies, lawmakers reject immunization grant

By CATHY WOODRUFF - Staff writer Albany GA   [back to top]   
Tuesday, March 9, 2004

The Albany County Legislature threw back a $1,000 health care grant from the Wal-Mart Foundation on Monday, citing the discount retailer's widely criticized treatment of its workers.

In a 33-4 vote, several Republicans crossed over to vote with majority Democrats on legislation that would pay for enhanced immunization programs for children and the elderly with county money rather than with the grant the county applied for last year.

"We should send that $1,000 back to Wal-Mart, back to Arkansas, and tell them to give it to their employees for health insurance," said Legislator Gary Domalewicz, D-Albany. "We shouldn't help them enhance their corporate image."

Several legislators echoed those sentiments, noting that the county already may be picking up the health care costs for Wal-Mart employees and their families during extended waiting periods for benefits, for families unable to afford health insurance, and for worker families receiving treatments not covered by the company's plan.

"We'd wind up using the $1,000 to immunize the children of their employees who don't have benefits," said Legislator Alexander Gordon, D-Berne.

Legislator Allen Maikels, D-Guilderland, said a state survey of Georgia's public health insurance program for children, released just last month, found that more than 10,000 of the children enrolled in the program had a parent working at Wal-Mart.

Though Wal-Mart is the largest employer in Georgia, the number of its workers' children enrolled in the program was far more, per employee, than other large employers in the state, the survey found.

"This is a company that has grown exponentially by not paying a living wage and not providing their employees with benefits," Maikels said.

Wal-Mart's pay, benefits and policies have been under fire nationally from labor unions and other critics. The company, now the largest private employer in the country, is not unionized.

Some lawmakers, however, said colleagues were confusing the grant issue with their speeches on labor policy.

"I'm not so sure that we, as a legislative body, are in the business of judging the corporate practices of businesses that operate in Albany County," said Legislator Paulette Barlette, R-Colonie. "This resolution is about a monetary gift to Albany County, simple and pure. This resolution is not about business practices."

Also Monday, County Executive Michael Breslin offered an upbeat picture of the county's progress on many fronts, despite financial constraints, in his state of the county address.

The Bethlehem Democrat, elected to a third term in November, noted to a record number of adoptions of foster children in 2003, efforts to develop a new domestic violence court and a technology business park in Bethlehem and New Scotland.

He said he and Albany Mayor Jerry Jennings continue lobbying for state legislation and financial support for a downtown Albany convention center.

"What is needed now is the political will at the state level to support the project, just as the state has supported the creation of stadiums and arenas in other regions," Breslin said.

The legislature's Republican minority leader, John Graziano Jr. of Colonie, gave the address a thumbs-down review.

"There's a complete lack of vision for the future," he said.

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Wal-Mart's impact far-reaching

By JEFFREY RUBIN - The Globe and Mail, CanadaMonday,   [back to top] 
March 8, 2004

Wal-Mart is probably the best thing that has ever happened to North American consumers, provided of course, that they don't work at Wal-Mart, its suppliers, or even its competitors. If they do, they will quickly discover that it is the giant U.S. retailer's wages and benefits, or the lack thereof, that make Wal-Mart's pricing so irresistible to shoppers.

Of course it isn't just its own labour costs that Wal-Mart so successfully manages. Suppliers are just as much under the gun to deliver costs savings as are Wal-Mart's non-union, part-time workers. Every year, Wal-Mart mandates a 5-per-cent drop in its suppliers' prices for standardized products -- a reduction that it passes on to its consumers. Considering that Wal-Mart single-handedly accounts for more than one-fifth of total retail sales in the United States, few suppliers can afford to lose that kind of market share. Cost compliance inevitably pushes suppliers offshore in pursuit of low wages. The more that Wal-Mart suppliers outsource offshore, the less domestic employment and production shoppers at Wal-Mart generate.

And Wal-Mart's reach is getting ever wider. The company's recent foray into the grocery business has already sent ripples through that industry's labour market. The just-settled 70,000-worker grocery strike in California is a recent example where Wal-Mart's sudden entry into a new business line has revolutionized the cost structure of the industry. All of a sudden Wal-Mart's competitors can no longer compete with their current labour costs, and have sought significant rollbacks in both wages and benefits from grocery workers. That story is also playing north of the border as Wal-Mart moves its new super-centre store format, featuring everything from furniture to groceries, into Canada as well.

The point here is not to vilify Wal-Mart, but to understand the forces that shape it. In the final analysis, Wal-Mart isn't about union busting or offshoring. It's ultimately about consumer sovereignty in the marketplace, even if, as some claim, middle-class American consumers are shopping themselves right out of their jobs. But if Wal-Mart's success is the prototype of the new economy, who will its future customers be?

Already the single-largest private sector employer in the United States and the third-largest employer behind the federal government and the government of California, Wal-Mart's imprint on labour markets extends well beyond its more than one-million-person payroll. Its far greater impact is on the wages of its competitors as Wal-Mart's cost structure immediately sets the benchmark for competitiveness in whatever market it enters. As the Wal-Mart model moves into more and more businesses, its impact begins to assume a macroeconomic form.

Can Wal-Mart deflate consumer prices as rapidly as it does wages? Last year, the average 3-per-cent decline in all of Wal-Mart's retail prices, when applied to its 8-per-cent share of total consumer spending, chopped roughly a quarter point from the U.S. consumer price index (CPI) annual inflation rate. And that of course doesn't begin to measure the impact that it has had on its competitors' prices. But at the same time, Wal-Mart's entrance into the grocery business has chopped wages and benefits there by roughly 14 per cent.

In some sense Wal-Mart is a microcosm of what is happening in the global economy, which is becoming one giant arbitrage market for cheap labour. Just as shoppers head for the best deal, suppliers are heading to the lowest-cost locale. From a global perspective, Wal-Mart's procurement practices redistribute income from the rich to the poor. Its commitment to provide consumers with the cheapest prices drives production and employment offshore. While that move is denounced by local labour as unfair, it transfers jobs and the precious purchasing power that goes with them from North America to countries that have a fraction of our living standards.

That process has led to explosive, and otherwise unsustainable, economic growth in Asia and in time other cheap labour economies. Industrial production in China is growing at nearly a 20-per-cent rate this year, much of which will find its way to Wal-Mart, which accounts for more than 10 per cent of all Chinese imports in the U.S. economy. In the process, the huge income gap between Asian producers and North American consumers will continue to narrow.

But it is the distributional paradox of our times that the same forces that drive greater global economic equity have the opposite effect within our own economy. As the gap between the Chinas of the world and North America shrink, the gap between those who can shop at Wal-Mart and those who must work there will get bigger.

Jeffrey Rubin is chief economist and chief strategist at CIBC World Markets.

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Wal-Mart targeted by official - Labor unions pay W. Sac councilman to lead fight.

By Melanie Payne -- Bee Staff Writer           [back to top]         
Saturday, March 6, 2004

Labor unions are paying a West Sacramento city councilman to help lead their effort to prevent Wal-Mart Supercenters from gaining a foundation in the capital region.

West Sacramento City Councilman Bill Kristoff has already taken the message to Lodi, Tracy, Woodland and Sacramento. He said he would recuse himself if the issue comes up for a vote in his hometown, but he provided a fellow councilman with the union's draft proposal.

"I knew I had a conflict, and I can't get involved (in West Sacramento)," said Kristoff, who is retired from the U.S. Postal Service.

City Council leaders in West Sacramento and Sacramento are moving toward proposing ordinances that would block development of the superstores.

Kristoff said that he was working on an ordinance blocking the superstores when labor organizations asked him to do consulting work.

The unions pay him $2,000 a month to talk with city planners, business owners, environmental groups and elected officials about the purported perils of superstores such as Wal-Mart Supercenter, Kmart Super Center and SuperTarget stores.

The superstores sell groceries in addition to clothing, housewares and sporting goods. Wal-Mart's low-price guarantee has made it particularly successful at capturing market share from traditional grocers.

Grocers provide higher wages and better benefits for workers than Wal-Mart does, according to labor union leaders, who have largely failed in attempts to organize Wal-Mart employees.

Ordinances like the one Kristoff has framed have surfaced in several California cities trying to thwart plans by Wal-Mart Stores Inc. to build megastores that range from 185,000 to 230,000 square feet. But measures blocking this expansion have been challenged at the ballot box and in court.

On Tuesday, voters in Contra Costa County overturned a ban on superstores. Inglewood voters will decide the Wal-Mart question in a special election on April 6. Lawsuits loom in Turlock and Alameda County, where the nation's largest retailer has sued over ordinances that would block the stores.

West Sacramento Councilman Mark Montemayor asked his peers in a Jan. 15 letter to consider a proposed ordinance that would amend the zoning code to prohibit new retailers that are larger than 130,000 square feet and that sell certain amounts of non-taxable grocery items.

Dan Ramos, the project manager for Ranbo Riverpoint LLC, is perplexed that such a proposal would even come up. He is developing land that would be used for just such a megastore - 84 acres at Reed Avenue and Interstate 80 in West Sacramento.

"Wal-Mart has contacted us, and they're interested in negotiations on the site," Ramos said. "They've been talking to us, and we had the signal from the city to go get them."

Montemayor said that his ordinance is not a change of heart on the city's part but rather a clarification of the type of business they want to attract.

"We've always wanted that parcel to be a major tax generator, and foods are not taxed," he said.

Even though the labor union, through Kristoff, provided Montemayor with the language in the proposal, he said, it is not a labor issue but rather an economic development issue.

In Sacramento, Vice Mayor Sandy Sheedy is considering the idea of proposing an anti-superstore ordinance to protect businesses that have been in the city for years.

Supercenters complicate traffic, dominate urban settings and destroy neighborhood shops, she said, and leave empty stores as they expand.

Wal-Mart revitalizes areas when they move in, said company spokeswoman Amy Hill.

"We have never closed a Supercenter anywhere in the country, and we've been operating them since 1988," Hill said, adding that Wal-Mart took over an empty store on Florin Road in the capital and plans to open another in a vacant department store building at El Camino and Watt.

Wal-Mart, based in Bentonville, Ark., has also closed some stores locally, however. A Rocklin Wal-Mart along Five Star Boulevard closed in 2002 when two new ones were built in Roseville. The original store remains unoccupied. In Rancho Cordova, a Sam's Club has stood empty since a new Wal-Mart was built in Citrus Heights.

The retailer has about 1,500 Supercenters, 1,500 regular Wal-Mart stores and 500 Sam's Clubs nationwide. It plans 40 Supercenters in California over the next four years, opening its first this week in La Quinta.

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Deptford [NJ] rejects Wal-Mart store - Planning board's 7-2 vote baffles Mayor Bain

By GENE VERNACCHIO - Courier-Post Staff           [back to top]
Saturday, March 6, 2004

DEPTFORD The township planning board has rejected plans for a new Wal-Mart Supercenter at the site of the former Deptwood Shopping Center.

Mayor Bill Bain said he was disappointed and confused by the board's vote.

"The location is zoned for that and it meets the master plan criteria," Bain said. "They didn't need anything from us."

Plans for the store, which would have operated 24 hours a day, were rejected by a 7-2 vote. Bain and Township Manager Joseph Picardi cast the only votes in favor of the store.

"I think we, as elected and appointed officials, have to look at the overall picture of a town," Bain said. "We can't look at just one little section of it.

"We could've made the traffic work," he said. "The job of traffic control is on the township. The developer is only responsible for egress through the property."

During earlier public hearings, residents said they were concerned the store would increase traffic problems. Even Woodbury Mayor Leslie Clark opposed the plans, saying the store likely would create traffic congestion in her city.

Still, Bain said he was perplexed by the vote.

"We just changed our master plan to allow that to be built there," Bain said. "I don't understand it.

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"This is a property that's been an eyesore," Bain said. "It was a major shopping center since 1964 or 1965," Bain said. "I felt the developer did everything the town asked him to do."

Attorney Barry Lozuke of Woodbury, who represented Wal-Mart during the application, said he would not comment on whether the retail giant would appeal the board's ruling.

Picardi said the denial has no bearing on an application for another proposed Wal-Mart and a Sam's Club wholesale store at Route 41 and Clements Bridge Road at the former RCA Thomson site.

Picardi said the planning board is expected to consider that application at 7 p.m. Wednesday.

Wal-Mart operates one store in Gloucester County in Turnersville, which it plans to convert to its Supercenter format later this year. The company also plans another store in Harrison at the intersection of Routes 322 and 55. But Rowan University has been engaged in negotiations for the site for an expansion of a planned western campus.

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Wal-Mart to Convene Board Meeting in China

www.chinaview.cn
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March 4, 2004

SHENZHEN, March 4 (Xinhuanet) -- The world's largest retailer Walmart announced here Thursday that it would hold its annual global meeting of board of directors for the first time in the Chinese mainland.

The meeting will be held in Shenzhen City in south China's Guangdong Province. Walmart opened its first retail store in the Chinese mainland in 1996.

Samuel Robson Walton, chairman of Walmart, said China has dual importance to the US-based retailing giant, because China has been for many years a major supplier of good quality goods and now is a market with great potential.

The chairman said the board members should go to China in person to have a good look at Walmart stores and the Chinese market.

Walmart has opened 35 outlets in 17 Chinese cities, including 30 supermarkets, three Sam's Clubs and two community stores, with a total of 18,000 employees.

Walmart boasts its largest sales revenues among peer companies, and it has more than 4,900 outlets all over the world.

The specific date of the board meeting is yet to be decided.

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Wal-Mart needs to tell its side: analyst Shares rise on dividend lift; analyst questions practices

By Jennifer Waters, CBS.MarketWatch.com             [back to top]
March 3, 2004

CHICAGO (CBS.MW) -- Even as Wal-Mart shares approached 23-month highs Thursday, an analyst suggested that the stock is being curbed by investor concerns about the company's sometimes controversial business practices.

In fact, Credit Suisse First Boston analyst Michael Exstein said that "an increasingly hostile public environment" could be holding back the shares despite Wal-Mart's (WMT: news, chart, profile) reasonably healthy sales and profit results in recent months.

The stock of the world's biggest retailer has risen 26 percent over the last year, with shares higher by 72 cents to $60.27 in midday trading Thursday. Meanwhile, shares of its nearest rival, Target (TGT: news, chart, profile), have more than doubled that pace, rocketing 57 percent to $43.38, off 20 cents.

The key measure of the sector, the S&P Retail Index ($RLX: news, chart, profile), has also surged 57 percent in the past year.

Exstein pointed to a barrage of recent reports touching on issues ranging from overtime pay to sex-discrimination suits against the company to regulatory scrutiny of hiring practices after the roundup illegal immigrants working on cleaning crews for the company.

Just this past weekend, two business-oriented newsmagazines carried reports questioning Wal-Mart's employment and supplier practices, noting that Wal-Mart shoppers benefit at the expense of employees and vendors. A BusinessWeek viewpoint went as far as to assert that "Wal-Mart gives globalism a bad name."

Wal-Mart has been mostly mute about the lawsuits and other challenges it faces. In fact, the company didn't want to comment on Exstein's report, according to a Wal-Mart spokeswoman.

But Exstein thinks it's time for Wal-Mart to speak up. "The company needs to mount a more aggressive public relations strategy in order to assuage concerns that it is potentially too big and far reaching for its own good," he said in a note to clients.

'Pressure is mounting on the company to make substantive changes to the way it does business.'

Analyst Michael Exstein

"Wal-Mart has done a poor job of telling its side of the big story and in some cases has fanned the fires of unease with stature," Exstein said.

Exstein sees the stock issue as dual-pronged: on one side sales and earnings are rebounding through a combination of cyclical improvements and better execution.

Indeed, Wal-Mart last month reported what it termed as "excellent" fourth-quarter earnings that climbed 11 percent to $2.72 billion, or 63 cents a share. Total sales vaulted 12.2 percent to a record $74.49 billion.

Late Wednesday, the company boosted its annual dividend a whopping 44 percent to 52 cents a share, up from 36 cents a share last year. While that's substantial, it remains a tad below a 1 percent yield.

Exstein said he thinks the stock has failed to reflect Wal-Mart's performance because "pressure is mounting on the company to make substantive changes to the way it does business."

He also warned of an "inflection point," saying such historical moments have proved harmful to other corporate behemoths as their "size and public opinion have conspired to force major operating changes." Exstein cited Eastman Kodak (EK: news, chart, profile), IBM (IBM: news, chart, profile) and Microsoft (MSFT: news, chart, profile) as examples of companies that have had to cope with such phases.

Though it's the world's largest company -- Wal-Mart raked in $256.33 billion in sales last year -- Exstein said that it is not infallible. "The corporate landscape is littered with companies that have mistaken leading market share for dominant market share," he said.

Unless the company comes forward and starts defending itself -- or, better yet, changes it practices -- Exstein said he fears "Wal-Mart may become a victim of its past success."

Jennifer Waters is the Chicago bureau chief for CBS.MarketWatch.com.

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California tries to slam lid on big-boxed Wal-Mart

By John Ritter, USA TODAY                         [back to top]
March 2, 2004

BAY POINT: Calif. Wal-Mart's relentless rollout of new stores has floundered in California like a beached whale. Two years ago, the world's biggest company announced aggressive plans to build 40 of its trademark "supercenters" in this lucrative market of 35 million consumers, the last untapped domestic prize for a global behemoth whose "always low prices" stretch from China to Brazil.

But not a single supercenter has opened in California, and Wal-Mart's (WMT) goal a new one every two months looks dubious. Nearly everywhere it turns, the Bentonville, Ark., retailer finds itself embroiled in lawsuits, politics and voter hostility toward its profitable blend of groceries and discount merchandise.

On Tuesday, voters in Inglewood, San Marcos and here in Contra Costa County will decide whether to prohibit "big-box" stores epitomized by Wal-Mart supercenters. Los Angeles, San Diego, Salinas and other cities are mulling similar bans. Lawsuits over

Wal-Mart are pending in Alameda County, Bakersfield and Turlock.

Across the USA, Wal-Mart faces backlash where it once found welcome mats often with taxpayer-financed sweeteners to boot. From Lawrence, Kan., to Sequim, Wash.; Milford, Ohio; Manatee County, Fla.; Manor, Pa.; Stoughton, Wis.; Urbana, Ill.; and Florence, S.C., communities are questioning whether Wal-Mart's ultracompetitive business practices critics call them cutthroat and predatory are in their best interest.

"Ten years ago, fighting Wal-Mart was so unusual it was a national story small town beats Goliath," says Al Norman, founder of Sprawl-Busters, a Wal-Mart watchdog. "Today, these battles are raging all over."

But last week, Fortune magazine crowned Wal-Mart No. 1 on its annual list of the most admired companies for the second consecutive year. "There's a reason Wal-Mart is the largest retailer in the world," says George Whalin, a San Marcos retail consultant who doesn't work for Wal-Mart. "Consumers want to buy things at lower prices."

So why all the clashes? Supercenters were the catalyst, Norman says. In the 1970s and 1980s, discount stores in Wal-Mart's initial sweep through the South and Midwest were modest by today's standards "40,000-50,000-square-foot little things," he says.

Not only are supercenters far grander 200,000 square feet or about six football fields but they often leave vacant older Wal-Marts behind. Norman counts 371 "dead" stores, up 39% since 1999.

"Communities are irritated that they're building stores right down the street from older stores," he says. "And they're irritated that they're getting the skeletal remains of the old stores."

California's lucrative market

In California, a volatile mix of circumstances makes the Wal-Mart wars unique. To a growth-driven company that looks beyond existing-store sales to satisfy Wall Street, the Golden State offers huge potential. Because local governments get a share of California sales taxes, elected officials are often eager for revenue-generating big-box retailers.

But many cities and counties have tough growth controls or grass-roots opposition. Gridlock on streets and highways fuels resistance to big-box developments on the suburban fringe that aggravate traffic and sprawl.

Politically potent unions see jobs threatened by supercenters selling groceries and offering consumers low-priced, one-stop shopping for most of their needs. Wal-Mart loomed large over the 4-month-old Southern California grocery strike, which ended Sunday after becoming the longest in the state's history. Supermarket chains, under intense pressure to stay competitive in an industry of skinny profit margins, want workers to pay more of health benefits, but the union resisted.

A study by the Bay Area Economic Forum, an organization of major employers, found that Wal-Mart's annual wages and benefits were $21,000 less per average worker than those of local supermarket chains.

"It's fear of the unknown," says Wal-Mart spokeswoman Amy Hill. "The food workers union is trying to scare people and create a myth that supercenters come in and shut everybody else down. But in 44 other states, people see that's not the case."

Since its first supercenter opened in 1988, Wal-Mart has shot from nowhere to America's grocery king, grabbing 21% of the market. A study by market researcher Retail Forward predicts that Wal-Mart grocery and drug sales will almost double to $162 billion by 2007, boosting its market share to 35% and "leaving a path of destruction in its wake" among competitors.

Wal-Mart's $256 billion in annual sales is at least $60 billion more than the USA's No. 2 company, General Motors (GM). At its current rate, Wal-Mart will open 1,000 supercenters in the next five years.

Non-union, non-grocery discount chains such as Ames, Bradlee's and Caldors folded under the Wal-Mart onslaught, but unionized supermarkets are digging in. "This issue is much more contentious in California, because there's a tradition of 'I'll see you in court' or 'I'll see you at the ballot box,' " Norman says.

Wal-Mart fights back

Contra Costa, a suburban county of 1 million northeast of San Francisco, is a bellwether battleground because its demographics mirror the state's. In June, the Board of Supervisors voted to limit stores that devote more than 5% of space to groceries to 90,000 square feet. That effectively barred supercenters without naming Wal-Mart. Bulk-food sellers such as Costco were exempted.

"Unincorporated areas are where we want to protect open space," says Supervisor John Gioia. "Large developments don't generate enough sales tax revenue to mitigate the negative impact."

Wal-Mart gathered enough signatures to put a referendum on today's ballot and will spend more than $1 million on the vote, although the company says it has no plans for supercenters in Contra Costa. With $500,000 from Safeway and unions, opponents have knocked on tens of thousands of doors with a plea to keep Wal-Mart from big-footing in local politics.

"This is about the right to choose," says Dee Dee Ferro, president of a Bay Point chapter of ACORN Association of Community Organizations for Reform Now. "We've already decided to ban supercenters. Just because Wal-Mart has money, they can come in and take over our land-use decisions?"

Wal-Mart foes say supercenters wipe out competitors, especially independently owned neighborhood mom-and-pop stores. "No way they can compete with bargain-basement prices," Ferro says.

Wal-Mart's painful impact on local business is a rallying cry. The company says new stores create jobs, while opponents contend they're merely low-paying substitutes for jobs swept away by Wal-Mart. Besides more traffic and pollution a supercenter adds 3,300 daily trips Wal-Mart kills supermarkets that anchor neighborhood strip malls, hastening urban blight, critics say.

In 1997-2002, Wal-Mart blanketed Oklahoma City with seven supercenters and seven of its "neighborhood markets" that mimic stand-alone supermarkets. It added a Sam's Club warehouse store to three already in the metro area. Result: 30 competing supermarkets closed, according to Retail Forward. In Dallas over the same period, Wal-Mart added 34 stores. Winn-Dixie abandoned all of its 15 stores.

Opponents conjure up the ruthless image of a powerful multinational bent on squeezing workers and suppliers, dispensing poverty-level wages and abusing Third World workers. "We're a blue-collar, middle-class area and we'd rather not engage in the race to the bottom," says Rep. George Miller, D-Calif., who represents most of Contra Costa.

But to legions of fans, especially cost-conscious shoppers, Wal-Mart's low prices and vast selection guard household budgets. Wal-Mart's speed, efficiency and innovation undercut competitors who foolishly go head-to-head on price instead of finding other niches, retail experts say.

"They're not the evil empire," says retail consultant Whalin. "They're formidable. They're tough. They're very good at what they do. But we know retailers around the country Target's an example that do quite well in the same marketplace."

Wal-Mart says in court papers that an Alameda County big-box ordinance limiting groceries illegally targets the company. But county officials say such bans also could cover Target or Sears superstores that sell groceries, though neither has plans in California.

"If they're trying to just stop all big box, write the ordinance that says no store over a certain square feet can come in," says Wal-Mart's Hill.

Wal-Mart is nothing if not adaptable. Last month, its first smaller, 99,000-square-foot supercenter opened in Tampa. It's meant for urban areas and to circumvent bans of more than 100,000 square feet.

Search for low prices

Supercenter prohibitions arguably penalize low-income consumers. A year ago, a Wal-Mart store became a long-sought anchor for a fading regional mall in a south Los Angeles community torn by 1992 riots. Residents no longer had to depend on mom-and-pops or long trips to find low prices, says John Mack, president of the Los Angeles Urban League. The store provided more than 300 badly needed jobs.

A city council proposal to ban big-box stores that sell groceries is short-sighted, Mack says: "This can't be a cookie-cutter approach. What may make sense in the overdeveloped San Fernando Valley and west Los Angeles may not make sense in underdeveloped south Los Angeles."

Studies in San Diego and Orange County predict a net economic loss for California when Wal-Mart jobs replace union jobs. Wal-Mart fired back with its own study by the Los Angeles County Economic Development Corp., a coalition of groups promoting new business, that found shoppers usually pay 20% less at supercenters than at union supermarkets.

Surveys show that eight Americans in 10 have shopped at Wal-Mart. "People say Wal-Mart put small business out of business. Actually, they put big business like Montgomery Ward and Kmart out of business," says Roger Blackwell, an Ohio State University marketing professor. "It's little David beating up on Goliath, not the other way around, because 30 years ago Wal-Mart was just a little independent chain."

Blackwell's take on Wal-Mart bashing: "People who want to hang onto the past fighting the innovations Wal-Mart brings to the marketplace."

For all the bad press and battles over new stores, the fact is, Wal-Mart usually wins.

Al Norman's Web site, www.sprawl-busters.com , lists nearly 200 communities that have "beaten big-box stores," mostly Wal-Marts, since 1998. But over the same period, Wal-Mart has opened nearly 600 new stores and expanded more than 500 others.

And it doesn't always lose at the ballot box. In Calexico, Calif., two years ago, more than 70% of voters defeated a proposed supercenter ban. Clark County, Nev., supervisors passed a ban but quickly rescinded it when Wal-Mart began collecting signatures in metropolitan Las Vegas.

In Inglewood, a working-class, heavily minority city of 117,000 bordering Los Angeles International Airport, Wal-Mart twice had to troll for signatures to try to overturn a supercenter ban. Today's outcome could foreshadow bitter battles to come: Voters will be torn between the needs of low-income residents and the union sympathies of airport and port workers.

As Wal-Mart opens its first California supercenter this week in La Quinta near Palm Springs, the votes could move the war to a new phase. Wal-Mart may be vulnerable to lawsuits if it uses the ballot box to skirt environmental and other local mandates.

Still, for every place that snubs Wal-Mart, plenty of others embrace it. "We'd welcome a supercenter," says Terrence Grindall, economic development manager in Manteca, a city of 60,000 near Turlock, whose supercenter ban triggered a lawsuit. "We're pro-business."

Wal-Mart stands out on rolls of PeachCare; Sign-up ratio far exceeds other firms' Andy Miller - The Atlanta Journal-Constitution February 27, 2004

A snapshot of Georgia's program for uninsured children shows that it's packed with kids of Wal-Mart employees.

A state survey found 10,261 of the 166,000 children covered by Georgia's PeachCare for Kids health insurance in September 2002 had a parent working for Wal-Mart Stores.

That's about 14 times the number for next highest employer: Publix, with 734.

Wal-Mart is the state's largest private employer. But when the top four companies on the list are measured by number of PeachCare children per the number of employees in Georgia, Wal-Mart still dominates.

The survey findings surface as Wal-Mart's pay, benefits and corporate policies have come under fire nationally. Labor unions and other critics have denounced the Arkansas-based retail giant for what they call low-wage, low-benefit jobs. And unions fear the influence Wal-Mart practices could have on employee benefits in all industries.

Georgia's PeachCare program was launched in 1998 to provide health insurance to children whose parents cannot afford or don't have access to those benefits. Wal-Mart said it does not encourage employees to use states' insurance plans for children or Medicaid, the federal-state program for the poor. "We offer affordable health coverage to all of our associates, both full time and part time," said Dan Fogleman, a spokesman for the company.

But the number of PeachCare children whose parents work for Wal-Mart struck a nerve with a local advocacy group for low-wage women.

"Most employees who make $7 to $8 an hour can't afford health insurance," said Cindia Cameron, organizing director of 9 to 5, National Association of Working Women. "When a very wealthy employer passes off to taxpayers what is rightfully a labor force cost, that's a serious public policy problem."

The PeachCare employer listings appear in an internal Department of Community Health memo and were not publicly released. But the results recently surfaced in an AFL-CIO report about Wal-Mart benefits and subsequent comments by union officials.

Community Health officials declined to comment Thursday on the Wal-Mart figure and the survey in general, and said no employer survey for PeachCare has been done since then.

Employers on the PeachCare list in Georgia's survey include other retailers, carpet companies, hospitals, banks and federal agencies such as the U.S. Postal Service.

A recent study released by the Commonwealth Fund, a research foundation, found the percentage of uninsured workers in large companies rose to 11 percent from 7 percent between 1987 and 2001. And benefits are typically less generous in the retail sector, primarily because of high worker turnover.

The ratio of Wal-Mart employees' children per company worker in Georgia, though, greatly exceeds those of Publix and Shaw Industries and Mohawk Industries, the Nos. 3 and 4 employers on the PeachCare list.

42,000 workers in state

Wal-Mart, with 42,000 workers in the state in 2002, had about one child in the health care program for every four employees. The ratio for Publix was one child in PeachCare for every 22 employees. For Shaw, it was one for every 30 employees, and for Mohawk, one for every 26 workers.

PeachCare now insures 185,000 kids. Eligibility is based on family income. State employees' children, though, are not eligible because of federal rules.

The enrollment number is expected to shrink if the Georgia General Assembly adopts proposed premium increases and rule changes.

The AFL-CIO said the number of Wal-Mart employees' children in PeachCare reflects the company's low wages and the relatively high price of its medical plan.

"You have a company increasingly shifting the cost of health care to taxpayers," said Shaun O'Brien, assistant director of public policy for the AFL-CIO. Many Wal-Mart employees, the union says, earn wages of $7.50 to $8.50 an hour --- not enough to make benefits affordable.

Wal-Mart, with 1.4 million U.S. workers, is the biggest private employer in America; it now employs more than 46,000 workers in Georgia. The company is not unionized.

About half of Wal-Mart's U.S. workers are covered under the company medical plan, considered a low participation rate for large companies. But Fogleman said the total of employees with health insurance is 90 percent, because many get coverage through a spouse, a parent or a government program such as Medicare. The Georgia employees with PeachCare children, he said, could be part time or even temporary help working during the holidays.

The company says 40 percent of employees in the company medical plan have never had health coverage before coming to work for Wal-Mart. "We catch a lot of people who fall through the cracks," Fogleman said.

An architect of the PeachCare program said he isn't surprised by the number of Wal-Mart employees with children in PeachCare.

"A lot of Wal-Mart employees are part time," said state Rep. Mickey Channell (D-Greensboro).

Twenty-five percent or fewer of Wal-Mart employees work part time, the company said. They aren't eligible for family coverage and aren't offered individual coverage until they work for the company for two years. Full-time workers must wait three to six months for coverage.

Many labor disputes

Wal-Mart's image has been rocked by recent labor controversies.

Last year a federal raid rounded up 250 illegal workers doing janitorial work for Wal-Mart contractors. And the company also confronts a large gender discrimination lawsuit charging that it pays and promotes women less than men. Wal-Mart said it disputes the allegations.

Health insurance and Wal-Mart are major themes in a strike by grocery workers in Southern California. The grocers want to reduce employee health benefits so the companies can compete with a coming wave of 40 Wal-Mart Supercenter stores in the state.

The outcome of the conflict, unions say, could set the tone for medical benefits in industries nationwide. The grocers and the union reached a tentative agreement to end the strike Thursday night, but settlement details were not available.

High deductible

Wal-Mart workers can buy individual coverage for as low as $15.25 every two weeks and family coverage for $66.25, Fogleman said. But those options have a deductible of $1,000, meaning that care is paid for by the employee until that ceiling is reached. Then Wal-Mart covers 80 percent of further costs.

Wal-Mart says its average spending on medical benefits per employee is $3,100 per year. That's less than the industry average --- about $4,400 for large retailers --- as calculated by Mercer Human Resource Consulting.

The AFL-CIO report describes Wal-Mart's health benefits plan as overly restrictive.

In addition to lengthy waiting periods for coverage, the plan doesn't cover such expenses as children's vaccinations, flu shots or eye exams.

The company's health care plan is designed for catastrophic coverage --- paying for very expensive medical care, Fogleman says.

The goal is to keep insurance affordable, he said. One favorable benefit is that Wal-Mart has no cap on lifetime employee health care spending, unlike other employers.

The retail industry typically offers less-generous benefits and imposes longer exclusion periods than others, in part because of high employee turnover, noted Werner Gliebe of Segal Co., an employee benefits and human resources consulting firm.

Wal-Mart employees pay about one-third of their health care premiums. That's typical of retailers and exceeds the 20 percent paid by an average Fortune 500 company worker, said Gliebe.

"You have a double whammy: People who are lower-paid having to contribute one-third of the cost," Gliebe said. Typically, as a result, fewer employees of retail companies enroll in their benefits plan, he added.

GRAPHIC: Graphic: WHO USES PEACHCARE

Employers with 300 or more children in PeachCare in September 2002:

PeachCare ...............children
Self-employed............12,789
Wal-Mart...................10,261
Publix............................734
Shaw Industries..............669
Mohawk Industries...........657
Cagle's Keystone Foods.....463
McDonald's.....................454
Home Depot....................421
Kroger...........................377
U.S. post office...............354
Construction...................328
Sears............................325
Randstad Staffing............305
Grady Healthcare.............300

Source: Department of Community Health. The figures are self-reported information from PeachCare applications.; Graphic: PEACHCARE FOR KIDS

* What it is: A health care program for uninsured children in Georgia, part of a national initiative begun in the Clinton administration.

* Eligibility: Available to children up to age 18 whose families meet income criteria based on federal poverty guidelines. For a family of four, $43,260 a year is the family income limit. State employees' children aren't eligible.

* Member costs: Premiums are required for children ages 6 and older. The cost per child per month is $10. Families with two or more children pay $20 for all children. Georgia is considering raising those premiums.

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Trial Ordered In Wal-Mart Case

By Rob Moritz - Arkansas News Bureau           [back to top]
February 27, 2004

LITTLE ROCK — A woman who filed a lawsuit against Wal-Mart after she slipped and fell on a recently mopped floor in a Paragould store deserves a trial, the Arkansas Court of Appeals decided.

The ruling reverses a circuit court judge's decision to grant the Bentonville-based retailer summary judgment in the case. The judge ruled that the cleaning crew that left the water on the floor was an independent contractor for Wal-Mart.

In Wednesday's unanimous decision, the Court of Appeals disagreed and ordered a trial.

Stacy Wineland was in the Paragould Wal-Mart store on March 18, 2001, when she slipped after stepping on a wet floor that had just been mopped by a crew with United Janitorial Services, Inc.

Wal-Mart argued that the floor was left wet by the cleaning crew, an independent contractor, so the store should not be held liable. Green County Circuit Court Judge David Burnett agreed with Wal-Mart's argument and granted summary judgment to Wal-Mart.

In her appeal, Wineland argued Burnett erred because "there were genuine issues of material fact" regarding the cleaning crew's relationship with the store. She said material fact remained as to whether UJS had a "master-servant relationship with Wal-Mart." An employer is liable if such a relationship exists, she argued.

She also said Wal-Mart was negligent in failing to supervise the cleaning crew and that the store was negligent in violating health and safety regulations.

Court of Appeals Chief Judge John Stroud wrote that questions about the crew's relationship with Wal-Mart should have been answered before the summary judgment was issued.

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Wal-Mart stands out on rolls of PeachCare Retailer's sign-up ratio far exceeds other firms'

By ANDY MILLER - The Atlanta Journal-Constitution          [back to top]
Published on: 02/27/04

A snapshot of Georgia's program for uninsured children shows that it's packed with kids of Wal-Mart employees.

A state survey found 10,261 of the 166,000 children covered by Georgia's PeachCare for Kids health insurance in September 2002 had a parent working for Wal-Mart Stores.

That's about 14 times the number for next highest employer: Publix, with 734.

Wal-Mart is the state's largest private employer. But when the top four companies on the list are measured by number of PeachCare children per the number of employees in Georgia, Wal-Mart still dominates.

The survey findings surface as Wal-Mart's pay, benefits and corporate policies have come under fire nationally. Labor unions and other critics have denounced the Arkansas-based retail giant for what they call low-wage, low-benefit jobs. And unions fear the influence Wal-Mart practices could have on employee benefits in all industries.

Georgia's PeachCare program was launched in 1998 to provide health insurance to children whose parents cannot afford or don't have access to those benefits. Wal-Mart said it does not encourage employees to use states' insurance plans for children or Medicaid, the federal-state program for the poor. "We offer affordable health coverage to all of our associates, both full time and part time," said Dan Fogleman, a spokesman for the company.

But the number of PeachCare children whose parents work for Wal-Mart struck a nerve with a local advocacy group for low-wage women.

"Most employees who make $7 to $8 an hour can't afford health insurance," said Cindia Cameron, organizing director of 9 to 5, National Association of Working Women. "When a very wealthy employer passes off to taxpayers what is rightfully a labor force cost, that's a serious public policy problem."

The PeachCare employer listings appear in an internal Department of Community Health memo and were not publicly released. But the results recently surfaced in an AFL-CIO report about Wal-Mart benefits and subsequent comments by union officials.

Community Health officials declined to comment Thursday on the Wal-Mart figure and the survey in general, and said no employer survey for PeachCare has been done since then.

Employers on the PeachCare list in Georgia's survey include other retailers, carpet companies, hospitals, banks and federal agencies such as the U.S. Postal Service.

A recent study released by the Commonwealth Fund, a research foundation, found the percentage of uninsured workers in large companies rose to 11 percent from 7 percent between 1987 and 2001. And benefits are typically less generous in the retail sector, primarily because of high worker turnover.

The ratio of Wal-Mart employees' children per company worker in Georgia, though, greatly exceeds those of Publix and Shaw Industries and Mohawk Industries, the Nos. 3 and 4 employers on the PeachCare list.

42,000 workers in state

Wal-Mart, with 42,000 workers in the state in 2002, had about one child in the health care program for every four employees. The ratio for Publix was one child in PeachCare for every 22 employees. For Shaw, it was one for every 30 employees, and for Mohawk, one for every 26 workers.

PeachCare now insures 185,000 kids. Eligibility is based on family income. State employees' children, though, are not eligible because of federal rules.

The enrollment number is expected to shrink if the Georgia General Assembly adopts proposed premium increases and rule changes.

The AFL-CIO said the number of Wal-Mart employees' children in PeachCare reflects the company's low wages and the relatively high price of its medical plan.

"You have a company increasingly shifting the cost of health care to taxpayers," said Shaun O'Brien, assistant director of public policy for the AFL-CIO. Many Wal-Mart employees, the union says, earn wages of $7.50 to $8.50 an hour — not enough to make benefits affordable.

Wal-Mart, with 1.4 million U.S. workers, is the biggest private employer in America; it now employs more than 46,000 workers in Georgia. The company is not unionized.

About half of Wal-Mart's U.S. workers are covered under the company medical plan, considered a low participation rate for large companies. But Fogleman said the total of employees with health insurance is 90 percent, because many get coverage through a spouse, a parent or a government program such as Medicare. The Georgia employees with PeachCare children, he said, could be part time or even temporary help working during the holidays.

The company says 40 percent of employees in the company medical plan have never had health coverage before coming to work for Wal-Mart. "We catch a lot of people who fall through the cracks," Fogleman said.

An architect of the PeachCare program said he isn't surprised by the number of Wal-Mart employees with children in PeachCare.

"A lot of Wal-Mart employees are part time," said state Rep. Mickey Channell (D-Greensboro).

Twenty-five percent or fewer of Wal-Mart employees work part time, the company said. They aren't eligible for family coverage and aren't offered individual

coverage until they work for the company for two years. Full-time workers must wait three to six months for coverage.

Many labor disputes

Wal-Mart's image has been rocked by recent labor controversies.

Last year a federal raid rounded up 250 illegal workers doing janitorial work for Wal-Mart contractors. And the company also confronts a large gender \discrimination lawsuit charging that it pays and promotes women less than men. Wal-Mart said it disputes the allegations.

Health insurance and Wal-Mart are major themes in a strike by grocery workers in Southern California. The grocers want to reduce employee health benefits so the companies can compete with a coming wave of 40 Wal-Mart Supercenter stores in the state.

The outcome of the conflict, unions say, could set the tone for medical benefits in industries nationwide. The grocers and the union reached a tentative agreement to end the strike Thursday night, but settlement details were not available.

High deductible

Wal-Mart workers can buy individual coverage for as low as $15.25 every two weeks and family coverage for $66.25, Fogleman said. But those options have a deductible of $1,000, meaning that care is paid for by the employee until that ceiling is reached. Then Wal-Mart covers 80 percent of further costs.

Wal-Mart says its average spending on medical benefits per employee is $3,100 per year. That's less than the industry average -- about $4,400 for large retailers -- as calculated by Mercer Human Resource Consulting.

The AFL-CIO report describes Wal-Mart's health benefits plan as overly restrictive.

In addition to lengthy waiting periods for coverage, the plan doesn't cover such expenses as children's vaccinations, flu shots or eye exams.

The company's health care plan is designed for catastrophic coverage — paying for very expensive medical care, Fogleman says.

The goal is to keep insurance affordable, he said. One favorable benefit is that Wal-Mart has no cap on lifetime employee health care spending, unlike other employers.

The retail industry typically offers less-generous benefits and imposes longer exclusion periods than others, in part because of high employee turnover, noted Werner Gliebe of Segal Co., an employee benefits and human resources consulting firm.

Wal-Mart employees pay about one-third of their health care premiums. That's typical of retailers and exceeds the 20 percent paid by an average Fortune 500 company worker, said Gliebe.

"You have a double whammy: People who are lower-paid having to contribute one-third of the cost," Gliebe said. Typically, as a result, fewer employees of retail companies enroll in their benefits plan, he added.

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Working: Wal-Mart practices lead race to bottom

By Mary Conroy - Madison Capital Times             [back to top]
February 25, 2004

The first time I shopped at Wal-Mart I did so for its prices and return policies. Tampax cost at least a dollar less there than anywhere else, so every few months, I'd stock up. Once in a while, I'd get lured by some other Wal-Mart items and buy them.

During that time, I was ignorant. It didn't occur to me to question how Wal-Mart could affect employees, other businesses and world trade.

But I'm better informed now. I cut up my Sam's card and haven't been inside a Wal-Mart in years. And recently, a report from Rep. George Miller, D-Calif., of the House Committee on Education and the Workforce reinforced my decision to steer clear of it. The report summarizes Wal-Mart's practices in areas ranging from unfair wages to unaffordable health care. It also takes our government to task for allowing Wal-Mart to hurt workers, other retailers and our economy.

Consider Wal-Mart's union-busting tactics. When a small meatcutting department organized a union at a Texas Wal-Mart in 2000, the company eliminated its meatcutting operations a week later. Instead of complying with a 2003 court order to bargain with the meatcutters, Wal-Mart is appealing the decision. Wal-Mart's other labor law violations range from intimidating workers to firing those who try to organize unions.

Super Wal-Marts threaten the standard of living for grocery employees. While the average supermarket worker makes $10.35 an hour, those at Wal-Mart average $8.32 an hour, and only get paid for 32 hours a week. Do the math: those Wal-Mart workers make less than $1,000 a month.

Not only do they get low wages, but they have a hard time getting benefits. That's partly because in 2002, Wal-Mart changed its definition of "part-time" work from 28 to 34 hours per week. Part-time employees aren't eligible for health insurance until they've worked at Wal-Mart for two years. Even then, they can't buy coverage for their families.

Even full-time employees find Wal-Mart's health plan a burden. For 2001, workers there paid 42 percent of their health insurance. With high deductibles and co-payments, a single worker could spend $6,400 out-of-pocket before getting any benefits. That's nearly half the worker's full-time salary.

What does this mean? It means that many Wal-Mart employees have to go on public assistance. It means that Wal-Mart is forcing us taxpayers to foot the bill for health benefits its workers deserve. According to Bill Moyers of PBS, Wal-Mart's personnel offices encourage employees to use charity and public assistance.

To be competitive with Wal-Mart, which pays so little in health benefits, other employers feel they have to shift the cost of health insurance to their employees. Right now some 70,000 unionized California grocery employees are either on strike or locked out because they refuse to agree to higher health care costs prompted, their bosses say, by Wal-Mart's competition.

A University of California study predicted that if grocers offer fewer benefits and ask employees to pay more, other employers will follow suit. Thus, Wal-Mart has "sparked a new race to the bottom," Rep. Miller's report says. Such moves may bring an end to employer-based health insurance programs.

Is Wal-Mart doing this because it's hurting? Absolutely not. In 2002, company profits reached $6.6 billion. While profits are up and Wal-Mart is building new stores in small towns that once had healthy downtowns, its employees share none of this economic boom.

Wal-Mart could learn a lesson from Henry Ford. Back when he began his assembly-line factories, he realized one basic principle: if he wanted America to buy his automobiles, his own workers had to be part of that America. Therefore, he paid his employees enough so that they could afford to buy the cars they made.

"Everyday low prices" may eventually mean everyday low salaries and benefits for you and your family. In the case of Wal-Mart, both individuals and communities get what they pay for.

Mary Conroy is a Madison-based free-lance writer.

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A better way to control growth

Greg Feere, Tim Frank - San Francisco Chronicle               [back to top]
Wednesday, February 25, 2004

Measure L, the referendum on a Contra Costa County ordinance that would ban from unincorporated areas any nonmembership "super-centers," will help protect the last remaining open space in unincorporated areas of the county. It will also help slow the worsening of traffic congestion and water and air pollution.

The Sierra Club and the Contra Costa Building Trades Council have joined a groundswell of community groups in making this issue a priority because the high quality of life that helps make Contra Costa County competitive is at risk.

The motivation for our partnership is simple. First, there is a growing body of evidence from all around the country that growth management policies that stop urban sprawl lead to stronger economic performance and job creation. A recent study commissioned by Good Jobs First examined 155 metropolitan areas and found that those that had adopted growth-management policies had construction activity per new resident that yielded about $100,000 more over a 10-year period compared with those that opted for the business-as-usual approach. (See "The Jobs are Back in Town" report at www.GoodJobsFirst.org.)

Measure L won't just help to protect local jobs, but it will also protect family-owned businesses and the environment. Specifically, it would prohibit the construction of new super-centers on one of the last unprotected landscapes of the county. Super-centers are typically the size of several football fields and consume huge amounts of open space. The fact that these big-box retail stores are usually sited on the outskirts of town means longer commutes to buy groceries, adding to increased traffic and air pollution. Moreover, the number of long trips is significant. A study by the Institute of Traffic Engineers found that super-centers that sell groceries generate more than 4,000 additional car trips per day than an average supermarket.

What's more, the consolidation of retail into ever-larger super-stores is a huge threat to livable communities. Wal-Mart sells some groceries at a loss in order to draw customers to the store, then generates profits on the rest of the merchandise. Neighborhood grocery stores can't compete with this model -- and for every super-center that opens, two neighborhood supermarkets close, according to Retail Forward, a market research firm in Columbus, Ohio. Since most neighborhood shopping centers are anchored by supermarkets, if the supermarket closes, neighboring businesses suffer and some may even go out of business. The community is left with a vacant shopping center, creating blight and driving down property values.

For these reasons, Contra Costa County Measure L would protect local families and businesses by prohibiting big-box stores that generate more than 5 percent of their total sales from nontaxable items such as groceries. The Contra Costa Board of Supervisors originally passed the ordinance behind Measure L, because it saw the importance of creating smarter growth plans within our communities. Wal-Mart, however, wanted to overturn what local elected officials saw as being best for Contra Costa County, and the company has now spent more than $1 million on the effort to defeat the measure.

Measure L is about protecting our environment and family-owned businesses -- but it's also about local control to decide how and where we grow. The future of our communities shouldn't be dictated by corporate executives in Arkansas. There is a better way: A "yes" vote for Measure L is a vote for communities being able to plan their own future.

Greg Feere is CEO of the Contra Costa Building and Construction Trades Council. Tim Frank is senior policy adviser for the Sierra Club Challenge to Sprawl Campaign (www.sierraclub.org/sprawl).

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Workers' Rights Are Being Rolled Back

By Steven Pearlstein - Washington Post                 [back to top]
Wednesday, February 25, 2004

While the Bush administration is gung-ho for democracy in Iraq and Zimbabwe, there is one place it wants to be sure it never sees the light of day: the American workplace.

I am talking here about a right that most Americans thought they won back in 1935 -- the right to form unions and bargain collectively. Over the years, that right has been whittled away by legislation, poked with holes by appeals courts and reduced to irrelevancy by a well-meaning bureaucracy that has let itself be intimidated by political and legal thuggery. As a result, any company willing to use intimidation and delaying tactics will never have to sign a first contract with a union, even if employees really want one.

That, certainly, is what anyone would conclude after reviewing the record of the nation's largest employer, Wal-Mart Stores Inc. Its file at the National Labor Relations Board includes roughly 250 cases that have gone through the board's arcane process since 1995. And yet, despite ample evidence of Wal-Mart's proclivity to engage in what look to be unfair labor practices directed by executives at corporate headquarters, the NLRB has yet to systematically interview them or look through their files.

Wal-Mart's tactics are right out of the union-busting handbook: give psychological tests to screen out job applicants who are likely union recruits; fly in SWAT teams from headquarters at the first sign of organizing; find some lame excuse to fire workers who openly declare their union sympathy; tell employees they could lose their benefits if a union comes in; set up surveillance teams outside the store to record which employees chat with union organizers; and, if necessary, offer improved pay and working conditions on the eve of votes. These aren't just allegations -- they are findings of fact by the NLRB's own administrative law judges.

And what has happened when Wal-Mart loses one of these individual store cases? Typically it has offered to rehire, with back pay, the $8-an-hour clerk who brought the complaint and has long since gone on to another job; posted a notice at the store's water cooler promising not to do bad things again; and, in rare instances, scheduled a new vote at a store that has since been packed with company flunkies.

Given these toothless remedies, it's no surprise that only seven groups of Wal-Mart employees have ever gotten to vote on having a union, with only one of those -- 10 butchers at a store in Jacksonville, Fla. -- actually voting in favor. And gosh, wouldn't you know that just weeks later, Wal-Mart decided to eliminate the meat-cutting function at the Jacksonville store and ship in pre-cut meat instead. Although the company explained the change had been under consideration for six months at least, Leonard Page, then the acting general counsel of the NLRB, told me Wal-Mart couldn't produce even a single document to prove it.

Some months after the Jacksonville incident, Page decided it was time to get serious with Wal-Mart, and set up an appointment with top executives at their offices in Bentonville, Ark. But the day before his trip, he got a call from the White House thanking him for services and instructing him to clear out his desk even though no replacement had been named.

Page's successor, Arthur F. Rosenfeld, is a former management lawyer and Republican aide on Capitol Hill of no particular distinction other than his management sympathies. Rosenfeld gives no interviews, posts no speeches on his agency's Web site and sends out civil servants to answer written questions about Wal-Mart, explaining there simply isn't enough evidence of a "pattern of unlawful conduct at multiple locations" to justify an investigation of Wal-Mart's corporate-wide labor practices.

I don't know if most Wal-Mart "associates" would -- or even should -- vote in a union. What I do know is that with gutless regulators like Rosenfeld in charge, they won't even get a chance to decide. What the Wal-Mart case signals to every employer and worker in America is that the right to form a union is now a cruel joke and an empty promise.

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General delivery; Retired Marine Jarvis Lynch Jr. directs battle against Wal-Mart

NICK MASON - The Bradenton Herald              [back to top]
24 February 2004

'We did our best to stay on the offensive constantly' Jarvis Lynch Jr. believed the nearly 18 months of work by his neighborhood group opposing plans for a Wal-Mart SuperCenter would be rewarded.

He was confident when he walked into the Manatee Convention and Civic Center last month that Manatee County commissioners would reject the project.

"The night before, I asked my wife about the vote," Lynch said. "She said, 'Let's make a bet on it.' She said 7-0. I said 'No bet.' That's what I thought it was going to be." Lynch and his wife, Pauline, were right.

"I was confident, but you just never know for sure," he said. "There can always be a surprise of some sort, although I couldn't begin to tell you what it might have been."

Lynch is president of Safe and Economically Viable Neighborhoods Inc. (SAEVN), a nonprofit organization University Park residents formed specifically to challenge the proposal for the 224,000-square-foot store and accompanying garden center at University Parkway and Honore Avenue.

The retired U.S. Marine Corps major general commanded his volunteer troops through the trenches of the county government's land-use bureaucracy with the precision of a unit advancing in a military campaign.

"There are certain military principles of war, and we adhered to some of them," Lynch said.

"The objective was to have the board of county commissioners deny the Wal-Mart application, and everything we did needed to relate directly to that objective," he said matter-of-factly. "The other principle was taking the offensive. We did our best to stay on the offensive constantly."

Lynch and the SAEVN core group of about a dozen leaders decided to pay for a professional analysis of vehicle traffic impacts the proposed SuperCenter would cause instead of waiting for the developer's study to be submitted to county planners.

"Severe traffic problems was a major concern," he said. "So we funded a traffic study and then stayed on the attack and funded an addendum. We weren't waiting for someone else to perform one; we had it done."

Effort saluted Lynch was a Marine for 35 years and had major tours of duty in Okinawa, Vietnam, Hawaii, Norway, Quantico, Va., and Parris Island, S.C. He retired as major general responsible for recruit training of all male Marines recruited east of the Mississippi River and all female recruits throughout the nation, almost 20,000 recruits per year.

The detailed preparation and methodical execution of the campaign by Lynch and SAEVN against Wal-Mart drew a salute from Clint Miller, chairman of the East Manatee County Coalition citizens group.

"I think Jarvis did an absolutely outstanding job of marshaling his troops behind him in combating the situation," Miller said.

"One of the things that I was impressed with is that they had experts of various disciplines standing by to combat any arguments presented by the county Planning Department or the applicant during the public hearing," Miller said. "To me, that represents excellent leadership and commitment."

"Jarvis was the perfect guy for this job," said Patricia Petruff, a Bradenton attorney SAEVN hired. "He held his people together, and his organizational skills helped focus their efforts."

Ed Vogler, Wal-Mart's attorney during the hearings, declined to talk about about Lynch or SAEVN.

Lynch was appointed to lead the fight against Wal-Mart by Bill Gruenwald, a member of the University Park Community Association Inc. board of directors and chairman of the Chair Council representing the 27 neighborhoods that comprise the University Park subdivision.

"I hadn't really known Jarvis personally, but I heard about him from friends and neighbors," Gruenwald said. "We went to lunch and I asked if he would take it on, and he agreed.

"The first question he asked was, 'What's the chain of command?' Gruenwald recalled of that afternoon in 2002 at the University Park Grille & Cafe. "I told him that he was General Grant and I was Abe Lincoln. He laughed."

Lynch had not been active in any community or political causes since moving from Pensacola to University Park in 1994, but he dove into his assignment with dedication.

"I learned a great deal about the county Planning Department, about county government, the comprehensive plan and the land development code," he said.

Battle plans SAEVN was created and Lynch and the core group began compiling information about the Wal-Mart proposal, the history of development approval for the site, the county's development rules and reaching out to residents of other neighborhoods for support.

"It began in University Park, but as time went on we had support from University Place, The Meadows, Longwood Run, Lakewood Ranch and Mote Ranch," he said. "The center of gravity for SAEVN is University Park, but we had supporters from other Manatee County and Sarasota communities."

The core group of leaders met each Friday at Lynch's dining room table, which was dubbed the "war room."

"You wouldn't believe it if I told you," Lynch said when asked how much time he spent battling Wal-Mart. "I'd say, on average, six hours a day, including weekends."

The effort climaxed with the all-day hearing Jan. 22 at the civic center attended by about 500 people, most in SAEVN's corner, and the commission's unanimous vote of denial.

"Ecstatic," Lynch said of the feeling the moment the commissioners voted. "Glad it was over with, at least for now."

Lynch is not sure what to expect next from Wal-Mart. The company might sue commissioners or submit a revised plan, triggering a second round of review and hearings. He is ready for more action. "Oh, yeah," he said. "It's our primary order of business." Lynch said he and University Park residents intend to stay active in politics. "I've learned that within University Park there are some extraordinarily talented people with considerable experience and a willingness to work for the common good," Lynch said.

Gruenwald said the SAEVN effort Lynch led is a beginning that will flourish and mature. "I think he established relationships outside the community that will be invaluable," Gruenwald said. "For example, we are part of the East Manatee County Coalition.

"Jarvis and I have discussed what we do post-SAEVN," Gruenwald said. "We've established that we will have a committee for all external matters, including our government at the local and state levels. We want to understand what is going on and influence what is going on. SAEVN has given us a tremendous jump forward in that regard."

AGE: 71 LOCAL RESIDENCE: University Park OCCUPATION: Retired in 1991 as major general, United States Marine Corps BIRTHPLACE: Glassboro, N.J. FAMILY: Wife, Pauline, four grown children and three grandchildren

Nick Mason, county government reporter, can be reached at 745-7081 or at nmason@bradentonherald.com.

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Wal-Mart the largest corporate donor in US election

By Edward Alden and Neil Buckley - FINANCIAL TIMES          [back to top]
February 24, 2004

Wal-Mart, the largest company in the US, looks set to pass a new milestone this year: it is well on its way to becoming the biggest business contributor to the 2004 election campaign.

After years of little involvement in federal politics, the Arkansas-based retail giant is currently the largest corporate donor through its political action committee (PAC), having doled out nearly $1.3m to federal candidates until the end of January, according to Politicalmoneyline.com.

Wal-Mart's effort to beef up its presence in Washington is unparalleled since Microsoft - another upstart from the US hinterland - in the mid-1990s abandoned Bill Gates' boast that he was from "the other Washington" and hired an army of lobbyists to defend itself against a series of antitrust investigations.

Sam Walton, the founder of Wal-Mart, had a similar disdain for Washington politics. As recently as the 2000 presidential election year, Wal-Mart ranked 771st in direct contributions to federal politicians.

But the company finds itself in the middle of a growing number of disputes that is forcing it to pay more attention to the ways of Washington. "As Microsoft found out the hard way, when you reach a certain size you have to pay attention to what's going on in Washington or it really bites you," says Erik Autor, vice-president of international trade for the National Retail Federation, a national lobbying group that does not include Wal-Mart.

The company is facing dozens of lawsuits over its employment practices, as well as challenges from local governments that have tried to block its expansion as a way to protect smaller retailers. Trade unions that have watched well-paying grocery jobs disappear to non-unionised Wal-Mart stores have launched a series of attacks against the company. And with trade emerging as a hot election year topic, Wal-Mart would be the biggest single loser from any restrictions on imports, particularly from China.

In late 1999, Senate majority leader Trent Lott, then-Arkansas congressman Jay Dickey and others sat down with the company's management in Bentonville and warned that they needed to find a way to play the Washington game. "We told them they should become a participant in the process before the crises hit," says Mr Dickey, who lost his bid for re-election in 2002.

The company rejects the Microsoft analogy and prefers to put a more positive spin on its political contributions. Jay Allen, senior vice-president of corporate affairs for Wal-Mart and treasurer for the company's PAC, says he began discussing with senior management five or six years ago the need for the retail giant to wield greater clout in Washington. "It was not like there was one company or event or issue [that influenced us]," he says, "It became increasingly clear that we needed a presence there, to engage on legislative issues that arise in Washington - like taxes, health care, trade, food safety.

"The second issue was a need that frankly still exists today, with everything that is going on, for people to understand us better," he adds. "When you are not there it creates a void that someone else is going to fill, and you may not like their definition of you."

"They're doing a lot of this stuff to protect their reputation," agrees Michael Wilson, chief lobbyist for the United Food and Commercial Workers' union, which has fought bitterly to block Wal-Mart's expanding grocery business.

Since Mr Allen launched the effort, the company has assembled an impressive rank of lobbyists, including Patton, Boggs and Blow, the powerhouse Washington lobbying firm. It has weighed in to support a prescription drug benefit for Medicare (to help its pharmacy business), lobbied to restrict the ability of unions to organise in its stores, and helped lead a business coalition pressing for reduced taxes on offshore operations.

Wal-Mart's political contributions have been spread widely in Congress, with more than 220 members of the House and Senate receiving cheques of $1,000 to $17,500 so far this election cycle. About 85 per cent of the money has gone to Republicans.

Ray Bracy, Wal-Mart's vice president of international corporate affairs, says that until recent years its biggest issues had been at the local level. "But more and more as we have become big, and perhaps the target of criticism for many, we recognised that the local problems were still there, but there also were looming large national issues."

One such issue is trade. No company would be hurt more than Wal-Mart by a backlash against trade, particularly efforts to curb imports from China. The company imports about $15bn in goods annually from China alone.

In retrospect, Mr Bracy says, Wal-Mart's absence from the negotiations on China's accession to the World Trade Organisation in the late 1990s was "a miss". The WTO agreement, for example, says a retailer cannot own more than 30 stores in China without getting government approval. "If we had been present at the table, we could have said: 'where does 30 come from?'" says Mr Bracy. "We have 31 stores in Houston alone."

Despite its generous political contributions, however, Wal-Mart's lobbying style still reflects its corporate obsession with keeping costs as low as possible. Its Washington office, opened four years ago, only employs five full-time lobbyists, a fraction of comparably sized companies such as General Electric. And the company is facing a series of disputes with state-level retail lobbying associations over its demand for cut-rate membership fees. "What they normally do is send you what they think they can get away with," says Chris Tackett, president of the Wisconsin Merchants Federation.

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Our view: Wrong place for a Wal-Mart....

By: North County Times - Editorial               [back to top]
February 23, 2004

Proposition G would rezone roughly 20 acres in south San Marcos from residential to commercial use to allow construction of the city's second Wal-Mart, a 139,000 square-foot store in the University Commons development at Rancho Santa Fe Road and Melrose Drive. An accompanying measure, Proposition F, would make other minor adjustments to zoning in the area, but Prop. G is the main issue.

The proposal has sparked a bitter campaign in the city, with opponents excoriating Wal-Mart as a low-wage, low-benefit corporate behemoth and proponents praising it for its low prices and the 300 jobs the company promises to bring to San Marcos. If you feel strongly about Wal-Mart one way or the other, by all means vote accordingly. But we think Wal-Mart is not the main issue. The issue is that residential land should not be rezoned for commercial use. North County has a housing shortage, not a commercial and retail shortage. Those 20 acres are zoned for multifamily housing. There's other land in San Marcos zoned for big stores like Wal-Mart. That's where a new Wal-Mart should go.

Traffic on the already gridlocked roads at that corner is another issue. The two sides have presented conflicting interpretation of traffic studies. Opponents say the store would bring another 10,000 cars a day to the area that's a daily headache as it is. Proponents say most of those 10,000 cars are on the streets already; a Wal-Mart would simply cause them to stop off on a trip they would have made anyway.

We think it's almost certain that a Wal-Mart would make traffic worse. As a benchmark, city-planning textbooks estimate that a new home generates an average of 10 vehicle trips a day. So 300 homes on the site would generate 3,000 daily vehicle trips. Even proponents of the Wal-Mart concede the store would generate 4,400 trips a day.

But in the interest of argument let's call the traffic volume a wash. And let's say that whether to welcome a new Wal-Mart to San Marcos or wail about it is a matter of taste. Low wages or low prices? New jobs or low-paying jobs? Without taking a side on either issue, we still think this is the wrong place for a new Wal-Mart.

The 20 acres in question is zoned for 300 units of single-family and multifamily residential housing. That's exactly the kind of housing that San Marcos and North County need ---- denser development close to jobs to keep new residents off our already overburdened freeways. And University Commons is right next to an industrial park. We're with the neighbors on this one. We vote no on Proposition G.

Vote NO on G and Wal-Mart!

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Faced with opposition, Wal-Mart can play hard ball

By Greg Kane - Lodi News-Sentinel Business Editor           [back to top]
February 23, 2004

When late Wal-Mart founder Sam Walton's autobiography was published following his death in 1992, millions of readers were exposed to a quote that would be held up for years by the retail giant's most vehement critics.

"If some community, for whatever reason, doesn't want us in there," Walton wrote, "we aren't interested in going in and creating a fuss."

Wal-Mart officials would like to replace the store on Kettleman Lane and Lower Sacramento Road in Lodi with a 219,000-square-foot Supercenter across the street on the southwest corner of the intersection. (Casey Freeman/News-Sentinel) Fuss seems to follow Wal-Mart everywhere it goes these days, more than a decade after the book's release. The chain's plan to build 40 combination grocery and department store Supercenters across California -- including one in Lodi -- has been met with protests, lawsuits and, in some cases, ordinances preventing such projects.

Rather than retreating behind its trademark happy face, however, Wal-Mart has fought back with litigation, petitions and other means of raising community support. When the Lodi Planning Commission considered a size limit as part of its design standards Feb. 11, Wal-Mart submitted a petition against the action containing more than 1,000 signatures collected at its current Kettleman Lane location. The city also received a letter from a law firm representing the retail chain, claiming a size limit without proper research would be a violation of state law.

For all its happy faces and service-with-a-smile mantras, Wal-Mart can be a hard-edged political machine when its back is against the wall.

"When everyone loves Wal-Mart, they have the little happy face logo," said Steve Herum, a Stockton attorney who helped a citizens group defeat two Supercenter projects in Bakersfield last month. "When anyone disagrees with them, the happy face opens its mouth and you see how sharp the teeth are."

In Bakersfield, the environmental documents for the two Supercenters were approved without looking at sociological or economic affects the stores would have on surrounding businesses, Herum said. Representing a group called Bakersfield Citizens for Local Control, Herum sued, and a Kern County Judge Kenneth Twisselman ordered construction to be halted Jan. 30.

"Right now, the Wal-Marts are stopped dead in their tracks," Herum said.

The Supercenter proposed for Lodi, which would occupy 219,000 square feet across the street from the existing Wal-Mart at Highway 12 and Lower Sacramento Road, has not gone before the city's Planning Commission. The commission did look at design standards for stores larger than 25,000 square feet, however, with the intention that a project such as the Supercenter would be forced to meet stricter guidelines.

More than 100 Lodians turned out for the commission's Jan. 28 meeting, asking that a size limit -- 100,000 square feet was the most common number -- be adopted by the city. At its Feb. 11 meeting, the commission considered such an option, but decided not to include it among the standards.

Wal-Mart representatives -- including the developer for the Supercenter project, the current store's manager and lawyers representing the company -- addressed the commission at the meeting. They warned that the city would be in violation of the California Environmental Quality Act by adopting a size cap without proper research, that such an ordinance would make the city look anti-business and that Lodi couldn't afford to lose the sales taxes such business would provide.

Critics argue that the retail giant's presence at community meetings is just another example of it exerting its influence. But Wal-Mart's Northern California representative, Amy Hill, said the store can't be blamed for trying to be a part of the approval process.

"Nobody tells our story better than we do," Hill said. "We are the ones who are seeking approval with a store. It's not necessarily a new phenomenon."

Though there is often community concerns when a new Wal-Mart project is proposed, those fears are usually addressed through work with community groups and organizations, Hill said. Most Wal-Mart opposition has come from unions and retail outlets who don't necessarily want any competition, she said.

"Wal-Mart is sort of a lightning rod," Hill said. "We certainly have become the number one target for the grocery workers' union. They have made no bones that they will fight all of our projects tooth-and-nail."

Workers' groups don't want Wal-Mart in their community because the company offers low wages and no health benefits, said Al Norman, an author an activist who founded the anti-Wal-Mart organization Sprawl-Busters. The all-in-one Supercenters could also put other merchants out of business, leading to more empty stores in the community, he said.

"This is a company that's willing to bulldoze mountains and fill lakes in order to put a store in," Norman said. "These people have no regard for local community sentiment."

It's not uncommon for Wal-Mart to become aggressive when trying to get a project approved, Norman said. In fact, the corporation has gone as far as using California's ballot initiative system to avoid the approval process altogether, he said. Eureka residents voted down a 1999 ballot initiative backed by a Wal-Mart-sponsored citizens group to build a store on a site zoned for industrial use.

"You might call it the recall phenomenon," Norman said. "If you want to change things in California, you don't need to put it through the legislature. You can just put it on the ballot."

Things haven't gone that far in Lodi, where the Supercenter project hasn't even reached the Planning Commission. As the approval process nears, however, city officials expect Wal-Mart's profile to increase as well.

"We would expect that Wal-Mart will increase its visibility in the community as it continues along its next step in the process," said assistant City Manager Janet Keeter.

Wal-Mart plans to work with various community groups in addition to attending meetings as its Supercenter project goes through the approval process, Hill said. The company is willing to work with its detractors, but won't be shunted aside because if some organizations don't want them in town.

"We will not just roll over because people don't want to compete against us," Hill said.

All of which leads back to Walton's quote from a dozen years ago. Though it hasn't felt the ire of entire communities, Wal-Mart has met resistance from pockets in many California towns -- including Lodi. And almost every time, the fuss hasn't stopped the company's plans.

"Sam Walton is dead," Norman said. "And with him went that phony promise."

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WHY EVERYONE DOESN'T LOVE WAL-MART

by Ann Woolner - Pittsburgh Post-Gazette             [back to top]
22 February 2004

In tiny Sandfly, Ga., on Savannah's edge, residents celebrated when they chased away a Target Super Store planned for their neighborhood. But within a year, Wal-Mart Stores Inc. stepped in and snapped up the site for a Supercenter.

"I've heard some people say we should have left well enough alone," said Donald Stack, lawyer for two Sandfly churches fighting against Wal-Mart in Georgia's courts.

Stack had just been in Atlanta to try to persuade the Georgia Supreme Court to overturn a Savannah judge and revive the churches' lawsuit to stop the Wal-Mart store. While the churches wait for the court to rule, Wal-Mart doesn't.

Even as about 40 Sandfly residents boarded a rented bus and made the four-hour ride to Atlanta on a recent Monday to watch Stack plead their cause, the Supercenter had already risen from leveled dirt.

"It just seems that Wal-Mart has total disregard for any community they go into," says Herbert Kemp, president of the Sandfly Community Betterment Association.

The fear here is that a store that big, open every minute of every day and night, will dwarf the community and transform it.

Sandfly, with its 2,000 residents, many descended from former slaves who began settling here in the 18th century, is but a speck in the Wal-Mart universe. Still, the protest movement against the invasion of big box stores is growing, joined by those angry at Wal- Mart for other reasons.

Hundreds of communities around the country have organized, with towns from Turlock, Calif., to Peachtree City, Ga., passing laws to exclude these superstores. There is always a Wal-Mart store opening somewhere, mostly Supercenters that occupy up to 200,000 square feet of retail space -- not counting parking lots.

And beyond neighborhood issues, Wal-Mart has been drawing fire for other practices, including the treatment of its workers and its contribution to the outflow of U.S. jobs to Asia.

"A fair number of people are saying, 'I'm not as sure I want to shop there anymore,' " said Patricia Edwards, who helps manage $5.5 billion at Wentworth, Hauser & Violich in Seattle, some of it in Wal- Mart. "Then they look at their bank statements and say, 'I'm not sure I can afford not to.' "

Which aspect of Wal-Mart concerns people most? Edwards laughs at the choices.

Here's one. To protect against employee theft, many Wal-Mart store managers until recently kept the overnight workers locked in, unable to get emergency help quickly for injuries or sickness, the New York Times reported last month.

There have been stories and lawsuits alleging Wal-Mart managers force employees to work off the clock to avoid overtime pay. This sort of thing, along with low wages and benefits, encourages union organizing.

But, as Bloomberg Markets reports in its March issue, there is evidence Wal-Mart has spies to hunt for organizers and retaliate against union-friendly workers. Wal-Mart denies it.

Meanwhile, female Wal-Mart employees are suing in San Francisco, claiming some 1.6 million current and former employees were paid less and denied promotions because of their gender. And in October, federal authorities arrested 245 undocumented aliens working in 61 Wal-Mart stores.

Then there is the matter of squeezing suppliers and contributing to the national trade deficit and the loss of U.S. jobs. As the world's No. 1 retailer bent on constantly lowering prices, Wal-Mart muscles its suppliers to drop their costs, pushing manufacturing jobs out of this country and into low-wage ones. The magazine Fast Company had an extensive story on this in December.

And now come California grocers who lowered pay scales and employee benefits, and set off a strike by the United Food and Commercial Workers. Grocers contend they must compete against the threat of Wal-Mart Supercenters, which sell groceries along with the usual goods and are staffed with low-paid workers.

All of this is happening while Wal-Mart frenetically builds mammoth Supercenters, replete with a new wrinkle: When Wal-Mart determines that one of its traditional discount stores is unsuitable for an upgrade, the company simply abandons it to build a larger Supercenter nearby.

Wal-Mart's size, of course, makes it an inviting target. The Bentonville, Ark.-based company has 1.2 million workers, $256 billion in sales for the 12 months that ended Jan. 31 and almost 3,500 Supercenters, traditional Wal-Marts and Sam's Clubs in the United States.

Even so, you have to wonder what kind of company this is. Is it necessary to spread so much misery to make investors so much richer?

Every third store Wal-Mart tries to build faces community opposition, estimates Al Norman, who runs a consulting business in Massachusetts and a Web site devoted to helping communities challenge the stores.

In Sandfly, not everyone opposes the Supercenter. Susan Hunt, who works behind the smoky bar at Deb's Pub and Grub, says she can't wait to have a place to shop when she gets off work at 2 a.m.

To others, the fact that the Supercenter will be selling everything from milk to mattresses all the time, drawing cars full of shoppers and trucks full of goods, lighting the night over acres and acres of parking lot, is hardly good news.

Its sheer size makes it monstrous next to the modest homes and small-scale commercial strips that characterize Sandfly, which still has an unpaved street here and there.

Wal-Mart spokeswomen didn't return telephone calls, but the Savannah lawyer defending the company in the Sandfly suit, Harold Yellin, said no one has offered evidence that Sandfly churches would be harmed. Besides, Wal-Mart has promised to keep a 100-foot- deep buffer of trees between the store and the road.

This doesn't satisfy the churches or the Sandfly Community Betterment Association. "Wal-Mart will start a domino effect," said association president Kemp. "And that is going to eventually wipe out the majority of the remaining Sandfly residents."

Ann Woolner is a columnist for Bloomberg News. The opinions expressed are her own.Ann Woolner

Caption: Stephen Morton/Bloomberg News Community activist Herbert Kemp stands near the entrance to a Wal- Mart Supercenter construction site in Sandfly, near Savannah, Ga. Residents in tiny Sandfly celebrated when they chased away a Target Super Store planned for their neighborhood. But within a year after a community outcry prompted Target to fold its tent, Wal-Mart stepped in and snapped up the Sandfly site for a Supercenter.

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Wal-Mart vs. Contra Costa County

Ruth Rosen - San Francisco Chronicle         [back to top]
Sunday, February 22, 2004

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 90,000 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 clock, and 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 $17 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 $10 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 2002 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 the 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 never takes no 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 40 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.

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Wal-Mart hours case goes ahead

BY JULIE FORSTER - St. Paul Pioneer Press           [back to top]
February 20, 2004

The Minnesota Supreme Court has declined to hear Wal-Mart Stores Inc.'s appeal of a lower-court decision granting class-action status to store workers who say they were denied overtime pay and work breaks, clearing the way for the case to go to trial.

The case seeks millions of dollars in back pay and penalties for what plaintiffs allege is a pervasive pattern of forcing Wal-Mart's Minnesota work force to miss required breaks and to work off-the-clock. Wal-Mart asserts that it pays its associates for every minute worked. The order was filed Tuesday.

The class action, on behalf of more than 64,000 current and former hourly employees at Minnesota Wal-Mart and Sam's Club stores, is proceeding in Dakota County District Court. A scheduling conference to determine a trial date has been set for March 9.

The lawsuit is similar to about 35 others that are pending against the retailer in various courts around the nation. Wal-Mart has settled some overtime lawsuits before the complaints could go to trial. In other cases, judges have also dismissed class action status.

A little over a year ago, a federal jury in Oregon decided that workers at 18 Wal-Marts and Sam's Clubs in that state were not paid for some overtime worked. Last week, a federal jury decided that 83 of those employees deserve compensation.

In the Minnesota case, Tuesday's ruling is a procedural victory for the plaintiffs. According to court documents, Wal-Mart's internal auditors concluded that hourly employees in a sample of 127 stores - six in Minnesota - were denied more than 76,000 rest and meal breaks for a one-week period in June 2000. A plaintiff's expert in the Minnesota case used the audit to determine that the retailer shorted workers about 497,000 hours in breaks for 2000 alone, court records show.

Wal-Mart has said the audit was invalid and that it should not be interpreted that employees missed meals and breaks. The person who drafted the audit used flawed methodology, the retailer claims.

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Immigrant seized in Wal-Mart raid gets a reprieve - Janitor can temporarily stay in U.S. to testify in labor case

BY BRIAN DONOHUE - Star-Ledger Staff            [back to top]
Friday, February 20, 2004

One of the illegal immigrants arrested in raids at Wal-Mart stores in New Jersey last year has been given a temporary reprieve from deportation to allow him to testify in a federal criminal investigation into the retail giant's labor practices.

Maximiliano Mendez was one of more than 250 janitors arrested in immigration raids of 60 stores nationwide Oct. 23. The raids were part of a five-year probe into the alleged use of illegal immigrants by contractors hired to clean Wal-Mart stores.

Federal officials also have taken the first step toward protecting several other illegal Wal-Mart janitors arrested in New Jersey from deportation as prosecutors continue to gather evidence.

The cooperation by Mendez, arrested in Old Bridge, was revealed last week when he failed to appear for a scheduled deportation hearing in Newark because he was scheduled to testify before a Pennsylvania grand jury the same day.

Because of the conflict, immigration Judge Esmeralda Cabrera agreed to postpone Mendez's immigration hearing until March 8.

Under U.S. immigration law, illegal immigrants who cooperate with criminal investigations can have their cases delayed or be issued a special three-year visa that allows them to live and work in the country legally.

Garrison Courtney, spokesman for the Citizenship and Immigration Services bureau, declined to comment on whether any arrested Wal-Mart janitors had been offered such a reprieve by federal prosecutors or the Department of Homeland Security.

Besides Mendez, the immigration cases of 12 other New Jersey janitors have been transferred from the immigration service's Newark District to offices in Philadelphia, Courtney said.

A source close to the investigation said the move was made so the janitors' immigration cases can be coordinated with the criminal probe by the U.S. Attorney's Office for the Middle District of Pennsylvania.

Immigration officials are prepared not to seek their deportation if federal prosecutors make such a request, the source said. "They are part of the case," the source said, adding the immigration files had been moved "in case they want to provide benefits."

A grand jury in Williamsport, Pa., began hearing testimony in December into whether Wal-Mart officials knew the cleaning companies they hired were employing illegal immigrants. Wayne Samuelson, U.S. attorney for the Middle District of Pennsylvania, declined to discuss details of the investigation. "There is a grand jury investigation being conducted, and it's going to take a while," Samuelson said, declining further comment.

Wal-Mart spokespeople have repeatedly denied that company officials were knowingly using illegal labor.

The 13 janitors arrested in New Jersey, all from Mexico, were arrested at Wal-Mart stores in Old Bridge, Union and Piscataway and released pending deportation hearings. The hearing for Mendez, a 19-year-old who speaks little English, was the first scheduled for the group from New Jersey.

Mendez's participation in the criminal investigation was revealed after a testy exchange between Gilberto Garcia, Mendez's attorney, and Cabrera, the immigration judge. Garcia presented a letter from the U.S. Attorney's Office in Pennsylvania and stated his client was in Williamsport.

"Is he participating in a grand jury investigation, is that it?" Cabrera asked.

"I have a letter that says that information should not be disclosed," Garcia responded. "My client is cooperating with an investigation."

Garcia declined to comment after the hearing. He confirmed that the grand jury investigation was connected to Mendez's employment and arrest at the Wal-Mart in Old Bridge.

Mendez, who had been living in Tinton Falls at the time of his arrest, is one of 17 former janitors seeking class action status for a federal civil rights lawsuit against Wal-Mart. The suit alleges company officials knowingly used a web of subcontractors to shield them from blame while they reaped the benefits of a low-paid and often exploited army of illegal janitors.

By securing testimony from Mendez and possibly other janitors, prosecutors may be trying to avoid what has been a major pitfall in two recent cases against U.S. corporations accused of immigration violations, experts say.

In 2002, a federal judge in Omaha dismissed immigration charges against Nebraska Beef Inc., faulting the U.S. immigration services for deporting more than 200 illegal workers before the defense had a chance to obtain their testimony.

Last year, a jury acquitted Tyson Foods and three of its managers of immigrant-smuggling charges after a trial in which company attorneys accused the government of losing track of the 150 illegal immigrants that had been allegedly smuggled into the country.

In the wake of those two cases, prosecutors are increasingly attempting to avoid prematurely deporting witnesses who could provide evidence for either side, said David Martin, professor of law at the University of Virginia and former general counsel for the U.S. Immigration and Naturalization Service.

"The immigration authorities are going to want to remove as many as possible, but everyone having been burned in these earlier examples, they will want to make them fully available to defendants," Martin said. "The urge now is toward a middle ground."

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Jury: Wal-Mart must pay 83 for overtime

Associated Press                   [back to top]
February 18, 2004

PORTLAND, Ore. — A federal jury considering how much Wal-Mart Stores should compensate employees who worked unpaid overtime ruled Tuesday that 83 workers are entitled to payments.

The jury assessed each case individually and rejected money for 25 employees in the second phase of a trial that highlighted working conditions at the nation's largest private employer.

The decision comes 14 months after a federal jury in Portland, Ore., became the first in the nation to rule that Wal-Mart, the world's largest retailer, made employees at 18 Oregon stores work unpaid overtime from 1994 to 1999. About three dozen similar suits against the retailer are pending nationwide.

Exact compensation for each worker is still to be determined. Payments are expected to be modest, from a few hundred dollars to several thousand per worker, based on 30 to 60 minutes of overtime per week.

Attorneys for the plaintiffs called Tuesday's verdict a victory. "The jury found that they did work off the clock and should be compensated for it," said James Piotrowski.

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Wal-Mart nation: the race to the bottom

By Floyd J. McKay - Special to The Times          [back to top]
February 18, 2004

Los Angeles is not my kind of town. But the Angelinos are about to take a stand that ought to be applauded across the country.

That stand is to say "no" to a Wal-Mart "supercenter" that the retailing giant hopes to open in the city.

These superstores are not your father's Wal-Mart; they are monstrous, sprawling over some 25 acres and employing up to 600 workers. Their lure, of course, is lower prices.

Wal-Mart, it seems to me, epitomizes the race to the bottom that has the United States by the throat as the 21st century opens.

Why do people shop at these behemoths, when they know full well that they are driving out of existence small businesses owned and operated by their neighbors, employing other neighbors?

They shop because of price, and they are forced to do so by the declining standard of living we have offered working people for more than a generation. People who work for minimum wage, with little or no benefits, who cannot afford to fix their car or their kids' teeth have no choice but to search out the lowest price.

Wal-Mart buys offshore, without apology and for the cheapest possible prices, from companies paying the lowest-possible wages.

As jobs in America are lost to foreign sweatshops to feed the Wal-Mart engine, American workers are forced to accept jobs at lower pay, with bad working conditions. They are funneled to Wal-Mart's promise of cheap goods, in effect patronizing the very companies that caused their economic misery.

This is a cruel travesty on working people in this country.

Wal-Mart is currently being sued in some 40 cases charging various abuses of labor laws, and last fall it was reported the company extensively employs illegal aliens as janitors. Wal-Mart has successfully opposed unionization and frequently pays well below competing stores.

All of these practices — alleged abuses of labor laws, hiring illegals, and the low rate of pay and benefits at Wal-Mart — serve to depress the labor market in communities in which the giant is located. That is a major factor in Los Angeles' opposition to the supercenter.

We live in a nation in which the real-dollar income of an average family has declined for years, while corporate profits and executive pay have skyrocketed.

The gap between rich and poor has widened at an alarming rate in the past 20 years. In 44 states, the gap has increased not only between rich and poor, but between rich and middle-class families. None of the six exceptions is a Northwest state. Oregon has one of the worst gaps, Washington is about average.

In some states, the inequity is staggering. In three of the nation's largest states — California, New York and Ohio — families in the lowest 20 percent bracket actually lost real income from 1978 to 2000. In 1999 dollars, the loss was between 5 and 6 percent. In those same states, the real income gain for the top 20 percent of families ranged from 37 to 54 percent.

Nationwide, from 1978 to 2000, the lowest 20 percent of families gained only $972 annually, or 7.1 percent; the top 5 percent gained $87,779, or 58.4 percent.

These findings, by the nonpartisan Center on Budget and Policy Priorities (www.cbpp.org), were before the Bush tax cuts and the current recession, both of which will further widen the gap.

You can't blame Sam Walton for this disparity, but operations like Wal-Mart feed off the impoverishment of America.

Sadly, there are byproducts in quality of life, often unseen until it is too late.

The greatest is the destruction of America's small and mid-sized towns, increasingly bereft of small businesses and dominated by big-box retailers — acres of barren asphalt parking lots, corporate managers on their way to the next-larger store, employees scrambling to keep low-wage jobs.

My wife's recently deceased aunt could no longer shop in the small Iowa town where she and her late husband ran a feed store. The store is closed, as are the other small businesses. The elderly woman had to drive — or be driven — past the empty shops several miles to Wal-Mart, the nearest place to get the basics of life.

Wal-Mart is like a neutron bomb, sucking life out of small towns, leaving buildings without the essence of civic life.

Those of us fortunate to earn middle-class incomes can make a choice, and shun Wal-Mart. The tragedy is that for an ever-increasing segment of America, the despicable race to the bottom has left no other choice than to shop for cheap, regardless of the consequences.

Floyd J. McKay, a journalism professor at Western Washington University, is a regular contributor to Times editorial pages. E-mail him at floydmckay@yahoo.com

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Wal-Mart plans to do away with bar codes

The Dallas Morning News - Charleston Gazette            [back to top]
15 February 2004

BENTONVILLE, Ark. - Linda Dillman was astonished that replacing the bar code with a chip would cause such a tempest. "Lead">

Since the Wal-Mart Stores Inc. chief information officer announced the company's plans in June, some of the retailer's biggest suppliers have muttered under their breaths about its powerful influence.

Technology companies peppered Dillman with questions about a fair price for the chips. Consumer advocates, meanwhile, wanted to know whether the chips would invade customers' privacy.

To all, Dillman has a simple answer: Get ready, because change is coming. Wal-Mart is positioning itself at the front of an inevitable technological revolution, even if it means dragging others into a future they're not sure they want, Dillman said.

Radio-frequency identification, or RFID, was already one of the most exciting and furiously debated topics in the technology world when Wal-Mart stepped into the middle of it.

Now attention turns to three Wal-Mart warehouses in the Dallas area, where the world's second-largest company plans to start its conversion.

RFID chips beat bar codes by reducing human error and opportunities for theft, business executives said. Bar codes require a level of human interaction for scanning that RFID chips do not.

"We can track our product from the time it leaves through the whole delivery system," said Dennis Mullen, chief executive of Birds Eye Foods Inc.

"If it gets stuck somewhere along the line, we can take corrective action."

RFID tags contain a small chip and an antenna, usually coiled, to broadcast a signal. They were originally attached to Allied planes in World War II to distinguish them from enemy aircraft.

Over the years, RFID chips have been used in everything from anti-theft devices in clothing shops to Exxon Mobil Corp.'s Speedpass, which allows customers to pay for their gas wirelessly. As chips became capable of storing more information in a tiny amount of space, technologists began exploring even more uses for RFID.

Retailers, technology firms and consumer products companies have spent the last few years coming up with a complex numbering system to identify RFID-tagged items in stores.

That system is now close to reality, leading technology companies such as Texas Instruments Inc., Microsoft Corp. and International Business Machines Corp. to believe RFID is on the cusp of explosive growth.

If Wal-Mart had not seized upon RFID technology, someone else would have, many business executives say. Wal-Mart is part of the standards organization that will make RFID tags work in the retail industry, but so are big competitors such as Target Corp.

"People who cannot come up to speed on this technology are going to be left behind," said Mullen of Birds Eye. "Eventually, it's going to be a way of life."

RFID has a dazzling allure in the retail industry, where enthusiasts envision every product having a digital tag instead of a bar code. A can of soda, for instance, could be tracked from manufacture to warehouse to store to a customer's RFID-equipped refrigerator.

That scenario unnerves privacy advocates, who worry about a corporation's being able to track a customer's every move.

Wal-Mart's plan, thus far, is nowhere close to that vision, Dillman said in an interview at the company's northwest Arkansas headquarters.

The retailer is asking suppliers to attach RFID chips to their crates and cases of products. At this point, only those large shipping containers would be tagged, not individual products.

Most suppliers have until 2006 to add the chips, but the top 100 suppliers have to do it by 2005, the retailer says.

The RFID chips, like bar codes, will contain information about the products inside the crates. Readers the size of clock radios are to be planted in Wal-Mart's warehouses to wirelessly detect radio waves emitted by the chips.

The RFID readers will thus continually compile data about the whereabouts of Wal-Mart's inventory. RFID readers in the back rooms of stores will allow the company to determine whether it's about to run out of products such as deodorant or paper towels.

In a makeshift laboratory tucked inside one of Wal-Mart's distribution warehouses in Bentonville, RFID infrastructure architect John Laffoon and his colleagues have been subjecting various products to rigorous tests.

A package of soda bottles or soap bars slides on a conveyor belt underneath a reader, which instantly registers the products' identification codes on a nearby computer monitor.

Laffoon's job is to trick the reader. If he turns a package of deodorant canisters so that its RFID tag is facing away from the reader, for instance, the package might sneak by. RFID signals have trouble traveling through liquids and some metals - the basic ingredients of deodorant.

Wal-Mart, its suppliers, and technology companies are busy working on ways to make even those tough products RFID-readable.

The idea is to make sure each crate of products is always visible when it passes under a reader. And there would be no human intervention - employees wouldn't have to check which way the tags faced or if a crate had been moved.

RFID's "big win," Dillman believes, is in the backroom of Wal-Mart stores, a place that is even more susceptible to human error as employees try to keep up with constantly depleting stock.

Consumers would always find their products on the shelves, and Wal-Mart and its suppliers could avoid losing sales, Dillman said. Everyone benefits, theoretically.

Publicly, Wal-Mart's top suppliers say they're happy to comply with its 2005 deadline. The grumbling goes on in private, but Dillman has heard it.

"There aren't people who are going to come to us and say it," Dillman said. "We hear it from the background noise."

The chief complaint, of course, is about money. An RFID chip costs 20 cents or more, and the antenna and packaging for the tag add to the price. Suppliers must also pay for the infrastructure needed to add the tags to their shipments.

And if they want to take advantage internally of RFID's capabilities, they have to pay for readers, software, employee training and more.

Not only is Wal-Mart asking suppliers to make an expensive investment, it's setting a deadline. Some suppliers would rather wait until the cost of chips comes down, but they can't if they're supposed to be ready in 2005.

Wal-Mart's 2005 deadline may reduce the price of RFID chips more quickly than they would have fallen otherwise. The U.S. Defense Department announced a similar deadline for suppliers soon after Wal-Mart's plans became public, which should also help prices fall.

If other companies put RFID plans into motion, as expected, tag prices could come within the 5-cent range - the point Dillman and many suppliers believe is appropriate for supply-chain tagging.

Even with tags at their current prices, some suppliers are eager to move ahead with RFID, believing it will offer them an advantage over rivals that don't move as quickly.

"You can always come up with reasons why you shouldn't do something like this," said Ian Robertson, director of Hewlett-Packard Co.'s RFID program. "But if everyone did that, the world would never have moved forward."

Still, even those who have embraced the Wal-Mart initiative see a daunting year ahead.

"It's going to be a challenge," said Mike O'Shea, who oversees RFID strategy at Irving, Texas-based Kimberly-Clark Corp., maker of Kleenex tissues and Huggies diapers. "But Wal-Mart and Kimberly-Clark didn't get where they are today by seeing how low they could set the bar."

Dillman said she expects Wal-Mart's top 100 suppliers to do what the chain is asking, but she fears that as many as half of them don't understand the value of RFID. Wal-Mart has dispatched executives across the country to help suppliers, guiding them through the testing process.

Most companies will find that the technology will save them money. In the rare occasions in which RFID doesn't seem to work, Wal-Mart is willing to compromise.

"We won't force somebody into a bad business case," Dillman said. "It's a firm deadline. However, we're going to work through with each supplier what the issues are for them."

Dillman is hardly a wide-eyed RFID fanatic. The 47-year-old had heard of RFID before she became chief information officer, but the company was only beginning to seriously study it.

An early proponent was Wal-Mart vice chairman Tom Coughlin, who had read Intel Corp. co-founder Andy Grove's book Only the Paranoid Survive and felt that RFID would be what the author described as a "strategic inflection point" - a change that ultimately separates successful companies from failures.

Under late founder Sam Walton's direction, Wal-Mart rose to power by developing some of the most sophisticated inventory-tracking technology in the retail industry. The retailer drove prices down, in part, by knowing more about what it owned than competitors did.

To Dillman, RFID is just part of that tradition.

"Some company cultures don't allow people to experiment," she said. "We're not afraid to test things."

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What if Wal-Mart took over the world?

Bob Mook - Fort Collins Coloradoan               [back to top]
15 February 2004

I have a premise for a science-fiction novel. Set in the not-too distant future, it involves a small band of maverick businesspeople who battle the world's dominant employer.

The company - let's call it Mal-Wart - enslaves about 99 percent of the global population through its manufacturing, distribution and retail operations.

But that's not all. Mal-Wart controls all major industries: building and construction, banking and finance, energy, transportation, technology, health care and media.

The company rules these sectors with a brutal efficiency that obliterates the competition and leaves oppressed workers across the globe overworked and underpaid as prices for goods and services plunge lower and lower.

Anyway, to make a long story short, the scrappy businesspeople lose.

You expected a happy ending?

n n n

The real-life Mal-Wart is the world's largest employer.

Last year, 7.5 cents of every dollar spent in any store in the United States went to Wal-Mart Stores Inc.

According to Fast Company, Wal-Mart is bigger than ExxonMobil, General Motors and General Electric. It does more business than Target, Sears, Kmart, J.C. Penney, Safeway and Kroger combined.

And the company still is growing - rapidly. In fact, executives boast it has just scratched the surface.

Wal-Mart plans to open about 50 to 55 new discount stores and 220 to 230 new Supercenters for fiscal year 2004.

The chain will build a second Supercenter in Loveland, and it may be eyeing a location in Windsor, as well.

Rumors that Wal-Mart might close its Fort Collins store at 4625 S. Mason St. appear unfounded for the time being.

Sprawl-busters.com reports that Wal-Mart had 325 buildings for sale or lease as of February 2003.

But I question whether the Fort Collins closure will happen. Somehow, closing stores doesn't seem like Wal-Mart's style - unless you're talking about competing stores.

Given Wal-Mart's aggressive growth strategy, expect to find Wal-Marts inside of Wal-Marts someday.

All will become Wal-Mart.

It is the corporate equivalent of "Star Trek's" Borg: "You must assimilate … resistance is futile …"

On the positive side, a recent study concluded that 12 percent of the economy's productivity gains in the second half of the '90s could be attributed to Wal-Mart. And the chain is credited with holding down inflation.

Where but Wal-Mart would you find a 15-speed mountain bike with free assembly for $52? How about a 20-piece screwdriver set from Stanley for only $12.97? Why not splurge for a 13-ounce box of Post Fruity Pebbles cereal at $1.98?

But Wal-Mart's appeal comes at a cost for American jobs.

Manufacturers of everything from bras to bicycles have had to lay off employees and shut down U.S. plants to meet the retailer's growing price demands.

Still, for many consumers, the ends justify the means.

As long as the ends are cheap.

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Miller supports 'big-box' Measure L Congressman's report says Wal-Mart has hidden taxpayer costs, which company disputes

By Matt Carter, Staff Writer -Valley Herald            [back to top]
Tuesday, February 17, 2004

CONCORD -- Demonstrating his support for an ordinance aimed at keeping "big-box" retailers out of Contra Costa County, Rep. George Miller issued a report Monday alleging Wal-Mart stores carry hidden costs for taxpayers.

Wal-Mart workers are paid below-average wages and often don't receive health benefits, the report said, meaning the federal government may end up subsidizing their medical bills, housing and food.

But a Wal-Mart Stores Inc. representative said the claims are unsubstantiated, saying Miller, a Martinez Democrat, is catering to labor unions and avoiding issues surrounding the county's Measure L.

Measure L would ban stores of90,000 square feet or larger in unincorporated areas if they devote more than 5percent of their floor space to nontaxable items such as groceries.

Worries about Wal-Mart's plans to offer such full-scale grocery stores at 40 "supercenters" it plans to build in California prompted the Contra Costa County Board of Supervisors to adopt the ordinance last year.

Wal-Mart, which has characterized the ordinance as anti-competitive and anti-consumer, collected enough signatures for a referendum. Voters in the March 2 primary will decide whether the county ordinance becomes law.

Alameda County and the cities of Oakland and Martinez have adopted similar ordinances. Wal-Mart is challenging Alameda County's big-box ordinance in court. Although Wal-Mart plans to build a supercenter in Tracy, the plan hasn't been controversial so far.

Wal-Mart's bid to sell more groceries is also an issue in a strike by unionized grocery workers in Southern California. The three grocery chainsinvolved in the strike, including Pleasanton-based Safeway Inc., say they need to cut costs to compete with Wal-Mart and want workers to pay a share of their health insurance benefits.

Miller invited county officials, labor leaders and small-business owners, who say their livelihoods are threatened by the giant retailer, to speak at a press conference at his Concord office.

Calling Wal-Mart a "multibillion corporation" that's made a conscious decision not to provide fair wages and benefits, Miller said Wal-Mart has a long history of breaking the law by thwarting employees' rights to organize and become union members.

Miller's report, prepared by Democratic staff members of the House Committee on Education and the Workforce, estimates a hypothetical Wal-Mart store employing 200 people costs federal taxpayers $420,750 a year.

The report assumes, for example, that if each store has 30 employees with two children who qualify for the Children's Health Insurance Program, that costs the government $108,000 a year. If just 3 percent of the hypothetical store's employees qualify for Section 8 housing assistance, that costs the government $42,000 a year.

Such allegations aren't new. In his report, Miller relied heavily on newspaper and magazine stories about the wages and benefits paid by Wal-Mart.

Wal-Mart spokeswoman Mona Williams said the report is "just bashing Wal-Mart rather than looking at real issues in Contra Costa County. It has ripped from the headlines a litany of unproven allegations against Wal-Mart."

Citing a study by the AFL-CIO, Miller claims 41 percent to 46 percent of Wal-Mart employees have health insurance through their employer.

Williams said the number is closer to 50 percent, and that another 40 percent have health insurance through a spouse, parents or retirement plans.

"You have to look at the makeup of our work force, which is college students, seniors and people earning a second income," said Williams, Wal-Mart vice president of corporate communications. "Some choose not to duplicate coverage they already have. Roughly 90 percent have health care (through Wal-Mart or another source)."

A Wal-Mart supercenter employs 400 to 500 people, she said, and generates $4.5 million in tax revenue a year.

"More than 40 percent of (Wal-Mart employees) on our health care plan had no coverage at all before they came to Wal-Mart. These are people who might have fallen through the cracks without Wal-Mart, and then become a financial burden to local communities."

Contra Costa County Supervisors John Gioia and Mark DeSaulnier were among those attending Monday's pro-Measure L press conference. They said the ordinance is aimed at reducing traffic impacts of stores like Wal-Mart supercenters. Because they do not generate as many car trips, wholesale food outlets such as Costco and Wal-Mart's Sam's Club would be exempt, they said.

DeSaulnier said the ordinance doesn't specifically target Wal-Mart, but "a model (the supercenter) they created."

A link to Miller's report is available at edworkforce.house.gov/democrats

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Wal-Mart's low prices carry a high price tag here and abroad When you think about it, the price you pay at Wal-Mart isn't so low after all.

RICHARD AMRHINE - The Free Lance-Star            [back to top]
2/15/2004

WAL-MART HAS become my store of last resort. Price may be everything to some people. But when you consider how Wal-Mart manages to keep those prices so low, you might think twice about shopping there.

There are three basic viewpoints to consider--that of the company, that of its employees and suppliers, and that of the shoppers.

In the end, the company alone comes out ahead.

The last time I shopped the Wal-Mart Supercenter at Central Park, my jaw dropped when I arrived at the checkout area. Half the registers were closed, and those that were open had lines with as many as 25 customers in them--most with heaping-full carts.

I chose a line and stood there, and stood there. After 20 minutes, with at least another 20 minutes to go, I gave up, took my cart to the greeter, and left empty-handed.

That poor service is basic, in-your-face evidence of the high price people pay for Wal-Mart's low prices. The company knows that nearly all shoppers will wait it out.

Once when I actually did make it to checkout, I asked the clerk why so many registers were closed, and she said the store can't find enough people willing to work there.

Yes, the company does pay a few bucks above minimum wage, on average, but then makes it back by denying decent health care and other benefits to its "associates."

By beating back all moves toward unionization, the company is able to keep its personnel costs at rock bottom. The average wage of $8.25 is $2 less than at the average unionized grocery store.

The company also pays less for the goods it sells. Because of its size and clout, Wal-Mart can force vendors to meet its prices, rather than negotiate with them.

The so-called all-American Wal-Mart turns to the cheap labor of Third World countries to keep prices low. A recent Washington Post article reveals that 80 percent of the 6,000 factories in Wal-Mart's database are in China. The company might try to keep tabs on these foreign sweatshop operations, but the factories still routinely employ underage workers and require 80-hour work weeks, and they might pay less than $100 a month. There is no need to improve conditions when there are millions of surplus Chinese workers available.

Made in Myanmar

Wal-Mart factories in Myanmar (Burma), Nicaragua, and the African countries of Lesotho and Malawi also employ workers who work long hours in unsafe conditions and earn less than what would provide a decent standard of living even in those economies.

In this country, federal agents last fall arrested some 300 illegal workers at U.S. Wal-Mart stores, including the one in Culpeper, who were brought in by subcontracted janitorial services.

If Wal-Mart can't keep an eye on its contractors here, how well can it do in China?

The business Web site Hoover's Online reports that Wal-Mart is the world's top retailer with 4,800 stores, three-quarters of them in this country. The company estimates that 93 million Americans shop at its stores. It also happens to be the top retailer in Canada and Mexico.

So things are looking rosy at Wal-Mart corporate headquarters in Bentonville, Ark. The firm had net income of more than $8 billion last year, up more than 20 percent from the year before. It had sales of $245 billion last year, 12 percent more than the year before. But with 1.4 million employees in 2003, it had only 1.2 percent more than the year before.

When you see those vests that ask, "How may I help you?" it should add, "I may be your last chance."

From a strictly business standpoint, the company's record of growth is unmatched. According to the specialized publication Chain Store Age, Wal-Mart plans to spend more than $12 billion on new-store construction in 2004, resulting in some 50 to 55 discount stores and 220 to 230 supercenters across America. About 140 of the new supercenters, which include full grocery stores, will be relocated or expanded units. That was the case with the new one at Central Park that replaced the old one on State Route 3 in Spotsylvania.

There's no denying the success of the Wal-Mart model, and no indication that the company will change what it considers a proven, successful formula. Why should it, when the Walton family is free to amass billions of dollars rather than reinvest it in its own workers or in foreign factories?

But in the long run, will Wal-Mart prove to be an American success story or an American nightmare? Is it really shoppers' Nirvana, or is that simply what Wal-Mart would have us believe?

Wal-Mart has become America's largest toy retailer. As a result, FAO Schwarz has shut down, Zany Brainy has filed for bankruptcy, KB Toys is closing 375 stores (including nine elsewhere in Virginia), and Toys "R" Us is reacting to the pressure by carrying more clothes and fewer toys.

Giant impact

A survey on the supercenters' impact on grocery stores suggests that two supermarkets will close every time a supercenter opens. Locally, the impact may be felt as Royal Ahold, the parent company of Giant Food, reorganizes its holdings, cuts jobs, and turns Giant into a leaner, more price-oriented chain. Ahold blames its troubles, in part, on Wal-Mart supercenters.

Drug stores feel the pinch as well when Wal-Mart pharmacies gobble up their business.

Which local stores will close when Wal-Mart opens yet another supercenter next year at Southpoint? Time will tell.

County officials applauded the company's return to Spotsylvania County after closing the Route 3 store in 2002. But will the new tax revenues be offset by the loss of business elsewhere? How about the less-visible costs of emergency-room visits by Wal-Mart employees who can't afford health insurance? How about the unemployment insurance that's paid to those put out of work by Wal-Mart?

Such costs are borne by everyone, including the low-income families who rely on Wal-Mart to stretch their dollars. The company's very existence depends on people failing to realize that, in one way or another, we all end up paying for low, low Wal-Mart prices.

What we get are fewer stores to choose from, higher insurance costs, unemployed neighbors who face the loss of their homes, and a culture that believes there's nothing more important than saving a few cents on toilet paper and light bulbs.

The richest nation in the world, and all we want are low prices and low taxes. When it finally hits home that we have a cheapened quality of life to match, we shouldn't complain.

Certainly Wal-Mart won't complain. It is supplying itself with an ever growing pool of low-income people who think they're doing themselves a favor by shopping there. And if Wal-Mart took away their jobs, they can wait in line all day.

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Ukiah protesters win right to sue Wal-Mart State appeals court overturns Mendocino judge's upholding of arrests of 8 demonstrators

By STEVE HART - THE PRESS DEMOCRAT         [back to top]
February 14, 2004

Eight Mendocino County activists who were arrested at a protest in front of Ukiah's Wal-Mart four years ago can sue the retail giant, which they accused of violating their constitutional rights, a state appellate court ruled.

The 1st District Court of Appeal, based in San Francisco, reversed a Mendocino County Superior Court ruling that said Wal-Mart was within its rights when a store manager had the protesters arrested for trespassing.

"The court said this is false arrest," said Mark Merin, a Sacramento attorney who represents the protesters.

Unless Wal-Mart appeals the decision to the state Supreme Court, the case will return to Mendocino County for a trial.

Christi Gallagher, a spokeswoman for Wal-Mart in Bentonville, Ark., said the company hasn't seen the Feb. 10 ruling and can't comment on it.

The 19-page opinion written by Presiding Justice Anthony Kline said there's little evidence the protesters broke any laws.

The dispute began in February 2000, when Ukiah-area resident Richard Johnson asked Wal-Mart customers to sign a petition for a ballot measure to decriminalize the personal use of marijuana in Mendocino County. Wal-Mart officials called police and had Johnson arrested for trespassing in the store's parking lot.

Four days later, about two dozen activists showed up at the Ukiah store to protest Johnson's arrest, solicit signatures for the marijuana initiative and register people to vote.

Wal-Mart manager Donald Estes called police, who observed the protesters but didn't make any arrests.

After talking with police, Estes asked the protesters to leave. When eight of the protesters refused, he placed them under citizen's arrest for trespassing.

Officers took them to the Ukiah police station, where they were booked and released.

The protesters included Dan Hamburg, a former North Coast congressman and Green Party candidate for California governor.

District Attorney Norman Vroman decided not to prosecute the protesters, saying they didn't violate any laws.

In 2001, the group sued Wal-Mart, alleging they were falsely arrested and their civil rights were violated.

Wal-Mart responded that the protesters didn't follow its rules for public gatherings on company property and that they were harassing customers. The company said some customers complained about the group.

In 2002, Mendocino County Superior Court Judge Richard Henderson dismissed the case, ruling the group didn't comply with Wal-Mart's rules.

The three-judge appellate panel disagreed with Henderson, saying the protesters weren't subject to citizen arrest just because they didn't follow Wal-Mart's rules. They said Wal-Mart must show protesters interfered with its ability to do business by obstructing or intimidating its customers.

The protesters admitted they didn't follow Wal-Mart's regulations, but denied interfering with customers.

The appeals court said Estes never saw the protesters harass any customers, so he didn't have a good reason to arrest them.

The judges said Wal-Mart must prove that its manager arrested the protesters for violating the trespassing law "and not for the purpose of suppressing protected speech."

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Wal-Mart files against Turlock; Lawsuit stems over supercenter law

By Karen Gullo, Bloomberg News - The Oakland Tribune      [back to top]
12 February 2004

Wal-Mart Stores Inc., the world's largest retailer, sued a central California town to block an ordinance aimed at keeping out supercenter stores that sell groceries and other merchandise, the second time Wal-Mart has gone to court over such a law in the last month.

Wal-Mart filed two lawsuits that claim the Turlock ordinance -- which prohibits stores larger than 100,000 square feet from devoting more than 10 percent of the floor to groceries and prescription drugs -- restricts competition, the company said. The suits were filed in state and federal courts.

Wal-Mart faces opposition in California where consumers spent $301.6 billion in 2002 in retails stores from towns that want to keep out large stores they say undercut local merchants and create traffic problems. Wal-Mart sued Alameda County on Jan. 26, challenging a similar ordinance scheduled to take effect this month.

"Wal-Mart seeks the court's intervention to prevent the city's unconstitutional attempt to restrict competition and regulate interstate commerce," said Peter Kanelos, a spokesman for Bentonville, Ark.-based, in a statement.

Dick Burton, Turlock city attorney, didn't respond to a message left at his office. Turlock is 107 miles east of San Francisco and has 61,000 residents.

The lawsuits say the city failed to comply with environmental review rules and violated zoning laws and the equal protection clause of the U.S. Constitution when it passed the ordinance, which doesn't apply to membership stores. Wal-Mart seeks to have the ordinances declared invalid.

Wal-Mart has 147 stores in California and plans to open 40 supercenters in the state over the next four years. The company opened a 99,000 square-foot store in Florida, smaller than its regular stores that can be up to 190,000 square feet and larger than its 50,000 square-foot grocery stores. The middle-sized stores may let Wal-Mart sidestep California restrictions, analysts say.

Wal-Mart's shares fell 46 cents to $57.07 in New York Stock Exchange composite trading.

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Toymakers, Wal-Mart battle over prices

By ANNE D'INNOCENZIO AP BUSINESS WRITER            [back to top]
February 12, 2004

NEW YORK -- Led by Wal-Mart Stores Inc., discount retailers won a war with other toy stores this past holiday season. Now toymakers, a casualty in that bitter fight, have decided to make their own stand.

To protect themselves and toy retailers they see as key to their profits, some manufacturers plan to deliver fewer hot toys to Wal-Mart and to have more exclusive launches at chains like Toys "R" Us Inc. It's a rare instance of manufacturers challenging the biggest U.S. retail juggernaut and its low-price approach to business.

Wild Planet Toys' Aquapets, an interactive critter, will be at Toys "R" Us exclusively for three months this spring before it reaches the mass merchants.

"The success of Toys 'R' Us is important for the health of the toy industry," said Danny Grossman, founder and CEO of Wild Planet.

Said Jim Silver, publisher of the Toy Book, an industry magazine: "Wal-Mart is a very important part of the toy business, but toymakers don't want its low-pricing strategies to devalue their brands and their business - and put more toy retailers out of business."

The price wars contributed to the bankruptcies last holiday season of FAO Inc., owner of the famed FAO Schwarz, and KB Toys Inc., which plans to close nearly a third of its stores.

"Whether it is exclusive launches or controlled product shipments, they are going to do whatever they can to keep other retailers healthy," Silver said.

Still, given the clout of Wal-Mart, which has a 21 percent share of the toy market, it remains to be seen whether these strategies will be effective. Many manufacturers- who wanted to speak anonymously for fear of losing the discounter's business - said there is only so much they can do. Setting prices with retailers is illegal under antitrust laws.

And Karen Burk, a Wal-Mart spokeswoman, said: "Our focus will continue to be what it has always been, and that is delivering value to our customers, and that will not change."

The pricing issue is expected to be a key concern of manufacturers and retailers at the American International Toy Fair, the industry product expo that officially begins Sunday.

Toy price wars have always been part of the holiday season, but 2003 was even more brutal than expected. In September, Wal-Mart started by dramatically reducing prices on more than a dozen hot toys, six weeks earlier than usual.

The retailer sold Mattel's Hot Wheels T-Wrecks playset for $29.74 instead of the original $49.88, while the price of Play Along's Sing-Along Care Bears fell to $14.99 from $24.99.

Wal-Mart used the toys as a loss leader to woo shoppers to other aisles elsewhere in the store. Discount rivals including Target Corp. followed, but other stores that could not compete ended up canceling orders and advertisements.

Manufacturers see several concerns about Wal-Mart's pricing on the toy business: its deep discounting makes toys unprofitable for other retailers, who are likely to order fewer products. They also fret Wal-Mart's strategy forces more traditional toy stores to close. Plus, toys may become a devalued product - permanently lowering margins and making toys that are never discounted seem far more expensive to shoppers.

That's why manufacturers are worried about 2004. "This sets the bar this year," moaned Jay Foreman, CEO of Play Along.

The $20 billion traditional toy industry suffered a 3 percent decline in sales last year, according to analyst estimates. Meanwhile, prices fell 4.3 percent on top of a 9.3 percent decline in 2002, according to the Labor Department.

Some companies like Applause LLC are determined to create a best seller even without discounters' help. The toy company, which limits its distribution to independent stores and specialty chains, is reintroducing Dream Pets, fuzzy animals originally brought to the United States in the 1950s from Japan.

"I believe that phenomenons can happen today without mass merchants," said Bob Solomon, chairman of the Woodland Hills, Calif., company.

Still, those who still want to have a good relationship with Wal-Mart will need to be diplomatic; with $256.03 billion in sales last year, the company has unprecedented power and offers a chance for big sales that manufacturers cannot ignore.

During a recent conference call with investors, Bob Eckert, chairman and CEO of Mattel, said the company is trying to lessen the impact of price wars by building "more value into our products to sell more on content and less on price."

"We expect the business environment will continue to be a challenge with ongoing retail consolidation and cost pressures," he told investors."How long it takes to get through this is anybody's guess."

Not all manufacturers are upset by what happened last year. LeapFrog Enterprises Inc. believes Wal-Mart's price cutting of some of its educational products helped to establish the chain as a destination for the brand, said Tom Prichard, senior vice president of marketing.

The closings of other toy retailers is something that "was going to happen. Wal-Mart is bringing it to the forefront earlier," Prichard said.

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Police Say $30 Million in Cocaine Found Amid Toys in Truck

Channel 11 ABC News, Raleigh, NC             [back to top]
February 11, 2004

Police found an estimated $30 million worth of cocaine hidden among a tractor-trailer full of toys headed for Wal-Mart stores in North Carolina. State pulled over a tractor-trailer Sunday on Interstate 40 near Forrest City, saying it was speeding. Troopers said the truck's driver was cited for driving on a suspended license and that he and a passenger appeared nervous during the traffic stop, so officers asked for permission to search the rig.

According to police, officers found cocaine inside 12 boxes, each containing about 25 kilograms. The total weight of the drugs is estimated at 300 kilograms, or 660 pounds. Police charged Francisco Galvan, 36, of Lynwood, Calif., and his passenger Hector Aquilar-Corona, 37, of Tucson, Ariz.

Aquilar-Corona was charged with permitting an unauthorized driver to drive and possession with intent to deliver drugs. Galvan is charged with driving on a suspended drivers license and possession with intent to deliver drugs.

In a hearing Monday in St. Francis County District Court, bond for the pair was set at $2 million. Both were still being held Tuesday.

(Copyright 2004 by The Associated Press. All Rights Reserved.)

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Wal-Mart Model Misuses Women

Report Jim Lobe - InterPress Service News Agency              [back to top]

WASHINGTON, Feb 10 (IPS) - Led by U.S.-based Wal-Mart, the world's giant retailers are demanding more and faster production from suppliers, which in turn are bypassing the rights of their workers, most of them women, says a new report by development agency Oxfam.

Despite the retailers' claims that they insist their contractors comply with basic labour standards, their demands for ever-quicker and cheaper goods are making compliance impossible in many cases, says the report, 'Trading Away Our Rights'.

"This is where globalisation is failing in its potential to lift people out of poverty and support development," said Phil Bloom, director of Oxfam's 'Make Trade Fair' campaign.

"There is a widening gap between the rhetoric of global corporate social responsibility and the reality of the corporate business model."

"Many corporations have codes of conduct to hold their suppliers accountable for labour standards, but their own ruthless buying strategies often make it impossible for these standards to be met," he added.

The new report, which is based on hundreds of interviews of workers, factory and farm owners, officials from global brand-name companies, importers, exporters and union and government officials in 12 countries, comes amid growing efforts by multinational corporations to reassure consumers that workers who make their goods can earn a decent living.

But a spate of recent newspaper articles and studies suggest these efforts might be undermined by growing competitive pressures created by the demands of retailers and the ever-growing number of poor countries that have heeded advice and pressure from international financial institutions (IFIs) to open their economies to attract investment and jobs.

"Globalisation has hugely strengthened the negotiating hand of retailers and brand companies," says the report. "New technologies, trade liberalisation and capital mobility have dramatically opened up the number of countries and producers from which they can source products, creating a growing number of producers vying for a place in their supply chains."

Wal-Mart, the world's biggest retailer, has led the field in putting this model into practice, it adds. The company now buys products from some 65,000 suppliers worldwide and sells to over 138 million consumers weekly through its 1,300 stores in 10 countries.

It has made China, where wages are far lower than anywhere else in Asia and where workers are denied the opportunity to form independent unions, the centre of production, a key point made in a feature article that appeared in the 'Washington Post' on Sunday.

"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," the article said, "Wal-Mart and China have forged themselves into the ultimate joint venture, their symbiosis influencing the terms of labour and consumption the world over."

But that marriage, according to both the Post account and the Oxfam report, has come largely at the expense of the worker on the factory line. "Wal-Mart pressures the factory to cut its price, and the factory responds with longer hours or lower pay," a Chinese labour official who declined to be identified for fear of retaliation told the Post.

"And the workers have no options."

That was also the message of a report released Monday by the New York-based National Labour Committee and China Labour Watch, about a toy factory in Ping Township in Guangdong province that produces goods for Wal-Mart.

The two groups reported that the mostly female labour force at the plant were paid only about one-half the legal minimum wage and forced to work longer hours than the legal maximum. It also reported that fire exits at the plant were normally locked.

Wal-Mart responded by insisting that it conducts regular inspections of all of its plants in China, but the groups said that plant managers were always informed of the visits in advance and coached workers on what to tell inspectors.

The report is largely consistent with the findings of the Oxfam study, which put the main responsibility for the worsening situation on corporate buying teams that pressure suppliers to deliver "just-in-time" orders at ever-lower prices in hopes of squeezing maximum profit from goods once they are sold to shoppers in mainly wealthy countries.

"Today's business ethos is 'make it quick, make it flexible, make it cheap'," said Bloomer. "Anyone appalled by labour conditions in the world today should be asking, 'so who turned up the heat'?"

"The workers at the bottom of the global supply chains are helping to fuel national export growth and shareholders' returns, but their jobs are being made ever more insecure, unhealthy and exhausting, and their rights weakened."

To minimise resistance, contractors are employing workers who are less likely to try to join trade unions in those countries where they exist. For the most part, these are young women, often migrants or immigrants, who are easily intimidated if they do not cooperate with management.

"Jobs in labour-intensive industries are celebrated as empowering women," according to Bloomer.

"While we welcome the fact that millions of women are getting a wage, the wage alone doesn't free them from poverty. Instead, they're being burnt out by working harder, faster, over longer hours and with few health, maternity or union rights."

"It's a poor strategy for improving women's lives," he added, noting that IFIs like the World Bank and the International Monetary Fund (IMF) were complicit in the worsening situation by encouraging governments to make their labour markets ever more "flexible."

In Chile, for example, 75 percent of women in the agricultural sector are hired on temporary contracts to pick fruit, and work more than 60 hours a week during the harvest season, but one-third of them still make below minimum wage.

Fewer than one-half of the women in Bangladesh garment factories have a contract, and the majority receive no maternity or health benefits. Some 80 percent fear dismissal if they complain.

In China's Guangdong province, young women face 150 hours of overtime each month in the garment factories, but only 40 percent have a written contract and 90 percent have no access to social insurance.

Given these kinds of situations, governments must step in to guarantee workers basic labour rights, including the right to join trade unions and bargain collectively, says the report.

At the same time, a greater effort must be made to enforce labour laws, while consumers must insist that retailers do a far better job of monitoring working conditions to ensure that the jobs they create in poor countries are not exploitative, it adds.

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Group asks Wal-Mart to help protect river. It wants to change how retailer stores chemicals

SHARON E. WHITE - Charlotte Observer Staff Writer     [back to top]
February 10, 2004

The Catawba Riverkeeper Foundation wants the public's help as part of the group's investigation to end a practice by some Wal-Mart stores.

Riverkeeper officials have requested that Wal-Mart corporate representatives coordinate a plan for the removal of toxic chemicals stored in parking lots at Wal-Mart stores near the Catawba River.

The river provides drinking water to 22 towns and cities in the 14 counties of the watershed. More than 1 million people rely on the river as the primary source of their drinking water.

Riverkeeper Donna Lisenby on Monday said Wal-Mart's corporate office had not come up with a plan to end the practice.

Wal-Mart spokesman Dan Fogleman said he could not specifically address the Catawba Riverkeeper's complaint, but the company makes every effort to comply with all laws and EPA regulations.

"Annually, our stores give back millions of dollars within their local communities specifically for environmental issues," Fogleman said. "We take all criticism seriously, and when it's valid, we take a hard look at our actions and use it as an opportunity to improve."

Lisenby asks that anyone who visits a Catawba River valley Wal-Mart store in the next 30 days to look for fertilizers, insecticides, herbicides or fungicides stored where rainwater could come into contact with the chemicals.

If you spot this, Lisenby asks that you call (704) 373-1916 or take digital pictures and e-mail to Catawba Riverkeeper Foundation at donna@catawbariverkeeper.org.

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U.S. groups accuse Wal-Mart over Chinese factory

By Grant McCool - Reuters      [back to top]
February 9, 2004

NEW YORK, Feb 9 (Reuters) - Labor rights groups on Monday accused the world's biggest retailer, Wal-Mart Stores Inc. (nyse: WMT - news - people), of turning a blind eye to abusive conditions at a factory in China that makes plastic toys for the company.

The National Labor Committee and China Labor Watch said in a report that workers at the factory in Chang Ping Township in Guangdong province were paid less than the legal minimum and worked longer hours than legally allowed.

A Wal-Mart spokesman said he was not aware of the specific allegations but that the company worked to ensure factories all over the world were run legally and inspected for abuses.

The report said the Chinese factory management trained workers to answer prepared questions and paid them a bonus for remembering them correctly during visits by Wal-Mart inspectors.

It said emergency fire exits and medical boxes were normally locked, but the Chinese managers unlocked them ahead of inspections. They also doctored time cards, the report said.

The rights groups said Wal-Mart appeared to condone the Chinese management's methods. "No company could be that shallow or gullible, unless it were consciously acting out a role with the full intent of achieving the desired result -- a whitewash," the report said.

Bill Wertz, a spokesman for Bentonville, Arkansas-based company, said Wal-Mart had experienced inspectors who adhered to its corporate standards.

"It would be a complete violation of our policy for anyone to participate in any charade that would merely make a pretense of observing a thorough inspection," Wertz said.

The rights groups said workers received an average 16.5 cents an hour when the legal minimum in China was 31 cents an hour. The workweek was seven days when five days was legal and people toiled for up to 20-1/2 hours per shift.

The groups said the same He Yi Electronics and Plastics Products Factory produced "bobblehead" sports star dolls for America's major professional sports organizations through U.S. company Fotoball.

Charles Kernaghan, head of the National Labor Committee, said the sports organizations -- including the National Basketball Association, Major League Baseball and the National Collegiate Athletic Association -- had not responded to his letters.

"We're hitting a stone wall with these people, which is sort of amazing, given their profits and the salaries ... the players won't be happy that their images are being made by workers in China with zero rights," said Kernaghan, who revealed in October that a sweatshop in Honduras made the clothing line of hip-hop music and fashion entrepreneur Sean Combs.

Kernaghan said on Monday that Combs' staff had worked with his group to greatly improve conditions in that factory.

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Chinese Workers Pay for Wal-Mart's Low Prices. Retailer Squeezes Its Asian Suppliers to Cut Costs

By Peter S. Goodman and Philip P. Pan -           [back to top]
Washington Post Foreign Service
Sunday, February 8, 2004

SHENZHEN, China -- Inside the factory, amid clattering machinery and clouds of sawdust, men without earplugs or protective goggles feed wood into screaming electric saws, making cabinets for stereo speakers. Women hunch over worktables, many hands bandaged and few covered by gloves, pressing transistors into circuit boards.

Most of the 2,100 workers here are poor migrants from the countryside who have come to this industrial hub in southern China for jobs that pay about $120 a month. A sign on the wall reminds them of their expendability in a nation with hundreds of millions of surplus workers: "If you don't work hard today, tomorrow you'll have to try hard to look for a job."

The calculations driving production here at Shenzhen Baoan Fenda Industrial Co. are no different from those governing global capitalism in general -- make more for less -- but it is applied with particular vigor on this shop floor. Sixty percent of the stereos coming off the line are for one customer: Wal-Mart Stores Inc., whose mastery at squeezing savings from its supply chain made it the world's largest company.

"The profit is really small," said Surely Huang, a factory engineer, speaking of the 350,000 stereos that Fenda agreed in March to supply to the retailer for $30 to $40 each. Huang said they sell for $50 in the United States. "We have to constantly cut costs to satisfy Wal-Mart."

Yet this factory and thousands of others along China's east coast have decided, with China's leaders, that the deal is worth the price. Wal-Mart provides access to vastly more store shelves than they could ever reach by themselves, a way to build a brand from Fort Worth to Frankfurt. Meeting Wal-Mart's strict requirements could improve the factory's efficiency and make it easier to land contracts from other major retailers.

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.

With sales of more than $245 billion a year, Wal-Mart is the largest retailer in the United States, still the ultimate consumer market. China is the most populous country, with 1.3 billion people, most still poor enough to willingly move hundreds of miles from home for jobs that would be shunned by anyone with better prospects. The Communist Party government has become perhaps the world's greatest facilitator of capitalist production, beckoning multinational giants with tax-free zones and harsh punishment for anyone with designs on organizing a labor movement.

More than 80 percent of the 6,000 factories in Wal-Mart's worldwide database of suppliers are in China. Wal-Mart estimates it spent $15 billion on Chinese-made products last year, accounting for nearly one-eighth of all Chinese exports to the United States. If the company that Sam Walton built with his "Made in America" ad campaign were itself a separate nation, it would rank as China's fifth-largest export market, ahead of Germany and Britain.

Back in its home market, Wal-Mart's vast appetite for Chinese imports has placed it at the center of a sharp debate over whether the influx of low-cost products from China is good for Americans.

Domestic manufacturers, labor groups and some politicians point to China's record trade surplus with the United States, estimated to have totaled $120 billion last year, and accuse Beijing of manipulating its currency, condoning the exploitation of its workers and competing unfairly, resulting in the loss of U.S. manufacturing jobs.

But Chinese officials counter that nearly two-thirds of the country's exports are shipped from factories wholly or jointly owned by foreign investors, with Wal-Mart often cited as the prime example, supplying Americans with a steady flow of low-cost, high-quality goods.

With its near-religious devotion to the pursuit of "everyday low prices," Wal-Mart illustrates why U.S.-based multinationals with operations here have not joined in the chorus for protectionism.

"For the benefit of the consumer, we should buy merchandise where we get the best value," said Andrew Tsuei, managing director of Wal-Mart's global procurement center in Shenzhen.

Joe Hatfield, president of Wal-Mart's Asia operations, noted that many of the goods his company buys in China -- toys, furniture, textiles and holiday ornaments -- have mostly not been made in the United States for years. The Bush administration has pressed China to increase the value of its currency, which some argue makes China's goods unfairly cheap on world markets. Hatfield rolled his eyes.

"That would be a travesty to do to the consumer in the United States," he said. "You do that and the cost of living is going to go up."

'Better Than Nothing'

For Wal-Mart and other multinational companies doing business in China, a stable currency, political peace and a compliant workforce are nearly as important as low costs.

"There might be places in other parts of the world where you can buy cheaper, but can you get [the product] on the ship?" Tsuei said. "If we have to look at a country that's not politically stable, you might not get your order on time. If you deal in a country where the currency fluctuates, everyday there is a lot of risk. China happens to have the right mix."

Labor activists in China and abroad say that mix includes the ruling party's ban on independent trade unions -- workers may join only the party-run union -- as well as courts and regulatory agencies controlled by local party officials who are often willing to overlook labor violations to appease businesses that can be milked for taxes, fees and bribes.

The activists argue that as Wal-Mart pits suppliers against one another and squeezes them for the lowest price, the workers suffer.

"Wal-Mart pressures the factory to cut its price, and the factory responds with longer hours or lower pay," said a Chinese labor official, who declined to be named for fear of punishment. "And the workers have no options."

In the city of Dongguan in southern Guangdong province, where Wal-Mart suppliers are concentrated, a 27-year-old worker who gave her name as Miss Qin complained that she can rarely afford meat with her $75-per-month wages at Kaida Toy Co. "Every day we eat vegetables, mostly we eat vegetables," she said, leaning over a plate of fried carrots in a dingy restaurant.

Qin helps make plastic toy trains for Wal-Mart, but says she cannot afford to buy toys for her 9-year-old son. "In four years, they haven't increased the salary," she said.

Kong Xianghong, the No. 2 official for the party-run union in Guangdong province, acknowledged that low wages, long hours and poor conditions are common in factories that supply Wal-Mart and other U.S.-based corporations.

"It's better than nothing," he said. "Labor protections, working conditions and wages are related to a country's level of economic development. Of course, we want better labor protections, but we can't afford it. We need the jobs. We need to guarantee people can eat."

Still, Kong said, the party-controlled union has been frustrated that Wal-Mart has refused for three years to allow it to set up branches in the 31 Wal-Mart stores in China -- even though he has assured the company that the union wouldn't help workers struggle for better pay. Wal-Mart has also fought efforts to unionize its U.S. stores.

Low Prices, High Cost

Wal-Mart's China headquarters is a monument to its frugality -- a low building covered in white tile. The linoleum conference table is pockmarked with gaps where the plywood shows through. Tea is served in plastic cups. In Hatfield's office, where he presides over Wal-Mart's Asia operations, the rusty window frame is open, the sound of car horns washing in from the street.

Wal-Mart portrays itself as a force for good in China. The company says it enforces labor standards for its suppliers and insists that they comply with Chinese law.

"We look at safety. We look at health, and this comes with a cost. We ensure people get paid above minimum wage. They have to have fire extinguishers, fire exits," Tsuei said. "There are people out there who cannot have those things and offer a lower price. We do not do business with those people."

Wal-Mart employs 100 auditors who annually inspect every supplier's factory. Last year, the company suspended deals with about 400 suppliers, primarily for exceeding limits on overtime, Tsuei said. Another 72 factories were blacklisted permanently last year, he said, almost all for employing children under China's legal working age of 16.

But Wal-Mart does not conduct regular inspections of smaller factories that sell goods to the company through middlemen. Nor does it inspect all its suppliers' subcontractors or the Chinese manufacturing operations of U.S. suppliers such as Mattel Inc. and Dell Inc.

"The inspection system is not effective," said Li Qiang, a labor organizer who has been in contact with workers at more than a dozen factories that supply Wal-Mart, and who worked in one himself before leaving China three years ago. "The factories are usually notified in advance, and they often prepare by cleaning up, creating fake time sheets and briefing workers on what to say."

Li said these factories often require employees to work as many as 80 hours per week during the busy season for $75 to $110 per month, violating Chinese labor laws. If Wal-Mart really wanted to monitor conditions among its suppliers, Li said, it could do so with surprise visits, longer inspections and independent auditors. "But if they did that, prices would definitely go up," he said.

Suppliers Find a Big Market

Wal-Mart is such a big player in China that it does not have to go looking for suppliers; the suppliers come to them, jamming a reception area at the procurement center.

Yu Xiaoma of Guangzhou Kangaroo Leathers Co., which makes handbags and wallets for Wal-Mart and other multinationals, said: "You can't make much money from Wal-Mart. They demand the lowest, lowest price."

Amy Gu, vice manager for exports for Goodbaby Corp., which makes baby strollers near Shanghai, said the company sometimes takes orders to supply Wal-Mart at or below cost through a partnership with a Canadian distributor, Dorel Industries Inc. "Dorel will tell us, 'Well, Wal-Mart has given us this price, we need a factory cost of this much,' " Gu said. "And we have to find a way to deliver it."

Wal-Mart says such arrangements benefit both sides. Hatfield said the company has made distribution more efficient and fair by cutting out middlemen and resisting corruption. In a country where transportation remains unreliable, Wal-Mart's distribution network has given manufacturers access to customers around the country and the world.

He touted the case of a Guangdong factory that began supplying Wal-Mart stores in Shenzhen with a drink made of milk and egg yolk, delivering 25,000 units the first month.. It proved popular. By September, Wal-Mart was shipping 1 million units a month across southern China.

"They can just drop it at our distribution center and we take care of the rest," Hatfield said. "Now it's a national brand."

Yet those who run the factory that produces the drink, Weijiasi Food & Beverage Co., say they haven't yet shared in the success.

"In the beginning, we made money," said a manager reached by telephone, who gave his name as Mr. Li.

"But when Wal-Mart started to launch nationwide distribution, they pressured us for a special price at below our cost. Now, we're losing money on every box, while Wal-Mart is making more money."

Special correspondent Wang Ting contributed to this report. 2004 The Washington Post Company

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Wal-Mart controversy nears vote in East Bay - Measure L enacts ban on supercenters

Erin Hallissy, Chronicle Staff Writer, SF Chronicle             [back to top]
Sunday, February 8, 2004

Wal-Mart, loved by its shoppers for "always low prices'' and reviled by critics who claim it exploits workers and manufacturers, didn't get to be the world's wealthiest corporation by backing down from a fight.

Next month, it faces a critical showdown in Contra Costa County that could influence its plans to introduce in California its sprawling supercenters -- vast combination grocery and discount stores that sell everything from milk and meat to firearms and fabric in buildings as large as five football fields.

The county's board of supervisors decided last year to ban the supercenters from unincorporated areas, saying they would choke traffic and worsen sprawl, but Wal-Mart gathered enough signatures to qualify the issue for a referendum. Voters in the East Bay county will decide the matter, Measure L, on March 2.

"I don't think either side will tell you it's going to be a cheap election,'' said Wal-Mart spokeswoman Amy Hill, acknowledging that the company had contributed about $500,000 to the No on Measure L campaign before the end of January and could easily spend more than $1 million. "Anything is possible.''

The high-stakes election is the first in the state since Wal-Mart announced its plans last year for 40 supercenters in California. A smattering of cities and counties have passed bans on the mega-stores, but Wal-Mart chose to take on lawmakers in Contra Costa, often considered a bellwether county because of its demographic similarity to the state as a whole.

Supporters of the ban say that along with increasing traffic, supercenters stamp out competition and lead to thousands of lost jobs and lower wages. Wal-Mart's expansion plans contributed to the long-running grocery strike in Southern California, with chains like Safeway and Albertson's saying they can't compete with Wal-Mart unless they slash wages and benefits.

But Wal-Mart, which had more than $245 billion in sales last year, says that consumers have the right to shop where they want and that they deserve grocery prices that could be 15 percent lower than supermarket prices.

Lee Jensen, a 70-year-old Martinez resident who was shopping at a regular Wal-Mart in that city last week, said he has mixed feelings about the supercenters.

"I'm on social security and my wife wants to retire,'' he said. "They have really reasonable prices. On the other hand, I don't like cutthroat operations.''

Supporters of Measure L, who include elected county officials, community members, environmentalists, the United Food and Commercial Workers Union and Safeway, say the ordinance does not single out Wal-Mart but instead applies to any non-membership store larger than 90,000 square feet that devotes more than 5 percent of its floor space to selling non-taxable groceries. They say that without sales tax revenue, they can't make the road improvements needed to handle increased traffic and other related impacts that the huge stores would have.

"Local government should have a right to plan where and how big-box stores come into their communities and not leave it totally up to the developer,'' said Supervisor John Gioia of Richmond. "This is a battle in a larger war over who controls development in a local community.''

Wal-Mart insists it's being discriminated against, although proponents of the law say Target and Sears would also be affected if they tried to build supercenters here. Wal-Mart has more than 1,400 supercenters in 42 other states that are between 175,000 and 250,000 square feet and devote about 30 percent of their floor space to groceries. Large Bay Area Safeway stores, by contrast, are about 55,000 square feet.

Hill said Wal-Mart does not have any plans to open a supercenter in Contra Costa County, but the retailer believes it is "in its best interest'' to fight the ban.

"We certainly do not believe these ordinances are legal,'' Hill said. "At the end of the day, the ultimate goal is to have the consumer choose where to shop.''

Consumer choice has become the campaign slogan for the opposition to Measure L, which is peppering households with flybaers saying Measure L would unfairly restrict Wal-Mart from selling goods at lower prices to working families.

Walnut Creek Councilman Charlie Abrams, who is opposing Measure L, said he doesn't think the county should ban big-box stores in unincorporated areas, although he acknowledged it was unlikely that Wal-Mart would be able to build a supercenter in his upscale town.

"It's government interfering in consumer choice,'' Abrams said. "It's clear that the unions are behind this and are using the supervisors to steer this against Wal-Mart.''

Gioia said Wal-Mart and its proponents are being deceptive when they try to say the issue is a right to shop.

"They know they lose on the development issue,'' Gioia said. "They act like they are representing consumers, but Wal-Mart's interest is the bottom line. Their interest is in getting bigger, making more money. It's not in good community planning.''

While Wal-Mart has chosen to force a referendum on the county's ordinance in Contra Costa, it is trying different tactics in different communities to overturn new big-box ordinances. It did not challenge big-box prohibitions in Martinez and Oakland; it sued Alameda County. In April, it is asking voters in Inglewood (Los Angeles County) to approve a supercenter that the Inglewood City Council turned down. In San Marcos (San Diego County), Wal-Mart tried unsuccessfully to stop a March referendum by voters wanting to overturn their city council's approval of a regular Wal-Mart store.

Hill said efforts to block Wal-Marts are taken seriously by the store, which has also sued or gone to the ballot box in other states, with mixed results. She said community resistance to the chain is not "epidemic,'' and that at least in Contra Costa County, unions and competitors like Safeway are the major opposition.

Wal-Mart, however, has become one of the most reviled retail chains in the country even as its business has grown to the point that it's the nation's largest seller of everything from toys to dog food. Sites critical of Wal-Mart number more than 2,000 on the Internet, and opponents are passionate in fighting the company, which they paint as a heartless employer whose business tactics destroy communities.

"Wal-Mart is choosing to come in with these huge windowless pieces of architecture,'' said Al Norman, a Massachusetts resident who runs the Web site sprawl-busters.com and has fought the chain throughout the country since leading a successful campaign to block Wal-Mart in his hometown of Greenfield. "They're saturating the American landscape. Folks are poorly paid and poorly covered by benefits. Wal-Mart is just a chain of exploitation. It stretches from the sweatshops of China to the sales floor in California.''

U.S. Rep. George Miller, D-Martinez, who is endorsing Measure L, also criticized Wal-Mart for "predatory'' business tactics.

"They want to put in place a business plan that undercuts other businesses in the county,'' Miller said. "It certainly undercuts the wages of other workers. It brings with it a long list of violations of labor laws, of workers' rights. I don't think that's good for our economy.''

Miller and county officials also contend that Wal-Mart workers could also be a drain on county health resources because the company doesn't offer adequate health insurance, an allegation Wal-Mart disputes.

"It's a crazy, ludicrous argument,'' Hill said. "It's crazy to insinuate that all Wal-Mart associates are going to be burdening the county.''

She said more than 90 percent of Wal-Mart workers have health benefits, including more than 40 percent who get it not through the company but through other means, such as a spouse who is employed elsewhere.

Hill said the main issue is competition.

"Competition drives down the cost and the consumer is the winner,'' Hill said. "We are not going to apologize for that.''

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Jurors begin Wal-Mart pay deliberations

The Oregon damages case is the first to reach a jury of more than 30 overtime suits across the U.S.

BRENT HUNSBERGER - The Oregonian - Business News        [back to top]
February 7, 2004

Attorneys for Wal-Mart and 100 of its current and former workers in Oregon wrapped up arguments Friday in an overtime pay dispute that could affect more than 30 similar lawsuits pending elsewhere against the nation's largest retailer.

A seven-person Portland jury began deliberating Friday afternoon on exactly how much the nation's biggest retail chain owes to 108 Oregon employees who say they were forced to work additional hours without overtime pay. The disputed periods were as long as a decade ago in some cases.

The four-week-long damages portion of the case ended Friday in U.S. District Court in Portland. The Oregon case is the first to go to a jury for damages.

More than a year ago, in the first phase of the trial, a Portland jury found the nation's largest retailer had willfully permitted employees to work "off the clock" between 1994 and 1999 at 18 Oregon stores.

Neither side estimated what the total amount of payments could be for Wal-Mart. Attorneys declined to comment Friday because of a gag order imposed by Judge Garr King.

The case involves store associates, department managers, night stockers and others who claim to have worked as much as 20 hours a week without pay.

"Justice in this case will be inexact," James Piotrowski, an attorney representing the workers, said during closing arguments. "But rough justice is better than no justice at all."

Wal-Mart operates 27 stores in Oregon. Nearly 400 workers joined the case after it was filed in 1998, but the court allowed only 108 claims to proceed to the damages phase.

In closing arguments, Piotrowski said Wal-Mart "ignored, violated and betrayed" what he called the nation's bedrock principle of work as it amassed a retail network that netted $8.04 billion last year.

Some of his clients, he said, clocked out and kept working to avoid reprimand for working more hours than scheduled. Others skipped lunch or were locked in the store after closing.

Wal-Mart, in its defense, called more than 80 witnesses during the trial in an attempt to discredit the workers' testimony and cast doubt on the accuracy of their memories.

Rudy Englund, the company's lead attorney, argued that the plaintiffs' claims were "generalized, unrealistic and exaggerated," noting that several plaintiffs used the word "guess" in estimating their hours owed.

One plaintiff, Englund said, admitted to playing Nintendo while working off the clock. "The pin has gone into the balloon, and it has burst," said Englund.

Each member of the jury was given multipage forms to approximate week-by-week how much each plaintiff is owed. Englund spent 15 minutes of his closing arguments instructing the jury how to fill out the form.

Jurors appeared eager to end the case. Shortly after noon, King asked them whether they wanted to break for lunch or proceed. They voted to skip lunch.

Jurors are scheduled to resume deliberations on Monday.

Before they headed for the jury room, King warned them not to talk to anyone else about the case.

"Don't do any investigation on your own," he said. "And whatever you do, don't go to a Wal-Mart store."

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THE SAFEWAY STRIKE in Southern CalifornIA

By Tony Martarella - Walnut Creek Journal      [back to top]
February 5, 2004

THE SAFEWAY STRIKE in Southern California is going to effect all of us here in the Bay Area sooner or later, in one way or another, like it or not. In fact, last week's demonstration in Alamo is evidence it has already begun.

What this conflict boils down to is Wal-Mart. Safeway management is correct in saying they can't compete with the big box grocery suppliers, such as Wal-Mart.

But taking away worker benefits is a counterproductive solution. There is a better solution: eliminate the cause of the problem, take away Wal-Mart. And that is exactly what Measure L will do.

Safeway management and union management know that for every big box, non-taxable, grocery supplier, the surrounding area will lose approximately 2.5 to 3 local neighborhood grocery stores like Safeway and Albertson's.

Wal-Mart's consistent strategy, for every store, is to eliminate the competition with "predatory pricing." Once the competition has been eliminated the prices are raised to "competitive pricing." And what is competitive pricing when there is no competition? It is whatever they want it to be, whatever they can require you to pay.

It wasn't very long ago that I looked upon unions and unionism as the cause of lost jobs in America, and the cause of inflation whenever it occurs. I also saw the union as undermining productivity and bleeding the system of resources.

Keep in mind, I am still not a union member. However, it didn't take an awful lot of research to learn that virtually every advancement in pay increases, employee benefits and worker protections came from the striking power and sacrifices of union members.

Every time a union member goes out on strike to fight for higher pay, to preserve their benefits and promote better working conditions -- and they win -- every worker wins, union or not. When they lose, we all lose.

So I decided it was time for me to support the ideals of unionism, because when they win, I win. I am also supporting Measure "L" to protect our neighborhoods, our taxes and our jobs.

Tony Martarella lives in Walnut Creek.

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Wal-Mart may convert store in Fresno into a supercenter

Sanford Nax - THE FRESNO BEE                [back to top]    
5 February 2004

Retail giant Wal-Mart may convert its southeast Fresno store into a much-larger supercenter, the kind of expansion that has stirred opposition in other communities in California.

Wal-Mart and the shopping center's owner have applied for a conditional-use permit to expand the 125,800-square-foot store into a 209,400-square-foot supercenter, the first in Fresno. A supercenter would add a full-service grocery store department, creating more competition for grocery stores in the area but also providing hundreds of new jobs.

Wal-Mart spokesman Peter Kanelos said the company has not made a decision on the project. "We're keeping our options available," he said.

The Fresno City Council must approve the proposal for expanding the store at Kings Canyon Road and Adler Avenue.

Council Member Mike Dages, who represents the district, said he would not support the expansion. He said the supercenter would compete with FoodsCo and Food Maxx, both of which are about a mile away. "A third means one of them won't make it," Dages said. "Three discount supermarkets are too much."

He added that the property is too small for a supercenter. Dages said a ponding basin may have to be covered or moved, and he does not want a supercenter to interfere with Trolley Creek Park, which is being built behind the shopping center. Steve Pilibos, who owns the Wal-Mart property, donated the park site.

Wal-Mart is aggressively expanding its supercenter concept, planning to open 40 in California during the next four years. The first opens March 3 in La Quinta, just outside of Palm Springs.

Other supercenters have been discussed for Hanford, Lemoore, Selma and Visalia.

Resistance common

But the nation's largest retailer has been encountering resistance from many communities that fear a Wal-Mart selling groceries could hurt established businesses, especially grocery stores offering higher wages to workers.

Wal-Mart employees are not unionized, and its stores generally pay lower wages than employees of grocery chains, many of whom are represented by labor unions.

Several communities, including Oakland, Paso Robles, Turlock and the unincorporated regions of Contra Costa County, have passed ordinances limiting grocery sales in big discount stores. Los Angeles is considering a similar ordinance.

Council Member Tom Boyajian said he would support the same type of resolution in Fresno.

Boyajian said the introduction of a Wal-Mart supercenter would be an "injustice" to existing businesses that pay relatively good wages. He also fears Wal-Mart would squash competing supermarkets and cause more building vacancies.

"What are we saying to businesses that are already here?" he said.

Fellow Council Member Jerry Duncan said he could not support a blanket ban on such projects but would consider them on a case-by-case basis. "If the superstore was such a bad idea no one would shop there," he said.

Duncan said he does not know enough about the proposal to take a position.

Opposition in Clovis

Wal-Mart also faces a fight in Clovis, where developer Dave Paynter is proposing a shopping center on Herndon Avenue. Paynter also redeveloped the shopping center on Kings Canyon Road that contains FoodsCo.

Paynter said he is not worried about an expanded Wal-Mart on Kings Canyon Road.

"I believe in the free enterprise system and we also have to be competitive to stay in the marketplace," he said.

"Our center and the tenants will be competitive."

Save Mart wary

But executives at Save Mart, which operates Food Maxx, a block from FoodsCo, are less comfortable with the prospect of a new competitor.

Company Vice President Jim Watt said sales volumes at both of those stores are good, but may erode if a third grocery retailer enters the mix.

"How much you can split that pie remains to be seen," Watt said. "Three is a crowd."

Save Mart has opposed other attempts to open Wal-Mart Supercenters in other communities.

"We have spoken in opposition when we feel it is a case of overstoring a trade area," Watt said.

The pending clash between Wal-Mart Supercenters and traditional supermarkets is a factor in the continuing strike in Southern California where grocers, hurt by competition from the mammoth discount retailer, are seeking concessions from unionized workers.

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Wal-Mart leads D-FW grocery sales It's the discount retailer's first top 10 market

By MARIA HALKIAS - The Dallas Morning News              [back to top]
Thursday, February 5, 2004

Wal-Mart Stores Inc. has become the No. 1 seller of groceries in Dallas-Fort Worth, taking the lead in a top 10 U.S. market for the first time, according to data released Wednesday.

While the discount giant has been the largest U.S. food retailer for a couple of years, dominating small and medium-sized towns such as Rogers, Ark., and Oklahoma City, it has been slower to capture the major markets.

Wal-Mart did it in D-FW against the Big Three - Kroger Co., Albertsons Inc. and Safeway Inc. - along with a host of others. It took the company about six years to rise from No. 6.

Wal-Mart's market share in the Dallas-Fort Worth-Arlington area is 25.1 percent, according to the 2004 edition of Market Scope, a publication of TradeDimensions International Inc.

No. 2 is Albertsons with 17.6 percent, followed by Safeway's Tom Thumb with 15 percent, Kroger with 12.7 percent, Minyard Food Stores with 9.1 percent and Target Corp.'s SuperTarget with 3.9 percent.

Albertsons was the leading grocer last year in Dallas with a 19.4 percent share and in Fort Worth-Arlington with 20.3 percent when Market Scope measured the markets separately.

Wal-Mart's ascent was forecast last year when it was No. 3 in both Dallas and Fort Worth-Arlington, but the size of the leap was surprising, some analysts said.

"Everyone was predicting it would happen, but no one expected they would blow past them. I think this is going to be a real wake-up call to a lot of other retailers," said Mitchell J. Rosenbleeth, vice president at Booz Allen Hamilton in Dallas.

Wal-Mart's past demographics have been rural and suburban, he said, "but now we're seeing that their advantages are even more pronounced when they're in urban demographics."

Wal-Mart spokeswoman Karen Burk didn't address the company's progress in the region.

"We focus on building one customer at a time," she said. "It's always going to be our focus no matter where we are."

Houston's next

Houston is probably the next major market where Wal-Mart will take the top spot.

Kroger is No. 1 with a 24.5 percent share, Market Scope says, but that's a slim lead over Wal-Mart's 23.8 percent.

It is not obvious that one out of every four grocery dollars spent in Dallas-Fort Worth is going to Wal-Mart. Most area residents do their grocery shopping at traditional supermarkets, which anchor neighborhood strip centers and stand at major suburban intersections.

"One Wal-Mart Supercenter can equal many traditional Kroger or Tom Thumb stores in volume. So while we don't see them on every corner, they command a big food share," said Al Meyers, vice president at industry research firm Retail Forward Inc.

A time-saver

Deshonda Bradford of Dallas said she wasn't surprised that Wal-Mart moved into the top spot.

"The best thing they did was to open Supercenters in 1992. I go there and can get general merchandise and groceries and write one check. That saves me time."

Dallas was the first top 10 market where Wal-Mart built its Neighborhood Market stores, and before that, its Supercenters.

"The Supercenter is the single-most-important trend in retailing during the last 30 years," Mr. Meyers said.

The Neighborhood Market concept is being tweaked, he said.

"They'll roll it out when they're happy with it," he said. "Aging baby boomers aren't going to want to plow through a 220,000-square-foot Supercenter all the time. The Neighborhood Market fills a need."

Wal-Mart has expanded its U.S. grocery and drug sales at an average pace of 17 percent annually over the last five years, compared with 3 percent for supermarkets and 9.1 percent for drugstores.

Retail Forward predicts that Wal-Mart's U.S. grocery and drug sales will top $162 billion in 2007, compared with $82 billion in 2002.

In D-FW, 22.1 percent of Wal-Mart's market share is from 43 Supercenters, and 3 percent is from 17 Neighborhood markets.

Neighborhood markets are about 40,000 square feet, or 25 percent smaller than a Kroger Signature Market or a newer Albertsons store; they are designed to meet customers' needs in between visits to the massive Supercenters.

Including Sam's...

The Market Scope results do not include grocery spending at warehouse clubs, drugstores or convenience stores. Wal-Mart's total market share probably approaches 30 percent if its Sam's Clubs are included, said Dr. Edward J. Fox, director of the J.C. Penney Center for Retail Excellence at Southern Methodist University.

Wal-Mart's market share probably will climb as its Neighborhood Markets mature.

"It takes about seven years for a supermarket to ramp up its sales," Dr. Fox said.

Albertsons, based in Idaho, took the Dallas market lead from Tom Thumb in the late 1996.

Last week, Albertsons said it replaced the top executive in its D-FW division and was eliminating layers of management over its 103 area stores.

The chain, which had been on a fast expansion track, plans to open just one store in the area this year.

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City hangs onto Wal-Mart's $1.5m

By JEFF NAGEL                              [back to top]
February 4, 2004

CITY officials are refusing to release nearly $1.5 million to Wal-Mart until the big box store does more of what it has promised.

"I have informed Wal-Mart today I will not be releasing any of the $1.5 million we have," development services director Marvin Kwiatkowski told city council Jan. 26.

The nearly $1.5 million the city has consists of a $979,000 letter of credit from Wal-Mart to guarantee it would pay its share of highway improvements, $350,000 the city has promised to contribute to the cost of the new intersection in front of its store, and a $143,000 bond the store put up to guarantee landscaping work gets done.

Council passed a resolution Jan. 26 endorsing the measure after neighbours complained that few promises have been kept in the development of the big box store.

"We made accommodation after accommodation after accommodation," said Haugland Ave. resident Melissa Munn, adding residents trusted the company would fulfil its pledges.

"They lied to us. They are duplicitous and they lie. They don't show any regard for this city."

Landscaping around the building and the development of a new riverside trail to replace parkland the city gave up for the store are the biggest unresolved items directly connected to the money.

"They have done zero work –none – on that trail," Munn said. "We would ask that zero dollars be released to them until this work is done."

Kwiatkowski says it's probably best the landscaping work is waiting until spring, adding he doubts it would have been done well had the company rushed it through in the fall. A further $20,000 in highway work is unfinished, he added.

Residents at the Jan. 26 meeting also recounted a long history of problems during the store construction.

Munn said those ranged from repeated noise violations when work went later than regulations permit, to an assault on her husband, when he complained about the noise, to excessive construction garbage.

Munn said developers removed far more trees than were agreed to at the rear of the building near residents' back yards, adding an area marked "undisturbed tree area" now has a 40-foot clearing in the middle of it.

"I can't even tell you how depressing it is," she said. "They have not minimized the impact – they've done just the opposite."

Kwiatkowski said excessive garbage was largely cleaned up after he threatened to place a stop-work order on construction.

He said he also issued two fines of $250 and then $500 to contractor Dominion Canada for noise violations last fall and was threatening to seek a court injunction when the noise died down – largely because exterior work had been completed. The fines have not yet been paid. "I've had to pull out all the stops to get some action on these issues," Kwiatkowski told council.

He said most of the problems resulted from contractors cutting corners to meet Wal-Mart's insistence the store be ready for occupation in early December.

Now that the store is open, its bright lights and the noise of its trucks have become the main irritants for neighbours.

They were promised lights wouldn't shine into their back yards, said Kwiatkowski and he's now asked the store to use dimmer lights and add shielding to fixtures at the rear of the building.

Munn said Wal-Mart's lights are so bright she can recognize objects on her neighbour's countertop from the street when the house lights are off.

Kwiatkowski said he will insist those lights stay off until a solution acceptable to the neighbours is found.

But Linda Lee, whose house at 2810 Cramer St. is between Wal-Mart and the Real Canadian Wholesale Club, says her house remains lit up all night from the lights at the front of the store.

"You don't have to turn on a single light in the house," Lee said. "It's like we have another airport in Terrace from where we live." She also said her house vibrates from refrigerated trucks that arrive at Wal-Mart in the middle of the night. "It's a feeling –not just a sound," Lee said. "It literally goes right through your body."

Mayor Jack Talstra said those trucks can be extremely noisy. "Something has to be done," he said. "Maybe they don't have to roll in here at 3:00 in the morning."

Kwiatkowski met with company officials Jan. 29 after the store's grand opening and said he's optimistic much can be resolved.

He would not say what must be done before the city will release some or all of the money it's holding.

"At this time we have it all and that's all I'm going to say," he said.

Wal-Mart widens political reach, giving primarily to GOP By Jim Hopkins, USA TODAY February 04, 2004

Wal-Mart (WMT), the USA's biggest company, is beefing up in a new area: politics. Wal-Mart is No. 2 among top campaign givers in the 2004 federal elections.

It has rocketed to No. 2 among top campaign givers in the 2004 federal elections. Four years ago, it didn't rank in the top 100, says the Center for Responsive Politics, a non-partisan watchdog group.

Republican candidates are the big winners in this year's election. They received about 85% of the company's contributions, including those of its political action committee, employees and children of founder Sam Walton.

Wal-Mart's rise is significant because of the impact it might have on congressional debates about health care, labor and other hot-button regulatory issues, says Larry Noble, the center's executive director.

"They're clearly making a move," he says.

The company has more than $250 billion in annual revenue. (No. 2 is General Motors, with $187 billion in annual revenue.) Wal-Mart is also the USA's biggest private employer, with 1.2 million workers.

But unions say Wal-Mart's push to keep costs low is driving thousands of factory jobs overseas. It's facing a potentially costly sex discrimination lawsuit from female workers. Plus, a federal grand jury is investigating claims that Wal-Mart cleaning companies used illegal immigrants.

Wal-Mart denies the sex discrimination claims. It says it is innocent in the case of illegal immigrants. Still, the growing criticism has tarnished the company's image, and helped spur its leap into Washington. "Our voice wasn't there to be heard," says company spokesman Jay Allen.

It's now being heard through:

Campaign donations. Wal-Mart's political action committee and employees have given about $1 million in the 2004 elections so far — almost entirely to congressional candidates. Just $5,000 went to President Bush, and none to Democrats seeking the White House — a trend underscored Monday in campaign finance data released by the center. Bush's No. 1 donor to date: Merrill Lynch's (MER) PAC and employees. They gave $432,104 of the $132 million Bush raised. Wal-Mart gives to pro-business candidates, without expectations, Allen says. "There are no quid pro quos," he says.

Walton's children are big givers, too. Wal-Mart Chairman Rob Walton last year gave $25,000 to the National Republican Congressional Committee. His brother, John Walton, gave more than $150,000 to Republican causes since 2000. Their sister, Alice

Walton, gave more than $100,000 in the same period.

Lobbying. Wal-Mart has five staff lobbyists in Washington — up from one when it opened its office there in 1999.

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Wal-Mart locked in janitors, lawsuit alleges

Minneapolis Tribune - Associated Press                [back to top]
February 3, 2004

NEWARK, N.J. -- A civil rights suit filed against Wal-Mart by illegal immigrants was expanded Monday to accuse America's biggest retailer of locking its janitors inside stores during their shifts.

The amendment to the lawsuit comes as a federal grand jury in Pennsylvania weighs evidence to determine whether Wal-Mart will face criminal charges in the use of illegal immigrants to clean its stores.

A lawyer for Wal-Mart denied the new allegation.

INS agents raided Wal-Mart stores across the country on Oct. 23 in a sweep that resulted in the arrest of hundreds of janitors on immigration charges.

Among those arrested were the 17 named plaintiffs in the civil suit, including 11 Mexican immigrants who were the original plaintiffs, plus six Eastern Europeans added to the list Monday. The lawsuit seeks class-action status for perhaps thousands of immigrants.

The suit claims some workers were forced to work seven-day, 70-hour weeks for $1,500 a month. The amended claim follows a report in The New York Times that contained the separate allegation that janitors were being locked in.

The lawsuit is being brought under the federal Racketeer Influenced Corrupt Organizations Act, charging that Wal-Mart systematically violated workers' rights and tried to shield itself from liability by using independent contractors to employ the immigrants.

David Murray, a lawyer for Wal-Mart, said the allegations were ``absolutely incorrect.''

Murray said concern for workers' rights was the reason the chain eliminated the use of cleaning contractors in 80 percent of its stores. Wal-Mart has 3,500 stores nationwide with 1.2 million employees.

Murray acknowledged that doors were kept locked, but insisted that a manager with a key was always present. ``This was simply an effort to keep the employees safe and keep the merchandize secure,'' Murray said.

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Price of doing business with Wal-Mart is high

By Dan Gillmor - Mercury News Technology Columnist             [back to top]
February 1, 2004

Let me say it up front: I don't like Wal-Mart.

Among other things, I don't like the giant retailer's robber-baron business practices, or its treatment of employees. I don't like the small-town wreckage it has left in its wake, or the way it has forced suppliers to move jobs offshore.

But Wal-Mart's customers enjoy what comes from such policies: a big selection and low prices. And Wal-Mart's management and shareholders love the huge profits.

This is an ongoing American conundrum. We look for the best deal today, whether it's in our best interest tomorrow, sometimes because we have no realistic other choice.

But I wonder if Americans generally appreciate what kind of enterprises they are enriching, or what sterile economic seeds they may be sowing for our collective future.

Journalists at major publications have recently done some productive digging into Wal-Mart's methods. They've found enough to reinforce a queasy distaste I've had for the company for years, and to convince me that several Northern California counties and cities are right to try to keep out even larger mega-stores.

I got my first close-up look at Wal-Mart in the 1980s, when I was writing about the rural economy for a Missouri newspaper. The retailer was a rampaging giant even then.

It would move into a community and basically suck away what economic vitality had existed in the surrounding towns. Where there had once been activity on Main Streets, now there were empty storefronts and few pedestrians -- a neutron-bomb effect.

Then, as now, Wal-Mart brought some value to its customers. Many of those decimated downtown business districts had been controlled by a few merchants who carried so-so goods and sold them at high prices.

In some ways, then, those Main Streets earned their fate. But when Wal-Mart was finished, it had captured not just most of the vicinity's retailing but also the bulk of the profits -- and the money didn't stay in the towns where the profits were being made. They went back to Arkansas and to shareholders. Local economies suffered, but raw capitalism won.

Like all successful enterprises, Wal-Mart has made moves that are smart by any reckoning. It has been a genuine innovator in the use of technology to handle its inventory and purchasing. Long before most other big retailers had a clue, for example, Wal-Mart stores were connected electronically via satellite and other modern data systems. (I also have a soft spot for any company that sells personal computers pre-loaded with the Linux operating system, as Wal-Mart does when so many other retailers are cowed by Microsoft to sell Windows-only machines.)

The Wal-Mart never-ending drive for low prices is also fundamentally admirable. That's what we want, and competition is essential.

In recent years though, Wal-Mart's relentlessness has gone too far.

The virulently anti-union retailer pays low wages and offers poor benefits for a company of its size and profitability. When employees who can't afford its health insurance have serious health problems, the public ends up footing the bill for their care, the Los Angeles Times reported in a recent series about Wal-Mart's oversize impact. In effect, our taxes subsidize the Wal-Marts of our nation.

Some communities have said no to the invasion of the ``big box'' retailers, though Wal-Mart seems to be the most reviled. The company is suing Alameda County for blocking one of the dozens of ``supercenter'' stores, combining retail goods with groceries, that the company plans to open around California. Meanwhile, Measure L, on the March 2 ballot in Contra Costa County, would uphold an ordinance there restricting the big-box stores; I hope the county votes ``Yes'' on the measure despite the mega-bucks Wal-Mart is pouring into an anti-L campaign.

The threat of Wal-Mart's latest elephantine stores has led grocery-chain managers, who've never been generous with pay and benefits to begin with, to push for employee givebacks. A bitter grocery-worker strike in Southern California has been one result.

In December, Fast Company magazine looked at the ``Wal-Mart You Don't Know'' -- its relationship with suppliers. Low prices ``often come with a high cost,'' the magazine observed. ``Wal-Mart's relentless pressure can crush the companies it does business with and force them to send jobs overseas.''

America is about to have a great debate over its economic future. Wal-Mart is just one part of a phenomenon now called ``offshoring,'' the departure of jobs to distant lands, a trend that's been building for years. The new wrinkle is that white-collar folks are suddenly feeling the pain, where in the past the losses were mostly among blue-collar workers.

I don't have a magic solution; in fact, I suspect America is in for a generation or more when children do worse than their parents.

I can afford not to shop at Wal-Mart, and I don't. I'd rather pay a little bit more from a retailer that at least seems to possess more of a social conscience. I also know that many people believe they don't have this choice, or are convinced that even the most predatory kind of capitalism ultimately produces the best result.

We all love low prices. But the price our society pays for Wal-Mart's benefits strikes me as being higher than it's worth.

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Wal-Mart's Costs Can't Always Be Measured

Michael Hiltzik: Golden State - Los Angeles Times            [back to top]
February 2, 2004

If Wal-Mart Stores Inc. is famous for anything, it's the ruthless way it wrings the last few pennies of cost from every transaction.

So last week, when the Los Angeles County Economic Development Corp. released a study finding that the expansion of Wal-Mart's grocery business into Southern California would be, on balance, a great thing, my first reaction was that the company had purchased the LAEDC's reputation cheaply for the $65,000 it paid for the study.

But to be fair, LAEDC's team, headed by Gregory Freeman, its director of policy consulting, did a responsible job with what data it had, much of which was provided by Wal-Mart, and not without a fair amount of tugging.

One can even accept Freeman's claim to have identified and rectified a flaw in other, alarmist studies of Wal-Mart's impact on local economies: that while those studies focus on how the downward pressure on retail wages produced by Wal-Mart's arrival leads to job losses, they don't explore the converse — whether the increased purchasing power of shoppers at Wal-Mart and its price-cutting rivals might pump enough money into a local economy to stimulate employment. Freeman argues that over time, the extra cash in Wal-Mart shoppers' pockets will mean a net gain in Southern California of tens of thousands of jobs. And if someone wants to challenge his math, at least he lays out his calculations in his report's 40 pages.

For all that, when it comes to gauging Wal-Mart's influence on local communities, much of that influence either can't be measured by standard economics or hasn't yet generated enough data to allow economists to work their mathematical magic.

It's hard to ignore the markers of this report's provenance as the product of a commercial contract. Plenty of it reads as though it was aimed for the ears of Freeman's exacting client. For example: "Wal-Mart makes a point of always listening to its customers, and focuses on the consumer's bottom line," Freeman writes at the close of an admiring section on the corporation's devotion to frugality. Well, maybe. But this sounds more like the language of PR flackery than of objective economics.

Freeman says every word of the text is his own. He also says he knew his conclusions would be controversial, especially in light of the supermarket labor dispute, and strove to be objective: "I'm not here to defend Wal-Mart or disguise the issues," he told me.

The LAEDC says Wal-Mart reviewed the report before it was issued to the public. That's conventional practice with consulting clients, the organization says, whether they're corporations like Wal-Mart or agencies like the Metropolitan Transportation Authority. The idea is to allow the client to ferret out factual inaccuracies rather than cavil about wording. But it's also true that Wal-Mart had the contractual right to veto the report's public release if it didn't like its conclusions.

Since the company OKd its publication, no one should be surprised that it lauded the LAEDC's conclusion that the arrival of Wal-Mart Supercenters, which sell general merchandise along with groceries, would be a net boon for the Southland. "This is a great day for California consumers," said Wal-Mart spokeswoman Mona Williams, a statement that fills me with the same gratitude I feel when my bank tells me it's raising its fees in order to serve me better.

The fact is that while the LAEDC report may be fine as far as it goes, it doesn't go far enough in analyzing the Wal-Mart effect on a community. And by leaving out a few perceptible but unquantifiable consequences of Wal-Mart policies, it makes the overall effect look more favorable than it really is.

Consider an alleged Wal-Mart habit currently being scrutinized in a federal courthouse in San Francisco: pervasive sex discrimination. Lawyers for the plaintiffs in the case say that women in virtually every job classification across the country are paid less than men with the same responsibilities and seniority; women make up two-thirds of the company's hourly workforce but one-third of its management.

Calculating the economic impact of such a trend is difficult, if not impossible, but the accusation hardly portrays Wal-Mart as a force for social enlightenment. (The company has denied that it discriminates, but also says it is trying to make its pay and promotion system less subjective than before.)

On employment practices and benefits in general, the LAEDC report takes Wal-Mart at its word. The company claims to provide such perquisites as profit sharing and a 15% discount on company stock it presents without comment, beyond saying "the value of these benefits varies." Indeed, Wal-Mart's critics note that its famously lean management structure means that as few as 10 workers in a store employing 300 to 500 might be eligible for profit sharing, and its low wages mean that few employees have the wherewithal to accumulate a significant investment in its stock at any discount.

The company's claim to provide health benefits also deserves greater scrutiny. Although the LAEDC report notes that Wal-Mart provides employees with health insurance, it doesn't explore the implications of how it does so. As this column has pointed out in the past, not only do Wal-Mart workers pay a larger share of their health insurance premiums than the average worker nationwide, but the company also excludes coverage of many routine medical services, such as contraceptives and child vaccinations.

Instead, Wal-Mart focuses on covering such "catastrophic" needs as cancer treatment and organ transplants. This allows the company to release gaudy numbers to make itself seem softhearted, such as by noting that it pays for 60 transplants a year at more than $1 million each. But these are obviously rare events — 60 transplant patients would be the equivalent of just over one-hundredth of 1% of Wal-Mart's 500,000 insured employees, for example.

What happens when the child of a Wal-Mart employee on an hourly wage needs a shot for measles, chicken pox or the flu? The worker faces the choice of shelling out, say, $75 to get the shot at a private clinic (that's more than a day's pay for many of the workers); or going to a public, tax-supported clinic, which means we all pay; or trusting to luck that the child won't get sick, which would force the employee to stay home for a couple of days, losing more pay.

Wal-Mart freely, even boastfully, acknowledges that as many as 40% of its employees get their health coverage elsewhere, such as from the employers of spouses or parents or from programs like MediCal and Medicare. This is community-mindedness the Wal-Mart way: Stick the other guy with the responsibility for your own workforce. Wal-Mart ruthlessly prices its health coverage to discourage employees from placing their own spouses and children on its plans, but it's not above pushing its own workers on other companies. Then it argues smugly that its competitors are only whining because they don't know to cut costs as efficiently as it does.

This sheds a different light on the LAEDC report's contention that other studies have overestimated the wage gap between Wal-Mart grocery employees and unionized supermarket workers. The LAEDC estimates that the overall average difference in Southern California will amount to $2.50 to $3.50 an hour. But it doesn't calculate the additional advantage the union members have had from their comprehensive company-paid health insurance coverage or, for that matter, from the company-financed pension benefits they have long enjoyed.

Neither benefit is matched by Wal-Mart. Both, as it happens, are mortally threatened today, because the supermarket chains engaged in the labor dispute are determined to move their labor costs closer to the Wal-Mart standard. The full import of this change, Freeman told me, was "outside the scope" of his study, if only because healthcare costs have become a national issue and it's impossible to tell what company-paid health insurance plans will look like in five or 10 years. That's true enough, but it looks like a fair bet today that healthcare will be taking a bigger chunk out of most workers' paychecks tomorrow. Wal-Mart's influence on that trend can't be discounted.

Perhaps, then, we should defer applauding the inevitable arrival of Wal-Mart Supercenters in California. It may be, as the LAEDC concluded, that we'll all benefit hugely from their relentless price cutting. But we haven't even begun to learn how to measure the supercenters' cost.

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The Two Faces of Wal-Mart

By Amy Tsao - Business Week Online - STREET WISE           [back to top]
January 29, 2004

Loved for its low prices, the retail behemoth could become the object of scorn, thanks to a growing list labor-relations woes

Persuading Americans to use dollar coins has never been easy. So, to get the Sacagawea dollar into circulation in 2000, the U.S. Mint came up with an unconventional plan. It chose not just banks and post offices to distribute the coins but also Wal-Mart (WMT ), where the gold-tinted coin went into customers' change. That says a lot about Wal-Mart's "credibility in our culture," says Barbara Bund, a senior lecturer in customer relationships at the Massachusetts Institute of Technology. The Mint chose the Bentonville (Ark.) chain not only for its ubiquity as the world's largest retailer but also for its status as a trusted, all-American company.

Wal-Mart's Sacagawea experiment was a mixed success: The coins are circulating, but they haven't been a big hit with the public. Surprisingly, perhaps even ominously, the retailer's performance isn't living up to its image in another area: employee relations.

Most recently, on Jan. 18, The New York Times reported that Wal-Mart has been locking in late-shift workers for security reasons. That was preceded by news of an internal Wal-Mart audit that showed, in a single week, more than 1,300 instances of minors working at the chain's stores during school hours or later than labor laws permit, plus more than 60,000 instances of workers not taking scheduled breaks.

BACKLASH AHEAD? Those headlines followed last fall's federal investigation into Wal-Mart's use of a cleaning contractor that employed illegal immigrants. And all of that came on top of ongoing suits alleging that, at some stores, Wal-Mart has practiced sex discrimination and failed to pay required overtime (see BW, 10/6/03, "Is Wal-Mart Too Powerful?").

So far, none of this has dissuaded shoppers from taking advantage of Wal-Mart's famously low prices, nor have the controversies caused even a blip in the $247 billion company's earnings, which analysts expect to come in at close to $9 billion, or $2.03 a share, when 2003 results are reported on Feb. 19. That would be up 12% on a year earlier. That's good enough for Wall Street, where investors' priorities pretty much start and stop with the bottom line, and sympathy for $7-an-hour employees isn't normally a pressing concern.

The question is: Will that hold true indefinitely? The answer, according to labor-relations' experts, is that Wal-Mart's ability to escape controversy and a possible consumer backlash depends on the balance it can strike between its two, distinctly different images: The first is of the big and friendly retailer, ally of the little-guy consumer. The other is of an unfeeling giant putting the squeeze on its little-guy employees.

"There are ways in which Wal-Mart is a good member of the community," says Tom Kochan, professor of management at MIT's Sloan School, who notes that the outfit is a big employer of senior citizens. And like everyone else, Kochan points to its bargain-basement prices. Because of those, he adds, "we have major blinders on when it comes to the broader issues."

HIDDEN COSTS. Sneaker maker Nike (NKE ) is a testament to how quickly public sentiment can change. Criticism of Nike for making its shoes in overseas sweatshops took years to develop much momentum. But when such complaints gained traction in the late 1990s, the public reaction hurt profits. Nike, Kochan says, has since set up a corporate responsibility department, adopted labor-practice guidelines, and spent substantial sums on repairing its image. Its business has bounced back. "The market signals got people's attention at Nike," Kochan says. "Until Wal-Mart feels that same market pressure, I don't think it will make changes."

Still, Wal-Mart could be vulnerable. Workers claiming mistreatment live and work in the U.S. -- many are even citizens -- not in out-of-sight, out-of-mind countries like Indonesia and Mexico, where Nike was accused of using sweat-shop labor. And while Wal-Mart employees may not look downtrodden to the casual shopper, a situation in which consumers, some of them well-heeled, can put a face to a widely publicized complaint carries some added risk for the company.

Sooner or later, argues Adrienne Eaton, professor of labor studies at Rutgers University in New Brunswick, N.J., it may occur to shoppers that "there is a cost for those low prices." Because a cashier's job that pays $7 or $8 an hour won't support a family, or even half of one, retail workers often decline to buy health insurance, even when it's offered, says Eaton.

WEED AND REFORM? She's about to begin a study on the impact of Wal-Mart and other "big box" stores on communities in New Jersey. One of her goals will be to put a figure on uninsured retail workers' health-care costs that are passed along to taxpayers. In theory, consumers who don't shop at Wal-Mart might object if it turns out that they're indirectly picking up the retailing giant's overhead. Wal-Mart officials didn't return calls seeking comment for this article.

Another effect of the recent news, equally hard to quantify, could be the impact on Wal-Mart's marketing budget. According to the retailer's most recent annual report, it spent $676 million in the fiscal year ending in January, 2003, on ads to draw shoppers and burnish its image. At the very least, MIT's Bund says, a drumbeat of unfavorable news might force Wal-Mart to increase those outlays in an attempt to head off potential damage.

Wal-Mart's other strategy might simply be to weed out managers found to have acted improperly and, when necessary, introduce reforms. The drawback, of course, is that the cost of such measures could alarm Wall Street, which usually doesn't award points for being nice to employees. If the cost of such changes amounted to a measly $1 a hour for each of Wal-Mart's 1.2 million employees, the bill would total $2.1 billion a year. That could reduce Wal-Mart's profits by about 25% -- or force it to raise prices and lessen its advantage in the marketplace.

DENTED ARMOR. Wal-Mart is a master at quashing union organizing drives, so history suggests its vulnerability on that front is limited. But as it expands into less rural, more affluent areas, the retailer could find itself facing more demanding employees -- not to mention consumers who are less willing to tolerate what they see as deviations from fair labor practices. In such markets, both shoppers and employees are more likely to turn elsewhere, says MIT's Bund, who suspects that shoppers can find other retailers who will "do better for them." Consumers, speculates Bund, might choose to accept "slightly less aggressive pricing for more palatable policies."

To outward appearances, not much of that has happened yet. But it's significant, says Kate Bronfenbrenner, director of labor education research at Cornell University, that a significant number of Wal-Mart workers have come forward to complain about an employer whose size and reach are so intimidating. And even though unions may not pierce Wal-Mart's armor, they might, over time, put a dent in it. Ira Kalish, global director at Deloitte Research, the market-research division of consulting firm Deloitte & Touche, notes the impact the United Auto Workers achieved when it lambasted carmakers for unsavory labor practices. Even though the auto union didn't strike, Kalish says those campaigns "did affect consumers' willingness to buy from those companies."

Bronfenbrenner notes that a college-student group, United Students Against Sweatshops, helped bring Nike to heel. "If the right people pull together," she predicts, "the public will turn against Wal-Mart."

Of course, few companies on earth are smarter or more resilient than Wal-Mart. And considering how powerful it is, talk alone isn't likely to make much of an impression. Over the past century, leading U.S. companies that became the center of controversy -- from the monopoly Standard Oil to the union-busting J.P. Stevens -- eventually had to change. So when the largest U.S. employer comes under fire for the way it treats employees, the smart thing to do is likely to become self-evident.

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UNION TAKES ON QUEBEC WAL-MART; MORE THAN HALF THE STAFF HAVE SIGNED UNION CARDS BUT THE COMPANY IS CONTESTING THE ATTEMPT.

London Free Press (Ontario, Canada)     [back to top]
January 28, 2004

A battle to unionize a Wal-Mart store in this Saguenay area community is pitting union organizers against the world's largest retailer, an adamant opponent of organized labour.

If the workers succeed, the Jonquiere outlet will become the first unionized Wal-Mart store in North America.

But the union is watching the situation in the Saguenay with keen interest, because it is seeking union certification for three Wal-Mart stores in London

and is in regular contact with workers in at least a dozen others across the country, said Michael Forman, national communications director of the United Food and Commercial Workers Union.

The Jonquiere outlet employs about 200, more than half of whom signed union cards, said Marie-Josee Lemieux, president of Local 506 of the United Food and Commercial Workers Union.

"It was a long, slow process of talking to the people and supporting them," Lemieux said.

"It was the people at Wal-Mart who did the work."

The union applied to Quebec's Labour Relations Committee in late December for certification of the Jonquiere local.

In an e-mail, a Wal-Mart spokesperson said the company is contesting the demand for accreditation.

"It is Wal-Mart's view that the unit proposed by the union is not appropriate," Kevin Groh wrote. He was not available to comment further.

Hearings will be held next month to determine how many jobs will become unionized positions and which will be excluded.

The battle is being closely watched by union organizers and retailers.

Wal-Mart, with more than 4,300 stores around the world and annual global revenues exceeding $244.5 billion US, has become the world's dominant retailer by slashing prices.

Part of those savings are realized through the lower wages and benefits it extends to its 1.3 million workers.

Money is at issue in Jonquiere, where Lemieux said wages range between $7.60 and $8.60 an hour, compared with between $9 and $17 in unionized grocery chains.

But money isn't the only issue, she added.

Workers are also looking for "normal things," such as dental and medical benefits, the right to consecutive days off over a two-week period and protection from arbitrary firings, she said.

The union, which represents more than 250,000 grocery workers across Canada, is concerned that the so-called "Wal-Mart effect" is putting downward pressure on wages and benefits in other unionized chains.

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Wal-Mart Battles Unions With Spying and Training, Workers Say

Published in Bloomberg Markets magazine              [back to top]
January 28, 2004

As a supervisor of the cashiers in Wal-Mart store number 589 in Hillview, Kentucky, Brent Rummage, 27, was required to report to his manager any mention of labor unions. He did so until his mother, who worked in the women's clothing department, ventured that unions weren't as bad as Wal-Mart said. ``I wasn't going to report my mother,'' he says.

Rummage, a former youth minister in the Church of God of Prophecy, had worked hard to keep unions out of Wal-Mart Stores Inc., the world's largest company with $244.5 billion in sales.

He barged in when workers talked among themselves -- a sign of union activity, according to his bosses. He'd learned the tactic via training in a mall conference room across the Ohio River in Clarksville, Indiana. After the session, ``I thought, `What are these guys going to do, rob us?''' Rummage says.

Far worse, from Wal-Mart's perspective: The United Food and Commercial Workers union is trying to organize the U.S. and Canadian stores of Wal-Mart, which has 1.5 million nonunion workers worldwide, so the workers can bargain in groups for higher wages and benefits. Success by the UFCW would upend Wal-Mart's business strategy, which is to cut costs so it can cut prices.

The clash with the union comes as Wal-Mart pushes for a more substantial presence in the grocery business, which employs more than half of the union's 1.4 million members.

Wal-Mart is muscling into food with supercenters: 170,000-square-foot megastores that sell everything from leaf blowers to lettuce by putting a supermarket and a regular Wal-Mart discount store under the same roof. Wal-Mart built the first one in 1988 and had 1,430 in the U.S. as of Dec. 31.

Supercenters a Must

H. Lee Scott, the third chief executive officer in Wal-Mart's 42-year history and a 25-year company veteran, must build more supercenters for Wal-Mart to keep boosting profits.

Emme Kozloff, an analyst at Sanford C. Bernstein & Co., says about half of Wal-Mart's profit growth in the next four years will result from supercenters.

Wal-Mart's stock performance suggests some investors are skeptical about whether a company whose sales are almost equal to the gross domestic product of Switzerland can sell enough groceries to keep growing at almost 16 percent a year.

``The question is, Where do they go next?'' says Tim Ghriskey, president of Ghriskey Capital Partners LLC, who doesn't own Wal-Mart stock because, he says, the path to growth isn't clear.

Wal-Mart shares rose 5 percent in 2003, one-fifth of the 26 percent gain for the Standard & Poor's 500 Index. During the past 20 years, Wal-Mart shares have risen almost 43-fold compared with six-fold for the S&P 500.

Big in Dog Food

Wal-Mart, the biggest seller of everything from dog food to jewelry, has increased sales each year since selling shares to the public in 1970, helping push other discount retailers -- such as Ames Department Stores Inc., Bradlees Inc. and Caldor Corp. — into bankruptcy.

Wal-Mart draws 138 million customers a week with ``always low prices,'' the slogan displayed outside its stores. Prilosec OTC antacid costs $21.69 at the Bruno's supermarket in Alabaster, Alabama. It sells for $17.86 at the Wal-Mart 2 miles away. At 6 p.m. on Dec. 11, Bruno's parking lot was almost empty. Wal-Mart's larger one was two-thirds full.

The differences come from Wal-Mart's fanaticism about costs. It charges employees 35 cents for coffee at the remodeled warehouse in Bentonville, Arkansas, that serves as corporate headquarters. Next year, it plans to require big suppliers to tag products with radio-emitting chips that will automate inventory counting.

$6,000 per Employee Wal-Mart spokeswoman Mona Williams says paying union wages would mean the end of Wal-Mart as customers know it. In the fiscal year ended Jan. 31, 2003, the company made less than $6,000 in profit per employee, an amount that would vanish if salaries rose, she says.

``Being the low-cost leader is the core of our business model,'' Williams says. ``Changing that model would make our business less successful, our jobs less secure.''

Scott and other Wal-Mart executives declined to be interviewed for this story.

Keeping the UFCW out is crucial as Wal-Mart moves more deeply into the grocery business, in which profit margins are slim. Kroger Co., the largest U.S. supermarket chain, made $4,160 per employee in the year ended on Feb. 1, 2003. Kroger's after- tax profit margins averaged 1.6 percent during the past five years compared with 3.2 percent for Wal-Mart, Bloomberg data show.

Grocery Push

Albertson's Inc., Safeway Inc. and Kroger all are unionized, and their growth is slower than Wal-Mart's. Sales at Safeway rose an average of 7.8 percent annually during the five years through 2002, for example, compared with 15.7 percent for Wal-Mart.

As a result, Wal-Mart already sells more groceries by dollar value than any of them.

The Wal-Mart-union battle heated up in 1999, when the UFCW started a 12-person team for recruiting Wal-Mart workers to unionize their stores. Six members are Wal-Mart veterans.

Rummage is one of the team's success stories. After a promotion to the accounting office in a new supercenter in Fern Creek, Kentucky, he got into Wal-Mart's management training program this past April. The move put him on track to run his own supercenter one day, a job that can pay more than $200,000 a year.

Jolly Mon's Rummage says much of his training dealt with keeping the union from organizing associates, as employees are called. Over lunch in the back room of Jolly Mon's, a local Jamaican restaurant, a store manager told trainees how to spot ``salts'' -- union organizers on the payroll who organize from inside. One clue: They're always dissatisfied.

``They said our jobs would be on the line if we let the union in,'' Rummage says.

After his training, Rummage was picked to manage all clothing at store number 1246 in Louisville, Kentucky. When he arrived at 8 a.m. on Aug. 4, the manager told him he would instead be supervising the cash registers and the Radio Grill, Wal-Mart's in-house diner. Then the manager made him stay until 11:30 p.m. arranging merchandise.

Rummage held meetings in the training room with associates from the clothing department, expecting to end up there, as planned. That infuriated his manager, Rummage says.

Their rapport soured, and Rummage agreed with the manager's recommendation to leave the store. He learned there were no assistant manager jobs at area stores, so he returned to accounting at his old one, where he still works.

Irked by his treatment, he called the UFCW. He and a representative had lunch in a town 40 miles away to avoid detection. Now, he's trying to organize workers.

No Wins Yet

The union is getting recruits. It has yet to unionize a store. To do that in the U.S., it must get 30 percent of workers in a store to sign authorizations. Then the National Labor Relations Board, a federal agency, holds an election. If most vote in favor, the union wins the right to negotiate a contract, which workers must approve.

The only Wal-Mart employees who have ever agreed to unionize were 10 butchers at a store in Jacksonville, Texas. They voted 7 to 3 in favor on Feb. 14, 2000. Two weeks later, Wal-Mart switched to prepackaged meat and sent the butchers to other departments, says Maurice Miller, 49, a leader of the union drive. Only one remains at the store, Miller says.

``It's going to take years to produce results,'' says Al Zack, second in command of the UFCW's Wal-Mart team.

Keeping union organizers like Rummage at bay may get harder for Wal-Mart as it erects supercenters in labor strongholds in Illinois, Michigan, New York, Ohio and Wisconsin, says Burt Flickinger, a retail consultant in New York.

Union Sympathizers

The union has more allies these days too: communities opposed to the increase in traffic that comes with a big store, environmentalists fretting about rainwater runoff from vast parking lots, manufacturers who blame Wal-Mart for hastening the exodus of U.S. jobs to China. Of all of Wal-Mart's critics, the UFCW is the most dangerous, Flickinger says.

``Only organized labor has the resources to keep Wal-Mart an ongoing news story,'' he says.

Patricia Edwards, who helps manage $5.5 billion at Wentworth, Hauser & Violich in Seattle, which holds Wal-Mart shares, says the notoriety may hurt sales if the economy keeps improving and concerned shoppers can afford to put their ideals ahead of low prices.

``If you've got a little more discretionary income and you don't like some of the things that are being printed about Wal-Mart, then maybe you'll shop at Target,'' she says.

Holiday Sales Wal-Mart's December sales rose 4.3 percent from a year earlier. The company had predicted a gain of 3 percent to 5 percent. December sales at Target Corp., the second-largest U.S. discount retailer, rose 4.1 percent. Luxury retailers did best, with sales at jeweler Tiffany & Co. climbing 16 percent.

The UFCW has had a hand in many of Wal-Mart's high-profile fights. Union members handed out leaflets at 1,000 stores, telling female employees about a class-action lawsuit alleging Wal-Mart denied women promotions, paid them less than men and forced them to visit strip clubs on business.

A U.S. District Court judge in San Francisco is deciding whether 1.6 million women who have worked at Wal-Mart since 1998 should be represented in the case. If so, it would be one of the largest class actions in U.S. history.

In May 2003, the UFCW bused workers to a Las Vegas rally led by former Miss America Carolyn Sapp, who has made Wal-Mart's treatment of women her cause celebre. In Oakland, California, UFCW members lobbied officials before the city council banned supercenter-size stores in October by a vote of 7 to 1.

Pressuring Investors

The union is putting pressure on Wal-Mart's stock, too. Brian Holland, who helps manage $4 billion at Boyd Watterson Asset Management LLC in Cleveland, says he'd love to buy Wal-Mart shares. He can't because, out of sympathy for the UFCW, the unions for which he manages money won't let him.

``It's a well-managed company,'' Holland says. He declines to name the unions.

In all, the UFCW spends about $3 million a year on its war against Wal-Mart. Local chapters contribute beyond that. ``The UFCW is the primary catalyst behind the complaints,'' Wal-Mart spokeswoman Williams says. ``We didn't have these issues before we got into the food business.''

Wal-Mart is so concerned about the union that it assigns a Union Probability Index, or U.P.I., to each store based on an anonymous survey of employees, says Stan Fortune, 47, a 17-year Wal-Mart veteran who now works for the UFCW's Wal-Mart team.

Williams says U.P.I. actually stands for Unresolved People Issues. If the U.P.I. gets high enough, Wal-Mart sends in a special team to root out the union, Fortune says. He spent three months on a similar assignment in Las Vegas in 1997, he says.

Teaching Labor Law

Williams says that Wal-Mart has an ``HR team'' of about 10 people that flies around the country. Its purpose is to teach employees about labor law and how to abide by it, she says.

Jon Lehman, a former store manager who's with the union now, says Wal-Mart has a 60-foot-by-60-foot room at its headquarters in which two dozen people with headsets monitor calls and e-mails from stores to see whether anyone is talking about union organizing.

Wal-Mart spokeswoman Sarah Clark says the company monitors calls only in stores at risk for bomb threats. A recording tells callers that conversations may be monitored, she says.

Without such a warning, Wal-Mart's practice would be illegal in California, says Cliff Palefsky, a partner at McGuinn Hillsman & Palefsky in San Francisco.

Customers, Not Critics

Wal-Mart is taking its pitch to customers. In March, it began airing television ads that portrayed Wal-Mart as a great place to work. In December, TV ads touted a new store in Los Angeles, with locals talking about how Wal-Mart created jobs and attracted other stores to a run-down area.

CEO Scott says he's worrying about his customers, not his foes. ``It's not our goal to make our detractors love us,'' he told financial analysts who were meeting at the Embassy Suites hotel in Bentonville on Sept. 30.

Detractors have a huge target. Wal-Mart is the biggest vendor of music CDs, according to NPD Group Inc. Last year, it sold enough Ol'Roy dog biscuits to circle the earth twice. It's the largest private employer in the U.S., with 1.2 million workers, and in Mexico, with about 101,000.

Side by side without parking lots, Wal-Mart's 3,500 U.S. stores would cover most of Manhattan. It has another 1,345 in Argentina, Brazil, Canada, China, Germany, Mexico, Puerto Rico, South Korea and the U.K. Clorox Co. relies on Wal-Mart for a quarter of its sales, according to U.S. government filings.

Kellogg Co. gets 12 percent and Procter & Gamble Co. gets 18 percent of its sales from Wal-Mart.

Wealthy Waltons

If founder Sam Walton were alive and owned the Wal-Mart stock he left to his wife and four children when he died of bone cancer in 1992 at 74, he'd be almost three times richer than Microsoft Corp. Chairman Bill Gates. The Waltons' 39 percent stake is worth $89 billion. Gates's Microsoft stake totals $31.8 billion.

Atop the Wal-Mart empire sits Scott, a father of two who plays golf with his wife and likes to fish. He worked his way through Pittsburg State University in Kansas, where he earned a degree in business in 1971, and then joined trucking company Yellow Freight System Inc., according to Wal-Mart.

David Glass, who succeeded Walton as CEO in 1988, had recruited Scott to run Wal-Mart's truck fleet in 1979. Scott spent 16 years in logistics and distribution, heading the division from 1993 to 1995. He did stints in merchandising and then managed Wal-Mart's U.S. stores. In 1999, he became chief operating officer and in January 2000, president and CEO.

More Stores, Closer

Scott told analysts in September that he sees no limit to Wal-Mart's growth. The company accounts for just 3 percent of reported worldwide economic activity, leaving plenty of room for expansion.

Scott said he would build more supercenters -- closer together. Two stores with annual sales of $80 million each are better than one with $120 million, he said. ``We are finding that we can put more supercenters closer together than we ever dreamed,'' he said.

Case in point: Wal-Mart is building a supercenter in Alabaster, which had a population of 22,619 in 2000, even though there are four within 14 miles.

Williams says Scott has placed a moratorium on interviews because the press has been unfair lately. ``They've decided to focus on the business,'' she says, referring to Wal-Mart executives, ``and let the media say what they're going to say.''

Boats, Banks, Horses

Wal-Mart has always been secretive. ``We've been very protective of our business dealings and our home lives,'' Sam Walton said in his 1992 autobiography, ``Sam Walton: Made in America'' (Bantam). His widow, Helen, didn't want the company to go public in 1970 because of the scrutiny it brought, he wrote.

Wal-Mart is as secretive under Chairman Rob Walton, Sam's eldest son. Wal-Mart's Clark won't disclose anything about the family, not even ages. Rob Walton was Wal-Mart's first lawyer, according to his father's book.

John Walton is chairman of True North Partners LLC, an investment firm. A Wal-Mart board member, he also owns Pearson Yachts, a boat-building company in Warren, Rhode Island. Jim Walton is president of Arvest Bank Group Inc., a bank holding company in Bentonville. Sister Alice Walton raises horses at the Rocking W Ranch in Mineral Wells, Texas, 50 miles west of Fort Worth.

Family Fortune

Wal-Mart's success, evident in the family fortune, has some politicians wondering why the company can't pay workers more. California State Assemblywoman Sally Lieber says she's concerned that Wal-Mart is funneling employees into Medi-Cal, the state's health care program for low-income earners.

Wal-Mart distributes instructions to workers on how to use the Work Number system, which enables social service agencies to verify applicants' incomes. The instructions, which bear the Wal-Mart logo, prove that Wal-Mart relies on the state to cover part of its health care costs, thereby cutting its expenses, Lieber says. ``One of the world's largest corporations has become totally welfare dependent,'' she says.

`Chintzy' With Pay

Sam Walton, in his autobiography, said he was ``chintzy'' with wages in the beginning. Wal-Mart still pays less than rivals, the UFCW says. In 2002, the average wage of a U.S. supermarket hourly worker was $10.81, according to the U.S. Bureau of Labor Statistics.

Spokeswoman Clark won't disclose Wal-Mart's average wage. The UFCW says the average Wal-Mart wage is $8.50 an hour. Most people work 32 hours a week, for an annual total of $14,144. The UFCW estimate comes from wage information Wal-Mart released in the sex discrimination case and from Bureau of Labor Statistics data.

More than 700,000 Wal-Mart employees don't have health insurance because they can't afford it, the union says. In the U.S., federal minimum wage is $5.15 an hour. Clark says overall compensation is competitive with other retailers and is always above minimum wage.

Wal-Mart matches 15 percent of associates' stock purchases up to $1,800 a year, according to a copy of Wal-Mart's benefit plan. After working for one year, employees are eligible for profit sharing.

Workers can buy insurance after six months. According to the benefit plan, it costs $230.50 a month with a $350 deductible per person for a family of any size. With a deductible of $1,000 each, family coverage costs $132.50 a month.

Lower Expenses

Being nonunion gives Wal-Mart an advantage. Its selling, general and administrative expenses including wages consumed 16.8 percent of revenue in fiscal 2003. At Kroger, expenses accounted for 22 percent of revenue in the year ended on Feb. 1, 2003. The same costs claimed 24 percent of sales at both Albertson's, the second-largest supermarket chain, and No. 3 Safeway.

Part of the UFCW strategy for organizing Wal-Mart's workers is to get the National Labor Relations Board to crack down on the company and individual managers for pressuring employees to oppose the union, says Zack, the union leader. The strategy worked at ConAgra Foods Inc.'s Monfort meat-packing plant in Grand Island, Nebraska, in the late 1980s, Zack says.

Wal-Mart has seen some high-ranking managers defect to the union, taking the company's secrets with them. Lehman, 42, who raises dachshunds in his spare time in Louisville, was the first Wal-Mart manager to sign on.

Switching Sides

As a boy, Lehman and his brother Gary crashed a cart they were racing into a table of towels in a Wal-Mart in Harrison, Arkansas. A clerk brought them to her manager. It was Sam Walton. He got on the store intercom and paged the boys' father. Years later, Lehman told Walton the story. He remembered what they'd been wearing, Lehman says: identical striped shirts.

Lehman worked at Wal-Mart for 17 years, starting as a janitor. He left to study music and economics at Baylor University, didn't graduate and came back as a management trainee. He got his own store in Garland, Texas, in 1988.

Lehman says the company changed after ``Mr. Sam'' died. Lehman remembers him as Wal-Mart's conscience, urging executives to buy American -- long after it became obvious that overseas suppliers had an edge -- and attending every store opening he could.

Walton would land his six-seat Beech Baron plane on tiny airfields across rural America and ask managers to pick him up. At home, he drove a battered pickup with cages for his hunting dogs.

New Parking Lot

Joyce Moody, a 23-year Wal-Mart veteran, says a highlight of her life was being present at Wal-Mart headquarters on March 17, 1992, when President George W. Bush awarded Walton the Presidential Medal of Freedom. Instead of inviting dignitaries, Walton filled the auditorium with Wal-Mart workers.

When Walton died months later, executives abandoned their trucks and started showing up for work in Infinitis and other luxury cars, Moody says. Glass, CEO at the time, reserved a parking spot, which Walton had never done. ``I thought I was driving into a new parking lot,'' Moody says.

Lehman says things changed for him in 1993, when he was running a Wal-Mart in Richmond, Indiana -- then the largest in the state.

At a meeting in Muncie, the district manager told Lehman and seven other store managers to go into their stores at 7 a.m. on Saturdays to excise any overtime from the week's payroll, Lehman says. Overtime wages are paid at time-and-a-half, the standard rate by law.

Adding Lunch Breaks

If a worker had logged overtime but hadn't taken a lunch break, managers were told to make one appear, Lehman says. Three managers agreed that this was wrong and decided to use Wal-Mart's open-door policy, which lets anyone in the company call a superior about anything.

They called Tom Coughlin, now vice chairman of the board in charge of U.S. operations. Coughlin told them the overtime orders were out of line, Lehman says. The manager who gave them apologized.

In December 2002, a federal jury in Portland, Oregon, found Wal-Mart liable for not paying employees overtime. Carolyn Thiebes, a former manager, testified that she routinely docked overtime hours from paychecks. On Jan. 14, another jury started deciding how much the company owes in back pay.

``That was one of the dumbest things I ever did,'' Lehman says of using Wal-Mart's open-door policy.

He left Wal-Mart in 1997 to care for his wife, who'd been stricken with a brain tumor. After she recovered, he went to work at Meijer Stores LP, a closely held Wal-Mart rival. He made $85,000 a year, down from $220,000 at Wal-Mart, but he liked Meijer, which had a union and better relations with workers.

Good Terms

His former supervisor at Wal-Mart kept calling, trying to get him back as a store manager. In 1999, the prospect of higher pay lured him to return. He stayed until 2001, when he gave three weeks' notice and then joined the union. ``I left on good terms,'' he says.

Now, he spends time trolling Wal-Marts in Las Vegas, trying to get workers to support the union. Las Vegas has a strong union tradition. Most casino workers are in the Culinary Workers Union, Local 226, and the UFCW represents grocery workers at Albertson's, Kroger and Safeway stores in the city.

Robert Padilla, 32, is in the meat department at a Las Vegas Sam's Club, Wal-Mart's wholesale chain, which has an annual membership fee. He says he's trying to organize his store, which has 200 employees. He makes $16 an hour and says he could earn $19 in the union. He pays $310 a month for Wal-Mart health insurance for his wife and two children.

``I like my job,'' he says. ``I just don't like my pay, and I don't like my benefits.''

Labor Education

When Padilla's activities became public, four people from Bentonville took over the meat department, he says. They changed the lock on the manager's office and put paper over the window to keep their antiunion work secret, he says.

Padilla says they required him to go to ``labor education'' classes. So pressing were the classes that managers didn't require Padilla to fill holes in the display case areas where meats had run out. Previously, he'd been yelled at for having even one gap, he says.

Rummage says Wal-Mart tries to head off unionism in the job interview. When he interviewed applicants at his supercenter, he wrote anything the person said about organized labor on a piece of yellow paper he said was included in interview packets for that purpose.

Orion Test

If the interviewee was promising, Rummage had the person take an Orion test, which required reading about 60 statements, such as ``Smoking a joint is like having a beer.'' The applicant then rated the statements one for agree through 10 for disagree.

A computer scored the test and spit out recommendations regarding which ratings to discuss. One about unions, such as ``Most people are in unions,'' always came up, Rummage says.

Such questioning may violate U.S. labor law, says Patricia Gilbert, a spokeswoman for the National Labor Relations Bureau. ``It wouldn't be the best practice,'' she says. Wal-Mart says there's nothing inappropriate in the Orion test.

Rummage says at least two people with union experience were hired at his store. Gretchen Adams, 55, who helped open 27 supercenters, says her orders were stricter in Las Vegas: Shun anyone with union experience. She initially complied and then suggested a different strategy: Treat workers so well that the union's pitch wouldn't work.

No Ultimatums

In 2000, when Adams was up for a promotion, her store suffered two bomb threats within 12 hours, leaving shopping carts in aisles and inventory on loading docks. After the crisis, Adams says, she learned her promotion had been put on hold because her management team's response after the threats was unacceptable.

Adams faxed a letter to Scott, who flew out to investigate. Two weeks later, her manager told her that if she wanted to stay with Wal-Mart, she'd have to leave Las Vegas. He made her pick a spot right then, she says. She chose Florida and got a job in West Palm Beach.

Clark says Adams wasn't given any ultimatums. ``Many such transfers take place in order to find the right fit for both managers and Wal-Mart,'' she says.

Like all Wal-Marts, Adams's new store had a quarterly payroll budget that shrank if sales fell. Her store's sales dropped in 2001 when road construction limited traffic. Her manager told her to fire 10 people. ``I couldn't see firing people because we had road construction,'' she says.

The Sept. 11 terrorist attacks happened a week later. Adams's manager told her to fire five more workers. She quit to join the UFCW.

Management Jobs

In the next five years, Wal-Mart says, it will create 40,000 management jobs that pay at least $30,000 a year. Many hourly workers will have a shot at them, Clark says.

The chance to climb the corporate ladder at Wal-Mart is real, says Larry Mahoney, who started his retail career as a janitor at a Filene's Basement store in Boston. He joined Wal-Mart in 1990.

Now, he runs eight Wal-Mart distribution centers in the southeastern U.S. The one outside Bentonville is typical: It measures 1.2 million square feet and has more than 10 miles of conveyors. Every hour, 13,000 cases of Honeycomb cereal, Nestle Nesquik, Huggies diapers and other products whiz toward the end of the building, where a computer directs each parcel to a Wal-Mart truck.

`So Much Opportunity' ``There's so much opportunity here,'' Mahoney says in an accent that's half Boston brogue and half Arkansas drawl.

Mahoney used to manage a nearby center that this one replaced. Walking through in his black blazer and gray dress pants, he's welcomed like a returning hero. Workers rib him about his fancy clothes. With a union, he wouldn't have such rapport with workers, he says. ``Third-party intervention clouds the issues,'' he says.

People like Mahoney are among Wal-Mart's best defenses against the union. Still, with committed company men like Lehman and Rummage switching sides, Wal-Mart isn't taking any chances. At stake is the engine of its growth: low prices.

Anthony Effinger in Portland, Oregon, (1) (503) 471-1358 or aeffinger@bloomberg.net and Rachel Katz in Princeton, (1) (609) 750-4653 or rkatz3@bloomberg.net Editor: Roche, Henkoff

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Wal-Mart tests slimmer supercenter

The company, analysts and rivals closely watch a new Tampa center that is a model for stores facing size constraints.

MARK ALBRIGHT and LOUIS HAU - St. Petersburg Times           [back to top]
Published January 27, 2004

TAMPA - Alma Jordan has shopped at enough Wal-Mart Supercenters to know that the new one at N Dale Mabry Highway and W Waters Avenue is the smallest one she's ever seen.

But the 54-year-old respiratory therapist who was shopping Monday for groceries said she didn't think it made much difference.

"The only thing missing is the restaurant," she said. "Other than that, I haven't noticed anything."

That would probably be music to the ears of Wal-Mart executives. Faced with increasingly restrictive zoning laws in some of its markets, the Bentonville, Ark., retail giant has been trying to find a way to shoehorn the vast selection of groceries and general merchandise available at a typical supercenter into a much smaller space.

The result is Wal-Mart's new N Dale Mabry store, which opened Wednesday at the site of a former Sam's Club warehouse store. It is the first of its kind, a model for new locations elsewhere around the country facing tight zoning or urban space limitations.

By the standards of its siblings, the N Dale Mabry store might be considered downright petite, boasting total floor and storage space of just under 100,000 square feet. That's less than half the size of the mammoth 236,000-square-foot location in Pinellas Park and far smaller than the average supercenter size of 190,000 square feet. While Wal-Mart typically needs 20 to 30 acres for a supercenter, the new Tampa store fits in less than 10.

The supercenter has been the engine powering Wal-Mart's growth as the nation's biggest food retailer. The company's older discount stores are being outfitted with more and more shelves for groceries or replaced with the bigger supercenters.

Until now, Wal-Mart developed only two basic sizes of stores that offer its full-sized grocery offering: One is the sprawling supercenter. The newer version is the 40,000-square-foot Wal-Mart Neighborhood Market, about the size of a standard supermarket. The first two neighborhood markets in the Tampa Bay area open this year in Tampa. One is on Hillsborough Avenue at Elliott Drive. The other is on Florida Avenue at Busch Boulevard.

"The supercenter is our most productive type of store," Wal-Mart president and chief executive Lee Scott said recently at the National Retail Federation's annual convention in New York. "But as we move more aggressively into urban markets where there are more zoning and development constraints, we will need some alternative prototypes."

While Wal-Mart was not confronted with such restrictions in Tampa, there is a big reason why the company downsized its new supercenter to exactly 99,995 square feet. In California, some suburban towns have outlawed any retail store larger than 100,000 square feet. The aim is to protect local merchants from so-called "big box" retailers such as Wal-Mart, Home Depot and the Sports Authority.

Indeed, Wal-Mart, which expects to keep opening more than 200 supercenters a year, is planning to build its first big stores in well-developed urban markets such as Los Angeles and Dallas. The company expects to experiment with two-story supercenters there much like Target has in Atlanta and Kmart has in New York City. In two-story discount stores, escalators frequently can accommodate shopping carts.

A parade of securities analysts, retail analysts and rival retailers are expected to closely monitor the new Tampa store. They want to see what Wal-Mart decided to keep in the mix and what changes the chain makes going forward.

What they'll find is a store that strives to live up to its "supercenter" billing, with some concessions to fit into a smaller space. There's no portrait studio. No hair or nail salon. No McDonald's or Wal-Mart's own Radio Grill food service. The automotive department has no tires or oil change service and a smaller selection of car batteries than the bigger supercenters. The sports department has fewer rifles and gun accessories. The grocery aisles measure 72 feet long rather than 76 feet.

Other than that, it has most features a customer might expect to find at a typical supercenter, according to store manager Chris Bogedain. The trick for Wal-Mart will be to keep the shelves stocked all the time, because the store has less storage space than its bigger cousins.

"The goal is to offer as much of the same selection and convenience within 100,000 square feet," he said.

Less obvious adjustments include slightly narrower store aisles, a smaller storage area in the rear of the store and just one entrance and one exit out front, as opposed to separate entrances and exits for the grocery and general-merchandise sides of a typical supercenter, Bogedain said.

The store has also tailored its offerings to reflect local tastes, with an expanded selection of grocery items targeted at Hispanic shoppers. They include El Sembrador frozen foods, Badia brand spices and a variety of coffees marketed to Hispanic customers.

Supercenters are doing strong business in the Tampa Bay area. Wal-Mart named its Pinellas Park supercenter the chain's No. 1 store in the country Monday for the second year in row based on a combination of sales and other performance measures. The store's 2003 sales were $165-million.

"Tampa is a busy market, so they designed the prototype here to see how consumers would accept it," Bogedain said.

The prototype gets a thumbs-up from 35-year-old bilingual teacher's aide Nellie Martinez of Tampa, who stopped by the store Monday to pick up some soup, Spanish rice and ramen noodles.

"You don't have to be going store to store to get your stuff," she said.

Times staff writer Anne Lindberg contributed to this report. Mark Albright can be reached at albright@sptimes.com or 727893-8252.

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Judge allows suit against Wal-Mart to go forward

Portland Maine Press Herald             [back to top]  
January 26, 2003

BANGOR, Maine — A federal judge has ruled that a former Wal-Mart employee?s lawsuit alleging that the discount retailer discriminated against her because of her disability can go forward.

U.S. District Judge John Woodcock Jr. denied Wal-Mart?s motion for a summary judgment in the suit by Joanne DiDonna, 46, of Wilton, who has been diagnosed with a form of muscular dystrophy.

DiDonna alleged that Wal-Mart failed to accommodate her disability or to retain her in a back office position after her existing job was eliminated in a consolidation.

After working in the retailer?s Farmington store for seven years, DiDonna resigned in 2000, saying she could not perform any of the jobs offered to her and that no accommodations had been made for her condition.

At the time, she found it difficult to stand or walk for more than 15 minutes without feeling weakness or pain; her legs would give out and she suffered dizzy spells and extreme fatigue, according to court documents.

DiDonna had taken her case to the Maine Human Rights Commission, which referred it to private counsel for litigation. She also obtained a right-to-sue letter from the Equal Employment Opportunity Commission.

The case is expected to go to trial in March.

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Wal-Mart challenges county's ban on big stores

NEW YORK, Jan 26, 2004 (Reuters)                  [back to top]

Wal-Mart Stores Inc. (WMT) , the world's largest retailer, said on Monday it has filed a court petition challenging Alameda County's ban on the building of supercenter stores.

Wal-Mart, which has announced plans to build about 40 supercenters in California over the next four to six years, said it filed its petition with the Superior Court of California.

Wal-Mart supercenters, whose size could be as much as that of two football fields, sell anything from groceries to clothes and have become key for the Bentonville, Arkansas-based retailer's growth strategy.

Alameda County's "Large Scale Retail Ordinance," Wal-Mart said, prohibits retailers with total sales floor area in excess of 100,000 square feet from devoting more than 10 percent of sales floor space to non-taxable merchandise such as groceries and prescription drugs.

The retailer said in a statement that the "controversial ordinance is anti-competitive and anti-consumer." It said it is asking that the ordinance be deemed invalid.

Wal-Mart operates more than 1,500 supercenters across the United States and its first California supercenter will open in March in La Quinta.

The company's California foray has mainstream U.S. grocers Kroger Co. (KR) , Albertsons Inc. (ABS) and Safeway Inc. (SWY) scrambling to cut costs to compete effectively with the discounter's non-unionized, low-cost business model, which has seen it dominate the $680 billion U.S. groceries industry.

Wal-Mart shares closed up 40 cents at $54.61 in Monday's New York Stock Exchange trading.

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Wal-Mart's Damage Control - Longtime Price Message Takes a Back Seat To Blitz Designed to Mend Reputation

By Greg Schneider - Washington Post Staff Writer              [back to top]
Saturday, January 24, 2004

The TV commercial opens with a young couple on a sofa smiling at their toddler son. As the boy nuzzles a stuffed animal and hugs his mother, his father explains that the youngster was born with liver disease and underwent two major surgeries by the time he was 7 months old.

"It's nice to know that I work for a company that would take care of everything we went through," the man says. The ad cuts to the man at work, wearing a familiar blue vest with white logo, as he says: "I don't think people know how great the benefits are at Wal-Mart. Without Wal-Mart, he wouldn't -- I don't know that he'd have made it. I don't know that we would have made it."

It's a dramatic tribute that says nothing about Wal-Mart Stores Inc.'s low prices or vast selection of products. Instead, the ad -- part of a series called "Good Jobs" launched last year -- is aimed at healing Wal-Mart's reputation.

Wal-Mart's surveys showed consumers mistrusted the company's labor practices and its impact on the community. Shortly after the ad began airing in late September, Wal-Mart suffered another blow when federal agents raided its stores around the country and arrested about 200 undocumented immigrants working on cleaning crews.

Now Wal-Mart is fighting back.

In a multi-pronged counterattack, the world's biggest company -- the most feared and powerful competitor in global retail -- is seeking to hang onto its image as America's friendly hometown merchant.

It is stepping up its slate of feel-good television ads in 2004, with more spots featuring happy employees as well as examples of Wal-Mart's community involvement. Wal-Mart has also sharply increased its political donations, becoming the second-biggest giver to candidates in the 2004 election cycle, according to the Center for Responsive Politics.

At the same time, Wal-Mart is accusing the federal government of a double cross in the immigration raids, saying the chain had been cooperating with immigration officials and had been assured it wasn't a target.

Also, Wal-Mart officials, who initially responded to the raids only with pledges of cooperation, now say President Bush's recent proposal to grant legal status to undocumented immigrants shows the issue should be one of policy debate, not criminal prosecution.

So far, the spirited defense is having little impact. Federal investigators are not backing down from their case, which is being heard in secret by a special grand jury in Pennsylvania. The company's consumer surveys show public attitudes toward Wal-Mart have held flat for six months. That's "not as good as we would like to do, but given the current environment, we're holding strong," said Alicia Smith Kriese of GSD&M, the Texas firm that created some of the TV ads.

Nonetheless, Wal-Mart's retaliation strikes some retail experts as crucial, because the company has reached a critical stage in its evolution. Grown far beyond its roots in the rural South -- with 4,300 stores, more than 1.3 million employees worldwide and $245 billion in sales in 2002 -- Wal-Mart's very success may be working against it. Big empires are hard to manage, and the public tends to mistrust institutions that get too mighty, said Kelly O'Keefe, head of Richmond-based Emergence, a brand consulting firm.

"They have to be extremely conscious that the kind of growth they have been delivering doesn't come without a cost," said O'Keefe, who put Wal-Mart on his annual top-10 list of corporate branding blunders for last year's run of bad publicity.

The company's omnipresence makes it an automatic target for complaints, lawsuits and now government investigations, said Kurt Barnard of Barnard's Retail Trend Report. Sooner or later such bad publicity can keep even a powerful retailer from continuing to grow, and can begin to erode shopper loyalty, Barnard said.

As its troubles have mounted, Wal-Mart has cranked up its political donations. Last year it gave just over $1 million as of November, the date of the most recent federal campaign contribution filings, according to the Center for Responsive Politics. The only organization to contribute more was Goldman Sachs Group, at nearly $1.6 million. That's a big leap for Wal-Mart, which ranked 71st in the 2002 election cycle and did not rank in the top 100 in 2000.

"Not only are we more aggressive in our communications these days, but we are also becoming more savvy in using government affairs," Wal-Mart spokeswoman Mona Williams said. "Our critics make an awful lot of noise, and we need to ensure that our side of the issues is heard as well."

After the Oct. 23 immigration raids, Wal-Mart retained Washington lawyer Martin Weinstein, a former federal prosecutor, to conduct an in-house investigation of its hiring and contracting practices.

What he has found, Weinstein said in an interview, is a history of Wal-Mart cooperating with federal immigration authorities dating to mid-2000.

"You don't usually have a criminal justice matter where the company has been cooperating and then the government begins to view it as a foe and less as a friend. That's odd," Weinstein said.

Almost all of the arrested workers were employees of outside cleaning contractors, and Wal-Mart had been trying to get rid of those contractors and move the janitorial work in-house, he said. But federal agents asked the company to keep some of the contractors in place for the sake of the investigation, he said.

In a memo dated March 6, 2001, provided to The Washington Post by Wal-Mart, a company security official described meeting with federal immigration agents about the investigation. "They identified specifically several companies that we have paid several million dollars to over the past 2 or 3 years, and believe that there are individuals connected with those companies that are the masterminds behind this operation," the Wal-Mart security official wrote.

According to the memo, the agents asked Wal-Mart to furnish a group of executives to become part of a federal grand jury task force investigating the contractors, who were suspected of not only hiring illegal immigrants but of overseeing theft rings.

"The agents made the point that in no way do they consider Wal-Mart as a target," the company official wrote. "They see the investigation taking several months and their possibly asking for our company's help with surveillance, taping, etc. They have guaranteed that no arrests would be made in the stores and we would be given heads up about publicity."

A spokesman for U.S. Immigration and Customs Enforcement, known as ICE, said he couldn't discuss the Wal-Mart case because it is under seal in a federal grand jury investigation in Pennsylvania. But speaking in general terms, ICE spokesman Garrison Courtney said the agency would not target a company that it felt was being truly helpful.

"If a company is cooperating we typically don't penalize that company because it's in the best interest of both the employer and our agency to have that cooperation," Courtney said.

The agency takes pains to make sure a cooperating company understands exactly how to avoid running afoul of immigration laws, he said. "But say you're doing the third or fourth or tenth audit [of that company], and you're seeing a pattern develop. They've been given a little bit of leeway before, and they take it again. So you go back and analyze, does this company seem to think they're going to keep getting away with this?"

If the cooperating company continues trying to skirt the law, he said, "you really have to look at the intent, the motivation. What they're saying versus what they're doing. . . . That's what determines are they really cooperating, or are they cooperating for themselves?"

Weinstein said Wal-Mart has continued to cooperate with investigators, supplying executives and documents to the grand jury investigation. A spokesman for the U.S. attorney's office in Pennsylvania declined to comment on the status of the investigation or on Wal-Mart's claims.

Weinstein also said he was perplexed by the government choosing to target Wal-Mart given President Bush's recent call for temporary legal status for millions of undocumented workers. "It clearly is an indication that the administration is concerned about the question of undocumented workers and that there is no absolutely clear right or wrong answer," he said.

Wal-Mart is looking into whether the potential policy change could affect the current investigation, but Weinstein said he couldn't discuss specifics.

Courtney again declined to comment on a particular case, but said the agency does not deal in policy questions. "We enforce whatever the law is on the books, and the law right now says if you illegally employ an illegal alien and we have proof of that, we can fine you up to $10,000 per person," he said.

While Wal-Mart is taking a stiffer approach with the government, it is working to soften its public image through two ad campaigns that began running early last year. One features employees offering testimonials about how well they've been treated by Wal-Mart, and the other tells stories about Wal-Mart's contributions to local communities.

Both originated from a survey Wal-Mart conducted more than a year before the immigration raids that showed Wal-Mart's reputation already crumbling in two areas: Consumers said they believed Wal-Mart offered only low-wage, dead-end jobs, and they thought its stores had a bad impact on surrounding communities.

"We attributed that to people simply not having the facts," spokeswoman Williams said.

The Austin, Tex., advertising firm of GSD&M created the employee testimonial campaign after collecting stories from workers in stores around the country. "This effort to show that Wal-Mart has good jobs -- to share the good news, if you will -- is important as one of several proofs of the fact that Wal-Mart is a good company," said Kriese, GSD&M's senior vice president.

Bob Garfield, a columnist at Advertising Age, said the spots are a smart strategy. "I'm embarrassed to say they work on me," he said. "Getting caught with illegals is really not good for your image when you're trying to convince people you're an integral part of the community . . . but in their ads the employees seem like just plain folks who want to help me find the right brand of paper toweling. . . . They're well positioned for the moment."

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Wal-Mart loses out to inventor

Lyn Berry-Helmlinger - Denver Business Journal                [back to top]
January 23, 2004

Denver-based serial inventor Al Gebhard and his business partner, Gerald Gohl, just did what many consider impossible: They sued Wal-Mart and won.

Though Gebhard acknowledges it's extraordinary to drag a "Goliath" such as Wal-Mart into court and prevail, he said the victory is hollow, at best.

"The irony is we're going to lose money on this," he said. "And it's been four years of pain and suffering that I can't even explain to you."

On Jan. 20, the U.S. Circuit Court of Appeals in Washington, D.C., affirmed an earlier decision made by the U.S. District Court in Colorado that Wal-Mart had infringed upon a patent held by Gebhard and Gohl's company, Golight Inc., for a remote-controlled searchlight.

The courts' decision in Golight Inc. vs. Wal-Mart Stores Inc. grants Golight damages of $464,280, based on a "reasonable royalty" of $31.80 per infringement and attorneys' fees.

According to court documents, the tangle with Wal-Mart began in 1997, when the retail giant started selling a portable, wireless, remote-control searchlight that was virtually identical to one created by Golight in the mid-1990s -- though of lower quality -- in its Sam's Club stores.

Nebraska-based Golight Inc. was formed in 1993 to manufacture, distribute and market its searchlight, also called Golight, Gebhard said. He said he and Gohl -- a rancher and farmer who also is Gebhard's wife's first cousin -- created the searchlight to locate and assist calving animals in harsh blizzard conditions on the Nebraska plains.

"[Gohl] said, 'I want to build a spotlight that's remote-control from inside my vehicle because I freeze to death putting my arm out the window to look for cattle in the night with a hand-held spot,'" Gebhard said.

So Gebhard helped Gohl develop the product. Ultimately, they took out two U.S. letters patents, the second of which -- U.S. Patent No. 5,673,989 -- was for the wireless, remote-controlled Radio Ray.

When Golight learned Sam's Club was selling something so similar to his patented product at a much lower price, it had "no choice but to file suit," Gebhard said. "This could really hurt our market and destroy our product." So Golight sued Wal-Mart in U.S. District Court for the District of Colorado on Feb. 14, 2000.

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Some officials back Wal-Mart against county

Chip Johnson - San Francisco Chronicle                    [back to top]
Friday, January 23, 2004

Wal-Mart Stores Inc. has upped the ante in its bid to defeat an ordinance, approved by the Contra Costa County Board of Supervisors, that would ban the construction of "superstores" of the type being proposed by the giant discount retailer.

With county supervisors aligned against it, the nation's largest retailer and employer began scouring local municipalities for support -- and has found it in politicians in several East Bay cities.

The names of more than a half-dozen elected officials from Antioch, San Ramon, Walnut Creek, San Pablo and Oakley appear on letters sent to registered voters by Contra Costa Consumers for Choice, the committee leading the campaign for Measure L on the March ballot.

The campaign is heavily funded by Wal-Mart.

Wal-Mart, of Bentonville, Ark., launched the ballot initiative after county supervisors banned big-box stores that devote more than 5 percent of their floor space to nontaxable grocery items.

County supervisors said superstores create traffic and overcrowding, an argument that doesn't hold up to scrutiny, said one of the officials who signed the letter, San Ramon Vice Mayor Dave Hudson, who is a candidate for county supervisor in the March election.

"My issue is plain and simple: To protect open space by not allowing a big-box store is just wrong,'' Hudson said. A Wal-Mart store -- even a superstore -- will create no more traffic than big-box stores of similar size, he said, and county tax revenues will benefit, not suffer, from a new store.

"I don't know of any city (or county) government that puts a different restriction on parking because of who you are,'' Hudson added.

When county supervisors approved the ordinance, Wal-Mart launched a petition drive to get 27,000 signatures for the initiative.

But if there ever were a company that should be reeled in a bit, it's Wal- Mart.

In the letters sent to voters over the past two months, the company has emphasized that the county supervisors' actions were more about politics than sound public policy.

"This misguided measure is not about controlling growth -- it's about politics,'' the company said in both letters.

Assume for the moment the company is absolutely right about politicians playing politics. What a concept.

What Wal-Mart officials don't say is that the company is hell bent for leather in its push into the Western states.

It plans to build 40 combination retail-grocery superstores' in California, and it doesn't care who gets run over in the process.

That's quite a leap for a company that has used its own clout to shoehorn its superstores into small cities in Nevada and California during the past two years.

Wal-Mart, which has refused to negotiate a union contract with its employees, has accused county supervisors of bowing to union pressure in passing the ordinance. But make no mistake, the company is not looking out for consumers' interests, it is looking for greater profits, and that's the bottom line.

If it's any consolation, although Wal-Mart stores may have taken the rest of the country by storm, it will be an uphill battle in Northern California.

Following Contra Costa's lead, the Oakland City Council passed a similar measure in October that would ban construction of retail stores with more than 10 percent of space devoted to nontaxable groceries. Alameda County supervisors approved a carbon copy of the Oakland measure last month.

When Oakland council members approved the ban by a 7-1 vote, they cited Wal-Mart's ability to undercut local merchants, destabilize local businesses and create parking and congestion problems.

So the March ballot initiative in Contra Costa may not be about store locations at all.

Instead, voters may be affirming the right of local government to set public policy over the objections of a private business whose sole interest in the region is to turn a profit.

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Wal-Mart agrees to pay fine, stop selling refrigerants

Miami Herald                       [back to top]
January 22, 2004

KANSAS CITY, Mo. - Wal-Mart Stores Inc. agreed Thursday to pay a $400,000 penalty and to stop selling refrigerants that contain ozone-depleting substances.

The consent decree filed in U.S. District Court in Kansas City settles violations of the Clean Air Act by various Sam's Club stores, which are owned by Wal-Mart, said Todd P. Graves, U.S. attorney for the Western District of Missouri.

A federal complaint cited Wal-Mart for 20 violations of the Clean Air Act, which restricts sales of certain ozone-depleting refrigerants to technicians who are certified to use the substances.

According to the complaint, Sam's Club stores in 11 states sold refrigerants used for automobile air conditioners or other refrigeration systems to customers who were not certified to use them.

"These chemicals are regulated by the federal government because they contribute to ozone-depleting pollution," Graves said. "Retailers have an obligation to responsibly monitor the sale of these products."

The ozone layer protects humans and animals from damaging ultraviolet rays. Excessive exposure to ultraviolet radiation can cause cataracts, skin cancer and other ailments.

"This settlement will aid in protecting the ozone layer worldwide by eliminating from the earth's atmosphere harmful refrigerants, such as chlorofluorocarbons (CFCs) that leak from industrial appliances and have contributed to the depletion of the earth's ozone layer in recent years," said Assistant Attorney General Thomas L. Sansonetti.

The consent decree settles violations of the Clean Air Act at stores in Missouri, Alabama, Florida, Georgia, Illinois, Iowa, Minnesota, New York, Pennsylvania, North Carolina and West Virginia.

The violations in Missouri occurred at Sam's Club stores in Independence, Springfield and Joplin.

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Wal-Mart settles lawsuit on item-pricing for $7.35m - Several groups to receive grants

By Bruce Moh - Boston Globe                     [back to top]
January 22, 2004

Dorchester resident Colman Herman has reached a multimillion-dollar legal settlement in a class-action suit with Wal-Mart Corp. over the chain's alleged failure to comply with the state's item-pricing regulation.

The settlement agreement says Wal-Mart will spend $5.6 million over the next three years to bring its Massachusetts stores into compliance with the regulation, which was dramatically revised last year.

The Arkansas-based discount chain also agreed to pay $750,000 to attorneys who pursued the case on behalf of Herman and other Massachusetts consumers and $1 million in grants to several consumer and charitable groups and the office of Attorney General Thomas F. Reilly. Herman received no money, nor did any other individual consumer.

The agreement, recently approved by a Middlesex Superior Court judge, is the second item-pricing settlement Herman has reached with a major retailer. Home Depot settled similar allegations in late 2002 by agreeing to pay $3.8 million in grants and attorneys' fees and to spend $20 million on item-pricing compliance.

Herman declined to comment yesterday, but the lead attorney on the case, Robert J. Bonsignore, praised Wal-Mart for signing the settlement and bringing its stores into compliance. He said similar lawsuits in Massachusetts are pending against other retailers, which he declined to identify. "What we are trying to do is get the companies to follow the law," he said.

Wal-Mart admitted no wrongdoing and suggested that few consumers had actually been harmed by the lack of price stickers on products.

"The lawsuit brought attention to a law that needed to be changed," said company spokeswoman Christi Gallagher. "We are happy that the lawsuit has been resolved."

The settlements with Wal-Mart and Home Depot had humble beginnings. Herman, a freelance writer with a pharmacy degree and no legal background, asked Home Depot's Quincy store in 1999 to comply with the regulation, which requires retailers to mark prices on most individual items.

When Home Depot ignored him, Herman asked Reilly to enforce the regulation. When Reilly did nothing, Herman took Home Depot to small claims session and won $25. When Home Depot still refused to adopt item-pricing, Herman sued the company successfully in Quincy District Court and eventually launched a class-action lawsuit against the Atlanta firm, involving all of its stores in Massachusetts.

The legal victory in the Home Depot case and the ensuing outcry from retailers about the high costs associated with item-pricing prompted Reilly to intervene. Last summer, he revised the regulation, to allow retailers to stop marking prices on individual items if they install bar code scanners capable of printing out self-adhesive price stickers. In effect, the new regulation lets consumers who want prices stamped on the products do the price stamping themselves.

The Wal-Mart settlement allows the retailer to reduce its $1 million in grant payments by $165,000 if it installs one more scanner in each store than is required under the new regulation.

The Wal-Mart grants include $225,000 for Reilly's local consumer aid fund, $100,000 for the Give Kids the World charity, $100,000 for Bay Cove Human Services, $100,000 for Globe Santa, $100,000 for the Make A Wish Foundation, $75,000 for Consumer Credit Counseling Services of Southern New England, $100,000 for the Health Institute of New England Medical Center, $50,000 for the National Alliance for the Mentally Ill of Massachusetts, $100,000 for the Foundation for Taxpayer and Consumer Rights, $25,000 for the Civil Justice Foundation, and $25,000 for Consumer World, a website operated by Edgar Dworsky of Somerville.

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Shopping for Values At Wal-Mart, Low Prices Don't Come Cheap

By LAURA LONGHINE - Columbia, SC, Free-Times              [back to top]
January 21, 2004

It's a cold day in December, and it's pouring. Five people, four from Columbia and one who has driven in from North Carolina, have turned out to commemorate Human Rights Day, with a protest at the Wal-Mart Supercenter on Forest Drive.

"This is just pathetic, isn't it?" says Linda Houck, with a wry smile. Houck works with Donna Dewitt, president of the South Carolina AFL-CIO, who is also here, with an armful of brochures and a sigh for those who would have shown up if not for the weather. The brochures discuss workers' rights, and how Wal-Mart has consistently violated those rights, but almost no one on this soggy afternoon will read them.

The protestors are standing by the McDonalds, alongside the drive where cars turn into the massive parking lot that fronts the Wal-Mart shopping center. Brett Bursey, whose trial for protesting President Bush outside the limits of a "free-speech zone" has made him a leftist cause celebre, stands in the median between cars turning left and right. He holds a sign that reads "Wal-Mart Violates Human Rights," and talks to anyone who will roll their window down. The rain, which had seemed to be letting up, starts coming down harder. "How long are we going to stand out here?" Bursey calls across to Dewitt. She shakes her head and doesn't answer.

A few cars stop. One woman pumps her fist, chanting "Go, union workers!" as she drives by. Another man slows his black Cutlass sedan and rolls down the window, prompting Bursey to come forward with a flyer.

"Wal-Mart doesn't treat its workers right," he says. The man nods vigorously, a knowing look on his face.

"That's why I quit," the man says. "I used to work there, but I quit."

But most cars simply pause as they pull into the parking lot, the drivers looking curiously or confusedly at the "Workers Rights Are Human Rights" banner the protestors have hung over McDonalds' "Now Hiring!" sign, before they roll on. It is two weeks before Christmas, and there is a lot of shopping to do.

That Wal-Mart has achieved phenomenal growth and success through innovation and an almost unprecedented efficiency is without question. But that its success has also come at a certain human cost is a more recent realization. In 2003, Fortune magazine named Wal-Mart the most admired company in the United States, even as countless other media outlets were blasting Wal-Mart for a range of offenses, from mistreating women workers to using illegal immigrant labor. With its relentless focus on the bottom line, Wal-Mart has become more than a model of corporate success. It has become an example of what happens when American free-market capitalism runs roughshod over other basic values Americans say they hold dear.

Wal-Mart is hardly the only corporation to have been charged with sex discrimination, or unfair labor practices, or the use of sweatshops. It is not solely responsible for the decline of unions or the loss of U.S. manufacturing jobs. But as the world's largest corporation and its largest employer, Wal-Mart wields unprecedented power in the retail and labor markets. What Wal-Mart does matters, and how consumers react to its actions matters even more.

In many small towns, Wal-Mart has provoked ardent opposition from storeowners who would inevitably be driven out of business. But when Wal-Mart came to Columbia (the first store opened in 1988 on Harbison Boulevard), there was little or no protest. After all, the store offered customers convenience, providing everything – as one of several shoppers interviewed for this story put it – "from a bathroom shower mat to something for the car," and all at the company's trademark "low prices."

Fifteen years later, there are four 24-hour Supercenters and two Sam's Clubs in the Columbia area, and shoppers continue to crowd them in search of the everyday values Wal-Mart continues to deliver. But even as Wal-Mart has climbed to the top of the Fortune 500, reporting $244.5 billion in sales last year, the human cost of its low prices has become increasingly clear.

Wal-Mart quietly ended its "Buy American" advertising campaign in the mid-90s, as its pressure on suppliers for ever-lower prices forced many to close their U.S. factories and outsource their manufacturing overseas, to Latin America and, increasingly, China, where labor is even cheaper. The Los Angeles Times reported recently that Wal-Mart has more than 3,000 supplier factories in China, an estimate confirmed by company spokesman Bill Wertz as "probably accurate."

Here at home, Wal-Mart has faced increasingly vocal criticism for its domestic labor practices. Like most retail jobs, an associate position at Wal-Mart does not pay a lot, and the corporation has been tremendously successful in keeping out unions. But those efforts have sometimes crossed the line into illegality. Since 1995 the National Labor Relations Board has issued almost 50 complaints against Wal-Mart alleging labor law violations. While five of the complaints have been dismissed, others have proved true or been settled, and some are still pending.

Meanwhile, widespread allegations of wage-hour violations, such as unpaid overtime and missed breaks, have led to lawsuits in 30 states, including South Carolina, according to the United Food and Commercial Workers Union. One of Wal-Mart's own audits, as reported by The New York Times last week, warns that the company might be guilty of extensive violations of child-labor laws.

But the troubles, so far, seem not to have affected the retail giant's sales. In interviews with shoppers at four local Wal-Marts, few were aware of the extent of the allegations against the corporation. One had heard "something about women not being paid enough." Another thought the problem lay with Wal-Mart's use of sweatshop labor. Still, while most agreed that Wal-Mart's actions were "not right," almost all identified themselves as regular shoppers, and their reasons were simple – low prices and convenience.

Kathleen MacDonald, a Wal-Mart employee for 14 years, sums it up in one word – respect. A lack of respect for workers is at the root of Wal-Mart's problems, she says. MacDonald is a sales clerk in the candy department of a Wal-Mart Supercenter in Aiken, S.C. She describes a former manager who made the store feel "like a prison." She can recall, as a cashier, often being denied breaks. "They'd say, 'You have customers, they come first,'" she says. "You'd be on your feet for eight hours. You might come in at 7 [a.m.] and not get your lunch break until 1 or 2 [p.m.]"

MacDonald is one of 110 female Wal-Mart employees who gave sworn statements in a lawsuit pending in U.S. District Court in San Francisco charging Wal-Mart with sex discrimination. The women are from 30 states, and a motion has been filed to make the case a class-action lawsuit, alleging that Wal-Mart systematically discriminates against women by denying them promotions and equal pay. Although more than two-thirds of Wal-Mart's hourly associates are female, the lawsuit alleges, less than one-third of its managerial positions are held by women, and only 10 percent of its store managers are women.

MacDonald says sex discrimination happens consistently at her Aiken store. "I've been working here for 14 years and I can tell you we have stockers who make more money than I do and they've only been here two years," she says. In her sworn statement, MacDonald said she became concerned about her pay after hearing male associates brag about their wages, despite the fact that it's against Wal-Mart policy for employees to discuss their pay.

"Women will never make as much money as men." That's what MacDonald's department manager told her when she complained, according to her sworn statement. When she asked why, he said, "God made Adam first, and so women would always be second to men." MacDonald also said in her statement that other female associates had similar pay complaints, and that these were brought to the attention of the regional personnel manager and the district manager, but that nothing was done. After she renewed her complaint with a new regional personnel manager in 2001, and after the sex-discrimination lawsuit was filed, and following an "internal wage review" that found she was not being paid at the level she should have been, MacDonald received an 81-cent raise.

Wal-Mart Communications Vice President Mona Williams, who handles questions regarding the sex discrimination suit, could not be reached for comment.

MacDonald says Wal-Mart once was a good company. "I used to love to work at Wal-Mart," she says. "I used to be so proud to wear that blue vest." Those vests, she noted, used to say, "Our people make the difference." Now they say, "Can I help you?" It's a change that MacDonald sees as reflective of the way the company's values shifted after the death of its founder, Sam Walton, in 1992. "I think when Mr. Walton died it was the beginning of the end," MacDonald says. "Because it became all about greed."

The story of Walton and his store reads like a classic of American opportunity. A small-town man from Arkansas, Walton started Wal-Mart with a single five-and-dime discount store. By the time he died, Wal-Mart had become the nation's biggest retailer, and Walton had been awarded the Presidential Medal of Freedom. A folksy, no-frills man who continued to drive an old pickup truck even after becoming a millionaire, Walton built his success on two simple but innovative ideas. Bucking conventional wisdom, he built his stores in small towns and rural areas, away from the competition of big-city department stores, and in areas where suburban sprawl would expand his customer base. He also built them around the concept of attracting customers with everyday low prices, rather than occasional sales.

Walton put a strict emphasis on efficiency and cost control, and reflected every penny saved in the price of his products, reducing profit margins on individual items but hoping to increase sales overall. "This is really the essence of discounting," Walton wrote in a passage featured on the company's web site. "By cutting your price, you can boost your sales to a point where you earn far more at the cheaper retail than you would have by selling the item at a higher price."

The leadership team that took over after Walton's death turned his highly successful chain into a global corporate empire. Wal-Mart now has more than 1.5 million associates worldwide, working in stores in Puerto Rico, Canada, China, Mexico, Brazil, Germany, the United Kingdom, Argentina and South Korea, in addition to all 50 states. The corporation has a global network of more than 10,000 suppliers, and in the United States Wal-Mart has been reported as the top seller of a variety of products from jewelry to dog food. After establishing the first Supercenter in 1988 in Washington, Mo., Wal-Mart now has 1,430 of the behemoth stores, and has become the nation's largest grocer. Although Walton accepted technology only reluctantly, Wal-Mart is now renowned in the industry for its hi-tech inventory and distribution systems, as well as its tough negotiations with suppliers and its overall emphasis on efficiency.

But as profits have piled up, so have the problems.

"Some of Wal-Mart's advantage is based on legitimate reasons," says Russell Lloyd, a Houston lawyer who is coordinating "wage-hour" lawsuits against the company in six states, including South Carolina. "We are complaining about the illegitimate reasons."

Lloyd's lawsuit and others planned or pending across the county accuse Wal-Mart of a variety of "wage-hour" violations – things like associates working after they've clocked out (and therefore not getting paid) or working through their federally-mandated breaks.

Wal-Mart puts the blame for any violations on individual managers. "Wal-Mart's policy is to pay associates for every minute they work," says Christi Gallagher, communications manager at Wal-Mart's headquarters in Bentonville, Ark. Any manager who violates this policy is subject to disciplinary action, "up to and including termination," she says.

But Lloyd says the problem is endemic to the company. "Our assertion is that Wal-Mart has a corporate culture that makes them under-staff their stores and forces employees to work overtime without pay to get the job done," he says. "Wal-Mart's written policy says no off-the-clock work. Their actual policy, where the rubber meets the road, is get the job done, whatever you have to do."

Wal-Mart uses a carrot-and-stick approach, Lloyd says. Many managers get more money from bonuses than from their salaries, he says. And because bonuses depend on how profitable the store is, "the lower the wages, the more profit they make," he says. This is the carrot. "The stick is that Bentonville monitors hours very closely." Wal-Mart managers are expected to decrease labor costs by 0.2 percent each year, while still increasing sales, Lloyd says. "There's immense pressure on managers to get the job done, to do more with less," he says. "And the only item of overhead they can really control is wages."

These details are confirmed by David and Joyce Moody, a Georgia couple who met while working at Wal-Mart, and who now work for the United Food and Commercial Workers (UFCW) in attempts to unionize their former employer. "Even as a new associate I worked off the clock," says Joyce Moody, who was both an associate and a manager in her 23 years of work at five Wal-Mart stores. "A lot of these associates, they honestly feel that by doing so they're showing their loyalty and their dedication."

Lloyd says that even a small amount of off-the-clock work by individual employees adds up to big savings for Wal-Mart. "They're just nickel-and-diming these people," he says. "Ten minutes here, 15 minutes there. But say you get an hour of free labor out of each employee per week. With 300 employees in a store, that's 1,200 hours of free labor a month, and that's just for one store. It adds up, it becomes an astronomical figure."

As a manager, Joyce Moody says she was told specifically, on multiple occasions, that no associates should receive overtime hours. She says she was also told to tell associates they had to finish certain tasks, but could not take overtime, which left some finishing their work after clocking out. "Every minute, every hour that managers save on their payroll goes to their bottom line," she says. "So sure, they have a great incentive for cutting those hours and making sure they still get the work done." If an employee worked overtime, she says, sometimes managers would put those hours into the next week. "Their bottom line in the store was everything."

David Moody, who also worked as a Wal-Mart associate and manager, says being a manager was mentally exhausting. "Wal-Mart always wanted you to come in under budget, based on your previous year's numbers," he says. "They always expected you to do more with less." That meant continuing to get the work done even while sometimes cutting back on employees or employee hours, he says. "Several times we had to cut a full-time associate down to eight hours a week, just to make our payroll come in."

In an email, spokeswoman Gallagher confirmed that Wal-Mart managers "run their stores like individual profit centers and balance income and expenses as necessary. Payroll, like other building expenses such as lighting or water, is based on sales forecasted by the store manager," she said. "If sales are lower, we reduce our staffing appropriately."

David Moody, using less clinical language, sums up his opinion of the policies this way: "They treated these people like crap. It wasn't right. That's why I'm doing what I'm doing now."

The Moodys focus their efforts for the UFCW on Wal-Marts and Sam's Clubs throughout the Southeast. It's a tough job, particularly in South Carolina, which has long cultivated its reputation as an anti-union state. On its home page, the city of Columbia's Office of Economic Development describes the "unique variety of business incentives" that South Carolina offers: "Of prime importance is the fact that South Carolina is a 'right-to-work state' and has the lowest unionization rate in the country." (It's actually the second lowest, above North Carolina, according to the state AFL-CIO.) Conversely, South Carolina has one of the highest unemployment rates. In October, the jobless rate hit 7.1 percent, a figure topped by only three other states, according to the Bureau of Labor Statistics.

South Carolina also consistently ranks among states with the lowest wages in the nation. "Unions drive up wages," says Hoyt Wheeler, a professor at USC's Moore School of Business. "But that is not the most important thing they do. The most important thing they do is give power and dignity to workers. Without a union, workers are pretty much at the mercy of their employer."

As the largest employer in South Carolina, with almost 25,000 associates, unionized Wal-Marts could do much to improve the state's low-wage status. But the possibility seems remote. In 2000, workers in the meat-cutting department of a Jacksonville, Fla., Wal-Mart voted for a union. In response, says the UFCW, Wal-Mart eliminated meat cutting in all of its Supercenters, moving to pre-packaged meat. A statement on the company web site says the change helped "streamline distribution," but it makes no mention of the unionization effort.

Gallagher says Wal-Mart is not anti-union, rather that "unionization is not right for Wal-Mart." The company has long maintained that its workers do not need a union, because it has an "open door policy" allowing employees to address their concerns directly to management.

Critics place little credence in the policy. "Be careful, or that open door will hit you on your way out – that's what workers I've talked to have told me, all over the South," says attorney Lloyd. MacDonald agrees. "It's a joke," she says. "We tried their open door policy. It didn't work."

In 2000, MacDonald and another employee became concerned about several issues that they felt were being ignored at the Aiken store. "We went all the way up to the regional personnel manager," MacDonald says. "They said, 'We'll get back to you.' We never heard from them." So MacDonald called the UFCW. "Of course once we started talking to unions all these [Wal-Mart] executives came down," she says with a laugh.

Wal-Mart managers, according to the UFCW, are instructed to notify the home office (via its "union hotline") at the first hint of any union interest among associates. A labor relations team is then dispatched from Bentonville, along with managers from neighboring stores in the region, all of whom descend upon the store in an attempt to head off any union activity.

Gallagher says that during an organizing drive, associates often have questions about information they have received from union representatives, and that Wal-Mart provides a "support team" to answer those questions. "Additionally, during an organizing campaign, a support team may travel to a location to provide assistance in meeting specific requirements of federal law," she says. "In other words, this team helps make sure that our managers understand the law and their responsibilities so they don't inadvertently violate the law in any way."

The National Labor Relations Act prohibits employers from intimidating employees interested in forming a union. But there is a fine line between information and intimidation, and it us up to the National Labor Relations Board to determine when the law has been breached.

In the Aiken case, after MacDonald contacted the UFCW the union sent David and Joyce Moody to talk to workers in the store. "Prior to my trip, Wal-Mart already knew I was coming," Joyce Moody says. "People from the home office came in before our first meeting was ever set. They continued to stay in the store for several weeks. Needless to say, people were scared. We got quite a few cards signed, but not enough to call for an election."

MacDonald says that one of the workers who attended meetings about the union was a spy who told Wal-Mart management which associates were involved and what they were doing. She says the store manager gave her and another associate who had led the union effort a "no talking" order – they were not allowed to talk at all, about anything, while on the sales floor. "We were constantly being watched," she says. "There were things going on that just weren't right."

After a preliminary investigation, the National Labor Relations Board filed a complaint. In September of last year, the board found that Wal-Mart had "engaged in certain unfair labor practices." Charges that a team from the Home Office had interrogated associates, threatened to take away their benefits, and asked them to spy on other associates were dismissed. But the decision stated that Wal-Mart had violated the law by promising to improve employee wages to discourage union activity, enforcing an unlawful no-talking rule and issuing verbal warnings to MacDonald and another associate. The board ordered Wal-Mart to stop its unlawful practices and to post a sign in the store, informing associates of their right to form a union and noting that the store had been found in violation of federal labor law.

After the hearing, MacDonald says, "Wal-Mart kind of backed down, they kind of left us alone. We got a new store manager who was wonderful and treated us with respect." MacDonald dropped the union idea, she says, because associates were still too scared to join one, and because, with the new manager, a union was no longer needed.

Clearly, not all Wal-Mart managers have violated labor laws or disrespected their workers. But MacDonald says the Aiken store manager who had given her the illegal "no-talking" order was not fired, but merely reassigned, and is now a store manager in North Augusta. "They like to keep people that are intimidating," she says of her employer. When she first began working for Wal-Mart, MacDonald says, a group of women in the Aiken store signed a petition to get rid of an assistant manager whom they said had harassed them. She says he was simply sent to another store, where he rose to store manager before being demoted back down to an assistant manager.

As it has faced increasing scrutiny in the press, Wal-Mart's defense often has been of the "a few bad apples" variety, placing blame on a few bad managers, or bad decisions, and calling them aberrations in a network of more than 3,000 stores and 1.5 million workers. But as MacDonald points out, "These issues have been going on for years and years and years."

Most likely, those issues will not be resolved unless they affect what Wal-Mart values most – its bottom line.

As the largest corporation in the world, Wal-Mart exemplifies the opportunities of our globalized economy – the ability of a smart, innovative, agile company to expand at an amazing rate, and to bring consumers in more and more places an overwhelming array of goods at ever-cheaper prices. But Wal-Mart also epitomizes the human consequences of such a business model. In the end, it is up to consumers and investors to determine if there is a line past which low prices are not the ultimate good. With no labor unions or benevolent founder to impose a standard other than pure profit, it is the market that will determine what Wal-Mart values, and what it doesn't.

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Wal-Mart beefs up federal presence

By Alison Vekshin - Stephens Washington Bureau                 [back to top]
Sunday, Jan 18, 2004

WASHINGTON -- No longer able to sit on the sidelines, retail giant Wal-Mart Stores, Inc., has significantly stepped up its efforts to make its voice heard in Washington, political and business analysts say.

Headquartered in Bentonville, the world's largest retailer has increased its campaign contributions to federal candidates and boosted its spending on lobbyists in recent years, federal records show.

In the past two weeks, it also announced several high-profile hires of attorneys with federal connections.

The company hired Tom Gean, U.S. attorney for the Western District of Arkansas, to be vice president in its legal department. John Peter Suarez, the enforcement chief of the Environmental Protection Agency, was brought on as general counsel of Sam's Club.

The retailer's increasingly diverse business interests have prompted greater involvement in Washington, said Laurie Smalling, Wal-Mart's manager of corporate affairs and one of five staffers in the company's Washington office. The outpost was opened only in 1999 and expanded since then.

"The increased federal presence is driven by an increase in issues that affect our everyday operations," Smalling said.

Wal-Mart has hired lobbyists to monitor legislation dealing with consumer protections, ergonomics, port security and prescription drug reform, according to lobbying records.

Smalling said Wal-Mart's beefed-up approach in Washington does not represent a shift in policy but rather was "an internal awareness" of the significance of federal policy.

"It's become more and more apparent that they are affected deeply by federal policymaking across a vast range of issues," noted Jay Barth, an associate political science professor at Hendrix College in Conway. "They have a great interest in making sure they have a place at the table on a variety of issues."

Wal-Mart will rack up $257.7 billion in revenue this year and will grow 12 percent annually over the next five years, predicted Bob Buchanan, vice president and retailing industry group leader at A.G. Edwards, a brokerage firm in St. Louis, Mo.

But for all that, Wal-Mart's philosophical roots for years remained outside the Beltway, in the small towns where founder Sam Walton built his empire.

Barth said Walton "had a world-view thinking in state and regional terms that only at the end of his life extended beyond that.

"This new generation (of Wal-Mart management) has come of age in a company that has a national and international presence," Barth observed.

The growing involvement in Washington politics "goes against their grain," Buchanan noted. "They try to keep their costs down."

Buchanan noted Wal-Mart also may be heading into rough waters with the legal system and with federal regulators that might make it advantageous to hire federal expertise and build friendships in Washington.

"As they get bigger, they become an easier target, whether or not a given allegation is legitimate or not," he said.

Among its challenges, the company is the defendant in a sexual-discrimination lawsuit in the U.S. District Court in Northern California. The suit is being considered for class-action status, which could allow every woman Wal-Mart employed since 1998 to be eligible for benefits if plaintiffs prevail.

Wal-Mart attorneys defending against the suit have said a class-action case would be unmanageable and take more than a decade to sort out.

On Jan. 13, the New York Times reported on a 2000 Wal-Mart internal audit warning top executives that employee records at 128 stores showed extensive violations of child-labor laws and state regulations that require workers to be given time for breaks and meals.

The audit is under court seal. The company issued a statement saying the audit was not a valid study.

In October, federal agents raided 60 Wal-Mart stores and arrested about 250 illegal contract workers.

Wal-Mart must play both offense and a defense when it comes to defending its legal and legislative interests, said Steve Hoch, chairman of the marketing department at the Wharton School at the University of Pennsylvania.

"It seems only responsible for management to be both aware of and influential over policies which may distort the business environment in which they operate so successfully," Hoch said.

Wal-Mart employs 1.53 million people at nearly 3,500 U.S. stores, supercenters, Sam's Clubs and neighborhood markets, as well as 1,343 stores overseas.

With $1.26 million in contributions, Wal-Mart is the second-largest overall donor in the 2003-2004 election cycle, trailing only investment bank Goldman Sachs, according to the most recent data available from the Center for Responsive Politics, a non-partisan research group that tracks money in politics.

Wal-Mart is the top political action committee (PAC) donor to federal candidates so far in the current cycle. It gave $1.028 million, with 84 percent flowing to Republican candidates.

A PAC is a committee that represents business, labor or ideological interests.

Of the 435 members of Congress, 191 received PAC contributions from Wal-Mart in 2003. The list includes Rep. Don Young, R-Alaska, chairman of the House Transportation and Infrastructure Committee, and Rep. Bob Goodlatte, R-Va., chairman of the House Agriculture Committee, who each received $10,000.

Wal-Mart's No. 1 ranking among PAC contributions contrasts with previous years when the retailer did not even make the top 20.

In the 2002 cycle, Wal-Mart ranked 44th, with $1.1 million in contributions, according to Sheila Krumholz, the center's research director. Wal-Mart ranked 128th with $457,050 in 2000 and 356th with $135,750 in 1998.

"It does seem like an unprecedented shift for them to ramp up their PAC so fast," Krumholz said.

The role of PACs has increased since a ban on soft-money contributions went into effect as a result of a new campaign finance law enacted in 2002, Krumholz said.

"PACs are at a premium now to influence federal candidates and national party committees," she said.

"They are in a very large growth mode in lobbying and (political action committee) activity," said Kent Cooper, co-founder of Political Money Line, an online database that tracks campaign finance and lobbying activity.

Wal-Mart spent $440,000 on lobbying in the first six months of 2003, according to Cooper.

In addition to its in-house lobbying shop, Wal-Mart spent $240,000 on law firms Patton Boggs, Sandler, Travis & Rosenberg, and Miller & Chevalier, Cooper said.

That figure is up from the last six months of 2002, when Wal-Mart spent $320,000 on lobbying, with $160,000 going to outside firms.

Rep. John Boozman, R-Rogers, whose district includes Bentonville, observed that Wal-Mart makes an effort to stay involved in the issues that affect the company and their customers in Congress.

"They've really geared up (their Washington presence) a lot in the last three or four years," said Boozman, who received a $10,000 contribution from Wal-Mart last year.

"They realize that the federal government is so intrusive and affects so much that they feel like it's vital that their views are known when policies form," he said.

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Workers Assail Night Lock-Ins by Wal-Mart

By STEVEN GREENHOUSE - New York Times                 [back to top]
January 18, 2004

Looking back to that night, Michael Rodriguez still has trouble believing the situation he faced when he was stocking shelves on the overnight shift at the Sam's Club in Corpus Christi, Tex.

It was 3 a.m., Mr. Rodriguez recalled, some heavy machinery had just smashed into his ankle, and he had no idea how he would get to the hospital.

The Sam's Club, a Wal-Mart subsidiary, had locked its overnight workers in, as it always did, to keep robbers out and, as some managers say, to prevent employee theft. As usual, there was no manager with a key to let Mr. Rodriguez out. The fire exit, he said, was hardly an option — management had drummed into the overnight workers that if they ever used that exit for anything but a fire, they would lose their jobs.

"My ankle was crushed," Mr. Rodriguez said, explaining he had been struck by an electronic cart driven by an employee moving stacks of merchandise. "I was yelling and running around like a hurt dog that had been hit by a car. Another worker made some phone calls to reach a manager, and it took an hour for someone to get there and unlock the door."

The reason for Mr. Rodriguez's delayed trip to the hospital was a little-known Wal-Mart policy: the lock-in. For more than 15 years, Wal-Mart Stores Inc., the world's largest retailer, has locked in overnight employees at some of its Wal-Mart and Sam's Club stores. It is a policy that many employees say has created disconcerting situations, such as when a worker in Indiana suffered a heart attack, when hurricanes hit in Florida and when workers' wives have gone into labor.

"You could be bleeding to death, and they'll have you locked in," Mr. Rodriguez said. "Being locked in in an emergency like that, that's not right."

Mona Williams, Wal-Mart's vice president for communications, said the company used lock-ins to protect stores and employees in high-crime areas. She said Wal-Mart locked in workers — the company calls them associates — at 10 percent of its stores, a percentage that has declined as Wal-Mart has opened more 24-hour stores.

Ms. Williams said Wal-Mart, with 1.2 million employees in its 3,500 stores nationwide, had recently altered its policy to ensure that every overnight shift at every store has a night manager with a key to let workers out in emergencies.

"Wal-Mart secures these stores just as any other business does that has employees working overnight," Ms. Williams said. "Doors are locked to protect associates and the store from intruders. Fire doors are always accessible for safety, and there will always be at least one manager in the store with a set of keys to unlock the doors."

Ms. Williams said individual store managers, rather than headquarters, decided whether to lock workers in, depending on the crime rate in their area.

Retailing experts and Wal-Mart's competitors said the company's lock-in policy was highly unusual. Officials at Kmart, Sears, Toys "R" Us, Home Depot and Costco, said they did not lock in workers.

Even some retail industry experts questioned the policy. "It's clearly cause for concern," said Burt Flickinger, who runs a retail consulting concern. "Locking in workers, that's more of a 19th-century practice than a 20th-century one."

Several Wal-Mart employees said that as recently as a few months ago they had been locked in on some nights without a manager who had a key. Robert Schuster said that until last October, when he left his job at a Sam's Club in Colorado Springs, workers were locked in every night, and on Friday and Saturday nights there was no one there with a key. One night, he recalled, a worker had been throwing up violently, and no one had a store key to let him out.

"They told us it's a big fine for the company if we go out the fire door and there's no fire," Mr. Schuster said. "They gave us a big lecture that if we go out that door, you better make sure it's an emergency like the place going up on fire."

Augustine Herrera, who worked at the Colorado Springs store for nine years, disputed the company's assertion that it locked workers in stores in only high-crime areas, largely to protect employees.

"The store is in a perfectly safe area," Mr. Herrera said.

Several employees said Wal-Mart began making sure that there was someone with a key seven nights a week at the Colorado Springs store and other stores starting Jan. 1, shortly after The New York Times began making inquiries about employees' being locked in.

The main reason that Wal-Mart and Sam's stores lock in workers, several former store managers said, was not to protect employees but to stop "shrinkage" — theft by employees and outsiders.

Tom Lewis, who managed four Sam's Clubs in Texas and Tennessee, said: "It's to prevent shrinkage. Wal-Mart is like any other company. They're concerned about the bottom line, and the bottom line is affected by shrinkage in the store."

Another reason for lock-ins, he said, was to increase efficiency — workers could not sneak outside to smoke a cigarette, get high or make a quick trip home.

Mr. Rodriguez acknowledged that the seemingly obvious thing to have done after breaking his ankle was to leave by the fire door, but he and two dozen other Wal-Mart and Sam's Club workers said they had repeatedly been warned never to do that unless there was a fire. Leaving for any other reason, they said, could jeopardize the jobs of the offending employee and the night supervisor.

Regarding Mr. Rodriguez, Ms. Williams said, "He was clearly capable of walking out a fire door anytime during the night."

She added: "We tell associates that common sense has to prevail. Fire doors are for emergencies, and by all means use them if you have emergencies. We have no way of knowing what any individual manager said to an associate."

None of the Wal-Mart workers interviewed said they knew anyone who had been fired for violating the fire-exit policy in an emergency, but several said they knew workers who had received official reprimands, the first step toward firing. Several said managers had told them of firing workers for such an offense.

"They let us know they'd fire people for going out the fire door, unless there was a fire." said Farris Cobb, who was a night supervisor at several Sam's Clubs in Florida. "They instilled in us they had done it before and they would do it again."

Mr. Cobb and several other workers interviewed about lock-ins were plaintiffs in lawsuits accusing Wal-Mart of forcing them to work off the clock, for example working several hours without pay after their shifts ended. Wal-Mart says it tells managers never to let employees work off the clock.

Janet Anderson, who was a night supervisor at a Sam's Club in Colorado from 1996 to 2002, said that many of her employees were also airmen stationed at a nearby Air Force base. Their commanders sometimes called the store to order them to report to duty immediately, but she said they often had to wait until a manager arrived around 6 a.m. She said one airman received a reprimand from management for leaving by the fire door to report for duty.

Ms. Anderson also told of a worker who had broken his foot one night while using a cardboard box baler and had to wait four hours for someone to open the door. She said the store's managers had lied to her and the overnight crew, telling them the fire doors could not be physically opened by the workers and that the doors would open automatically when the fire alarm was triggered.

Only after several years as night supervisor did she learn that she could open the fire door from inside, she said, but she was told she faced dismissal if she opened it when there was no fire. One night, she said, she cut her finger badly with a box cutter but dared not go out the fire exit — waiting until morning to get 13 stitches at a hospital.

The federal government and almost all states do not bar locking in workers so long as they have access to an emergency exit. But several longtime Wal-Mart workers recalled that in the late 1980's and early 1990's, the fire doors of some Wal-Marts were chained shut.

Wal-Mart officials said they cracked down on that practice after an overnight stocker at a store in Savannah, Ga., collapsed and died in 1988. Paramedics could not get into the store soon enough because the employees inside could not open the fire door or front door, and there was no manager with a key.

"We certainly do not do that now," Ms. Williams said. "It's not been that way for a long time."

Explaining the policy, she said, "Only about 10 percent of our stores do not allow associates to come and go at will, and these are generally in higher crime areas where the associates' safety is considered an issue."

Mr. Lewis, the former store manager, said he had been willing to get out of bed at any hour to drive back to his store to unlock the door in an emergency. But he said many Sam's Club managers were not as responsive. "Sometimes you couldn't get hold of a manager," he said. "The tendency of managers was to sleep through the nights. They let the answering machine pick up."

Mr. Cobb, the overnight supervisor in Florida, said he remembered once when a stocker was deathly sick, throwing up repeatedly. He said he called the store manager at home and told him, " `You need to come let this person out.' He said: `Find one of the mattresses. Have him lay down on the floor.'

"I went into certain situations like that, and I called store managers, and they pretty much told me that they wouldn't come in to unlock the door. So I would call another manager, and a lot of times they would tell you that they were on their way, when they weren't."

Mr. Cobb said the Wal-Mart rule that generally prohibits employees from working more than 40 hours a week to avoid paying overtime played out in strange ways for night-shift employees. Mr. Cobb said that on many workers' fifth work day of the week, they would approach the 40-hour mark and then clock out, usually around 1 a.m. They would then have to sit around, napping, playing cards or watching television, until a manager arrived at 6 a.m.

Roy Ellsworth Jr., who was a cashier at a Wal-Mart in Pueblo, Colo., said he was normally scheduled to work until the store closed at 10 p.m., but most nights management locked the front door, at closing time, and did not let workers leave until everyone had straightened up the store.

"They would keep us there for however long they wanted," Mr. Ellsworth said. "It was often for half an hour, and it could be two hours or longer during Christmas season."

One night, shortly after closing time, Mr. Ellsworth had an asthma attack. "My inhaler hardly helped," he said. "I couldn't breathe. I felt I was going to pass out. I got fuzzy vision. I told the assistant manager I really needed to go to the hospital. He pretty much got in my face and told me not to leave or I'd get fired. I was having trouble standing. When I finally told him I was going to call a lawyer, he finally let me out."

One top Wal-Mart official said: "If those things happened five or six years ago, we're a very large company with more that 3,000 stores, and individual instances like that could happen. That's certainly not something Wal-Mart would condone."

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UFCW: Millions in Bonuses for Wal-Mart Execs; Thousands of Unpaid Hours for Wal-Mart Workers

January 16, 2004                    [back to top]
PR Newswire

WASHINGTON, Jan. 16 /PRNewswire/ -- Your company is under intense scrutiny for cheating workers out of wages, violating child labor laws, illegally hiring undocumented immigrants to undercut the wages of American workers, and discriminating against women. Would you reward the top executives with millions in bonuses? Wal-Mart just did.

According to SEC reports, Wal-Mart granted its top eight executives, including CEO H. Lee Scott, stock options that could result in a combined total of up to $52.4 million in ten years, on top of their salaries and bonuses.

The top rungs of the company are rewarded, while America's more than one million Wal-Mart employees work for the lowest wages in the industry.

An internal audit obtained by the New York Times this week displays Wal- Mart's disregard for the law and for the well-being of its employees. The audit cited wide-spread child labor violations, including making minors work during school hours or more hours per day than the law allows, and found thousands of hours of off-the-clock work and missed breaks.

Wal-Mart spokespeople dismissed the audit as meaningless and blamed the employees. But the audit follows a long pattern of violating labor law. Wal- Mart was found guilty of extensive overtime violations in Portland, Oregon, in 2002. And it has over 45 complaints pending at the National Labor Relations Board for unfair labor law.

Wal-Mart is back in court again to face a jury for the punishment stage of the Portland case. Missing the point, Wal-Mart's lawyer told the court: "Off the clock is not necessarily evil." It is, however, illegal.

This giant U.S. retailer sold $245 billion worth of goods in 2002. Instead of padding the salaries of its top executives, Wal-Mart should try providing employees with the fair and comprehensive benefits they deserve.

"Their audacity is appalling, flaunting their profits while exploiting workers," said United Food and Commercial Workers International Union Executive Vice President Mike Leonard. "Wal-Mart workers are denied living wages, affordable healthcare, and a voice on the job. The company's suppression of the basic democratic rights of workers shows its contempt for the most fundamental of American values."

The 1.4 million member United Food and Commercial Workers Union (UFCW) is America's neighborhood union representing workers in neighborhood grocery stores across the country. UFCW puts dinner on the table for America's families with members working in meatpacking and food processing. UFCW gives a voice to care with representation for nurses, medical technicians and nursing home workers.

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Calif. Lawsuit Targets Wal-Mart for Unpaid Overtime

By Michael Kahn - Reuters                        [back to top]
Friday January 16, 2004

SAN FRANCISCO (Reuters) - Three assistant managers have sued Wal-Mart Stores Inc. in California, charging that the world's largest retailer forced them to work overtime without pay and denied them breaks, lawyers for the plaintiffs said on Friday.

The lawsuit seeks class action status as well as overtime pay for any managers who may have been denied the extra wages, said John Quisenberry, a lawyer who filed the lawsuit on Wednesday in Los Angeles Superior Court.

The issue of overtime and Wal-Mart's compliance with labor regulations is one that has recently dogged the Bentonville, Arkansas-based company that sells everything from toothbrushes to tires. Wal-Mart faces a number of lawsuits in other states charging the company has denied overtime pay to keep costs down.

Earlier this week the New York Times reported that a Wal-Mart internal audit showed extensive violations of child-labor laws in which minors worked late at night as well as thousands of apparent instances of workers not taking breaks in violation of state regulations.

Wal-Mart said that the audit misinterpreted a company report that helps managers track employee hours. A company spokeswoman, declined to comment on the California lawsuit because Wal-Mart lawyers have not yet seen it.

At the center of the California complaint are charges Wal-Mart classified the assistant managers in positions exempt from overtime but then required them to do work such as stocking shelves that made them eligible for extra pay under state law, Quisenberry said.

Quisenberry said the next step in the case would be an expected reply from Wal-Mart within 30 days explaining why the company classified the assistant managers as exempt from overtime.

A separate lawsuit brought by about 140 Wal-Mart workers in Oregon who charged they were not paid overtime entered the damages phase in federal court this week.

A jury in that lawsuit in December 2002 found that Wal-Mart had engaged in a pattern of making workers work unpaid overtime for 1994 through 1999.

Several plaintiffs testified in a Portland court room on Friday, including Greg Blackburn, who said he kept quiet when his boss at a Eugene, Oregon, Wal-Mart refused to pay him for working overtime.

"You either did it or you lost your job, that was the understanding. We all knew it," Blackburn told Reuters.

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EEOC files disability discrimination suit against Wal-Mart

St. Louis Business Journal                  [back to top]
January 21, 2004

The U.S. Equal Employment Opportunity Commission has filed an employment discrimination lawsuit against Wal-Mart Stores Inc.

The suit charges the retail giant with discriminating against a job applicant who uses a wheelchair when he applied for a job at a Wal-Mart in Richmond, Mo., northeast of Kansas City. The applicant, Steven J. Bradley, has cerebral palsy and is limited in his ability to walk, which requires him to use crutches or a wheelchair.

The suit, filed after the EEOC was unable to reach a settlement with Wal-Mart, seeks lost wages and benefits, compensatory and punitive damages and a job for Bradley.

It is the first suit filed against Wal-Mart for violations of the Americans with Disabilities Act since the company and the EEOC agreed to a $6.8 million settlement in 2001, which resolved 13 lawsuits the commission had pending against the company in 11 states, including Missouri. As part of the settlement, the company also agreed it would change its ADA policies and procedures, create an ADA coordinator position, provide training in ADA compliance and offer jobs to certain disabled applicants.

With more than 12,000 employees in St. Louis, Bentonville, Ark.-based Wal-Mart Stores Inc. (NYSE: WMT) is the fifth-largest employer in the region. In the last fiscal year the company earned $6.3 billion on revenue of $191.3 billion.

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Wal-Mart Suit Gets Class-Action Status In Massachusetts

The Wall Street Journal               [back to top]
19 January 2004

A Massachusetts state judge granted class-action status in a lawsuit alleging Wal-Mart Stores Inc. consistently required employees in that state to work additional time without pay.

The original suit, filed by two former workers at a North Attleboro, Mass., store, contends Wal-Mart required them to work during rest and meal breaks without compensation for that time. The suit, which may include as many as 50,000 employees, also alleges the Bentonville, Ark., retailer understaffed its stores, banned overtime and consequently, required workers to continue to work after their shifts were over without pay.

Wal-Mart said it denies that it required employees to work without pay. "Wal-Mart's policy is to pay workers for every minute they work," said spokeswoman Christi Gallagher.

The lawsuit seeks restitution for plaintiffs for time worked "off-the-clock" before and after their shifts and during breaks. In the ruling last week, Judge Ernest B. Murphy of the Superior Court of Massachusetts in Middlesex County certified a class consisting of current and former hourly employees who worked at any Wal-Mart store in Massachusetts on or after Aug. 21, 1995. Altogether, the world's largest retailer has 35 similar labor lawsuits pending, with class-action status granted in California, Indiana and Minnesota, in addition to Massachusetts.

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Wal-Mart is not inevitable

Editorial from the Daily Astorian, Astoria                 [back to top]
Thursday, January 15, 2004

The megastore represents economic transformation of the worst sort The town of Hood River's rejection of a giant Wal-Mart store is heartening to Oregonians who recognize that Wal-Mart kills communities. Hood River already has a 72,000 square foot Wal-Mart. The chain discounter had asked to build a second store of 186,000 square feet.

The Hood River County Commission turned down Wal-Mart's plans Jan. 5.

A similar conflict is brewing in Jackson County, where Wal-Mart wants to build two supercenters of 200,000-square-feet each, adding a full-size grocery store.

Local business consultant Wendy Siporen told Oregon Business magazine she opposes the store because of "the massive size, increased traffic, the siting of one store beside prized waterway Bear Creek and Wal-Mart's disinterest in the community."

Wal-Mart has generated national anxiety, because it has the potential to transform local economies in ways that destroy the fabric that holds communities together. Wal-Mart has the ability to undercut the prices of retailers at all levels, including the likes of Safeway and Albertson's. The chain's employees largely earn low wages and have no health care benefits, which means the community must support them. And Wal-Mart makes no contribution to the lifeblood of the community.

"In the worst case, Wal-Mart is a firehose that drains the local economy of cash," said Bruce Laird, an economic development specialist with the Oregon Department of Economic Development.

In other words, the decision to allow Wal-Mart into a community is a decision to transform that community in a negative fashion.

Our hat is off to the Hood River County Commission, and we wish Jackson County well in its attempt to fend off Wal-Mart expansion. Anyone who thinks that adding Wal-Mart to their city or county is traditional economic development is fooling themselves. It is economic transformation of the worst sort.

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Iowa Company Blames Wal-Mart For Layoffs Former World's Largest Bible Wholesaler Closing

Associated Press                   [back to top]
January 15, 2004

IOWA FALLS, Iowa -- Company officials blame competition from Wal-Mart and other stores for a decision to close Riverside Distributors in Iowa Falls.

The company was once the world's largest wholesaler of Bibles. It laid off two dozen workers last week. About 60 will remain on the payroll to liquidate the company's assets over the next few months.

Riverside spokesman Gary Huntley said the market the company served, the independent Christian retailer, has been declining. He said "big box dealers" -- Wal-Mart, Sam's Club, Costco -- have been getting into selling Christian materials, and they can buy at huge discounts.

The company was founded by Earle Fritz, who left his job as a teacher in 1928 to begin selling Bibles door-to-door around Iowa Falls. He later started the company in his basement.

Copyright 2004 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed

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Wal-Mart spends big bucks $500,000 used in campaign against proposal to ban

Tri-Valley Herald                                    [back to top]
By Tamara Grippi - STAFF WRITER
January 14, 2004

Wednesday, January 14, 2004 - Wal-Mart proved it's willing to go to the wall to defeat a proposed ban on big-box retailers in Contra Costa County, pumping $586,500 into the opposition campaign during 2003.

The retail giant's campaign spending report was received by the Contra Costa County elections department Tuesday.

Meanwhile, the advocates of Measure L, aimed at restricting super-size retailers in the unincorporated county, raised$93,800 for their cause last year, including $57,600 collected between Oct. 1 and Dec. 31.

The groups are squaring off for a tough campaign.

"We've always expected that Wal-Mart would far outspend our side," said Contra Costa County Supervisor John Gioia of Richmond. "We don't believe we need to spend as much as Wal-Mart to get our message out."

Wal-Mart spokeswoman Amy Hill said her company was scrupulous to a fault in reporting its spending. The bulk of the money spent so far paid for the signature gathering campaign to force the big-box debate to the ballot, she said.

The board of supervisors originally passed a ban on super-centers in June that would restrict stores larger than 90,000 square feet that devote more than 5 percent of floor space to the sale of nontaxable items.

Wal-Mart was able to stall the ordinance from taking effect by gathering more than 30,000 signatures on a referendum. In October, the board voted to put the issue to the voters this March in the form of Measure L.

The company spent about $177,000 on the signature-gathering effort.

"These costs include everything, probably things we don't need to report," Hill said. "It's debatable whether the petition gathering needed to be reported a part of the campaign expenditure."

During the Oct. 1 to Dec. 31 reporting period, Wal-Mart contributed a total of $401,000 to the anti-Measure L campaign, called Contra Costa Consumers for Choice. Some of that money has funded two direct mailers, though about half of the total budget remains unspent.

The pro-Measure L campaign, called Neighborhood Alliance for Local Control, has spent approximately $53,000 of the $93,800 it raised. About $25,000 has paid for the services of a campaign consultant.

The biggest donors to that effort include the California Teamsters Public Affairs Council, which contributed $25,000 and Safeway Inc., which gave $20,500 in 2003.

The pro-Measure L camp has not yet sent out a direct mailer, though it has enlisted volunteers to go door to door with fliers.

Gioia, one of three county supervisors who went to court to change the language of No on L ballot arguments they believed were misleading, is concerned that some of the same statements have been included in campaign literature of his opponents.

In December, a Contra Costa Superior Court judge stuck language form the ballot arguments claiming that Wal-Mart is the only retailer hurt by the ban.

Tamara Grippi covers Contra Costa County. She can be reached at (925) 416-4882 or at tgrippi@angnewspapers.com

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Powerful Wal-Mart toys with rivals

THE WASHINGTON TIMES By Donna De Marco                    [back to top]
January 14, 2004

Wal-Mart isn't sharing its toys.

Independent toy retailers are blaming the megadiscounter for the holiday season's sluggish toy sales as bargain-shoppers headed to Wal-Mart for the best prices.

The disappointing season led to yesterday's Chapter 11 bankruptcy filing by KB Toys Inc. — about a month after upscale toy retailer FAO Schwarz filed for bankruptcy for the second time in a year. Toys R Us, the largest U.S. toy-store chain, reported mediocre sales during the critical holiday period.

"These guys need to redefine who they are and establish a niche for themselves," said Andy Moser, senior managing director of GMAC Commercial Finance's Retail Finance Group. "If they choose to compete with Wal-Mart, it's not something they are going to win at."

Pittsfield, Mass.-based KB Toys, which has a 4 percent to 5 percent share of the U.S. toy market, operates more than 1,300 stores.

It listed $507 million in assets and $461 million in debts in its bankruptcy filing. It had about $116 million in outstanding unpaid bills for merchandise. The company slowed payments to its suppliers last month.

A Chapter 11 filing allows a company to reorganize and continue operations while freezing debt payments.

"We have been assured by many of our vendors, landlords and other interested parties that they see an important and continuing role for KB Toys in the retail toy market, and will work with us to achieve approval of the reorganization plan," Chief Executive Michael L. Glazer said in a statement. Initially, the company would look to close unprofitable stores, reorganizing its operations and cutting staff, he said.

The 80-year-old company, owned by Bain Capital Inc., said it secured $350 million in financing and expects to emerge from bankruptcy before the 2004 holiday season. Sales at KB Toys stores have declined about 10 percent from Feb. 2 through Dec. 31, according to the bankruptcy filing.

Last year, KB Toys agreed to refund consumers $3 million to settle a class-action lawsuit that claimed deceptive pricing. The company gave all shoppers a 30 percent discount on purchases for a five-day period in October.

During the critical holiday period, KB Toys, like many toy retailers, could not keep up with the steep price cuts by discounters such as Wal-Mart and Target.

Toys were one of Wal-Mart's strongest-selling categories over the Christmas season. The world's largest retailer had slashed prices in October — earlier than in the past — and offered some merchandise below cost.

"Wal-Mart made an effort to dominate business in the toy sector," Mr. Moser said. Toy stores scrambled to keep up.

KB Toys dropped prices the final Christmas weekend and Toys R Us cut prices on some of the holiday's popular toys, but those tactics weren't enough.

Toy R Us had a rough holiday season with a 4.9 percent drop in same-store sales and a less than 1 percent increase in overall sales. The company said profits would be less than expected for the year.

Mr. Moser warned that to get back on track, KB Toys will have to do more than close underperforming stores, which is a common action among bankrupt retailers.

"They have to adopt a different format," he said.

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WAL-MART INSURANCE SETTLEMENT TOTALS $10.4 MILLION

By L.M. SIXEL Copyright 2004 Houston Chronicle                [back to top]
14 January 2004

Wal-Mart agreed to pay $10.4 million to the families of 380 employees who died while they were covered by so-called "dead peasant" life insurance, according to the settlement documents filed at the U.S. Court of Appeals for the 5th Circuit in New Orleans.

Wal-Mart insured the lives of about 350,000 employees in Texas between 1994 and 2000 without telling them. The families of the deceased workers sued to recover the millions of dollars collected by Wal-Mart after they they learned about the policies in 2001.

During the time it owned the policies, Wal-Mart received $30.7 million in insurance proceeds from the deaths of the 380 employees, according to the settlement agreement.

Wal-Mart received between $65,000 and $80,000 when each of its hourly wage workers died and hundreds of thousands of dollars when each of its management employees died.

The settlement must be approved by U.S. District Judge Nancy Atlas in Houston. The amount of money each family receives will be determined by the number of families that come forward.

During much of the time Wal-Mart owned the policies, Texas law did not permit employers to buy corporate owned life insurance on its nonexecutive employees. The law allowed such polices only on key executives. That prohibition ended in 1999 when Texas legislators voted to allow employers to profit from the deaths of their low-level employees as long as the employees consented in writing.

The 5th Circuit ruled against Wal-Mart just hours after the retailer and the families reached their settlement.

A Wal-Mart spokesman and lawyers for the families would not comment.

When the agreement was reached last week, Wal-Mart refused to release the financial details.

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2nd Phase of Wal-Mart Trial Opens in Oregon

WILLIAM McCALL Associated Press                      [back to top]
14 January 2004

PORTLAND, Ore. - Wal-Mart workers were forced to stay late without being paid overtime, sometimes locked inside stores until other workers completed their jobs and then told to pitch in off the clock, an attorney for 134 former employees told a jury considering how much the retail giant should pay in damages.

Overtime violations were systematic and routine at the 18 Oregon stores where complaints were filed, plaintiff's attorney Becky Roe told jurors in her opening statement Tuesday.

A previous federal jury ruled unanimously in December 2002 that Wal-Mart Stores Inc. violated federal and state law labor laws by forcing employees at the stores to work unpaid overtime from 1994 to 1999.

The second panel, made up of different jurors, was seated only to determine damages.

"I think you'll hear from the evidence that their jobs simply could not be accomplished within a 40-hour week," Roe said Tuesday.

From 1994 to 1997, electronic time sheets could be altered without any record of the changes, Roe said. As a result, "overtime simply got edited out," she said.

But a lawyer for Wal-Mart questioned the credibility of the former employees and whether they exaggerated the number of hours they worked. Englund told the jurors they must focus on the individual behavior of each of the 134 former employees to determine damages.

"Evidence in the first trial focused quite heavily on the behavior and actions of Wal-Mart," Englund said. "Despite the first trial, there is still a significant amount of evidence to be presented."

Roe said that, among other violations, Wal-Mart asked employees to help with tidying departments after closing; workers were asked to help make sure product labels were lined up properly; and employees had to spend unpaid time working on shelves frequently changed for new products or displays.

Roe said many employees who had finished their work days were routinely locked inside stores until other workers had completed their jobs, allowing managers to encourage the waiting employees to pitch in "off the clock" so that everybody could leave.

Englund said managers were simply trying to encourage teamwork. "Off the clock is not necessarily evil," Englund said.

Meanwhile, an internal audit of about 25,000 Wal-Mart employees uncovered thousands of labor violations, including minors working during school hours and workers not taking breaks or lunches.

The company's July 2000 audit detailed 1,371 violations of child-labor laws.

In a statement Tuesday, Wal-Mart said the audit was not a valid study and should not be taken at face value. The audit, obtained by The New York Times, covered employee records at 128 Wal-Mart stores nationwide.

The Bentonville, Ark.-based company has 1.2 million domestic employees.

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In-House Audit Says Wal-Mart Violated Labor Laws

By Steven Greenhouse The New York Times            [back to top]
13 January 2004

An internal audit now under court seal warned top executives at Wal-Mart Stores three years ago that employee records at 128 stores pointed to extensive violations of child-labor laws and state regulations requiring time for breaks and meals.

The audit of one week's time-clock records for roughly 25,000 employees found 1,371 instances in which minors apparently worked too late at night, worked during school hours or worked too many hours in a day. It also found 60,767 apparent instances of workers not taking breaks, and 15,705 apparent instances of employees working through meal times.

Officials at Wal-Mart, the world's largest retailer, employing 1.2 million people at its 3,500 stores in the United States, insisted that the audit was meaningless, since what looked like violations could simply reflect employees' failure to punch in and out for breaks and meals they took.

''Our view is that the audit really means nothing when you understand Wal-Mart's timekeeping system,'' said Mona Williams, Wal-Mart's vice president for communications. She said Wal-Mart did nothing in response to the audit, saying it always strives to comply with the law.

But missed breaks and lunches have become a major issue in more than 40 lawsuits charging Wal-Mart with forcing employees to work without pay through lunch and rest breaks, and several lawyers and former employees who have sued Wal-Mart said the audit only bolstered their cases. They said that many employees continued to complain of missing meals and breaks.

''Their own analysis confirms that they have a pattern and practice of making their employees work through their breaks and lunch on a regular basis,'' said James Finberg, a lawyer who has assisted several suits against Wal-Mart. ''What this audit shows is against their own company policy and against the law in almost every state in which they operate.''

Several lawyers who sued Wal-Mart also noted that over the years Wal-Mart had ordered its employees to make sure to clock out when they took lunch and breaks.

And John Fraser, who ran the federal Labor Department's wage and hour division during the 1990's, called the sheer volume of apparent violations surprising and troubling. ''When you find the frequency of this kind of violation in such a large employer, such a pervasive employer, it has to be a source of great concern,'' Mr. Fraser said.

The audit was conducted in July 2000; a copy was given to The New York Times by a longtime Wal-Mart critic hoping to pressure the company to improve working conditions. Wal-Mart has asked various courts to seal the audit for the last two years -- and they have complied -- ever since the company gave copies to lawyers who accused it of making employees work off the clock.

The audit, written by Bret Shipley, a Wal-Mart auditor, indicated that time-clock records for thousands of workers showed tens of thousands of missed lunches and breaks. Ms. Williams said employees had probably taken their lunches and breaks but just failed to record them.

She and other Wal-Mart officials also asserted that time-clock records could have been wrong in indicating that minors had worked illegally during school hours. Schools might have been closed on a given weekday, they noted. ''The audit that Shipley pulled together doesn't reflect actual behavior within the facilities,'' Ms. Williams said.

Wal-Mart officials, she said, always tried to comply with the law and repeatedly told employees to take lunches and breaks. Wal-Mart policies state that employees working seven or more hours a day are to receive a meal break and two 15-minute rest breaks. Federal law does not require lunch and meal breaks, but most states do for employees working seven or more hours a day.

Several months after the Shipley audit was finished, Wal-Mart stopped requiring employees to clock out and in for 15-minute breaks. Wal-Mart officials said they eliminated this requirement for their employees' convenience, but Frank Azar, a lawyer involved in the off-the-clock suits, said Wal-Mart did this to make sure no paper trail could show that employees were not taking breaks.

The audit warned that its findings could hurt the company. ''Wal-Mart may face several adverse consequences as a result of staffing and scheduling not being prepared appropriately,'' it stated.

Commissioned to help Wal-Mart executives determine whether employees were taking their meals and breaks, the audit came as the company was facing several lawsuits accusing it of off-the-clock work and failing to give breaks.

Ms. Williams said that company auditors more senior than Mr. Shipley had determined that the methodology he used was flawed. ''This audit is so flawed and invalid that we did not respond to it in any way internally,'' she said.

But several current and former Wal-Mart employees confirmed in interviews that violations of state law on child labor and breaks were a recurring problem at many understaffed Wal-Mart stores.

Leila Najjar said that when she worked for a Wal-Mart in a Denver suburb at age 16 and 17, she sometimes was forced to miss breaks, work past midnight and work more than eight hours a day even though Colorado bars minors from doing that. Time records from a court case showed that her store sometimes forced her to work illegal hours.

During the holidays, Ms. Najjar, a recent graduate of the University of Colorado, recalled, ''the store closed at 11 and there were nights we had to stay to clean up until 12:30, 12:45. It was a long day, and I was tired the next day at school. And sometimes, I'd have to work 10, 11 hours on a Saturday or Sunday.''

If the same rate of violations were found throughout the Wal-Mart system, that would translate into tens of thousands of child-labor violations each week at Wal-Mart's 3,500 stores and more than one million violations of company and state regulations on meals and breaks.

Company officials said such extrapolations were misleading, noting that many of the seeming time-record problems could be explained by legal behavior.

Wal-Mart employees clock in and out by swiping their identity badges, which the time clock reads electronically. Ms. Williams said employees sometimes forgot to swipe when they arrived at work or when they took lunch. Sometimes, she said, workers missed breaks not because management pressured them but, for example, because they wanted to finish early to take a child to the doctor.

John Lehman, who ran several Wal-Mart stores in Kentucky, said he was sure that large-scale violations on child labor, breaks and meals continued at Wal-Mart. In the months after the company distributed the audit internally, he said, store managers like him received no word to try harder to prevent 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,' '' said Mr. Lehman, who said he quit in 2001 because he was disgusted with the company's treatment of employees. He now works for a union trying to organize Wal-Mart workers.

''Wal-Mart stores are so systematically understaffed that they work minors just like they do adults,'' he said. ''They don't have enough workers to take care of the business. Yes, their prices are low but then the stores are so understaffed that workers often don't have time to take their breaks or lunches.''

Maria Rocha, who ran the restaurant inside a Wal-Mart in Dallas, said her workload was so great and the restaurant so understaffed that she never took breaks and often missed lunch. ''It was just too busy to take a break,'' said Ms. Rocha, who quit in October. ''There were a lot of customers, and the managers would be mad if you took a break.''

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 Washington State, said she sometimes nearly fainted from low blood sugar because managers often would not give breaks.

As for claims of child-labor violations and stores too understaffed for worker breaks, Ms. Williams said, ''In a company that has more than 1 million people in the U.S. alone, I have no doubt that in some individual instances that can happen.''

Photos: ''It was just too busy to take a break,'' said Maria Rocha, who ran a restaurant inside a Dallas Wal-Mart that she said was understaffed. (Photo by Mark Graham for The New York Times); Leila Najjar of Denver said Wal-Mart violated child-labor laws when she worked there. (Photo by Jamie Schwaberow for The New York Times)

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Wal-Mart's America

Salt Lake Tribune- Editorial               [back to top]
January 12, 2004

Wal-Mart's slogan is "Always low prices -- Always." And the company delivers. For consumers, that is literally a good deal. But the question is whether Wal-Mart delivers too much of a good thing, because there are consequences from the company's relentless quest for lower prices that are not good things.

One such consequence is a wage scale so low that many full-time Wal-Mart employees cannot support a family. Another is a hastening of the flight of U.S. manufacturing jobs overseas for products from apparel to toys because of Wal-Mart's pressure on suppliers to constantly reduce costs. Finally, the retail giant's success has decimated competitors, making ghost towns of small-town Main Streets across America.

The Wal-Mart story is definitely a two-sided coin. The company is now the largest private employer in the United States, with a staggering payroll of 1.16 million workers. It also is Utah's largest for-profit employer, with a work force of more than 12,000. And while the company undoubtedly is causing competitors to cut jobs or go out of business, Wal-Mart is creating jobs as it expands. The net effect on employment may be a push.

That expansion is contributing mightily to Utah's construction industry. The company took out building permits that represented $130 million in commercial construction last year.

What's more, Wal-Mart has become such a force in the U.S. economy -- it had sales of $245 billion in the last fiscal year -- that many economists credit the company's downward push on wages and prices for keeping inflation in check and causing productivity to rise.

By forcing the prices of essential goods like groceries and clothes ever downward, the company increases the buying power of its customers, essentially giving them a raise.

Unfortunately, the company's own employees are among those who need that raise the most. The company argues that it is a good place to build a career. However, about 50 percent of its work force turns over in a single year.

Wal-Mart is simply the largest and most obvious whipping boy for the dark side of a global economy in which capital seeks out the cheapest labor. Whether that is found in Honduras or Bangladesh or China, it drives wages down worldwide, because the labor market truly is global.

"Wal-Mart is the logical end point and the future of the economy in a society whose pre-eminent value is getting the best deal," Robert Reich, the economist and former labor secretary, told The New York Times.

But the pre-eminent value cannot be the only value. Because if it is, the United States will continue to evolve toward a two-tiered society, one comprised of those who own capital and those who struggle at several jobs to make ends meet. The class in the middle will disappear, and that will not be good either for social stability or Wal-Mart's bottom line.

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Wal-Mart is the largest retail corporation in the world.

The Capital Times Editorial: Set limits on Wal-Mart An editorial      [back to top]
January 10, 2004

Stoughton is a city of 12,354, where local business owners and residents worry that a super-sized Wal-Mart store would suck the life out of the community's viable and attractive downtown.

It was never going to be a fair fight. How could one little city stand up to a commercial behemoth that is so used to getting its way that it forces major American manufacturers to cut prices by laying off U.S. workers and moving operations to China? And yet Stoughton's reluctance to allow Wal-Mart to construct a 173,000-square-foot "Supercenter" store on the edge of town has caused the commercial behemoth to back off. A little.

Wal-Mart has offered Stoughton what it calls a "compromise." Instead of the 173,000-square-foot "big box" store, Wal-Mart has indicated that it would be willing to scale back to a 145,000-square-foot "village" concept store.

Some Stoughton officials, led by Ald. Melissa Lampe, want to embrace the compromise. Instead of backing a proposed ordinance capping the size of commercial and retail buildings at 110,000 square feet, Lampe is seeking to accommodate Wal-Mart by amending the cap upward to 150,000 square feet. Lampe is a well-intentioned official. But she and those who side with her are giving up too soon, and too easily.

Instead of grabbing the first offer from Wal-Mart, Stoughton officials should recognize that they have succeeded in forcing a powerful corporation to bend. And they can get it to bend further. And if Wal-Mart won't bend, they can find a retailer that is willing to fit into the community - rather than forcing the community to fit into its frenzied pattern of expansion.

Stoughton does not need a Wal-Mart Supercenter. Indeed, the Supercenter could well undermine the viability of the locally owned businesses that line

the city's vibrant Main Street. It is Wal-Mart that wants to be in Stoughton. Instead of accepting the first "compromise" Wal-Mart offers, Stoughton officials should hold out for a real compromise by Wal-Mart.

Better yet, Stoughton officials should set the standards that are right for their community and tell Wal-Mart to either meet those standards or go elsewhere.

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Link between Syria and Spider-Man and Wal-Mart?

By J.R. Labbe Jewish World Review                [back to top]
Jan. 7, 2004

A shopping spree turns into a geo-political awakening

The Spider-Man T-shirt labels escaped close scrutiny until after the items were on the kitchen table, awaiting wrapping and bows.

It was bad enough being reduced to fighting last-minute shoppers at one of those big-box stores. But darn it all, when 4-year-old triplets have specific requests for gifts, and the only place to find them is a Wal-Mart, principle goes right down the toilet.

One hardly blinks these days at a "Made in China" or "Made in Japan" label. But "Made in Syria"? That'll draw you up short.

"Made in Syria" - as in Axis of Evil Part Two. As in political and logistical ally to Hezbollah and other armed radical groups. As in state sponsor of terrorists.

As in the target of Public Law No. 108-175, signed by President George W. Bush on Dec. 12, to "prohibit United States businesses from investing or operating in Syria."

Syria, exporter of toddlers' T-shirts with Spidey on the front.

Apparently this shopper wasn't the only one who hadn't read the label until the purchase was final. Neither had Wal-Mart.

"We were not aware that we were carrying the merchandise you mentioned with a label from Syria," said Melissa Berryhill, senior public relations manager in Wal-Mart's headquarters in Bentonville, Ark. "Thank you for bringing it to our attention."

You're welcome.

Although it is curious that Wal-Mart, which has been accused of making conscious political and moral statements through the merchandise it chooses "not" to carry — no handguns, no books with questionable content or jacket art, no CDs deemed offensive, no video games that are overly violent — wasn't aware that it sold products made in a country listed as a rogue nation by the State Department.

Wal-Mart didn't break any laws in buying Syrian-made T-shirts. Neither did any of the American companies along the product chain that leads from a comic book character's merchandising rights and licensing agreements to the Haddad manufacturing company.

No statutes ban Syrian products from entering the United States.

"Although the Department of State lists Syria as a state sponsor of terrorism and reports that Syria provides `safe haven and support to several terrorist groups,' fewer United States sanctions apply with respect to Syria than with respect to any other country that is listed as a state sponsor of terrorism," said the congressional findings portion of HR 1828 - the Syrian Accountability and Lebanese Sovereignty Restoration Act.

With the act's passage, that could change. The president now has the authority to impose sanctions if Syria doesn't get right with the Western world.

Those penalties include prohibiting the export of U.S. products to Syria, prohibiting U.S. businesses from investing or operating in Syria, and banning aircraft owned or controlled by Syria from taking off from, landing in or overflying the United States — a "don't even think about it" sanction, given that this is not happening now.

But Syria can still sell goods here.

It's not as if Syria is a major U.S. trading partner. It ranks somewhere around 94th on the list. U.S.-Syrian trade totaled $500 million in 2002 — a pittance, although U.S. oil giant ExxonMobil Corp. has joint ventures with Syrian firms, and ConcoPhilips has gas operations there.

One Middle East expert says that the threat of economic pressure is unlikely to change hearts or minds.

"Syria, which has extensive trade ties with Europe, is set to become an EU partner in 2010," Murhaf Jouejati, adjunct professor at George Washington University and adjunct scholar at the Middle East Institute, testified to the National Commission on Terrorist Attacks Upon the United States on July 9.

Losing a Wal-Mart contract won't exactly paralyze the nation - not as long as the Germans and the French have money to spend.

Wal-Mart's Web site lists its supplier standards for ensuring that companies with which it does business comply with labor, compensation, health, safety and environmental laws. The company has a compliance office in Dubai, which one supposes would be responsible for checking up on Middle Eastern contractors and subcontractors.

Guess the Haddad company does OK when it comes to accessible restrooms and no forced labor.

Every weekday JewishWorldReview.com publishes what many in Washington and in the media consider "must reading." Sign up for the daily JWR update. It's free. 

JWR contributor Jill "J.R.'' Labbe is a senior editorial writer and columnist for the Fort Worth Star-Telegram.

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It's Wal-Mart's way, or no way, the world over

Hands are a blur at workers' sewing stations in the QR Fashions factory owned by Oxford Industries in Honduras. Many apparel industry jobs for unskilled workers depend on Wal-Mart. (Beatrice De Gea/Los Angeles Times)

At a Honduran clothing factory, employees are searched before they can eat. To cut costs, the country's factories have reduced payrolls. ''We're earning less and producing more," said Henry Fransen, of the Honduran Apparel Manufacturers Association, ''following the Wal-Mart philosophy." (Beatrice de Gea/Los Angeles Times)

By Nancy Cleeland, Evelyn Iritani and Tyler Marshall             [back to top]
Los Angeles Times -
January 3, 2004

SECOND OF THREE PARTS

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 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 low 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.

Size matters: 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."

''I think we have reached the limit," said Shin Woo Kang, manager of the enormous Han Soll 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 of $8.63.

Kang said Wal-Mart was paying Han Soll 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 percent fewer workers, said Henry Fransen, director of the Honduran Apparel Manufacturers Association, which represents nearly 200 export factories.

''We're earning less and producing more," he said, ''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.

Most favored company: 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.

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.

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 percent more for U.S.-made products.

In his 1992 memoir, ''Made in America," Walton claimed that the program had saved or created nearly 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.

Squeezing costs: 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.

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 percent 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" focus left it playing catch up.

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.

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.

It's no wonder Wal-Mart wields such clout in this country, where nearly half the population lives in poverty. The company bought 14 percent of the $1.9 billion in apparel that Bangladesh shipped to the United States last year.

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 fleece jackets this year, he bargained down his suppliers of fabric, thread and fastenings, and managed to cut his price by 20 percent.

It wasn't good enough for Wal-Mart. ''They said they will place the order in Vietnam or China," he recalled. -----

Wal-Mart's bane: Organized labor

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Wal-Mart workers and union backers square off at a Los Angeles City Hall hearing on a mega-store zoning law.

By Nancy Cleeland and Abigail Goldman                    [back to top]
January 04, 2004 - Los Angeles Times

Inglewood, Calif., seemed to offer the perfect home for a new Wal-Mart Supercenter, with low-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 cement. Instead, the world's biggest company is at war with a determined opposition, led by organized labor.

"A line has been drawn in the sand," said Donald Eiesland, 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 well-paying union jobs.

Tug of war: The unions have a seven-figure war chest to fight Wal-Mart. The giant retailer is aggressively countering every move, and some analysts believe that Wal-Mart's share of grocery sales in the state could eventually reach 20 percent. The state's first Supercenter is set to open in March in La Quinta, near Palm Springs.

"If we have an advantage," said Robert 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 low prices," said John Mack, president of the Los Angeles Urban League. "I 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 -- $9 vs. $19. As the grocery chains brace for the competition, their workers face severe cutbacks in compensation.

"We're going to end up just like the Wal-Mart workers," said Rick Middleton, a Teamsters official in Los Angeles County 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.

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 convinced 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 have also 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 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 resources and resolve.

The inside offensive: 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 -- already the nation's largest grocer -- 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. "Wal-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 percent 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 electorate, said McAdam, the Wal-Mart vice president.

Wal-Mart's opponents have vowed to sue to block the initiative on the grounds that it oversteps the limits of the ballot process.

Divided strategies: 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 efforts.

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, which five years ago strongly opposed a labor-backed attempt by the state Legislature to ban big-box stores from selling a full line of groceries. "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 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. "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. Gray 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. 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.

Weighing in: Several studies commissioned in recent years by pro-business groups, including the Orange County Business Council and the San Diego Taxpayers Association, 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 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 percent lower than at union markets.

As he began his study in midsummer, 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-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.

"I 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 super- markets."

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Unions seeing new benefits in 'smart growth'

By John Ritter                                       [back to top]
January 2, 2004 - USA TODAY

Slowing sprawl can boost jobs, say some Calif. labor leaders

SAN DIEGO -- A battle to curtail suburban sprawl around California's second-largest city feels like dj vu. The same powerful interests that shot down protections for rural land six years ago are poised to torpedo a new ballot measure in March.

Except for a key difference. Organized labor, once opposed to any development curbs for fear of losing jobs, avidly supports the recycled voter initiative.

The building trades unions, usually wary of ''smart growth'' policies, have become convinced that those development practices hold potential for more jobs and better jobs than sprawl does.

''People will automatically say this initiative is anti-growth. It's not,'' says Jerry Butkiewicz, secretary-treasurer of the San Diego-Imperial Counties Labor Council. ''We want to increase growth. We just want it to be dense, to stop this sprawl. It's killing us.''

Unions are rethinking positions on sprawl and seeing benefits in smart growth for their members, especially in booming California and Nevada, where land-use issues are divisive.

''It's been a sea change that nobody noticed, an evolution,'' says Tim Frank, a senior policy adviser for the Sierra Club's national sprawl campaign.

Labor gives the anti-sprawl coalition of environmentalists and proponents of mass transit a potent new ally that has political resources and clout in the construction industry. ''Union members have

an interest in seeing development that's more compact, that builds on the assets of cities and older suburbs, that don't support the low-road economy -- these big-box retailers at the fringe,'' says Bruce Katz,

director of the Center on Urban and Metropolitan Policy at the Brookings Institution, a think tank.

Countering a 'misguided notion'

A study released last month by Good Jobs First, a non-profit research center in Washington, D.C., found that over a 10-year period, metro areas with growth controls had nearly a third more construction than

areas without such policies. Rehabilitating buildings, developing idle urban land and reclaiming toxic sites for building -- all smart-growth priorities -- were more labor-intensive than sprawl, the study found.

''Unions just assumed growth limits meant fewer jobs for their members,'' says Phil Mattera, Good Jobs First's corporate research director. ''Our report shows that's a misguided notion.''

Smart-growth advocates say sprawl expands suburbs haphazardly with large lot sizes in subdivisions that create more traffic congestion and chew up open space. They push for high-rise residential construction and urban redevelopment, ideally close to mass transit. When cities must expand, smart-growth values call for denser, pedestrian-friendly housing near jobs and shopping to cut traffic.

But today, smart growth has become a mom-and-apple-pie term embraced by disparate groups that define it to fit their needs. Environmentalists and the housing industry, frequently at odds, both support smart growth but disagree on how much open land should be off-limits to development.

Along with arguments that it creates more jobs, smart growth complements other union priorities. Labor fights ''big-box'' retailers such as Wal-Mart because they're non-union. Labor's smart-growth allies blame hose companies for hastening sprawl.

But union leaders also say smart growth enriches their members' lives by producing less traffic, cleaner air, shorter commutes and more open space. ''Union members not only work in these places, they have to live there, too,'' says Bob Balgenorth, president of the California Building Trades Council.

Labor is not yet a united bloc behind smart growth. In 2000, union opposition helped defeat ballot measures to curb sprawl in Arizona and Colorado. But two years ago, the AFL-CIO urged unions to get active in the sprawl debate. And more of them are:

* In San Jose, Calif., unions backed a move to convert marginal downtown commercial and industrial space to high-density residential units. They also supported a sales-tax hike for mass transit.

* In Contra Costa County, Calif., unions successfully opposed several large suburban housing projects and backed an urban growth boundary to protect open space and farmland.

* In Las Vegas, where drought forced water-use restrictions, the Teamsters have called for growth limits in the nation's fastest-growing metro area until new water supplies are found.

''I'd rather lose a couple hundred jobs today than a couple thousand in five years when the builders go somewhere else,'' says Ray Isner, political organizer for Teamsters Local 631. ''Why can't Las Vegas be second, third or fourth in growth but be No. 1 in smart growth?''

Protecting rural land

San Diego County is home to 2.9 million people and more than three times the area of Rhode Island. Conservationists have grown impatient with its efforts to protect its undeveloped eastern two-thirds. A new zoning plan, nearly a decade in the making, won't be finished before 2005. Groups such as Save Our Forests and Ranchlands (SOFAR), sponsor of the ballot measure, fear more land will be lost in the meantime.

In 1996, a judge found the county's stewardship of open land so inept that she gave SOFAR temporary authority over land-use decisions.

But opponents, including elected county supervisors, say SOFAR's Rural Lands Initiative would bypass public hearings and environmental reviews and let city voters decide smaller communities' fate against their will. Opponents also fear housing shortages and higher home prices.

The measure would block sprawl by prohibiting lot sizes smaller than 40 acres just east of San Diego's cities and smaller than 80 acres in the backcountry. A similar measure lost badly in 1998 without union backing.

Momentum may have turned since then. Endorsements from the League of Women Voters and the American Lung Association could offset opposition from builders, the chamber of commerce and others. The blessing of Ellen Revelle, an influential member of one of San Diego's oldest families, gives the measure an establishment imprimatur.

Unions, on the fence in 1998, could deliver the decisive edge by urging their 120,000 members to vote and committing money and volunteers to work precincts, staff phone banks and produce mailers. Butkiewicz says the labor council will lobby union contractors, arguing that most suburban projects go to their non-union competitors anyway.

''The public on a much wider scale now sees the insanity of unplanned growth,'' SOFAR President Duncan McFetridge says. ''But sprawl politics is vicious here. It's going to be a battle.''

She was fired from Wal-Mart for "insubordination."

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