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Los Angeles Daily News, August 31, 2004
Anyone who has walked down a Wal-Mart aisle knows that the store's
prices are hard to beat. I am certainly not against low prices. However,
we must be careful to ensure that we do not sacrifice well-paying
jobs and increase tax burdens when we allow superstores to come into
our communities. Careful planning is key to ensuring that the aggressive
expansion plans in our state by one of the nation's most profitable
companies don't hurt California workers and taxpayers in the long
run.
The Center for Labor Research at the University of California at Berkeley
documented the hidden costs to the California taxpayer that are created
by Wal-Mart's low wages and inadequate benefits. This discussion of
hidden costs has stirred up much controversy. Wal-Mart pays its employees
far less than other large retailers pay their employees in California,
and taxpayers are often left to pick up the difference. That's fact,
not assumption. Using the findings based on employment data that Wal-Mart
was forced to turn over during its sex-discrimination litigation,
UC Berkeley economists conclude that this year Wal-Mart is lagging
30 percent behind potential competitors in wages.
The low pay and benefits packages create the need for Wal-Mart's workers
and their families to get $86 million annually in public assistance
in programs like Medi-Cal and food stamps. Taxpayers paid an average
of $1,952 per each low-wage Wal-Mart worker. That's a whopping 40
percent more than needed from taxpayers for workers of other California
retailers.
Of course Wal-Mart and its supporters are disputing the findings,
but their arguments are simply wrong. Take, for instance, the claim
that Wal-Mart provides jobs to otherwise unemployed workers who, without
those jobs, would be drawing down many more public resources. What
they fail to calculate are the store closures caused by Wal-Mart,
especially when its new store is a Wal-Mart Supercenter — a
superstore or megastore that sells a substantial amount of groceries
in addition to regular retail items.
Data show that for each new Wal-Mart superstore, at least two supermarkets
close down. In addition, many small local and independent stores are
forced to shut their doors when a Wal-Mart superstore comes into town.
In other words, Wal-Mart is both a job creator and a job killer. Often
superstores kill better jobs than they create. That's a dangerous
trend. As the UC study documents, if other large retailers in California
paid Wal- Mart wages and curtailed health coverage down to Wal-Mart
levels, California's workers would become poorer, and taxpayers would
be stuck with paying an additional $410 million in subsidies every
year.
Another argument marshaled by supporters of superstores is the unsupported
claim that they bring in sales revenue to the state and counties.
But there is little evidence that a superstore actually adds to sales
revenue if it is allowed to displace other retailers.
Local governments need to know the facts, and that's what my proposed
legislation does. SB 1056 does not ban Wal-Marts or Wal-Mart Supercenters.
It would simply require that any retailer that wants to build a superstore
pay for an independent economic impact report when applying for a
building permit in any city in California. Local governments would
still be able to approve or disapprove of superstores, but they would
do so armed with important information about how their area, their
small businesses and their workers would be affected.
I'm pleased that this concept has been approved as a Los Angeles city
ordinance. But a piecemeal approach isn't enough. Cities need a uniform
state law to level the playing field. Without such a law, corporations
can simply move from town to town looking for municipal leaders who
are so enticed by potential sales tax revenues that they don't fully
investigate the long-term effects.
Getting all the facts before making important decisions is just common
sense. It's the same way you buy a car, choose a home or pick a school.
You weigh the pros and the cons and make an informed decision. This
legislation, which has passed through both the state Assembly and
the state Senate and is currently on the governor's desk, is simply
good public policy.
State Sen. Richard Alarcon, D-Van Nuys, is a candidate for mayor
of Los Angeles.
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