The NYC Council hosted a raucous hearing on the potential entry of Wal-Mart into the NYC market. The hearing was hosted by the Committee on Community Development, chaired by Council member Al Vann, jointly with the Committees on Small Business and Economic Development. Titled “When Wal-Mart comes to Town: The Effect on Small Businesses and Communities: A Historical and Prospective View,” the hearing exposed Wal-Mart’s predatory business practices.
Wal-Mart representatives were a no-show. Instead, Wal-Mart flooded NYC airwaves with commercials touting the alleged benefit of Wal-Mart – low prices.
Public Advocate Bill de Blasio submitted a report on Wal-Mart’s Economic Footprint in collaboration with the Hunter College Center for Community Planning and Development. The report found “Wal-Mart depresses area wages and labor benefits contributing to the current decline of good middle class jobs, pushes out more retail jobs than it creates, and results in more retail vacancies.” Despite Wal-Mart NYC strategy of placement in sites the size of corner grocery stores as opposed to its suburban business model of locations of 180,000 square feet or more, “there is no indication that smaller ‘urban’ Wal-Mart stores scattered throughout a dense city in any way diminish these negative trends.”
The lure of Wal-Mart’s cheap goods has a high cost to tax payers. The Public Advocate’s report notes nationally, “Wal-Mart has thousands of associates who qualify for Medicaid and other publicly subsidized care [such as food stamps], leaving tax payers to foot the bill… [b]ecause many of Wal-Mart’s employees do not earn enough to make ends meet they often turn to public assistance.” Wal-Mart “likely avoided paying $245 million in taxes [FY]2008 by paying rent to itself and then deducting that rent from its taxable income.” In addition, “Wal-Mart has admitted a failure to pay $2.95 billion in taxes for fiscal year 2009.”
According to the group Wal-Mart Subsidy Watch, a non-profit watchdog group, Wal-Mart has already received subsidies worth about $52 million in New York State. At least eight Wal-Mart locations in New York have challenged their property tax assessment, recouping about $766,000. “Wal-Mart has already cost New Yorkers millions of dollars, even before entering the state’s largest marketplace.”
University of Illinois at Chicago professor David Merriman testified that when it entered the Chicago market, “Wal-Mart displaced many neighborhood businesses and in doing so displaced a number of jobs about equal to those it directly generated.” Merriman concluded “proximity to Wal-Mart is associated with a higher probability of going out of business for local retail establishments.
Hunter College Professor Tom Angotti, Ph.D. cautioned “the entrance of Wal-Mart in the city could trigger a snowball effect that in the long run undermines the local economy and has devastating effects on our neighborhoods” and warned “after Wal-Mart saturates a market it then abandons it and moves on to the next frontier, resulting in more vacant stores. The abandoned suburban malls are testimony to this and a cautionary tale for New York City.” Angotti recommended required discretionary land use review for all large retailers regardless of the size of their individual stores and establish clear and precise policies for both the preservation and development of local retail over the long-term future.”
Small business owner and Hip Hop Summit Youth Council founder Charles Fisher suggested “If Wal-Mart can’t come into our city, then we should ask Target, Sears, K-Mart, Costco and all the other big box stores with or without a UNION to also go. If we get rid of all the big box stores, that would be a greater victory for small business.”
Sung Soo Kim, President of the Korean American Small Business Service center of New York representing 1,200 Korean American green grocers, stated “Wal-Mart is not qualified to run its business in NYC… it does not benefit our town at all, but rather destructs welfare and quality of life on New Yorkers as well as cannibalizes neighborhood-friendly small businesses through predatory pricing.”
Steven Barrison of the Small Business Congress NYC said Wal-Mart is a special interest interested only in itself. “Savvy New Yorkers know how to get ‘cheap’ or discounted underwear without the Wal-Monster,” Barrison said. “NYC must
remain Wal-Mart Free because we must lead the way for our nation to
strong jobs and revenue for our citizens.”
Michael Pricoli, member of CWA Local 1180 said he is “100% against Wal-Mart coming to NYC. After citing instances when Wal-Mart closed after employees unionized, Pricoli said, “Wal-Mart does not listen to its employees or community. If Wal-Mart was to let it’s workers decide openly and freely without
repercussions to unionize or not unionize, and if Wal-Mart was to take into consideration the businesses it may hurt in NYC, and if Wal-Mart would promise not to raise prices as it has all over America when some of its competitors fold, then and only then Wal-Mart’s bid to come to NYC [should] be looked at seriously.”
Ken Baer said the Sierra Club “opposes the Wal-Mart store proposed for Schenck and Fountain Avenues near Shore Parkway based on many environmental factors.” Brian Ketcham, who owns an engineering firm and represented the Wal-MartFreeNYC
Coalition spoke of “the increased costs of congestion, increased costs from additional traffic accidents and increased environmental damages,” form an analysis of the traffic impacts of adding a 180,000 square foot Wal-Mart super center at the Gateway Estates project in ENY.
Stephen Parker on behalf of NYC Americans for Democratic Action stated, “Wal-Mart’s slogan ‘Everyday Low Prices’ has really camouflaged its successful efforts to destroy the skilled jobs of American manufacturing workers whose
living wages and benefits previously provided work and a middle class lifestyle for women, recent immigrants, and members of minority groups.” Parker said “Wal-Mart has set up hundreds of factories in China to make cheap goods. Chinese workers earn as little as 75 cents per hour for a 16 hour workday. Wal-Mart is the largest single importer of cheap Chinese made goods in America. Wal-Mart has
single-handedly destroyed millions of well paying manufacturing jobs in America and new York City.” Bringing the issue home, Parker said “In what is surely a cruel twist of irony Wal-Mart having sent our good paying jobs to China, now wants to move into our neighborhoods to save us money by offering ‘Everyday Low Prices’ or maybe even an everyday low-paying job!”
Philip Serghini, community affairs manager for Wal-Mart “respectfully decline[d] participation in the hearing because “New York City is home to many of our best
competitors. Companies such as Sears, Kohl’s, Macy’s, Trader Joe’s, Marshall’s TJ Maxx, Home Depot, Costco, Target, Best Buy, BJ’s, Lowes, Ikea, Kmart, Office Max, Office Depot, Toys ‘R Us, Borders, Barnes & Noble certainly have changed the face of retail across all 5 boroughs. We believe that the jobs, business competition and economic growth created by Wal-Mart and companies such as these are to the benefit of any community. The joint hearing, however, does not
appear to consider the impact of the hundreds of NYC stores operated by these companies; rather it focuses solely on Wal-Mart,” he said. “I respectfully suggest the committee first conduct a thoughtful examination of the existing impact of large grocers and retailers on small businesses in New York City before embarking on a hypothetical exercise.”
Council member Letitia James is has also taken a stand against Wal-Mart “Small
businesses are the engines of the New York City economy, creating jobs, spending locally and keeping our dollars in the community.
Wal-Mart could put those small businesses out of business, costing us valuable jobs, as well as hurting our economy while doing so,” she said. “For these reasons, New York must say no to Wal-Mart.”
Council member Charles Barron’s opposition to Wal-Mart is well-known. He
worked with East New York Congregations and national developer Related Companies to create and expand Gateway Estates. Barron is proud of the project’s creation of 2,385 units of housing priced at what Barron defined as affordable: 40-60% of the AMI. He calls the development a community, with new junior and high schools, 2 day care centers, and 3 new parks. The project has created 7,000 temporary
construction jobs and 1,700 permanent jobs “without Wal-Mart,” said Barron.
Phase ll of Gateway estates is underway, consisting of a Town Center with
housing above storefronts. Barron received a commitment from Related
Company that a percentage of those storefronts would be for mom-and-pop stores. Gateway Mall currently consists of 600,000 square feet of retail space, which will be extended another 600,000 square feet. Barron stated at planning meetings with Related that Wal-Mart would not be located there. “If you bring in Wal-Mart,” Barron said, “the Town Center, Gateway Mall and local businesses would
go out of business, as would local distributors. Wal-Mart has its own distributors.
Barron’s chief criticism of wal-Mart is how it treats its employees. “For
every 2 jobs Wal-Mart creates,” said Barron, “three are destroyed.” Barron’s other issues with Wal-Mart: part time work with no pension or health care anddiscriminations lawsuits filed by Wal-Mart’s female workers.
“Wal-Mart,” Barron said, “Is a rotating plantation looking for a slave. There
is a high cost for those low prices.”