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The Home Town Advantage Bulletin - February 2004
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Reprint Policy and Guidelines
CONTENTS
- About this Bulletin
- Reprint Policy
- LOCAL BATTLES
-- Hood River Rejects Wal-Mart Supercenter
-- Judge Halts Construction of Superstores in Bakersfield
-- Brattleboro Group Urges Residents to Support Local Merchants
- ALLIANCES AND COOPERATIVES
-- Buy Local Campaign Launched in Northwest Washington
-- Local-Only Shopping Day Boosts Austin Business Alliance
-- Santa Fe Alliance Releases Independent Business Study
- NEW RULES
-- Tuolumne County Caps the Size of Retail Stores
-- Stoughton, Wisconsin, Adopts Big Box Limits
-- Vermont Governor Proposes Closing Tax Loophole that Favors Chains
-- Denver Drops Plan to Evict Asian Businesses for Wal-Mart
-- California Laws Targeting Supercenters Raise Concerns
- NATIONAL NEWS
-- Supercenters in Southern California: Boon or Bane?
-- Wal-Mart Internal Audit Finds Thousands of Labor Violations
- INTERNATIONAL NEWS
-- Britain's Main Streets Fast Becoming Ghost Towns
- RESOURCES
-- How Wal-Mart's Health Coverage Stacks Up
-- Envision New Zealand
-- Elsewhere in the Media
The Home Town Advantage Bulletin is a bimonthly electronic newsletter reporting on efforts nationwide to stop chain store proliferation and support locally owned, independent retail businesses. Learn about land use policies and other tools that can protect the character and vitality of your hometown. Find out how other communities are bucking the "big box" retail trend and encouraging small-scale, homegrown businesses - and why this approach is proving far more beneficial to the local economy. Plus, news on e-commerce, independent business alliances, development subsidies, franchisee legislation, and all the latest resources.
To get this e-bulletin in your e-mail box, subscribe by sending a blank e-mail to: home_town_advantage-subscribe@topica.email-publisher.com
ABOUT THIS BULLETIN
In communities across the country citizens are taking action to defend and strengthen their local economies. The Institute for Local Self-Reliance (ILSR) has been tracking these efforts and will use this bulletin to provide bimonthly updates on significant developments. We hope it will serve as a tool for making connections and sharing strategies within this growing movement. We encourage readers to share news and resources by sending email to smitchell@ilsr.org
ILSR is a nonprofit organization providing research, analysis, and innovative policy solutions for building healthy communities and strong local economies. This bulletin is part of ILSR's New Rules Project, which maintains a web-based clearinghouse of model public policies at http://www.newrules.org and publishes reports, several electronic bulletins on specific issues; and books, including The Home Town Advantage: How to Defend Your Main Street Against Chain Stores and Why It Matters.
Another good source of news on local efforts to keep chain stores is the NewsFlash! section of the Sprawl-Busters web site (http://www.sprawl-busters.com). Additional links and organizations are listed at the end of each story.
REPRINT POLICY
Are you interested in reprinting an article from this bulletin in your newsletter or web site? Please see our reprint policy.
I. LOCAL BATTLES
HOOD RIVER REJECTS WAL-MART SUPERCENTER
In early January, the Hood River, Oregon, County Commission voted 3-2 to reject Wal-Mart's application to build a 186,000-square-foot supercenter.
"This was a marvelous and gutsy decision by the board," said Kate Huseby, co-chair of the Citizens for Responsible Growth (CRG), a grassroots group that has fought the proposal in this community of 5,000 people in north central Oregon for more than two years. "We applaud them for doing their homework, and making the tough vote."
The County Commission gave two reasons for its vote. One was that the supercenter, at more than seventeen times the size of any building in the area, would be incompatible with the surrounding neighborhood. County zoning rules require commercial buildings to conform in "height, bulk and scale" to nearby properties.
The commission also concluded that Wal-Mart had failed to demonstrate that the supercenter, which would be located in a floodplain, would not cause flooding downstream. Engineers hired by the city and CRG uncovered numerous mistakes in the company's floodplain plan. "I found several errors that I, as a lay person, could see and understand," Commissioner Carol York said. "That did not give me much confidence in the information they were giving us."
Wal-Mart already has a 72,000-square-foot store in Hood River. It planned to close the store, as it has done with hundreds of others nationally, once the new supercenter opened. When the company's plans first surfaced two years ago, a group of Hood River residents formed CRG and persuaded the city and county to adopt ordinances limiting commercial buildings to no more than 50,000 square feet. The caps are designed to protect the community's livability and its vibrant downtown.
The size limit, however, did not apply to Wal-Mart's supercenter application, which had already been submitted and thus had to be considered under existing zoning rules. Wal-Mart has 21 days to appeal the county's decision to the state Land Use Board of Appeals.
Once the Wal-Mart fight is behind them, CRG members plan to continue their community work as the Hood River Civic Forum, which will host educational events around a variety of local issues.
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JUDGE HALTS CONSTRUCTION OF SUPERSTORES IN BAKERSFIELD
A California Superior Court judge has suspended construction of two Wal-Mart supercenters in Bakersfield, California, indefinitely.
Judge Kenneth Twisselman ruled that the city council had not adequately examined the urban blight that could result if existing big box stores close after the new supercenters open. Vacant big box stores, the judge said, have significant environmental impacts that the city is required to consider as part of its environmental review process.
The lawsuit was brought by the grassroots group Citizens for Local Control. According to officials, it will take about six months for the city to study the economic impact of the supercenters and complete another environmental impact statement with information on retail vacancies. At that point, the proposals will go back before the city council.
BRATTLEBORO GROUP URGES RESIDENTS TO SUPPORT LOCAL MERCHANTS
Last year when Home Depot announced that it would open in a former Ames department store building in Brattleboro, Vermont, a group of residents organized a campaign urging people to avoid the store and continue supporting their hometown merchants.
The group, BrattPower: Supporting Our Local Economy, gathered 3,200 petition signatures in this town of 12,000, organized a community forum, and began running radio and newspaper ads outlining the hidden costs of large chain stores and the benefits of locally owned businesses.
The group's radio ad opens with Bob walking into Alice's restaurant and telling Alice that he just saved 60 cents at the new Home Depot. Bob is surprised to learn from Alice that Pop's Hardware is closing. They begin to talk about all the other businesses that rely on Pop's. "A lot of Pop's people eat here," says Alice. "My wife does his accounting," notes Bob. "And doesn't your sonin- law do his printing?" Bob decides that saving 60 cents probably was not such a good deal after all.
The ads began running in November and continued after Home Depot opened in mid January. BrattPower hopes the store will rank as Home Depot's worst-performing outlet.
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II. ALLIANCES & COOPERATIVES
BUY LOCAL CAMPAIGN LAUNCHED IN NORTHWEST WASHINGTON
More than 250 independent businesses in and around the city of Bellingham in northwest Washington have joined together to urge residents to "think local first" when shopping. Organized by Sustainable Connections, a coalition of locally owned businesses, the campaign aims to build public awareness of the benefits of supporting homegrown enterprises. "People don't always make the connection between their quality of life and the choices they make through their purchases," said Sustainable Connections director Michelle Long.
The campaign kicked off in early December and has already become very visible within Bellingham and Whatcom County. Its eye-catching logo, which features Mount Baker and the words, "think local, buy local, be local," now appears on hundreds of storefronts, posters, teeshirts, bumper stickers, flyers, and newspaper advertisements.
Sustainable Connections provided every participating business owner with a kit that includes tips on how to promote the campaign; a fact sheet on the top ten reasons to support local businesses; a poster to display in their stores; and a window decal with the campaign's logo.
The kit also included six different thank-you cards for business to give to their customers. Each includes a unique message about why supporting locally owned businesses is good for the community. One, for example, reads "Local businesses are owned by people who live in this community, are less likely to leave, and are more invested in the community's future." Participating businesses also received a listing on the campaign's website (www.ThinkLocal.org) and were supplied with master copies of the campaign logo, which they've been reproducing in their own advertising and in-store marketing.
Small businesses "tend to be more flexible, more attuned to what their neighbors need and want, and they tend to give more to charitable organizations," said Kathy Van Winkle, manager of Griggs Office Supply, explaining her message to customers. "The more you spend your money with local businesses, the more those dollars stay in the community."
To get the campaign off the ground, Sustainable Connections created a month-long contest in which residents gathered receipts from local businesses. Those who collected the most win prizes. The two runners-up get $100 gift certificates good at any participating business. The grand prize is a month of daily free meals at locally owned restaurants. More than 100 people have entered the contest, according to Long. The winners will be announced in a few weeks. The campaign has received extensive coverage from local radio, the Bellingham Herald, and the Bellingham Weekly, and participating businesses say it's beginning to affect residents' purchasing decisions.
Long notes that businesses that have gone the extra mile to highlight their role in the local economy are getting the most from the campaign. Village Books, for example, has been promoting local authors, while La Fiamma Wood Fired Pizza has invited producers to talk about the local ingredients used in its pizzas. Sustainable Connections plans to expand the campaign in the coming year with special seasonal celebrations and a local business directory.
Sustainable Connections is affiliated with the Business Alliance for Local Living Economies (BALLE), a two-year-old national network of small, sustainable businesses that are dedicated to rebuilding their local economies. BALLE has affiliates in several communities. Buy local campaigns are in the planning stages in Salt Lake City; Philadelphia; Portland, Oregon; San Francisco; and British Columbia. BALLE will host a national conference in Philadelphia in May.
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LOCAL-ONLY SHOPPING DAY BOOSTS AUSTIN BUSINESS ALLINACE
Austin residents responded enthusiastically to a call by independent retailers to shop exclusively at locally owned businesses on Saturday, November 15. The one-day event, called Austin Unchained, was organized by the Austin Independent Business Alliance (AIBA) and was promoted through posters, tee-shirts, and flyers distributed throughout the city.
"On November 15, break the chain habit. Shop locally owned. . . By choosing to shop locally owned for just one day, we can contribute $14 million to our local economy," the posters read, referencing a Civic Economics study that found that the event would benefit Austin's economy, because, compared to chains, local retailers buy more goods and services locally. "It was a huge success on many levels," according to Rebecca Melancon, AIBA co-founder and publisher of The Good Life magazine. The event was covered by four television stations, eight radio stations, and all the major print media in Austin.
It catapulted AIBA to new level of visibility and standing within the community. "We've been contacted consistently by the media ever since," said Melancon. At first, reporters were doing follow-up to Austin Unchained, but now they routinely solicit AIBA's perspective on a variety of issues not directly related to its mission.
"Just this morning a reporter called to ask how we felt about the new overtime pay regulations," said Melancon. "That to me is exciting, because we've gotten the news media to recognize that the viewpoint of independent businesses is important."
Many AIBA members reported being especially busy in the two weeks following the event, and said that more of their customers asked if they were locally owned. Hits on AIBA's web site nearly tripled to 8,000 a day.
The event also helped further AIBA's local policy goals. The group has urged city officials to offer more to support locally owned businesses and to more thoroughly scrutinize chain retail proposals. "We're not saying that there's no place for national chains," said Melancon. "But one side should not exist at the complete extinction of the other."
In response to pressure from AIBA and a coalition of community and environmental groups, the city of Austin has commissioned a study on the economic and environmental impacts of big box stores. The city appointed members of AIBA to a committee overseeing the scope of the study, which is being conducted by Texas Perspectives and should be released in about two months. Perhaps most important, Austin Unchained has energized AIBA's members and attracted new businesses. The group had record turnout at its most recent monthly meeting. Fifteen new businesses have joined since November, bringing AIBA's total membership to 240. AIBA has several initiatives planned for the coming year. In response to growing interest from citizens who want to get involved, AIBA will be expanding its web site to allow people to signon as supporters of the organization. They will receive a monthly email update with news and coupons for different AIBA member businesses that they can print-out at home.
Also in the works is a newspaper ad campaign that will convey AIBA's core message and draw people to the group's web site. This in turn will expand membership, Melancon believes, as business owners join to gain visibility on AIBA's web site and offer coupons to an expanding market segment actively seeking out independent businesses.
AIBA is a member of the American Independent Business Alliance, a national network of independent business alliances with affiliates in several cities.
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SANTA FE ALLIANCE RELEASES INDEPENDENT BUSNESS STUDY
Chains are multiplying much faster than locally owned businesses in Santa Fe, New Mexico, according to a new study commissioned by the Santa Fe Independent Business & Community Alliance (SFIBCA). The study concludes that the decline of independent retailers is eroding Santa Fe's distinctive character and undermining its economy.
The study was conducted by Angelou Economics, a consulting firm based in Austin, Texas, that helps cities draft and implement economic development plans.
Using a database of the nation's 12 million businesses maintained by Dun & Bradstreet, which indicates where a business is headquartered and whether it is a single- or multi-location operation, Angelou Economics found that "independent businesses comprise a higher share of Santa Fe's economy than the national average."
But this is rapidly changing, especially in the retail sector. Between 1998 and 2003, the number of non-local retail businesses in Santa Fe grew by 38 percent and employment at non-local retailers increased by 25 percent. Over the same period, the number of local retailers expanded by 17 percent, with employment at local retailers growing by just 9 percent.
The database does not contain information that would enable researchers to determine what percentage of retail sales are captured by chains compared to independents. Because several large superstores have located in Santa Fe over the last five years, the data on number of nonlocal businesses probably understates the growth of chains within the city's economy.
The study also concludes that, "dollar for dollar, money spent in locally owned shops has a larger impact on the community than money spent in shops headquartered outside of the region." Using grocery stores as an example and relying on US Census figures on operating costs, the study estimates that 25 percent of a national grocer's operating costs leave the local area compared to 12 percent for locally owned grocers. After accounting for a multiplier (the dollars spent locally by the grocer's vendors and employees), the study roughly estimates that the value of a dollar spent at a local retailer is two times higher than the impact generated by a chain store.
The response to the study has been very encouraging, according David Kaseman, co-founder of SFIBCA. Five of eight city councilors attended a press conference announcing the results. Both local newspapers carried front-page stories. The Santa Fe New Mexican editorialized, "The success of Santa Fe's economy is in large part tied to the success of the many men and women who run small businesses. Those businesses need---and deserve---our support."
As a result of the study and SFIBCA's advocacy, several pro-local business initiatives may be included in Santa Fe's new economic development plan. Angelou Economics was also hired by the city to draft the plan, which should be completed in the next few months.
SFIBCA, formed a little over one year ago, has 500 members, about half of which are independent businesses. The rest are community organizations and individuals. The association, which is affiliated with the American Independent Business Alliance, has published an independent business directory and increased business-to-business local purchasing. It plans to launch a "buy local" campaign this year.
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III. NEW RULES
TUOLUMNE COUNTY CAPS THE SIZE OF RETAIL STORES
Before a standing-room-only crowd, the Tuolumne County, California, Board of Supervisors voted unanimously in January to ban retail outlets over 60,000 square feet, about half the size of the average Home Depot store.
The vote came after several months of review and more than two hours of public testimony in which residents overwhelmingly endorsed the measure. "Towns that have resisted the boxes have a vital diverse downtown business climate," one resident told the board. Large chains, she said, are causing a "loss of American entrepreneurial spirit."
Over the last couple of years, developers have expressed increased interest in building superstores in Tuolumne County. In response to a proposed 120,000-square-foot Home Depot store, County Supervisor Jim Peterson initiated a discussion about regulating large-scale development. A grassroots group, Citizens for Responsible Growth (CRG), endorsed the idea of limiting large retailers and worked to get an ordinance drafted and approved.
In comments to the Board of Supervisors, CRG said that allowing the county to be overtaken by a handful of large chains would destabilize the local economy. Small retailers spend more money with other local businesses and are more invested in the community, the group argued.
CRG presented the county with several policy options, many of them drawn from the New Rules web site. The county chose the 60,000-square-foot limit based on the size of existing retailers. The new ordinance effectively blocks construction of the proposed Home Depot.
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STOUGHTON, WISCONSIN, ADOPTS BIG BOX LIMITS
After months of pressure from a vocal citizens group, the City Council in Stoughton, Wisconsin, adopted an ordinance banning stores over 110,000 square feet.
Stoughton is a community of 12,500 about 20 miles southeast of Madison. Last year, after Wal- Mart announced plans to close its 40,000-square-foot Stoughton outlet to build a 183,000-squarefoot supercenter on undeveloped land, a citizens group called Uff-da Wal-Mart formed. Uff-da is a Norwegian expression of disdain.
At Uff-da Wal-Mart's urging, the city immediately adopted a moratorium on superstore development. The group pushed for a permanent size cap, arguing that giant superstores would destroy Stoughton's locally owned businesses and lively Main Street, exacerbate traffic and storm water run-off, and lead to higher property taxes due to the burden on roads and public services.
Uff-da Wal-Mart sought a smaller size limit, but the City Council ultimately compromised at 110,000 square feet. The measure will block Wal-Mart's supercenter plans, at least for now. The company is threatening to abandon its Stoughton outlet altogether and build in the nearby village of Oregon. City councilors who voted against the cap are pushing for a referendum that would allow Wal-Mart to build a slightly smaller 155,000-square-foot supercenter.
Meanwhile, in Tampa, Florida, Wal-Mart unveiled a prototype 99,000-square-foot supercenter--- the smallest Wal-Mart that combines both general merchandise and a full supermarket. If successful, the store will become a model for sliding under many local size caps that have been set around 100,000 square feet.
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VERMONT GOV. PROPOSES CLOSING TAX LOOPHOLE THAT FAVORS CHAINS
In his State of the State address, Vermont Governor James Douglas proposed closing a tax loophole that gives national chains an advantage over local businesses. The loophole allows multi-state corporations to shift income made in the state to subsidiaries in low- or no-tax states like Delaware and Nevada, thereby evading Vermont corporate income taxes.
As we reported in the July 2003 issue of this bulletin, similar loopholes exist in twenty-two states and the District of Columbia. Small businesses with all of their operations in one state cannot take advantage of these loopholes and must instead pay state income tax on all of their earnings. "Huge companies pay only a minimum $250 tax while our homegrown Vermont businesses, particularly our small businesses, pick up the rest of the tab," Douglas said in his speech. The next day, on Vermont Public Radio, the governor gave an example of three multi-state companies (he did not name them) that had $6 billion in combined revenue in the state last year, but paid only $750 in corporate income taxes. He then cited three local businesses with combined revenue of $700 million that paid $7 million in corporate income tax last year. Governor Douglas has proposed closing the loophole and using the additional revenue to fund an across-the-board cut in Vermont's corporate tax rates.
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DENVER DROPS PLAN TO EVICT ASIAN BUSINESSES FOR WAL-MART
Following an outcry from local and national activists, the city of Denver has abandoned plans to condemn a shopping center, evict more than a dozen Asian-owned business, and transfer the property to a Wal-Mart developer.
The city is now working with the Asian Chamber of Commerce to help the business owners, who currently lease their spaces, buy a nearby site and develop it as a retail plaza. The city still wants to bring in Wal-Mart, but the Front Range Economic Strategy Center and other local activists are continuing to organize against the project on the grounds that will harm the neighborhood and the local economy.
The controversy promoted a group of Colorado legislators to draft a bill that would bar cities from using their powers of condemnation to transfer property from one private business to another. Hearings will be held in February.
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CALIFORNIA LAWS TARGETING SUPERCENTERS RAISE CONCERNS
Rather than capping the size of all retail stores, a growing number of cities and counties in California are banning supercenters in particular. These are generally defined as stores over 90,000 or 100,000 square feet that devote more than 5 or 10 percent of their floor area to nontaxable grocery items.
Under these ordinances, developers can still build massive box stores, so long as they do not combine department store merchandise and a full supermarket under one roof. The measures primarily affect Wal-Mart, which already has 1,400 supercenters nationally and is currently building the first of 40 supercenters slated for California. Kmart and Target are the only other national retailers operating supercenters. Together they have about 200.
The cities of Turlock, Oakland, and Martinez, along with several smaller towns and the counties of Contra Costa and Alameda, have already prohibited supercenters. Bans are under consideration in San Diego, San Francisco, and Los Angeles.
Supporters of these laws---including many community organizations, local policymakers, and the United Food and Commercial Workers (UFCW) union, which represent supermarket workers--- contend that supercenters have far greater impacts than other kinds big box stores and therefore warrant special consideration.
In particular, they cite extremely high traffic counts at supercenters, which are caused by a unique combination of nearby residents making frequent grocery shopping trips and the regional pull of the general merchandise side of the store. They also argue that low-wage supercenters have a greater economic impact than other kinds of big boxes, because they compete directly with unionized supermarkets, which pay substantially higher wages and benefits.
But some long-time advocates of limiting the growth of large-scale chain stores believe that a better and more effective strategy is to establish size limits and other standards that apply across the board to all types of retail stores. They contend that, while supercenters may be worse in some regards, massive retail stores of all kinds entail such significant economic, social, environmental, and traffic costs that cities should prohibit them altogether.
"A cleaner, more straightforward way to defeat superstores," according to Al Norman of Sprawl- Busters, "is to place a size cap on all retail buildings---regardless of what's sold inside." He suggests capping retail buildings at 50,000 square feet---still large enough to accommodate a department store or a full-service grocery store---and limiting each floor of a retail building to no more than 25,000 square feet, thereby encouraging multi-story development. The New Rules Project also favors a straight size cap of 30,000 to 50,000 square feet, and advocates requiring proposals for stores over 20,000 square feet to meet strict economic and community impact standards.
These kinds of laws curb sprawl and related air and water pollution, create a more level playing field for small businesses, and reward retailers that meet high community standards. Such approaches are much easier to justify in terms of mainstream planning principles and generally attract a stronger and much broader base of support that includes unions as well as small business owners and those concerned about sprawl and the environment. Narrowly crafted supercenter-only laws, meanwhile, are easily characterized by opponents as driven by nothing more than union self-interest. Supercenter ordinances are also more likely to face legal challenges. Wal-Mart has already filed suit against Alameda County, contending that the county's ordinance unfairly targets the operations of one company. While many city and county attorneys in California believe the supercenter laws are sound and will be upheld, should there be an unfavorable court ruling, it could chill efforts elsewhere to set any kind of limit on big box development.
Across-the-board size caps are well within accepted zoning practice. They are rarely challenged and have always been upheld as a valid use of local planning authority.
Finally, narrowly targeted laws are often relatively simple to get around. In Tampa, Florida, Wal- Mart just unveiled a prototype 99,000-square-foot supercenter---the smallest Wal-Mart that combines both general merchandise and a full supermarket. If successful, the store will become a model for skirting more restrictive zoning in California and, although its smaller size will mean reduced impact, it will still lower wages and exacerbate traffic.
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IV. NATIONAL NEWS
SUPERCENTERS IN SOUTHERN CALIFORNIA: BOON OR BANE?
As Wal-Mart seeks out locations in central Los Angeles and the city council considers a measure that would ban supercenters from much of the city, a debate is brewing concerning the costs and benefits of supercenters for residents of low-income urban neighborhoods. Two dueling studies examining the impact of supercenters in southern California were recently released.
One, prepared for the Los Angeles City Council, concludes that big box stores harm low-income urban neighborhoods by reducing competition, creating blight, lowering wages, and forcing new costs onto taxpayers.
The study, "Final Report on Research for Big Box Retail/Superstore Ordinance," was produced by Rodino Associates, and contends that, by pricing groceries as "loss leaders" and using higher margin non-grocery items to make up the difference, supercenters often force existing chain supermarkets and independent grocers out of business. Because grocery stores commonly anchor neighborhood business districts and shopping centers, their closure would harm many other retailers and likely lead to a spiral of vacancies in fragile areas that are only now beginning to recover from years of economic decline.
The resulting business failures and blight, according to the report, would negate much of the investment Los Angeles has made in economic incentive zones. The city has invested $44 million, and leveraging an additional $219 million in private investment, in these low-income areas, which cover about 40 percent of the city's land area and account for almost all of the sites suitable for big box development.
The report finds that supercenters would negatively impact job opportunities by replacing unionwage supermarket jobs with a smaller number of lower-paying jobs. Fewer workers would have health care benefits, further burdening public hospitals and health care programs.
The report notes, "Big box retailers and superstores often destroy attempts to create. . . a sense of place and pride in low-income neighborhoods by use of unattractive building architecture and site layouts featuring huge expanses of black-top parking lots."
Wal-Mart fired back with its own study, "Wal-Mart Supercenters: What's in Store for California?" conducted by the Los Angeles County Economic Development Corporation. The polished, $65,000 report concludes that southern California residents will save enough on groceries to more than make up for supercenters' downward pressure on wages.
The report, written under close supervision by Wal-Mart, is largely framed as a response to a 1999 study by the Orange County Business Council that found that the arrival of supercenters in southern California would reduce grocery store workers' wages by up to $1.4 billion annually.
The report concludes that Wal-Mart will save southern California households $2.78 billion on groceries, both by offering prices 15 percent lower and forcing competing retailers to drop their prices by 10 percent. The pricing information is based on surveys conducted when Wal-Mart supercenters first opened in Las Vegas. Given the company's history of pricing entire departments below cost in order to gain market share (as it has done with toys, pharmacy goods, and gasoline), it's unclear how long these initial low grocery prices will last.
The report also finds that the gap in wages between what Wal-Mart employees and unionized supermarket workers earn is only $2.50-$3.50 an hour, less than reported elsewhere, and concludes that southern California grocery workers will forfeit $529 million in wages once Wal- Mart enters the market.
But the report does not account for the difference in benefits---valued at $3.15 an hour in 1999. Nor does it discuss the career potential for unionized grocery store employees, who can earn $18-20 an hour after a several years on the job. Although Wal-Mart often promotes from within, there are relatively few management jobs to which low-paid workers can aspire.
The report focuses exclusively on prices and wages and does not venture into other areas, such as tax implications and environmental costs. Nor does it address the social and economic consequences of losing locally owned businesses and declining entrepreneurial opportunities in low-income neighborhoods.
The report ends with a threat by suggesting that, if barred from the city, Wal-Mart will form a "ring around Los Angeles" by building dozens of supercenters just beyond its borders.
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WAL-MART INTERNAL AUDIT FINDS THOUSANDS OF LABOR VIOLATIONS
An internal audit obtained by The New York Times documents thousands of violations of state labor laws at Wal-Mart stores. The audit, performed by the company in 2000, uncovered 1,371 violations of child labor laws, 60,767 cases of missed breaks, and 15,705 instances when employees skipped meals at 128 stores during a one-week period.
Shortly after the audit, Wal-Mart stopped requiring employees to punch in and out for legally required 15-minute breaks. The company claims the change was for employees' convenience. But critics contend Wal-Mart was seeking to eliminate evidence of labor law violations.
The Washington Post reports that Wal-Mart has launched an ad campaign to soften its image, while Business Week explores whether growing consumer concerns about the company's labor practices will eventually catch up with the bottom line.
More:
-- The complete story can be purchased from the New York Times web site
-- Wal-Mart's Damage Control - Washington Post
-- The Two Faces of Wal-Mart - Business Week
V. INTERNATIONAL NEWS
BRITAIN'S MAIN STREETS FAST BECOMING GHOST TOWNS
"A new retail feudalism is emerging across Britain as a handful of brands take over our shopping. We are witnessing the slow death of small independent retailers," contends Andrew Simms, policy director for the London-based New Economics Foundation (NEF) and co-author of a new report called "Ghost Town Britain: The threat from economic globalisation to livelihoods, liberty and local economic freedom."
According to the report, between 1995 and 2000, Britain lost one-fifth of its Main Street enterprises. Everything from corner shops and local grocers to pubs, bank branches, and post offices are steadily disappearing from town centers. The report warns that the country may soon reach a tipping point where the decline will accelerate sharply.
Many factors have contributed to the decline, notably the growth of large supermarkets and superstores on the outskirts of town, and the many policy and tax advantages they enjoy.
The report's conclusions could easily apply to the United States: "Despite the government's rhetoric in favour of sustaining small businesses. . . there is no willingness to tackle the real reasons why Britain's towns are dying on their feet: increasing market domination by---and preferential policy treatment of---supermarkets; the failure to halt the 'downsizing' of banks and post offices; transport systems that encourage car travel; weak planning controls on out-of-town stores, and a lack of support for truly local enterprise."
"Ghost Town Britain" outlines several policy recommendations. It favors giving local governments more authority to veto large developments, establish more stringent planning rules, channel resources into local purchasing, and develop tax and incentive policies that encourage Main Street shopping. It calls for boosting antitrust policy and enforcement, and requiring economic impact reviews for developments over 1,000 square meters (11,000 square feet).
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VI. RESOURCES
HOW WAL-MART'S HEALTH COVERAGE STACKS UP
Unaffordable premiums, overly strict eligibility requirements, and major gaps in coverage characterize Wal-Mart's health insurance plan, according to a new report from the AFL-CIO.
The annual premium a full-time Wal-Mart employee must pay for coverage for her and her spouse is $2,672 (with a $350 deductible), which amounts to about 19 percent of her pre-tax earnings, according to the report. Part-time employees (under 34 hours per week) are only eligible to enroll after two years on the job and even then, coverage is available only for themselves, not their families. Full-time workers are eligible for family coverage after six months.
Costly premiums and strict eligibility requirements result in only two in five Wal-Mart employees being covered by the company's health care plan, compared to a national average of 66 percent at large firms. Moreover, unlike nearly all other corporate health insurance plans, Wal-Mart's plan does not cover most basic services, including regular check-ups for adults and children, childhood immunizations, and routine screenings such as prostate exams.
According to the report, taxpayers are subsidizing the world's largest corporation by paying the healthcare costs of uninsured and underinsured Wal-Mart employees and their families. In Georgia, for example, 10,000 children of Wal-Mart workers are enrolled in the state's health insurance program, at an annual cost to taxpayers of $6.6 million.
More:
-- Download the report
ENVISION NEW ZEALAND
Our friends on the other side of the world have launched a new web site as part of their growing campaign to defend New Zealand's Main Streets and town centers. The organization, Envision New Zealand, has an email newsletter, The Local Advantage, for those interested in staying abreast of the latest developments.
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ELSEWHERE IN THE MEDIA
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