Engaging Wal-Mart pt. 1

            So much is said when a big business comes into an ailing community: it’s going to bring jobs, revenue, more big businesses and greater exposure to the city. It is spoken about it as if it’s the bright light at the end of the tunnel; the answer to all the recent financial troubles the city of South Gate has been experiencing. As approved by 4 out of the 5 city councilmembers, Wal-Mart has been elected to help solve the city’s problems. Although it isn’t visible yet on the Azalea Shopping Center announcement, Wal-Mart is indeed shipping one of its stores to the corner of Atlantic & Firestone Blvd. Along with yet to be announced Wal-Mart, an array of restaurants and department stores have been handed the task of revitalizing the economy of South Gate. The main piece of the puzzle here is Wal-Mart, known for its prices and selection, which the city is banking to bring the most revenue and jobs to South Gate. But is Wal-Mart really that bright light and answer to all of South Gates’ problems?

            The approving councilmembers hope that by bringing in Wal-Mart, the job market and economy in South Gate will get a boost. It’s true that Wal-Mart will bring an influx of jobs to the city, but what will happen to the local businesses and those jobs? After Wal-Mart opens, local markets and discount stores tend to suffer the most, averaging a sales decline of 10 to 40 percent. So, not only will Wal-Mart bring jobs and revenue, but also it will simultaneously put local shops out of business at a decaying rate. Why is that? It’s because Wal-Mart’s business model makes sure every local shop is unable to compete with Wal-Mart’s revenue policies. Meaning these mom & pop shops start cutting hours, laying off employees and eventually close their doors because they are unable to compete with Wal-Mart. At least Wal-Mart will bring huge revenue to the city, to cover the losses, yes? It is estimated that Wal-Mart and other big businesses only contribute slightly more in taxes that single family homes, so that’s a no. And to top it off, it is also estimated that Wal-Mart cost taxpayers around $1 billion dollars per year through its employment policies. Maybe things get better…

            Let’s look at the job situation. For every two jobs Wal-Mart creates, three local jobs are lost. If the city of South Gate is willing to bet on the jobs Wal-Mart is bringing in, these must be some amazing jobs. They must be offering benefits, great pay, hours, retirement plans, etc. Taking a quick look: the average Wal-Mart associate makes a stunning $8.81 per hour, which is just over the minimum wage in California. The hours must be better, right? Wal-Mart’s definition of what qualifies as “full-time” is limited to 34 hours per week. Not only are these jobs not offering decent pay or hours but that puts an employee’s annual wage to $15,500 per year, which is below the poverty line. Benefits at least, right? As of January 2012, Wal-Mart no longer offers health benefits to employees who work less than 24 hours. Meanwhile, “full-time” employees have had their premiums raised by 120 percent. Explain again how these jobs will help pay bills…feed and clothe one’s children…provide access to affordable health insurance…give a jump-start to the economy of South Gate…still waiting.

To be continued…