Walmart Sinks Low in Heights Grab
Part one of a series covering Walmart’s new developments in Houston and the company’s negative impact locally and abroad
This July, Walmart launched WalmartHouston.com as a damage control effort due to the public uproar against the new proposed location just south of I-10 at Yale, just 5 miles west of the new Silber location, marking the first urban Walmart store in Houston. More traffic and crime are two of the residents’ concerns, but the problems run much deeper.
As it turns out, it won’t just be a 15 acre Walmart, but a 23 acre development by Ainbinder and Moody Rambin that will extend to Heights Boulevard. The icing on the cake is that they all want a multi-million dollar tax break for the project, something Walmart attempts to extract from every city in which they operate. This is just one of that reasons that Walmart spends over $500 million a year on maintaining a positive public image, but no amount of money can buy back the truth. Their poorly veiled confessional-website refuting publicly known facts about the company is evidence enough that we should all be wary and stay informed of how this company will effect our communities.
From WalmartHouston.com’s page ‘Myths vs Fact: Walmart in Central Houston’:
Myth: Walmart doesn’t pay competitive wages or benefits; Walmart will be benefitting unfairly from tax breaks
Fact- That’s just not true…The I-10 and Yale location will offer more than 300 quality positions. We need new economic opportunities and Walmart is ready to help lower *our city’s unemployment rate. Walmart jobs are good jobs that offer competitive pay and benefits and the opportunity to advance; The average Walmart store that carries groceries in Houston generates $870,000 in city sales taxes.
Sike! The Truth: *Editor’s note: ’Our’ city? Don’t you mean HQ at Bentonville, Arkansas? Does this ‘our’ mean that the writer refuting all of these facts is a local Houstonian? If so, who are you? I’d like to introduce my friends…
Walmart doesn’t want the public to know how much their stores actually cost the communities they operate in, be it through over $1 billion in subsidies and tax breaks like the 380 Agreement they are seeking from Houston, or the $2 billion and growing annual tab the public picks up for their employees who must rely on government welfare to make ends meet. Our state has given Walmart, a company which makes over $300 billion in sales annually, more than $100 million in tax breaks and in 2005, Texans alone paid over $130 million in public welfare for Walmart employees and their dependents who live below the poverty line. Walmart employees children are the main beneficiaries of state insurance, with over 4,000 dependents enrolled.
The Democratic staff of the House Committee on Education and the Workforce found that the average annual cost to a local community for one Walmart store with 200 employees is over $400,000. There are over 4,000 stores in the States. Houston has 20 and two more on the way. That $870,000 in sales taxes Walmart promises is quickly returned to their coffers. The big box behemoth has learned to manipulate the corporate welfare system to their advantage so the executives and shareholders can save money and live better at our expense.The majority of Walmart’s workforce are part-time hourly employees who don’t qualify for overtime or advancement. They must work there one year, or 1,000 hours, before qualifying for health benefits.
Each year, Walmart’s turnover rate exceeds 50% of their 1.4 million U.S. employees. Coincidence? Nope. Walmart’s workforce is structured to limit the cost of providing healthcare to their employees by cutting hours, demoting full time managers to hourly floor positions, making workers clock out and continue working, even altering workers’ timecards, to avoid paying overtime. Not able to make a living wage, employees must seek work elsewhere, that is, if there are other jobs available after Walmart comes to town. Ultimately, if they don’t have a second job, they are probably impoverished, by federal poverty standards.
When Walmart workers try to organize a union in order to guarantee a decent wage, Walmart will go to any length to see that the union never materializes. “A Manager’s Toolbox to Remain Union Free” is a training manual that primes their managerial staff with prompts and hotline numbers to immediately notify HQ of any union activity. In 2000, when the meat cutters at the Jacksonville, Texas Walmart successfully organized a union, Walmart retaliated by eliminating the entire meat cutting division throughout the southern region and turned to selling only prepackaged meat. It took nine years, but Walmart was finally forced to bargain with their union. When a store in Quebec successfully organized a union in 2005 and were days away from a contract, Walmart simply closed that store.
In 2006, Chicago passed a ‘big box minimum wage’ ordinance but Mayor Daley used his first veto in 17 years to shoot it down. Walmart plans to build several dozen stores in the urban Chicago area and recently boasted on their WalmartChicago.com newsroom page: By shrewdly playing the unions off against each other, Wal-Mart traded the short-term pain of dealing with the construction workers for initial development in return for the long-term gain of not relying on the UFCW (United Food and Commercial Workers Union) ongoing operations.
Excerpts from a 2006 Walmart internal document, entitled Supplemental Benefits Documentation discuss how to cut even more employee benefit costs without further damaging their public reputation:
-From 2002 to 2005, our benefits costs grew significantly faster than sales, rising from 1.5 percent of sales to 1.9 percent.
-Growth in benefits costs is unacceptable (15 percent per year) and driven by fundamental and persistent root causes (e.g., aging workforce, increasing average tenure).
-Initiatives include reducing the number of labor hours per store, increasing the percentage of part-time Associates in stores, and increasing the number of hours per Associate…The most significantchallenge here is that the shift to more part-time Associates will lower Wal-Mart’s healthcare enrollment, which could have an impact on public reputation.
-Address the Medicaid issue head-on by reframing the debate (e.g.,this is everyone’s problem, not just Wal-Mart’s)…Wal-Mart is under serious attack from state governments with regard to the number of Associates on publicly funded health insurance. These attacks show no signs of abating – in fact, they seem to be accelerating – and elected officials are proposing increasingly costly solutions.
-In FY2011, the cost of these…proposals would be between $300 million and $350 million…the team is rigorously testing these ideas with the public and policymakers to determine whether these investments would effectively “move the needle” on Wal-Mart’s public reputation.
We’ve seen Walmart enact all of these incentives so it looks like the WalmartHouston.com website is just a fraction of that $300 million plus budget to ‘move the needle’ in our city. “Public monies are being used through the 380 Agreement that will draw from all Houston taxpayers. Walmart is pushing an urban business strategy, so this is potentially just the beginning. It may be the Heights today and Upper Kirby or West U. tomorrow,” says Nick Urbano of RUDH.org (Responsible Urban Development for Houston) and StopWalmartHeights.org, two local groups that are working hard to keep the public informed and holding the city responsible for for representing its citizens. Go to their websites get the latest developments and meeting schedules.
Houstonians must stay informed and demand that our council members not move forward in sealing this deal unless it meets public approval and under the guarantee that Walmart will pay their workers a living wage and not just offer dead end part-time jobs. City council needs to represent those who would be directly impacted by the new store, namely those who would be footing the bill, not just for a commercial venture, but the future employees of this Walmart.
Published in Free Press Houston