ANDERSON VALLEY ADVERTISER
August 26, 1992
Inviting the Cannibals for Dinner
by Maria Gilardin
Every second day a new Walmart is opened somewhere in this country. Walmart is now the largest, fastest growing, and most predatory retailer in the U.S. with 2,000 stores and 380,000 employees. The West coast is its last frontier and the corporation has targeted California's small towns with 200 new stores. From clothes to electronics, wedding rings to live goldfish, motor oil to Tylenol, garden hose to dry food and recently even fresh foods, there is virtually nothing that Walmart does not sell and sell cheaply. The national chain has its own private labels, supply, production, and distribution facilities, including one of the largest over-the-road trucking fleets in the U.S.
On Friday, August 14th, in a four-to-one vote the Ukiah City Council welcomed Walmart to town, promising at least $200,000 in taxpayer's money to facilitate the stream of traffic the corporation says it will draw. If not stopped by legal action, the Walmart corporation will open up a 120,000 square foot megastore south of Talmadge Road projected to rake in $23.5 million in sales each year. By the corporation's own admission, local retail businesses will fail and around 190 people will lose their jobs. As was well documented in public hearings, the store will create traffic jams as yet unknown in Ukiah as 9,260 cars per day will inch their way from 101 and through small town intersections onto the vast asphalt frying pan parking lot. The traffic fumes and noise will degrade the air and destroy the peace of the neighborhood north of the store. Even the survival of the Ukiah airport is threatened by the complex as frightened shoppers stuck on access roads see the landing gear of CDF fire bombers zip past their car roofs. The avalanche of cheap consumer things sold by the store will soon fill the local dumps where future archaeologists will be able to determine that Ukiah too was a Walmart town.
When founder Sam Walton died in April of this year, he left his children the world's largest fortune. It took the Rockefellers over a hundred years to scrape together their legendary wealth of $5 billion. Sam Walton extracted $23.8 billion in 30 years and he mined it exclusively from small town America. Kenneth Stone, professor of economics and student of the Walmart phenomenon said if trends continue, Walmart will become the biggest corporation in the US by the year 2000, surpassing Exxon and General Motors. Since he made this statement, part of his prediction has become true. Walmart surpassed GM in the just published 1992 Business Week list of top 1000 US companies. Ranked by stock market value, Walmart is now the fourth most valuable U.S. corporation after Exxon, Philip Morris, and General Electric.
In a world where only so many plastic gardenias and polyester shirts can be sold in a given market, Walmart's success comes at the expense of other retailers. "Walmart cannibalizes Main Street" say retail analysts at Solomon Brothers. "Walmart stores have descended on Southern and Midwestern towns with a vengeance" reports the Washington Post. In Anamosa, Iowa, main street was devastated when Walmart opened. IC Penney shut down, two men's clothing stores, a shoe store, a children's clothing store, a drug store, a hardware store, and a dime store all closed their doors shortly after the discounter arrived. Hearne, Texas, was devastated twice by Walmart. The local downtown was destroyed when the store moved in. When Walmart closed ten years later it left the townspeople with the carcass of it's old downtown and no place to shop. Since Walmart takes sales away from other merchants in a 20 mile plus radius it does not usually bring a net increase in the revenue from sales tax.
The City Council was well aware of the economic facts involved. According to the economic study, commissioned and paid for by the city of Ukiah, only $5 to 6 million of the $23.5 million in sales projected by Walmart may be new sales to new customers. The $17 to $18 million balance would represent losses to other area businesses. The net sales tax increase generated by Walmart would not be $235,000 annually but a paltry $50,000 to $60,000 per year.
The corporation's success is based in large measure on the demise of others as Walmart absorbs, reorganizes and monopolizes the existing flow of retail trade. In the pre-Reagan era this phenomenon would have given rise to concern. In the final Environmental Impact Report the economic consultant spells out the obligation of local governments to protect their communities from the predatory practices of monopolies "Unfortunately, the preservation of a competitive environment through government and private invocation of anti-trust law has been seriously neglected in the past 12 years, putting an even greater burden on local governments to 'maintain a level playing field'. Local government has considerable power to protect the investment of present and future local residents if they choose to exercise it." Again, the City Council did not read the study commissioned by them.
Walmart is not simply a predatory retailer of enormous economic power. Corporate leadership has created a myth of near religious proportions focused on the idea of "service" to the customer and to the corporation. The loyalty of staff, the willingness to maximize profits while employed at minimum wage is matched only by the work ethics in some Japanese mega-corporations. An employee on the podium at the June '92 annual meeting claimed to speak to the ghost of the dead founder in the rafters. "Mr. Sam," he said, wanted everybody to sing "God bless America." The Wall Street Journal reported that the shareholders obliged.
Eulogized in death, founder Sam Walton remains the patriarch and founder of a sect. The church of redemption through consumption rests on three pillars or "Corporate Beliefs" defined by him and laid down in the handbook for all employees: "Every Day Low Prices," "Satisfaction Guaranteed," and "Not being Undersold by any Competitor." Today a few, austere, hard working apostles direct his empire via a giant, satellite linked computer system centralized in Bentonville, Arkansas. From there, without the help—and added expense—of mid-level management, they are controlling and supervising a growing army of close to 400,000 neo-feudal termite sales clerks.
To become a soldier in that army, a member of the Walmart family, one has to be willing to work irregular hours at minimum wage and pass a drug test — lie detector tests are no longer used. The day in a Walmart store begins with a cheer. They may be as simple as: Give me a W, give me an A , give me a L etc. or more to the point: "Stack it deep, sell it cheap, stack it high and watch it fly! Hear those downtown merchants cry!" At work personal initiative is carefully funneled into efforts to save the corporation money, streamline one's job and control expenses. And, as Mr. Sam says: "Anytime a customer comes within ten feet of you, smile, look them in the eye and greet them!"
"Mr. Sam" also set the corporation's "Buy American" policy, ostensibly to help save jobs, cut back on the trade deficit, and save the free enterprise system. Jeffrey Fiedler, secretary treasurer of the AFL-CIO Food and Allied Services Trades department has studied reams of US shipping data and walked Walmart aisles for the past two years. He wondered how the company could compete with other retailers that import from Indonesia or Guatemala where hourly rates are mere cents per hour. Today he contends that Walmart is deceiving customers into believing that most of the merchandise it sells is made in the U.S.A. and he raises the possibility that Walmart sells products made in markets where labor does not get paid at all.
He found that 22 of Walmart's private labels in clothing and shoes and over 400 other items from electronics to plastic flowers are made in the most onerous market of all: mainland China. Recent research by the human rights organization Asia Watch confirms that China uses the labor of prisoners to manufacture cheap products for export. By China's own admission the prison system there is "making a sizable contribution in developing the state's foreign trade enterprise."
Walmart's private label jeans, appropriately called "New Order," are made in Shanghai. According to Asia Watch most denim in China is made in prison under the label of New Life Cotton. Of WalmartÕs 21 private shoe labels, 14 are made in China. Shoes are a common prison product. It seems entirely possible, says Jeff Fiedler, that Walmart uses prison labor in violation of federal trade law. The AFL-CIO asked the corporation to investigate. Chairman Rob Walton and CEO David Glass initially refused. After pressure on the Board of Directors the corporation claimed they are making site visits in China. We called Walmart P.R. director Jane Arend two weeks ago. She was unable to report on any site visits or spell out corporate policy regarding China.
In 1989 Walmart announced its "commitment to land, air and water." At the City Council hearings corporate representatives proudly described their recycling program. Walmart is also planning to illuminate the signs in one of their stores with solar power. In three years the corporation has avoided spending much of its own money on environmental programs. They lean on their suppliers to change packaging and on their staff to volunteer in efforts to clean up beaches and highways. The impact of billions of consumer items they sell in their stores is of no concern to the corporation. They have no policies regarding disposable diapers or plastics or toxics in food or other products. "Walmart won't be in a position of saying how good a product is for the environment," says Jane Arend. Until her resignation from the Board of Directors earlier this year, due to Bill's bid for the presidency, Hillary Clinton was credited for inspiring and defining Walmart's bogus environmental policies.
The environmental impact of the store itself and the over 9,000 cars it draws every day is not considered either. Automobiles already are the major cause of air pollution. Every day in Mendocino County they spew out 35 tons of carbon monoxide alone. Cars are also the main cause of ground level ozone. Ozone is considered so dangerous to the health of people and the growth of agricultural crops that limits were set by State law. When ozone tests were taken in 1988, Ukiah already reached the limit of 0.09 ppm set by the Clean Air Act. If the city exceeds this limit—even for one hour—it will be forced to cut back emissions at great cost to the taxpayers and local businesses.
Those among us committed to preventing the Walmart takeover do not want Ukiah to become a "retail hub" as promised by Walmart. We think it is criminal for the City Council to sell local jobs and businesses, the future of the airport, the future of land set aside for local industry for a speculative gain of $50,000 to $60,000 in sales tax a year. We think that no city in Mendocino County should be allowed to impact the survival and livelihood of neighboring towns by letting a predatory retailer set up who tells us unabashedly that it will cause even more unemployment and business failures in Willits, Fort Bragg, Legget, Point Arena, Laytonville and Cummings than in Ukiah.
A story was told once at a realtors' convention about Chic-Pitt and Bos-Wash, the eastern megapolises. The urban sprawl between Chicago/Pittsburgh and Boston/Washington was seen as a sales opportunity. San-San was their western counterpart and ten years ago it reached from San Diego to San Francisco. Since then the megapolis has continued to grow as agricultural land was paved over. San Diego/Santa Rosa lies just south of here. Those of us who know what city life is like want it to end just there.