My letter to Walmart, rebutting its claims to DC

After I published “Walmart and the Mayoral Field Give D.C. the Bait-and-Switch” in early August, Steve Restivo, Walmart’s senior director of communications, wrote me an email spelling out his opposition to the article. I disagree with pretty much all of his talking points – the same ones that are fed to the public and to council members – so I decided to share my responses with the city as it nears a decision on the Large Retailer Accountability Act, which would require large, profitable retailers in DC to pay a living wage with benefits. Mr. Restivo’s responses to my original piece are italicized.


1.
     There didn’t appear to be a second source for this statement:  “When Walmart first decided to come to town, it privately promised a group of D.C. clergymen that it would pay a starting wage of $13 an hour…”  A credible corroborator is important because (as you point out) we normally only share our average, hourly, full-time wage.  It’s posted for every state where we do business here.

Why is your word more credible than that of a widely supported clergyman with deep roots in DC? This isn’t the first time you’ve implied that Reverend Graylan Hagler misunderstood you – or is “struggling with the difference between starting and average” – a claim that comes off as condescending at best.

As I was told by Rev. Hagler – who was in the room at the time (you were not), “Insinuating that I don’t know the difference between starting salary and average wage is really casting aspersions at the community and our ability to understand simple English. So it points to their playing hardball and insulting the residents of the community. The reality is we don’t tolerate the insults coming from Congress or from big business.”

By the way Mr. Restivo, where is your credible corroborator?

I checked out your website, and found that the listed hourly wages have an asterisk saying they refer to “regular, full-time hourly associates.” How is that defined, and what proportion of Walmart’s hourly workers fit that description? According to a recent Reuters article, “Walmart’s everyday strategy: Add more temps,” most if not all of your new hires are temps, and for the rest, company healthcare is getting even harder to access. One anonymous store manager said, “Everybody who comes through the door I hire as a temporary associate. It’s company direction at the present time.” We’re going to need more transparency before we can believe your claims about your employment practices.

And still the question remains: if, as your website claims, your average hourly wage in the US is $12.78, including $12.04 in Maryland and $12.39 in Virginia, why would you be opposed to legislation that creates a level playing field and forces your big competitors to pay the same amount you already claim to pay?


2.
     Our history in DC and the rationale for our decision is outlined here but because you failed to include any of that content I wanted to make sure you were aware that the LRAA creates an unlevel playing field by imposing arbitrary costs on a handful of business while exempting most others.

The argument that LRAA is “arbitrary” doesn’t hold water. The businesses it targets make sense – it forces the biggest and most profitable companies in the world to pay living wages because they can and because the workers need it. The overall minimum wage should also be raised (as mayoral candidate Tommy Wells has proposed), but this legislation raises some wages while protecting local small businesses, which give the city its character and would be threatened by Walmart’s very presence, regardless of its wages.

The LRAA also isn’t arbitrary in terms of the numbers. The current minimum wage in DC is unsustainable for hard-working residents trying to live a quality life here, or even trying to live here at all. Far from being arbitrary, the living wage is a technical term arrived at by professionally researched calculations. The Massachusetts Institute of Technology’s Living Wage Calculator, for example, is based on government-reported, location-specific costs of food, childcare, healthcare, housing, transportation, taxes and other necessities. The Calculator defines the living wage as “the hourly rate that an individual must earn to support their family, if they are the sole provider and are working full time (2080 hours per year).” It calculates a living wage in DC at $13.68/hour, but the wages required for survival jump to $26.37/hr if you’re a single parent with one child – as many of your associates here would be. What’s arbitrary about paying people enough to subsist and – as your slogan says – live better?

In a city with growing inequality and economic displacement, many people want a city-wide raise in the minimum wage. What’s arbitrary about asking stores like the largest retailer in the world to lead the way? Costco and Safeway pay fair wages – why can’t you? What seems a bit arbitrary, as well as discriminatory – a complaint you’ve lodged elsewhere about LRAA – is Walmart’s 1,034:1 CEO to worker pay ratio. For every dollar’s worth of labor associates earn, the CEO gets $1,034. Weird.

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3.     You included some old comments from Councilmember Bowser but didn’t feel the need to interview her about how she views our community engagement in ward 4 today.  She might have formed a new opinion over the past three years and not including an update is a disservice to HuffPo readers.

Councilmember Bowser certainly has formed a new opinion, and it’s one that gets more than enough airtime without me writing about it. I think the value in my article was my discussion of why she appears to have changed her opinion: Walmart money.
4.  Same with Mayor Gray…your post ignores every positive thing he has ever said about Walmart, our commitment to the city and our role as a good corporate citizen.

Same thing here. My goal in the article was to look at what the mayor was saying before your lobbying and legalized bribery changed his position. On your “commitment to the city” – is that why you’re threatening to pull three DC locations if our elected officials pass a popular bill?


5.
     You failed to mention our Community Partnership Initiative, an unprecedented and voluntary document (as a reminder, Walmart is not accepting any tax incentives even though some of our projects qualify for government assistance).  Still, our agreement spelled out our plans to stock local products, allow space for local retailers, provide good jobs, ensure an inclusive construction process, fund transportation measures, create a city-wide job training program, and support non-profits to help fulfill unmet needs throughout the city.

How generous of Walmart to voluntarily enter into a vague agreement with zero enforcement mechanisms. But if it includes a provision for good jobs, surely you’ll agree that “good” encompasses making enough money to survive in the city where you live, and having a modest level of benefits. (How are your pay and benefits, Steve?)

Longtime Washington City Paper reporter Lydia DePillis wrote about your “unprecedented” Community Partnership Initiative in a piece called “Ways In Which Walmart’s Community Partnership Thingy Is And Isn’t ‘Unprecedented,’” noting that in a very similar document Walmart wrote for Chicago, there were “a lot of promises to ‘work with’ the city to increase the amount of local and minority hiring and contracting, and a lot of statements about what the company already does for workers in wages and benefits, but no actual commitments.”

You also told Kojo Nnamdi that all we have to back up the document is Walmart’s word. It comforts me to know that the same company that the New York Times described as an “aggressive and creative corrupter” in Mexico, “offering large payoffs to get what the law otherwise prohibited” – the same company that falsely denied sourcing clothing from the Bangladesh factory that killed more than 100 workers in a fire last year and the one that killed more than 1,100 in a collapse this year – is telling us to trust it on this one.

“Walmart is not accepting any tax incentives even though some of our projects qualify for government assistance” – false. The problem is your employment structure more than qualifies your associates for government assistance. Surely you’ve seen the report produced by congressional Democrats in May finding that because of its poor employee compensation a Walmart store with 300 employees costs taxpayers between $900,000 and $1.75 million per store, per year, between Medicaid, subsidized housing, heating assistance, food stamps and other public programs. You may not be asking for direct tax incentives, but as Mayor Gray once noted, your refusal to fairly compensate employees obliges the city to essentially provide Walmart indirect taxpayer support.

If most or all Walmart employees needed full government benefits, according to the numbers above, the cost to the city could almost match what the stores generate in tax revenue. Developer Foulger Pratt promised that the Walmart it’s building in Ward 4 – expected to be one of the more profitable ones in DC – would generate $2 to $3 million in annual taxes. At a potential $1.75 million in public benefits required per store, Walmart could end up costing the city 88 percent of its tax returns ($1.75 million in public benefits required divided by $2 million in tax revenue). That almost puts you indirectly into tax-free status, Community Partner!

In DC, six Walmarts would be leaning on a crutch of $4.5 million to $8.75 million in taxpayer dollars every single year ($900,000 to $1.75 million in public benefit costs, times five stores). The LRAA simply says that Walmart, rather than taxpayers, should be responsible for paying that money to its workers. Wages and benefits: a cost of doing business.


6.
     Thanks for highlighting our contribution to D.C.’s summer youth programming.  Last year, we gave more than $3 million to city non-profits.  We’re proud of our contributions as well as the programs and initiative that they help to support.  We gave more than $1 billion as a company last year.

Such donations are very nice on paper, but they also serve as one more way for you to buy off and nullify potential opposition. Wherever you go, and indeed around the country, your size and number of employees and suppliers give you a huge (and thus far economically depressive) impact on wage standards. Why not give that $1 billion to, you know, the people who work for you? Does your “Live Better” motto not apply to those who work so hard to make your low prices possible?


7.
     Finally, the latest report from D.C.’s Office of the Chief Financial Officer asks, “Is the DC economy stalling?”  Given the report’s findings, why would some Council members continue to pursue legislation that discourages investment in our nation’s capitol?  Especially when city residents are spending $1 billion at suburban retailersD.C. ranked last for being business friendly; D.C. is home to the second highest rate of children who have inadequate access to food; only a handful of the city’s grocery stores actually doing business in underserved areas and DC unemployment stands at 8.5% and is as high as 20.9% in some neighborhoods.

It is certainly a problem that DC’s growth is being shared disproportionately. But if you listen to people in underserved communities they say they want access to food and also to good jobs. The DC Council can and should do more to pave the way for retailers who provide both. It’s hard to believe DC’s economy is stalling – check out the skyline of cranes or the local blogs – or ask Target or Barnes & Noble. Perhaps instead of spending for public benefits for Walmart workers, DC could subsidize new stores in underserved parts of the city that will actually pay their workers fairly.

The LRAA invests in the workers and economy of DC by creating more locally circulating disposable income for those who need it.  But if you’re concerned that paying decent wages will threaten the solvency of the company I found a few places where it can cut down on costs: the $20.7 million salary of CEO Mike Duke (which grew 14 percent last year – did associate pay grow?), the $157 million Walmart spent last year on probes of bribery allegations against it in four countries (how did you spend that much on probes?), and the $90 billion to $100 billion value of the Walton family.


We look forward to a decision from Mayor Gray.

So do we! We hope he’ll side with the people of DC.

One response to this post.

  1. Posted by Basav Sen on September 9, 2013 at 8:56 pm

    Great post, Sam! Please send it to the Mayor and the entire City Council (unless you’ve done it already).

    Reply

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