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The Big Box Debate: Good Jobs or Bad Jobs?The retail sector expects to see major job growth in the coming years, but there is some question whether workers at "big box" stores will benefit from this boom. Retailers that fall into the big box category include such stores as Wal-Mart, Target, Costco, Kohl's, The Home Depot and Lowe's.
Among the concerns raised by workforce advocates is that certain big box retailers don't provide adequate wages and healthcare benefits. Local community groups are working to amend this. Recently, the Chicago Big Box Living Wage Ordinance was introduced by the Grassroots Collaborative, a coalition of community groups that work together on large-scale social issues. The proposed ordinance asserts that big box retail stores pose many potential risks to developing communities, including the elimination of existing local businesses, net job loss and a drain on public dollars. If passed, the ordinance would require newly developed big box retailers (over 75,000 square feet) to pay employees a wage of about $10 per hour, with an annual cost-of-living raise. (This wage would keep a family of four slightly above the poverty line.) Retailers would also be required to provide a health benefits package equivalent to an additional $3 per hour in pay. Ken Snyder, coordinator of the Grassroots Collaborative, says big box retailers are very profitable and can afford to pay employees enough money to support themselves and their families. Snyder cites Costco as an example of a retailer that offers fair compensation and health care benefits. "In Chicago, Costco offers a starting wage of at least $10 per hour," says Snyder. "Costco is … a profitable company that pays a livable wage and offers affordable health care benefits – this is what should be done [by all big box stores]," he adds. Under the proposed ordinance, big box stores would be encouraged to hire employees through non-profit community agencies and local government job placement programs, prioritizing the hiring of people living in the community. In addition, these retailers would not be allowed to discriminate against rehabilitated, non-violent ex-offenders. The ordinance also contains free speech provisions that would protect employees and allow community groups and others to use the stores' public areas for such things as community affairs and discussion of workplace rights. The stores, in turn, would agree not to retaliate against employees who exercise their free speech rights in the workplace. Snyder says the ordinance is timely, given that an increasing number of big box retailers have started to move into the city. "A lot of the job creation that's happening in Illinois is retail. … Chicago is losing living-wage factory jobs and replacing them with non-living-wage retail jobs," he says. "This is really the time to address that." The ordinance was reintroduced to the Chicago City Council on March 29, whereupon 33 out of 50 aldermen signed on as supporters. This is a strong showing, since only 26 votes are needed to pass the ordinance. Snyder acknowledges that the ordinance still has to pass several more hurdles, but he is optimistic about the final outcome. "People understand the fact that these large retailers are some of the most profitable companies in America," says Snyder. "[Yet] the strategy of these companies is to make taxpayers pay for the health care, food and shelter needs of [their] employees." The Chicago Jobs Council will keep members posted on the status of the ordinance via future Industry Insider issues.
Of all the big box retailers, Wal-Mart has undoubtedly gotten the most media attention – both negative and positive. Among Wal-Mart's supporters is Alderman Emma Mitts (37th ward), who fought hard to bring the retailer into her community. The new store, located at 4650 W. North Ave., is slated to open this summer and will be the very first Wal-Mart built in the city of Chicago. Mitts has lived in the same Austin community she now presides over for 28 years, which she says helped her to better understand what the area needs. "We don't have a lot of major retail stores here. … All I knew is we needed Wal-Mart, and we needed them within our neighborhood," says Mitts, explaining that her community really suffered when local factory jobs disappeared and left hundreds unemployed. The alderman worked closely with Wal-Mart's regional office to ensure that 75-80% of jobs at the new store will be given to people who reside on Chicago's West side. She also plans to set up hiring centers to assist with screening and interviewing applicants.
When asked about Wal-Mart's policy of not hiring individuals with criminal backgrounds, Mitts says she's working with the retailer to expand the guidelines. "[As long as] it's just a misdemeanor, and not a major criminal offense," she says. John Bisio, regional manager of public affairs for Wal-Mart, acknowledges that the retailer will be looking at a very diverse pool of candidates for the new store. "We'll have a hyper-sensitivity to the issue [of criminal backgrounds]. … We'll look at it on a case-by-case basis," says Bisio, adding that Wal-Mart is the number one employer of African-Americans and Hispanics. Wal-Mart and other big box retailers have been criticized for their non-union work environments. In an effort to address this in her ward, Mitts set up a meeting between Wal-Mart and union representatives, but she says neither side was willing to compromise. "I support the union and my constituents, and my constituents want Wal-Mart," says Mitts, who hopes negotiations with the union will continue once the store opens. Bisio implies, however, that the retailer will most likely keep its non-union stance. "Our associates have been approached by [union representatives], and they've rejected them," says Bisio. "Wal-Mart associates have a voice. … They can talk to their boss [about work-related problems]." Snyder argues that Wal-Mart employees who unionize potentially face severe repercussions. "It's been widely reported that when employees at other Wal-Mart stores have voted to unionize, the stores were abruptly closed by the parent company," says Snyder. Bisio emphasizes that Wal-Mart is committed to providing employees with competitive wages, along with other benefits, like a 401(k) plan and an employee discount card. "Our average wage for hourly employees is $10.99 per hour throughout the Chicagoland area," he says. Snyder, however, stresses that the figure is just an average, and that many Wal-Mart employees earn less than the quoted $10.99 per hour. "Wal-Mart confuses its average wage with a living wage for all employees," says Snyder. Bisio states that Wal-Mart is also working on making its health care benefits more affordable. The company offers a variety of health insurance plans, including an individual plan that costs employees $23 per pay period, and a family plan at $65 per pay period. "Historically, Wal-Mart has paid more than two-thirds of the health care costs for its employees," says Bisio.
Snyder adds a word of caution, saying it's been reported that part-time employees at Wal-Mart are required to wait up to two years before being eligible for benefits, while full-time employees reportedly have to wait up to six months. When asked to comment on this, Bisio said Wal-Mart is working on shortening the amount of time employees must wait to be eligible for benefits. Mitts believes that Wal-Mart is good for the community at large. "[Wal-Mart] donated school supplies, and they've agreed to set up a trust fund for education," she says, adding that the retailer contributed Christmas toys to the community and donated money to local non-profit groups. Critics of Wal-Mart continue to speak out against the retailer and its encroachment upon the Chicago area. A recent article in the Chicago Sun-Times (1) features an interview with Dennis Gannon, president of the Chicago Federation of Labor, who stated that Wal-Mart jobs are not good jobs. He further commented that Wal-Mart notoriously drives down wages and drives out small businesses; passes its health care costs on to taxpayers; and eliminates good manufacturing jobs by importing the majority of its products from places like China. Mitts acknowledges that Wal-Mart needs to make improvements, so she intends to keep close tabs on the new store and solicit feedback from employees. "I'm not pleased with all I've heard about Wal-Mart, but I might help [it] to be a better corporate citizen," says Mitts.
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