A friendly neighborhood store can help people feel rooted in their community. But what happens when those businesses close up shop? And how can small businesses in particular survive in the high-rent, high-risk Washington region?
Walmart’s new plans to build six stores in the District –up from the four they originally proposed — have further inflamed local debate. Walmart and the District’s Office of Economic Development just announced a “Community Partnership Initiative” to address concerns about salaries, local hiring, and benefits. But a coalition known as “Respect DC” says that the partnership isn’t legally binding, and that communities weren’t properly consulted.
- Victor Hoskins Deputy Mayor for Planning and Economic Development, District of Columbia
- Marina Streznewski Executive Director, DC Jobs Council
- Lydia DePillis Staff writer, Washington City Paper
- Steve Restivo Director of Community Affairs, Wal-mart
MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. Wal-Mart recently announced that it plans to open six stores in the District, up from four originally proposed, stores that Wal-Mart and the District say will bring 1800 jobs to areas that are struggling economically, particularly in Southeast Washington.
MR. KOJO NNAMDIBut Wal-Mart's plans have met with resistance. A coalition of community and labor advocates known as "Respect DC" has asked that Wal-Mart sign an agreement to hire locally and to pay a living wage among other things. Mayor Vincent Gray and his economic development team announced last week that they had negotiated a deal with Wal-Mart to address some of those concerns. But community and labor advocates point out that the deal the District reached with Wal-Mart is vague on details about wages and other commitments and more importantly that the deal is not legally binding, it's simply a statement of intentions.
MR. KOJO NNAMDICommunity groups say that the District has few options if the retailer doesn't follow through. Joining us to discuss this first is Steve Restivo. He is Wal-Mart's national director of community affairs. He joins us by phone from Chicago. Steve Restivo, thank you for joining us.
MR. STEVE RESTIVOGood afternoon, thanks for having me.
NNAMDIYou too can join the conversation at 800-433-8850. Are you in favor of Wal-Mart coming to D.C. or not? You can also send email to email@example.com or go to our website kojoshow.org and join the conversation there. Steve, Wal-Mart has made several big announcements recently related to the District. There are now six stores planned for D.C. rather than four. Where will those two additional stores be and how was that decision made?
RESTIVOWell, I mean, from day one, we've said we've been evaluating additional opportunities across the city all in an effort to try to help folks get jobs and also lower the cost of groceries. So the two new stores, one is in Ward 4, one is in Ward 7. The one that's getting the most attention is the one that's part of that Skyland redevelopment. We hope to be part of the solution there. The other store in Ward 7 is by Fort Totten.
NNAMDIThat would be the store in Ward 4, by Fort Totten?
RESTIVOI'm sorry, yes.
NNAMDIIt seems that plans for the Skyland Shopping Center have hit a snag. Safeway which is across the street has a covenant that prevents competitors from opening nearby. Were you guys at Wal-Mart aware of that issue at all?
RESTIVOWe were and as you know there are lots of extenuating circumstances around that particular site. A good portion of the land is owned by the city. Our understanding is that the city, the developer and Safeway are going to try to work toward a solution that's good for Ward 7 residents.
NNAMDIWal-Mart and the District's Mayor Vincent Gray made another announcement last week. Can you tell us about the Community Partnership Initiative?
RESTIVOSure. and I, you know, we recognize that D.C. is like no other city in the nation and so we decided to grow here. We also made a commitment that we would make sure we understood the community. So to us that meant taking the time to listen, understand unique challenges that folks are facing and try to work together towards solutions.
RESTIVOSo over the past 12 months we've been doing just that, having a conversation with the city and after a year of listening we thought it was important to document what we heard in order to really reinforce what our commitment was to the District.
NNAMDIA few of the provisions of that Community Partnership Initiative include funding job training programs, donating $21 million to District charities. It also talks about Wal-Mart promising not to sell guns or ammo. As you know some community groups Steve have said that these commitments are not sufficient mainly because this is not a legal agreement, just a statement of intentions. Is this Community Partnership Initiative binding in any way whatsoever?
RESTIVOWell, I mean, it certainly is to us in that it's a public document. It's black and white. It's on our website. It's there for anyone to read and we expect quite frankly to be held accountable for every syllable in it or else my guess is we'll get run out of town if we don't commit to those things we put forth in that agreement. So to us we expect to be held accountable. We intend to follow through on every single item in that agreement and so we think it's an important and unprecedented agreement for the city.
NNAMDIYou're saying essentially that Wal-Mart's word is the assurance that we have?
NNAMDISome District residents are concerned about bringing large format stores to urban neighborhoods. They worry about traffic. They worry about parking. What does Wal-Mart plan to do to address that?
RESTIVOWell, I think, you know, our stores will be not unlike other large retailers that already exist in the District and in countless cities across the country. I think the part we see our role being a bit different is we think we can open stores and create opportunity in areas that are under-served either in terms of unemployment or access to fresh, affordable groceries.
NNAMDIIn case you're just joining us, we're talking with Steve Restivo, Wal-Mart's national director of community affairs about Wal-Mart's plans to come to the District of Columbia and providing an update. You can join the conversation by calling us at 800-433-8850. Do you think big retailers benefit communities where they are located? You can also send us email to firstname.lastname@example.org or go to our website kojoshow.org and join the conversation there.
NNAMDIWe're talking about the District today Steve but a related debate is brewing in neighboring Montgomery County a judge ruling yesterday that Wal-Mart cannot be required to sign an agreement with the community as a condition to open stores. Is Wal-Mart, however, willing to sign an agreement if that is what a community wants?
RESTIVOAh you know, we're not in that case. We're against that particular piece of legislation. We think the council should support opportunities to stimulate economic development rather than creating what are really arbitrary and discriminatory hurdles that will just discourage recovery. We're not alone in that opinion, by the way. I mean, a few weeks ago, the council heard from a wide range of local voices and they agreed with our position.
RESTIVOMy understanding is the Montgomery County attorney just basically called that piece of legislation unconstitutional so you know we look forward to that particular piece of legislation being turned back.
NNAMDIWell, you're opposed to that specific one, but has Wal-Mart signed community benefit agreements anywhere else around the country that are legally binding?
RESTIVOUm, you know, not a legally binding piece, but certainly in the city -- I mean, here in Chicago, we've signed community-specific agreements again in partnership with the community and in association with the individual aldermen who preside over the communities where we're looking to build stores so we have done them in the past.
NNAMDIAllow me to go to the phones. Here is Heather in Washington, D.C. Heather, you're on the air. Go ahead, please.
HEATHERThank you, Kojo. The very first words out of this individual's mouth was that the purpose of Wal-Mart coming to D.C. was to provide jobs and affordable food. That is just so much puka. Wal-Mart is a huge corporation whose purpose is profit so I take the word on everything exactly as I take the word on the reason to come to D.C.
NNAMDIYou're saying you do not accept Wal-Mart's assurances about anything?
NNAMDIOkay. Well, I guess there's no point in having a conversation then with Steve Restivo, unless Steve you'd like to respond to that?
RESTIVOWell, I mean, I think, you know, one of the things we've found out in D.C. is that the more people got to learn facts about the company as opposed to urban myth, the more they saw the value in bringing a store to their community. I think, you know, the conversation regarding Wal-Mart has been pretty one-sided for many years and as a result, a lot of negative perceptions about the company have become reality in a lot of people's eyes and what we're finding is getting out in the community, we've done more than 100 community meetings in the District over the last 12 months folks walk away saying, gee, I didn't know that and they're coming away with a greater appreciation for our stores and what they can bring to their individual neighborhoods.
NNAMDII have one more call for you. It's David in Washington, D.C., David, your turn.
DAVIDYeah, I'm just concerned. I think Wal-Mart recently said that they would not give benefits to anyone working under 24 hours a week. What's to keep them -- I mean, this is one of many concerns that I have, but what's to keep them from, you know, hiring everyone at less than 24 hours a week and not paying benefits? They certainly have. It's not, you know, it's not paranoia. That's the track record in the past.
DAVIDThey also have a track record of spending millions of dollars when they come into communities and then short-changing the communities and furthermore what about the support for small realtors in the area?
NNAMDILet's try one question at a time. How about the notion, Steve Restivo, that Wal-Mart is going to employ everybody for under 24 hours a week in order to avoid paying benefits?
RESTIVOYeah, I mean, again, it's one of these urban myths that, unfortunately, have continued to gain traction. I mean, the reality is across the country the majority of our jobs are full-time. If you go and ask our competitors, I'm going to guess you're not going to find that that's the case. In terms of the healthcare offerings, even with those changes, we remain competitive with other large retailers and grocers currently doing business in the city.
RESTIVOWe pay the majority of the costs for our associates' healthcare. We insure more than a million people. Our most popular plan is going to ensure quality coverage for $15 a pay period, an increase from last year of just $4 per pay period. And I think the most important thing to note on these healthcare changes, they only affect new hires so essentially a million and a half people are grandfathered into the existing system.
NNAMDIDavid, what say you?
DAVIDWell, I mean, everyone will be a new hire in D.C., right?
DAVIDI guess I'm saying all this because it's not a positive track record elsewhere. I don't have the faith that there's really going to be a serious attempt to hire D.C. workers, if there really will be sufficient healthcare benefits et cetera. I wish it was a binding agreement in short.
RESTIVOYeah, I think you raise a good point. I think I would point just to our track record, even prior to this agreement being forged. I mean, we've already committed to create 1800 jobs, open six new stores, many in cities that need more options. And I would more specifically point you to what we heard in those meetings, what we see as a challenge moving forward, is a workforce development initiative.
RESTIVOWe put forth $3 million just this year alone to start a workforce development initiative so that when we're ready to open those hiring centers and start hiring folks we can hire local and we can have a whole trained workforce and I think you know the question you raised about contributing to local non-profits and then those funds being discontinued, nothing could be further from the truth. I think if you look at our track record of giving over the past four decades it's fairly consistent and I think moving forward whether we have stores in D.C. or not, we'll continue to support non-profits and philanthropic charities in the city.
NNAMDISteve, I know we're running out of time in this segment, but it's my understanding that when you talk about competitive salaries Wal-Mart tops the list nationally of companies with employees who receive benefits like Medicaid and food stamps. So when you say you're paying people competitively, that doesn't necessarily mean you're paying them in a way that they can afford all of their expenses.
RESTIVOYes, so two quick points on that and I know we're running short on time. You know, we post the average hourly full-time wage for every single state we do business in on our website. I'm not sure of another company that goes to that level of transparency on wages. We feel really good about the competitive natures of our wages and we feel like, at this point, our wages are as good if not better than a majority of businesses we would be competing with that are currently doing business in the city.
RESTIVOOn the issue of public assistance, I think that talking point comes from a list in Massachusetts and I think the thing that our critics neglect to point out is that we share the top three positions on that list with a unionized grocery store called Stop and Shop as well as the Commonwealth of Massachusetts.
NNAMDISteve Restivo is Wal-Mart's national director of community affairs. He joined us by phone from Chicago. Thank you for joining us.
RESTIVOThank you for having me.
NNAMDIWe're going to take a short break. When we come back, we will continue our conversation on Wal-Mart coming to the District of Columbia, taking your calls at 800-433-8850. Email to email@example.com or send us a tweet at kojoshow. I'm Kojo Nnamdi.
NNAMDIWelcome back to our conversation on Wal-Mart and D.C. Joining us now in studio is Lydia DePillis. She is a staff writer with the Washington City paper. Lydia, good to see you again.
MS. LYDIA DEPILLISYou too, Kojo.
NNAMDIAlso with us is Marina Streznewski, executive director of the D.C. Jobs Council. Good to see you again, Marina.
MS. MARINA STREZNEWSKIAnd you.
NNAMDIAnd joining us by phone is Victor Hoskins, deputy Mayor for Planning and Economic Development for the District of Columbia. Victor Hoskins, thank you for joining us.
MR. VICTOR HOSKINSOh, it's my pleasure. Thank you for having me.
NNAMDIVictor, we just learned, we know where the two new Wal-Mart stores will be. How involved was your office in deciding where the new Wal-Mart's would be located?
HOSKINSWell, let's be clear that, you know, our mission is to create jobs and really to expand business opportunities in the city, attracting retail is just part of that mission. And we look at all parts of the city. In terms of the two new locations, we were actually, obviously, in conversations with Wal-Mart executives as early as May in regards to the Skyland location. It is a location that has -- and I don't -- many of you are more familiar then I am. This has been a couple of decades in trying to find the right combination of retailers and land uses that include residential to develop that site.
HOSKINSSo really, landing a tenant like Wal-Mart, really makes the biggest difference in that transaction. So that transactions continues to move ahead. In terms of Fort Totten, we had no involvement. We were, you know, just as surprised as everyone else to hear about Fort Totten, we were pleased that they considered our market large enough. And it is large enough to have another store. We currently have about a $1 billion in retail sales leakage from the city of Washington, D.C.
NNAMDIYeah, because we got a tweet from someone who said "How did they decide six stores in such a small area is sustainable?" And we got a Facebook post that says "That seems a bit excessive to say the least, six stores in how many square miles?"
HOSKINSYeah, and that answer could be answered better by Wal-Mart than us. But, as I was saying, Kojo, we currently have about a $1 billion in retail sales leakage in the city. And, you know, this is part of our effort in order to capture those retail sales tax and those retail jobs. You know, temporary construction jobs, of course, but also those 1,800 retail jobs that are currently, you know, in other places around the city.
DEPILLISSure, I just wanted to mention, as far as Wal-Mart's calculus for why six stores will be sustainable, these are all sites that have been looking for an anchor for years now. And so if it wasn't going to be Wal-Mart, it was going to be someone else except for the problem was that it wasn't going to be someone else because Target is in a major contraction mode, other stores like Lowes.
DEPILLISThere's other big boxes that all of those developments have been hoping for just are backing up. And Wal-Mart is backing out of its suburban and rural locations, but really doubling down on the urban environment. So I think that that -- they saw, well, it might as well be us.
NNAMDIVictor, we said earlier that the District in Wal-Mart announced a community Partnership Initiative meant to address some of the Respect D.C. Coalitions concerns, what was agreed on?
HOSKINSActually, it wasn't just the Respect D.C. Coalitions concerns. It was actually the -- really the citizens across the city. We -- you know, Wal-Mart met with community members, but so did we. We sat down with ANC members, we sat down with non-profit organization members. We sat down with some for-profit business, we sat down with councilmen. You know, we took input from everyone. And through this process, them listening, us listening, we worked through a process of what we thought was, you know, appropriate for, you know, the city of Washington, D.C.
HOSKINSA couple of things we should note, first of all, they're building six stores in D.C., they're looking at building 40 in Chicago. And the amount of money that they committed to the city of Washington, D.C. is unprecedented, it's $21 million. In addition, another $2 million in transportation improvement from Brideshare, Public Space, etcetera, that's pretty amazing. And everyone has to admit, that's a huge commitment. And we do, you know, understand it's not perfect but we're not going to let perfect get in the way of good.
NNAMDIWell, let me run down a quick list here and see if I got this right. They agreed to allow local businesses to locate in the store, even store fronts or to promote local goods within the store.
NNAMDIBikeShare stations at the stores.
NNAMDINo guns and ammo.
NNAMDIThey'll look to small and minority owned businesses to construct the stores?
NNAMDIThey'll create and fund job training programs aimed at areas with high unemployment rates and opening hiring centers in the wards with the stores.
NNAMDIOkay. Now, on...
HOSKINSAnd create community organizations of residents within 1,000 feet of the stores. I didn't want you to forget that.
NNAMDIOkay. Marina Streznewski, you've been...
HOSKINSAnd $21 million to non-profit organizations, training programs and feeding programs in the city.
NNAMDIMarina, you've been working with the coalition known as Respect D.C. which has been trying to get Wal-Mart to sign a community benefits agreement with many of the same issues as rest. You've been sitting here silently for the past 20 minutes. How do you feel about the deal that the District negotiated?
STREZNEWSKII'm disappointed. I was really hoping for a lot more. While I appreciate that Mr. Hoskins negotiated in good faith and I really do believe that, I am disappointed that this was the best that we could do. The $21 million in philanthropic contributions sounds like a lot of money until you realize that, and this is in the agreement that it is over five to seven years, which takes it down to $3 or $4 million a year, which is what Wal-Mart is already doing. So there's nothing new in this community partnership initiative. The other issue...
NNAMDIHow long has Wal-Mart been doing this in the district?
STREZNEWSKII don't know exactly how many years, but it has been several years...
STREZNEWSKI...that they have been contributing to job training organizations, anti-hunger organizations. I mean, their philanthropy has been doing good things, I'm not going to take that away from them. What I am most concerned about is that the community or the community partnership initiative is not an enforceable agreement at all. And the fact that there aren't concrete commitments to wages and hours which I believe are among the most important issues when we're talking about Wal-Mart or any large retailer.
STREZNEWSKIAnd while Wal-Mart is concerned that we appear to be singling them out unfairly, it is because they are so large that as goes Wal-Mart, so goes the rest of the big box retail industry. And it is important to ensure that they are paying appropriate wages, offering benefits, offering reasonable and consistent hours to their associates.
NNAMDILydia DePillis, how does Wal-Mart's promises here compare with the promises made in Chicago?
DEPILLISThere's a bit more in Chicago. There was an agreement to a $1 more than the minimum wage, that they would work with all of their construction is with union construction companies which is not at all mentioned in D.C.'s agreement. But other than that, though, they're really stunningly similar. A lot of the languages was just ripped right from the Chicago documents, right down to the little bit at the end that says none of the supplies if things aren't going well for us economically, which is just an escape hatch for the rest of the agreement.
NNAMDIVictor Hoskins, if none of the terms in the community partnership initiative are indeed binding, what recourse does the district have if Wal-Mart doesn't follow through?
HOSKINSWell, Kojo, I have had the unique experience, being in D.C. for the last 10 months, of finding out the methodology for accountability in a city. And I have to tell you, it's a unique in this nation. And I can't think of stronger community groups, more -- excuse me, qualified, incredibly articulate advocates for the issues that will hold a group accountable. In addition, the city itself will hold them accountable.
HOSKINSWhen you make a public declaration like this and you are Wal-Mart and you're in the nation's capital, so close to the seat of government both representative and executive branch, it's going to be pretty hard for them to move away from their commitments that they've laid out here. In addition to that, this hasn't even been mentioned, they are going to generate $15 million in combined sales tax and property tax revenue to the District, annually which pays for quite a few services over a 10 year period.
HOSKINSThat's $150 million over 20 years, that's $300 million, that's a third of a billion dollars. That money can be used for doing a lot of good in the city of Washington, D.C. And the other thing that has been overlooked and no one has even mentioned is that they will not -- they have already committed, they will not claim the supermarket tax exemption. We pay the supermarket tax exemption to stores that come into the district that they're doing this of their own volition. We are not -- there's no other retailer that's doing these types of investments in the city when they come in.
NNAMDIWe got a bunch of...
HOSKINSActually it's quite the opposite. We're paying for them to come in. You know, I mean, that's the reality.
NNAMDI...have a bunch of callers who want to get in, but Lydia, you point out that most of the commitments in the community partnership initiative are not new.
DEPILLISThat's right. Right when it came in, Wal-Mart promised a lot of things like that it wouldn’t have guns in stores and that it would allow small businesses to -- a crack at setting up shop inside their stores. It -- soon after that, Tommy Wells came to them and said can we work out a training program? So they said, all right, we'll commit $3 million to that, which really helps train their workers so why wouldn’t they? You know, my problem is not that Wal-Mart's coming in, it's just that to pretend that this is significant in any way as far as an agreement is somewhat duplicitous.
STREZNEWSKIAnd if I can jump in, one Mr. Hoskins pointed out about the increase in tax revenue from two sources. He did not point out any tax revenue increase that could be expected from income tax. That's because, again, it goes back to -- I'm going to sound like a broke record, which is an analogy which is rapidly losing currency.
STREZNEWSKIBut it goes back to wages and hours and the income that comes to the workers or doesn't come to the workers. And if a worker was working 24 hours a week, a worker who's working 32 hours a week at D.C.'s minimum wage is still eligible for public assistance through the alliance program and through other benefits. So I wonder what the net benefit, at least in terms of income tax and social services, is to the district.
NNAMDIWell, we have a lot of calls and Victor Hoskins, before I go to those calls, you may want to respond to what Marina just said.
HOSKINSWell, I'm -- I really don't -- I think that's a response for Wal-Mart, not for us in terms of wages because we don't -- it's their business, not ours.
NNAMDIOkay. We got an email from Jennifer in D.C. who said "I just want to say that as a neighbor of the soon to be Wal-Mart on East Capital Northeast, I look forward to its arrival. The goods and services Wal-Mart will offer are currently lacking in my area. So thank you Wal-Mart." Is East 58th and East Capital Street an area that you would describe as a food desert, Victor Hoskins?
NNAMDIOkay. So that's one of the reasons why Jennifer is happy. Now, let's see who isn't. Here's Ryan in Gaithersburg, Md. Ryan, you're on the air. Go ahead, please.
RYANHi, Kojo, thanks for taking my call. Aside from the wage disparity and the health insurance that you guys have already touched on, I had three things that I wanted to mention. First being the modus operandi of Wal-Mart every since Sam Walton owned the company which has been basically to open a store, reduce their prices, take a loss for the first two years to drive any other possible business out of business until they have basically gone and buried them. And basically forced them to go and work for Wal-Mart.
RYANThe other thing is that as a huge giant, they basically can set the price that other companies like, for example, Johnson and Johnson can sell their merchandise to them. They'll tell them no, we're not going to pay $1.50 for it, we're going to pay 50 cents a bottle for that bottle of shampoo. And it basically causes everybody else's amount of money that they have to go down. So, yeah, it's great that you're saving money, but the amount of money that you have just reduced. So you have...
RYAN… (unintelligible) spent.
NNAMDI...here's this email we got from Amber. "While I do have ethical issues with Wal-Mart's corporate practices, I would welcome another department store in my area. I live in Southeast and I have to travel at least 45 minutes on public transportation or rent a zip car to buy basic things such as sewing and craft supplies, home improvement items, inexpensive furniture items, even socks. I usually log into Amazon.com and order things with free shipping. I know this is unsustainable and does not support the local economy, but I don’t have the time to travel up to Columbia Heights to visit Target."
NNAMDI"A Wal-Mart location would provide the same goods and pay wages to district residents in other areas. I think most residents in Southeast who have to deal with the lack of access to retailers of basic household products would support a convenient location." So, Ryan, on the one hand, there's driving others out of business, on the other there's people who say there is no other business.
RYANWell, that may be true. And the other thing...
NNAMDIAnd that's a difficult issue. Lydia DePillis, Wal-Mart and Victor Hoskins talked about all of the community organizations or the community meetings they held in the District of Columbia. I know you covered some of those. Was the general sentiment people wanting Wal-Mart to come.
DEPILLISIt was really split and depended...
DEPILLIS...where you were. In Ward 6, for example, there were people who were delighted that would be coming after many years. That's...
NNAMDINot so in Ward 4, huh?
DEPILLISNot so much.
NNAMDINot -- care to comment on that, Marina?
STREZNEWSKIThere's other -- there's issues that are specific to each neighborhood, for example, Ward 4, the Curtis Chevrolet site, the traffic is difficult right now and we can only imagine what it will be like if there's a large retailer like Wal-Mart in that space.
NNAMDIAnd we got an email from Jack in D.C., Ryan, who says "If truth be told, employed D.C. residents with cars do not shop in small neighborhood stores, they drive to where they can get better prices. Challenge the assertion that poorer residents without cars shouldn't also have access to lower prices?" Well, let's see what Steve in Washington has to say. Steve, you're on the air. Go ahead, please.
STEVEYeah, hi. I'm a resident of D.C. and I just have a comment which is that I support Wal-Mart and in particular the Ward 6 store where there's nothing but a open parking lot right now. To the extent that these stores offer more choice and more competition, it only benefits the residents, it's along with the community benefits. I believe that it is a positive for Wal-Mart to come to D.C. My comment.
NNAMDIOkay. Steve, thank you very much for your call. Getting back to you, Victor Hoskins. You mentioned that D.C. has no control over what wages Wal-Mart play but does the city have any influence? It certainly had influence in persuading or helping to persuade Wal-Mart to locate to Skyland. Washington is an expensive city to live and with a very high cost of living, did the district ask Wal-Mart to pay employees the districts living wage at $12.50 an hour?
HOSKINSThis is -- this was our position, Kojo, we discuss with them wages. I mean, of course, and honestly this is a very complicated issue. And the bottom line is that they have to pay competitive wages. If they don't pay competitive wages, they can't hire people. That's flat out the truth and everybody knows that. And that means that the other companies are paying those same wages. You cannot -- you just can't get good employees unless you pay a competitive wage. You've probably experienced that in your organization. I mean, it's what we all experience. If we don't pay people well, we don’t get good people.
HOSKINSSo the bottom line is that, that's where they end up falling. And if you look at their average wages that they posted in -- that they have posted for Maryland and Virginia, you know, those are pretty substantial, the -- in the 11 plus range. So I'm not going to speak to them on -- again, on their issue of wages. The city has a living wage that we require and that's what we can enforce. We can't enforce something on one company that's not enforced on all companies.
HOSKINSIt's anti-competitive. I mean, it's not...
NNAMDIMarina is the job situation in Washington, D.C., especially in certain sections of the city so desperate that people will work for even lower wages?
STREZNEWSKII think it is in some areas, there is a certain amount of desperation. So that you're going to get workers who will take a job -- especially people who've been unemployed for a long time, they will take a job, any job, just to get some income coming in. The point I wanted to make though is that, well, Wal-Mart does post these average wages on its website, our research indicates that those need to be considered with a grain of salt. That they're saying that -- in Maryland, for example, that it's somewhere north of $11, but our research indicates it's more along the $9, $9.50. Even for people with experience. So I question the methodology they've used to arrive at their numbers.
STREZNEWSKIAnd that's one of the reasons why we had hoped that there would be more specificity in some kind of an agreement.
NNAMDILydia DePillis, we got an email from Tom in Tacoma Park. "The film "The High Cost of Low Price" documents Wal-Mart's practice of steering it's part time workers toward Medicaid, transferring its corporate responsibility to the American taxpayer. Do you know whether Wal-Mart intends to continue this practice in D.C.?"
DEPILLISI certainly can't read their mind and am pretty sure they would deny it really vehemently. But a couple points on what we were just saying about I think Marina's right that you can't say on the one hand that there's 25 percent unemployment in Ward 8 and say that people won't take jobs if they're not paying more than $8.50 or whatever.
DEPILLISBut the other thing I would say is that I think it's the wrong strategy to try to get Wal-Mart to be the one to raise those wages. I think that if you want people to get paid more you got to raise the minimum wage. And there is a bill pending in the D.C. Council that would do that for big boxes. But there doesn't seem to be the political will to push it forward.
NNAMDIWe've got to take a short break. When we come back we will continue this conversation on Wal-Mart and D.C. providing you with an update. If you have called, stay on the line. If the lines are busy send us an email to firstname.lastname@example.org, a Tweet at kojoshow or simply go to our website kojoshow.org and make a comment or ask a question there. I'm Kojo Nnamdi.
NNAMDIWe're talking Wal-Mart and D.C. with Victor Hoskins, Deputy Mayor for Planning and Economic Development for the District of Columbia. Lydia DePillis is a staff writer with the Washington City Paper. And Marina Streznewski is the Executive Director of the D.C. Jobs Council. You can send us email to email@example.com or a Tweet at kojoshow.
NNAMDIVictor, the Skyland Center, as we mentioned, has hit a snag. This is an area that already has a supermarket. Since Safeway is already there and apparently has a covenant with the District of Columbia, how is your office going to resolve this issue? The covenant, is my understanding, is legally binding, is it not? And what does the covenant say? Nobody can open up across the street?
HOSKINSYeah, it's very interesting. Yeah, first of all, let's clarify that the Safeway is actually operating across the street from Skyland Shopping Center and that it used to be on the Skyland Shopping Center site. So let's just get that clear first. The second thing I'd like to mention is that this site has been mired in various forms of litigations and problems for the last 22 years. And, like I said, most -- many in your audience know that much, much better than I do and have experienced that.
HOSKINSWhen I joined the mayor's team, he made it clear that this was a priority. As a matter of fact, you would be floored at almost every city council person -- I met with every city council person and I asked them their top three priorities. And on everyone's top of their three lists Skyland came up. Now that's the entire council all looking at Skyland as a needed place to change.
HOSKINSSo we have been dealing with litigation. Actually when I first sat down with our attorneys I received a schedule that said five or six years in order to get it done. I'm going through this answer to let you know that there have been many barriers, many barriers over the last nine months. And we have made extreme progress. We have some very gifted people here that have done diligent work on this. And yes, this is an issue. But like all the other issues we are going to work through this one. That -- the thing is that's what our business is in economic development. It's not just accepting a problem as a problem. It's trying to turn that problem into an opportunity.
HOSKINSAnd we're in conversations with Safeway, we're working with the developer. And as you heard earlier, Wal-Mart mentioned that they were aware of this covenant.
NNAMDIIs one of the possibilities that if Wal-Mart locates there there will be no Safeway?
HOSKINSNo. The Safeway is already located across the street. Safeway would not be locating on...
NNAMDI...on Skyland. Right, I understand that.
HOSKINSYeah, yeah, yeah, yeah. No...
NNAMDIBut I guess their concern is that if Wal-Mart locates across the street they are going to lose business and maybe lose their location.
HOSKINSI think that's something that really Safeway could best answer than I could.
NNAMDIOkay. Lydia DePillis.
DEPILLISYeah, I mean, I wouldn't be surprised if it picked up and left. They have closed other stores in underperforming parts of the city to concentrate on more profitable areas with better mixed east developments. I would not be surprised to see that.
NNAMDIAnd Safeway is organized, isn't that correct?
STREZNEWSKIThat is correct. And if they are able to -- if Wal-Mart decides to take a loss for the first couple years, which is something that they do to develop a foothold in a particular neighborhood, I agree with Lydia that there's at least a halfway decent chance of Safeway leaving the area.
NNAMDILydia, one of the concerns people have is that big box retailers don't fit the format of urban neighborhoods. But you seem to be pretty impressed with the look of the plans you've seen so far for D.C. What does the plan say for New Jersey Avenue look like?
DEPILLISYeah, they vary. The Ward 6 one on New Jersey Avenue and H Street Northwest is the best of them. It's anything we could ask of in a mixed east development. It's got affordable housing on top. It's got Wal-Mart on the second floor with other smaller businesses on the ground level retail. It's -- that site could've been a blank office building. And instead it's going to be something that'll really contribute to the neighborhood. So that's great.
DEPILLISBut there's others in the District that are pretty standard Wal-Marts. The Ward 4 one on Georgia Avenue, the Ward 6 one on -- I mean, Ward 7 on East Capitol not so great. So they vary. It just depends on what the developer wants to do.
NNAMDIHere is Dell in Lana (sic) , Md. Dell, you're on the air. Go ahead, please.
DELLHi. I'm not an activist against Wal-Mart and I'm sure I'll shop at their stores. I do not but I've had a couple of experiences about their labor practices and also their management practices that raise some eyebrows. But the first thing is my best friend from high school became an assistant manager at Wal-Mart. And his first job was to go in -- it was in a small town in Iowa and his first job was to go around the little towns and into the stores and see what they were selling milk for at the little grocery store, and bread. See what they're selling motor oil for at the local gas station. And go to the hardware store and see what they're selling a saw or a hammer for and bring that back.
DELLAnd then they would just automatically undercut those stores. And, you know, he told me that. I don't know if it's true or not but the next thing that really kind of turned me off is my brother, he's a handicapped person. He's perfectly capable of work. He works in construction, but he's got dwarfism. He's a very small person. And there was a maintenance job at a Wal-Mart and he had called -- he was living in Phoenix but called the store out in Iowa and inquired about it and made arrangements to fly out there at his own expense. Talked to the manager, you know, over the phone. Got all the way out there, the guy took one look at him and said, sorry, the job's not available. Didn't offer to interview him at all.
NNAMDIWell, frankly that sounds like a violation of law, Dell.
DELLI would think so. And I encouraged him to pursue it actually, but he didn't. But it was just a real turnoff.
NNAMDIYeah, that sounds like a violation of law and he should probably have pursued it. On the other issue, Dell and Marina, in this case people would say that's what competition is all about. They're competing at the price level because they can afford to do that.
STREZNEWSKIThey can afford to do that but they are so big it's like a very large planet and with a large gravitational pull. They are -- because they are so big and they're able to control the means of production as well as the salaries of workers, they are able to exert and outsize influence on prices and wages in any particular market.
STREZNEWSKIYou remember that unions -- one of the reasons that unions arose back in the 19th century was in response to large organizations taking advantage of workers. And the parallels between what other large corporations did in the past and what Wal-Mart is doing today are interesting, to say the least.
NNAMDIDell, thank you very much for your call. We got an email from Steve in Silver Spring who says, "As an interested Montgomery County resident who has observed the Wal-Mart related developments in Washington, D.C. and who very much supports Wal-Mart's interest in opening stores in Aspen Hill and Rockville, here is my question. Would there be any uproar at all if we were talking about the opening of multiple Whole Foods markets or Target stores, even though these retailers, to my knowledge, are also nonunion?
NNAMDIThe answer, I suspect, is that there would be far less controversy surrounding these other perhaps more politically correct stores." I know there is a controversy over a Whole Foods opening in Prince George's County, but I don't know if you've been noticing at any of the meetings you attended, Lydia, or any of the interviews you've conducted if people single out Wal-Mart because of what...
DEPILLISThey do. I think it's the history of business practices that it really is unique to Wal-Mart. But I do think it's true that (sounds like) Harris here, which is also nonunion whole foods people are usually greeted with delight in neighborhoods, except for those who are unhappy with the fact that they're kind of expensive. So, yeah, I think that's a fair point.
NNAMDIVictor, even if these stores are smaller format, one of the concerns is the traffic a big box store may bring to areas that aren't laid out to accommodate large parking lots and heavy traffic. How is the District planning to address that?
HOSKINSWell, it's part of the large track review in the plan unit development process, the PUD process in the city of Washington, D.C. All these issues are looked at, you know, and requirements are laid on the developer and on whoever is going to develop the site. And that they have to mitigate whatever impact that they have.
NNAMDIHere is Char in Washington, D.C. Char, you're on the air. Go ahead, please.
CHARYes, hi. Thank you. I live in Ward 4 and I'm not unopposed to -- excuse me -- the Wal-Mart simply because the Safeway, for instance, is closest to me at Georgia and Piney Branch. A very dirty store, very dingy, just, you know, not a pleasant place to shop.
NNAMDII'm intimately familiar with that store. Go ahead, please.
CHARAnd just wondered if anyone's had any conversations with the folks about that particular Safeway and why they've let that store -- well, the time that I've been here just stay in the condition that it's in, deteriorate. It's like, you know, they don't care.
CHAREven though they're very nice people that work there.
NNAMDIMarina Streznewski. Yes. I spend a lot of time there.
STREZNEWSKIThere has been a lot of traffic on Twitter over the past couple days about that particular Safeway, but also the Safeways east of the river about cleanliness. That is an issue that's something I think that it would behoove Safeway to look into. But if you look around the country as well, it is also something -- if Wal-Mart is looking to cut costs at an underperforming store, and this can happen, you know, from Maine to California, one of the things they cut back on is cleaning.
STREZNEWSKIAnd there are complaints that over time the Wal-Mart stores become dirty as well. I mean, any store that's new is going to be nice and shiny and clean and fun to shop at for that reason. But the cleanliness issue over time is something that any decent grocery store needs to pay attention to.
NNAMDIChar, thank you very much for your call. Marina, Wal-Mart has agreed to open job training centers and to make, as we mentioned, the $21 million. You talked about that. How about the job training centers?
STREZNEWSKIThat's a good idea. One would expect that if you're looking to hire employees and to train them to work in your system that you would open job training centers. Again, that's nothing unexpected. That's nothing that hasn't been promised by Wal-Mart from the beginning of when they were looking into coming to the District.
NNAMDIOkay. Back to the telephones. Here is Steve in Washington, D.C. Steve, you're on the air. Go ahead, please.
STEVEWell, one of the things that -- and I want to speak to quite a few things...
NNAMDIWell, one at a time, please.
STEVEYes, sir. I think you should have Wal-Mart put some money aside for those things that are promised to community. Maybe that could be worked into the agreement. Since we have someone from the mayor's office they understand. Maybe that some money could be put up front to show that those things that are promised to the community will be done, number one. Number two, a lot of the stores that are in these communities already under serve the communities, worrying about people that are not very nice to them and the prices are -- have always been high.
STEVEAnd overall I see -- I'm not necessarily for Wal-Mart. I don't like a lot of things associated with the Cook Brothers and they come out of the south. And that is antiunion kind of mentality that comes with it. But I'm for having better choices and a walkable community. And I think one of the projects that they have will have like a shopping center. And that will allow the people in the area that have a walkable community like they do in Capitol Hill and so forth. So I hope that's the beginning of other retailers coming.
NNAMDIVictor Hoskins, I'm sure that one of the things you considered was the often made argument that Wal-Mart would be displacing local businesses. And Steve feels that some of the local businesses were not serving neighborhoods very well.
HOSKINSYes, yeah. And actually we've started looking at the small businesses that are in the area that look like they will be in competition with Wal-Mart in seeing the type of financial assistance we can provide and technical assistance and marketing assistance. Because we know that will be important over time.
NNAMDIIndeed we got an email from Alice who says, "I understand all the reasons that many people are opposing Wal-Mart's entry into Washington. But I think the problem isn't Wal-Mart. I think the problem is that the city has failed to do much to help create locally owned businesses. The reason Wal-Mart sees opportunities in southeast for instance is that there just aren't enough other businesses there. I wish the city had put more energy into supporting small businesses than into attracting big box stores." How can the city put more energy into supporting small businesses, Victor Hoskins?
HOSKINSWell, the city has a pretty extensive program here. The Department of Smaller Local Business Development provides many of the services that most of the jurisdictions in the country provide metropolitan areas. And actually, there's some pretty good programs here in the city of Washington, D.C. But an entrepreneurial environment has many factors that affect it. And we do work with small businesses and we do -- for example in this case we're going to be working with them before the impact even comes because we want them to be prepared for whatever challenges that may be ahead.
HOSKINSBut the bottom line is that it's like any other, you know, problem. You know, you get from it the resources that you pour into it.
NNAMDIAnd I'm afraid that's about all the time we have. Victor Hoskins, thank you for joining us.
HOSKINSThank you very much, Kojo, and you have a great day.
NNAMDIYou, too. Victor Hoskins is the Deputy Mayor for Planning and Economic Development for the District of Columbia. Lydia DePillis, thank you for joining us.
NNAMDILydia DePillis is a staff writer with the Washington City Paper. Marina Streznewski, thank you for joining us.
STREZNEWSKIYou're most welcome. Thanks for asking.
NNAMDIMarina's the Executive Director of the D.C. Jobs Council. "The Kojo Nnamdi Show" is produced by Brendan Sweeney, Michael Martinez, Ingalisa Schrobsdorff and Tayla Burney with assistance from Kathy Goldgeier and Elizabeth Weinstein. The Managing Producer is Diane Vogel. Our engineer is Andrew Chadwick. A.C. Valdez is on the phones. Thank you all for listening. I'm Kojo Nnamdi.
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