Big box retailing giant Wal-Mart has saturated the market in rural and suburban America. The only ground left for expansion is inner cities like New York and Chicago. Paul Street recounts the promises and machinations of Wal-Mart and the part local leaders, politicians and community activists have played up till the article's publication in October of 2006.
The People of Chicago vs. Wal-Mart
Urban Neoliberal Racism and Civil Rights Sell Out
by Paul Street
The Mayor and the Corporation versus the People
It was just too terribly perfect. For the first time in his seventeen years as the Mayor of Chicago, Richard M. Daley found it necessary last September to veto an ordinance by his normally obedient City Council. The measure successfully moved to stamp out was widely supported by rank and file citizens, community-based organizations, and labor unions in his city's black, Latino, and working-class wards. According to a poll conducted by Lake Research Partners, 84 percent of the city's residents and 90 percent of its black residents supported the "big box" Living Wage bill.
Originally passed by the council under pressure from a remarkable grassroots campaign, the measure would have required giant retail corporations like Wal-Mart, Target, Lowes, and Home Depot to pay workers in the city a modest minimum wage of ten dollars an hour by 2010. The ordinance led leading retailers Wal-Mart and Target to announce that they were putting a number of "big box" retail developments in the city on hold. They launched a preemptive capital strike, threatening to disinvest in the city unless and until the popular ordinance was shelved and a "favorable business climate" restored in the City of Big Shoulders.
"Mayor Soul Man and Mayor Big Business on the Same Day"
In killing this minimally decent measure, Daley made a special point of wrapping his business-friendly veto in the purported flag of racial justice. He claims that it is necessary to permit "economic development" in the city's abandoned predominantly black ghetto neighborhoods, where jobs and mass retail shopping opportunities are notoriously scarce. He defended his veto at a South Side gathering attended by a crowd of handpicked black supporters and where he accused the ordinance's proponents of opposing the "economic development" for the black ghetto.
"Daley was Mayor Soul Man and Mayor Big Business on the same day."
This performance has earned him the ironic praise of Chicago Tribune columnist John Kass, who notes that "Mayor Daley is a brilliant politician. Who else but Daley," asks Kass, "facing his toughest re-election fight from a credible black challenger, could play both the race card and the free market card and get away with it? He was Mayor Soul Man and Mayor Big Business on the same day" (John Kass, "Daley Shows He Still Holds All the Cards," Chicago Tribune, 14 September, 2006)
Propagating Preemptive Capital Strike
Kass's sense of irony is not shared by the Tribune's reactionary editorial board and news chiefs. The paper has predictably applauded the veto as a statement that "Chicago is still open for business, that it is hungry for development and jobs for its citizens." According to a "news" item in its business section, the Tribune informs readers that "it was a fight that Wal-Mart needed to win. Under pressure to show continuous growth and stumbling in international markets," the Tribune notes, "the world's largest retailer is attempting to win entry into cities like Chicago. Until [Daley's veto], it had little to show for its effort. With Mayor Daley's successful veto of a higher minimum wage ordinance for big-box retailers, the way is paved for Wal-Mart's expansion to the city." Like the city's other corporate newspaper the Sun Times, the Tribune has been arguing that the ordinance was a "bad idea" that would create huge job losses for the city.
Divide and Rule
Richard Daley the Second's playing of the race card - quite disingenuous for reasons I will discuss below - was straight out of Wal-Mart's three-year campaign to crack the Chicago market. Wal-Mart, a notoriously low-wage, labor exploiting, and race-and gender-discriminating template of low-road capitalism at home and abroad, has been trying to enter the lucrative Chicago through the city's weakest link - the desperately income, job, and development poor black inner city. It's been posing as a concerned corporate citizen motivated by a benevolent passion to solve the problems of the forgotten black ghetto. The company and its allies in the Illinois Retail Merchants Association have gone on black radio to trumpet this line. They have cultivated loyal statements of support and hysterical statements of concern for potential lost jobs from pathetic black corporate and City Hall toadies like Leon Finney (of The Woodlawn Organization) and James Compton, the malingering millionaire ex-CEO of the Chicago Urban League who has finally made his long retirement from civil rights activism official. They have recruited the president of the Chicagoland Chamber of Commerce to trumpet Wal-Mart et al.'s deep concern for "future economic development in the city's most underserved neighborhoods."
Uncle Compton and the Chicago Corporate Urban League
In one of his last great acts of public subservience to white corporate power, Compton last July sent all 50 city council members a letter in which he begged Chicago aldermen to vote against the big box living wage ordinance. If the city dared to "mandate wages and benefits" for Wal-Mart and its fellow mass retailers in Chicago, Compton claimed, it would have a "negative impact on sales taxes and revenues" and a "grave effect on Chicago residents and businesses." The "long-term viability of these stores," Compton claimed, "is questionable with the passage of this ordinance," which he identified as an enemy of his supposed goal of creating "balanced communities in which to live, work, and raise families"
"Inner-city residents should be happy, the ‘civil rights leader' counseled, with any kind of position, no matter how exploited and underpaid."
In black ghetto neighborhoods where employment opportunities were scarce, Compton told black aldermen, "all jobs are welcome." Beggars, in other words, can't be choosers. Inner-city residents should be happy, the "civil rights leader" counseled, with any kind of position, no matter how exploited and underpaid (James W. Compton, "From the President's Desk," July 20, 2006, retrieved online on September 11, 2006 at www.cul-chicago.org).
There was nothing in Compton's letter about the need for a basic affordable housing ordinance to make the city livable for the rising number of poor and ordinary working people who are being forced out of the city's highest opportunity neighborhoods by the Mayor's aggressively gentrifying "global city" agenda.
There was nothing about Daley's long record of neglecting economic development and social health in the city's many ghetto neighborhoods in favor of serving downtown and multinational business interests (see below).
There was nothing about the need for the kinds of jobs that provide the sorts of wages and benefits that make "balanced communities" possible.
And there was nothing, of course, about the role of Wal-Mart and other low-wage mass retailers in the undermining of social and economic health across the nation and the world.
Since he rarely if ever read his own agency's reports and publications, Compton was likely unaware that his agency's venerable research arm was on record in support of the big-box ordinance. I penned an argument in support of a strong living wage ordinance for big-box retailers in a Chicago Urban League (CUL) study published last year (see Working Poor Families in Chicago and the Chicago Metropolitan Area [Northern Illinois University, Roosevelt University, and The Chicago Urban League, 2005] at www.cul-chicago.org).
In a second major Chicago Urban League report published the same year, I anticipated Compton's letter, observing that the paucity of economic development in Chicago's ghetto neighborhoods helps us understand why some black elites "become excited...over the possibility that a notoriously low-wage retail employer might set up shop in two black Chicago neighborhoods, one on the South Side and the other on the West Side. The employer, Wal-Mart, had," I added, "a long track record of worker abuse, race discrimination, and local economic displacement, but company officials nonetheless claimed to be interested in solving the ‘social ills of the inner city.' Despite the company's questionable history and motives, many residents and community leaders made efforts to accommodate its needs, with the hope that such investment in their neighborhoods would translate into jobs and services. "Beggars can't be choosers" was the basic argument of black community leaders who pushed for the zoning changes that the giant corporate employer (Wal-Mart) needed in order to construct "big-box" stores in black Chicago, even as local labor market researchers reported that the company's proposed stores would actually generate a net loss of jobs within the city's black community" (see Paul Street, Still Separate, Unequal: Race, Place, Policy and the State of Black Chicago [Chicago Urban League, 2005]).
"The company's proposed stores would actually generate a net loss of jobs within the city's black community."
These published comments were likely not read by Compton, as were numerous memorandums I produced detailing Wal-Mart's negative labor and related civil rights record within and beyond the U.S.
Half a Basic Family Budget is Just Too Much
I say that the vetoed big-box bill was "modest" and "minimally decent" for some very simple reasons. According to a rigorous and reasonable study by the Economic Policy Institute, the cost of a "basic family budget" - the real no-frills cost of living (taking into account housing, food, child care, transportation, health care, and other necessities and taxes) - for even a small family of one parent and two children in Chicago in 1999 was $35,307. The minimum wage that would have been set by the dead ordinance would have required that Wal-Mart pay its employees no less than $20,000 four years from now, when the minimum basic family budget for a mom and two kids in the city will certainly cost more than $40,000 a year, particularly when you factor in the ever rising disappearance of affordable housing in Daley's gentrifying metropolis. The measure that Daley is slaughtering, in other words, wouldn't have put Wal-Mart wages at more than half the escalating cost of being a poor single mother with two children in the city. Black median household income in Chicago in 1999 was $6000 less than that basic small family budget. White median household income exceeded that amount by more than $11,000.
Ironically enough, "Mayor Big Business" and his sold-out "civil rights" supporters like Compton (who has long parlayed his civic credentials into the attainment of various corporate board memberships) seem to hold a remarkably low opinion of American capitalism's ability to meet basic human needs. If the American System's dominant managerial-capitalist mass-retailing firms were required to pay entry-level workers just half the cost of a minimally decent small-family budget, they claim, those great global enterprises would suddenly be unable to operate profitably in Chicago. This would appear to be an argument for the construction of a post-capitalist social order.
Daley's Deleted Abandonment
The mayor's calculated racial rhetoric is rich with unintended irony. Who has been running the metropolis during the years of ghetto abandonment that Daley claims to oppose? A close friend and supporter of big white-run business, Daley's corporate-neoliberal reign of "pinstripe patronage" has more than accidentally coincided with persistent and deepening black misery in and around the city. The dominant city media's mainly laudatory appraisal of the Mayor over the years - recently tempered by a city hiring and corruption scandals - has consistently ignored the steep racial oppression and inequity experienced by hundreds of thousands of black Chicagoans living on the outskirts and in the shadows of Daley's ever more "beautified," "vibrant," and expensive downtown business, commercial, and residential district and its growing ring of glittering condominium and entertainment complexes. Endemic deep poverty across the city's vast stretch of highly segregated and conspicuously non-beautified black neighborhoods has never struck the city's wealthy or this mayor as a "big ticket" item requiring concentrated private or public investment.
"Endemic deep poverty across the city's vast stretch of highly segregated and conspicuously non-beautified black neighborhoods has never struck the city's wealthy or this mayor as a ‘big ticket' item."
The $475 million that Daley got the city's rich to spend on the city's spectacular new Millennium Park would have been more than welcome in those communities. It would be especially appreciated in the form(s) of job training and/or child welfare and/or after school programs and/or "green space" expansion and/or drug treatment and/or...fill in the blank. The list of unmet neighborhood requirements goes on and on. It includes a crying need for affordable housing in the face of the mayor's dedication to the gentrification of centrally located neighborhoods that are marked out as the preserve of affluent urban professionals deemed vital for the city's ascendancy to the status of a "global metropolis."
Local corporate media in global Chicago routinely ignores the curious fact that social and economic inequality deepened between Chicago's black and white neighborhoods during the decade between Daley II's ascendancy in 1999. That rising inequality has been richly fed by the mayor's corporate, downtown-centered, and globalist development regime, which has pushed many of the city's numerous black poor further and further to the urban and suburban margins of the new global metropolis.
Chicagoans who paid attention got a taste of the depth and degree of Daley's disdain for the city's many black poor when he joined his "good friend" the openly plutocratic President George W. Bush on an imperial helicopter flight that passed over some of the city's ghetto communities on the way to address the rich, corporate, and extremely white "Chicago Economic Club" at the Sheraton Chicago Hotel and Towers in January of 2003.
The purpose of Bush's visit was to sell his call for the elimination of taxes on American corporate dividends - a measure that was designed, the New York Times observed, to "cost the government $300 billion over ten years" and "create much bigger budget deficits for the future." "More than half the benefit of eliminating dividend taxes," the Times reported, "would flow to the wealthiest 5 percent of taxpayers." Bush also called for the acceleration of preexisting steep income tax cuts and the repeal of the estate tax, which meaningfully affects only a tiny and super-privileged and very disproportionately white segment of the population.
While Bush accused those who opposed his profoundly regressive tax "stimulus" plan of engaging in "class warfare," his package was designed to increase the already formidable accumulation of private wealth in disproportionately white places like Chicago's Gold Coast, Lincoln Park, and Lake Forest while further bankrupting already inadequate social programs serving devastated black Chicago neighborhoods where corporate stock ownership and high incomes were too rare for residents to applaud the president's jihad against the "double taxation" of corporate dividends and his call for top-down tax relief.
After flying over part of North Lawndale in an impressive, roaring phalanx of armored military helicopters with the president on the way from O'Hare to the Gold Coast Sheraton and listening to the president's largely inept tax-cut pitch, the Mayor told reporters that Bush "hit a home run in that he talked to Middle America. I don't think it was good versus evil," Daley said, or "‘rich versus poor.'" Daley's concept of "Middle America" left out much of his own city, including fifteen predominantly nonwhite community areas, very disproportionately black, where more than a quarter of the children were living at less than half the poverty level in 1999.
Corporate Deletions, Corporate Blackmail
In Tribune and Sun Times editorials applauding the mayor's gallant action to "save jobs" and "economic development" for Chicago, there was no mention of recent estimation by the University of Illinois at Chicago's Center for Urban Economic Development's determination that Wal-Mart will displace more merchandising jobs than it creates in the city. There was no mention of the money that will be sucked out of the metropolis by large corporate chains that do not invest or save primarily in Chicago. There was no mention, of course, of Wal-Mart's long record of violating civil rights and equal opportunity employment laws or of the large number of Wal-Mart workers who are compelled by its low wages and benefits to rely on public assistance.
"Wal-Mart will displace more merchandising jobs than it creates in the city."
There was nothing about the terrible impact of its global purchasing practices on U.S. manufacturing employment or about the millions of public dollars that Wal-Mart and other large retailers extort from the city in the form of local and state subsidies and tax breaks. There was nothing about the company's record of refusing to hire ex-offenders, a major concern in a city where - as I showed in a 2002 Chicago Urban League report that held minimal interest for Compton (who was more interested at the time in supporting Daley's push for the expansion of O'Hare Airport's runway capacity) - at least 40 percent of black male adults carry the crippling mark of a criminal record.
There was nothing about the remarkably humble and affordable level of the wage and benefit levels the big box ordinance would have mandated for large retailers' lowest-paid employees. Like the Chicagoland Chamber of Commerce and the craven business-dominated Chicago Urban League, the papers' editors simply repeated as self-evident truth the big retailers' insistence that they simply couldn't afford to pay entry-level workers wages equal to half the cost of a tiny family's basic budget and ignored the NYU Brennan Center for Justice's informed judgment that big retailers' assets and their pressing need to enter new urban markets would have compelled them to work within the minimally decent wage standards set by the law.
Welcome to the world of metropolitan neoliberal racism, where the regressive workings of the supposed "free market" - well, the machinations of the market and state's creature and master The Corporation - are falsely sold as the solution of capitalism's most truly disadvantaged inner city victims and where filthy-rich, limousine-riding "civil rights" leaders play ball with the objectively racist Mayor in handing the keys to the city to ruthless and concentrated economic power.
An Afterword
In a depressing aftermath to this essay's original draft, a front-page article in the New York Times that appeared three weeks after Daley's veto reports that Wal-Mart is "pushing to create cheaper, more flexible workforce by capping wages, using more part-time workers and scheduling more workers on nights and weekends." Wal-Mart workers report that managers are "further reducing their already modest incomes and putting a serious strain on their child-rearing and personal lives" by demanding that workers "make themselves available around the clock." By numerous worker accounts, Wal-Mart is "making changes with an eye to forcing out longtime higher-wage workers to make way for lower-wage part-time employees" who put less strain on the firm's wage and benefit costs. Investment analysts and store managers report that Wal-Mart executive wants to push the percentage of Wal-Mart employees who work part-time from the current rate of 25 percent to 40 percent (Mike Barbaro and Stephen Greenhouse, New York Times, 2 October 2006, p. A1).
"Wal-Mart is ‘making changes with an eye to forcing out longtime higher-wage workers to make way for lower-wage part-time employees' who put less strain on the firm's wage and benefit costs."
The drive to eliminate older, long-term workers is consistent with a notorious internal Wal-Mart memo that was anonymously released to reporters in October of 2005. In that revealing communication, leading Wal-Mart human resources officer Susan Chambers argued that it was not cost-efficient for the company to employ long-term workers. She maintained that shifting to more part-time employees would help the company reduce the number of workers eligible for expensive health-care benefits (Stephen Greenhouse and Mike Barbaro, New York Times, 26 October, 2005, p. A1). Chalmers has subsequently been promoted to Executive Vice President for Human Resources at Wal-Mart.
Reflecting the cost-cutting Chalmers agenda, the Times reports, Wal-Mart is currently pushing senior workers out of their jobs by insisting that they agree to be available for work 24 hours a day and seven days a week and by denying older employees with back or leg problems the right to use stools on the job. A 67-year-old woman with a service record of 22 years and an $11 hourly wage at an Oklahoma Wal-Mart told the Times that her supervisors recently insisted that she be ready to report 24/7 - without any time restrictions. Wal-Mart was trying "to get rid of me," this long-service senior citizen reports, "to save on health insurance and wages" (Barbaro and Greenhouse, 2006).
Now that the Urban League's Compton has finally made his long retirement from meaningful civil rights activism official, he could go to work at Wal-Mart. This might help him develop a focused perspective on the extent to which it is possible to develop "balanced communities" and stable families on the basis of Wal-Mart wages and Wal-Mart work schedules.
While Compton performs this participant-observatory research, other investigators can pursue a different line of inquiry. They should try to determine how much money Wal-Mart and/or any of its mass-retailer partners have contributed to the Chicago Urban League, paying special attention to these companies' participation in the agency's upcoming Golden Fellowship Dinner. They can also look for any evidence that Wal-Mart is rewarding Compton or other CUL staff or board members personally, consistent with a long tradition of racialized business class bribery and civil rights sell-out within and beyond "global Chicago."
Paul Street was the Director of Research at the Chicago Urban League between 2000 and 2005. He is the author of Empire and Inequality: America and the World Since 9/11 (Boulder, CO: Paradigm, 2004), Segregated Schools: Educational Apartheid in the Post-Civil Rights Era (New York, NY: Routledge, 2005), and Still Separate, Unequal: Race, Place, and Policy in Chicago (Chicago, 2005) Street's next book is Racial Oppression in the Global Metropolis: A Living Black Chicago History (New York, 2007).