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| From the Los Angeles
Times Wal-Mart Finds Big Apple Chilly Toward Big Box By PAUL LIEBERMAN Los Angeles Times August 22 2005 NEW YORK -- In April, Wal-Mart CEO John Menzer enjoyed one of this city's traditional honors, ringing the opening bell at the New York Stock Exchange. But that's about the only way New York City has been inviting of late to the giant retailer, which so far has no stores in the five boroughs. Earlier this year, the city council refused to grant a zoning variance for what would have been the first, in Queens, citing the pay and benefits that Wal-Mart gives its employees. Earlier this month, the New York Central Labor Council staged a rally outside a Greenwich Village school urging parents not to buy back-to-school supplies at the non-unionized company's stores in surrounding areas. And last week the city council voted 46-1 to require all large food retailers to offer a minimum level of health care benefits. While that legislation did not name any retailer, and could affect an estimated 12,000 employees currently working at large grocery stores, its sponsor, Councilwoman Christine Quinn, said one goal was to create a barrier that would keep Wal-Mart out of the city unless it increases health benefits for workers. Brian McLaughlin, president of the labor council, similarly said the measure was a response to "the Wal-Marts of the world [who] continue their `race to the bottom' by lowering standards for working men and women." And a poverty study center at New York University's law school, which helped draft the legislation, simultaneously prepared a study critiquing Wal-Mart's health benefits, spotlighting such practices as a six-month waiting period before full-time employees are eligible for coverage, and a two-year wait for part-timers. The city's Republican mayor, Michael R. Bloomberg, has come out against the measure, but the lopsided vote on Wednesday signaled that there easily is enough support on the heavily Democratic 51-member city council to override his veto. That would leave the fate of the bill to the courts following a certain legal challenge, if not by Wal-Mart, than by those large grocers already doing business in the city who would be forced to increase the amount they spend on health care coverage for workers. Supporters of the bill, which was introduced by Quinn and backed by council Speaker Gifford Miller said it aims to prompt all large food sellers to contribute toward health care at the same level as the grocery chains that spend $2.50 to $3 per hour on such coverage for each employee. The city bill covers conventional groceries with 35 or more employees or other retail stores that use 10,000 or more feet of space to sell grocery items, the provision that would apply to Wal-Mart and some other "big box" retailers. A similar measure is scheduled to be considered this week in suburban Suffolk County on Long Island. "Quite frankly, it has a very anti-competitive bent," said Mia Masten, Wal-Mart's eastern region spokeswoman. "Some of our competitors want to keep us out." Wal-Mart also argues that the bill discriminates against its discount-seeking customers, who now have to go across the Hudson River to the three stores it has in New Jersey suburbs, or two in Long Island's Nassau County, which abuts the borough of Queens. "Last year, New Yorkers spent over $98 million at our nearby stores so we know that New Yorkers are shopping at Wal-Mart," Masten said. Both Wal-Mart and Mayor Bloomberg have criticized how the law targets only a narrow group of employers, food stores. City officials originally did consider covering more than food sellers, according to one of the architects of the legislation, Paul Sonn, deputy director of the poverty program at the Brennan Center for Justice at NYU. But after investigating "a variety of industries," they settled on groceries as "a sensible first step," he said, because many of the chains now serving New York provide health benefits. Backers of the measure considered it a victory that the Food Industry Alliance, the grocers' trade group, remained neutral. Sonn said the grocers were saying "look, we just don't want to compete around how little health care we can provide our workers." One goal was to protect those employers, he said, from pressure to "cut back" in order to keep down prices in response to those offered by Wal-Mart and others who don't spend as much on benefits. "Around the country Wal-Mart has been a leading firm putting pressure on [others]," Sonn said. "It's not that they don't contribute at all, they just contribute at a lower level." Copyright © 2005, The Los Angeles Times |
