Yesterday the City Council of Chicago unanimously rubber-stamped a new Wal-Mart in the South side neighborhood of Pullman yesterday, the second one within the city. My friends and I (and their friends) have been having rather vigorous debates about the benefits and detriments of such a move. Most of us are at least somewhat torn (which is good in having such debates). On the positive side (or is it negative, but pro-having Wal-Mart), the neighborhoods that the Wal have moved into are economically in shambles, with little-to-no businesses in which residents can turn to work, and few fresh, abundant, available and affordable food options. Indeed, the common term for us urbanites is “Food Desert*,” as in, “OTOH, bringing in a Wal-Mart may help to reduce the food desert problem in the West and South Sides.”
One thing you write about early in the book is how Sam Walton, in pioneering the Walmart stores in the 1960s and 70s, took advantage of the rural isolation of these small towns in Arkansas and Missouri. I was wondering if you saw any parallels to what they’re trying to do now, getting into these urban markets. A lot of these neighborhoods, particularly on the south and west sides of Chicago, suffer from similar kinds of economic isolation.
There are two similarities between the very early Walmart and their recent effort to move into urban areas. One is that in rural Arkansas, in effect, the population was underserved. There were all these small stores which were kind of monopolies and had poor distribution and high prices. Walton took a look at that and saw there was a big opportunity there. Secondly, in both situations you have a large underemployed population of potential clerks, or workers in the stores, so really the wages in the stores can be quite low.You write that opening stores in areas where a lot of people are living on the edge is actually part of their corporate strategy: their business model basically can’t exist without a churning underclass.
I would add: Walmart would’ve been a success in any event, but it became a particularly big success because its years of great growth were, whether by luck or by planning, the same years of the Reagan, Bush, even Clinton-era transformation of the minimum wage and the decline of the unions. It took advantage of that. Walmart’s always prided itself that 25,000 people apply for 400 jobs when a Supercenter opens up. But this has been the case in America in general for the last 30 years. It’s not attributable to the fine job Walmart does. Whenever you have an employer of any size in any kind of urban area you’ll get 25,000 applicants. Walmart often uses that as a kind of argument that “Well, we’re doing great.”