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March 10, 2005

Welcoming WalMart into Blue Cities

Phil at Laboring Away at the Institute has some more thoughts on Wal-Mart and labor. I'll follow up on a separate point in a later post, but Phil raises an interesting argument for liberal cities welcoming WalMart into their communities. He argues against using zoning laws -- a favorite anti-WalMart tool -- to block their entrance:

I don't understand why progressives are trying to keep Wal-Mart out of these pro-union communities - these are exactly the places where Wal-Mart stands to lose elections and where unions will be able to mount a strong fight.
I actually agree that blocking WalMart from a few liberal cities is an ultimately losing strategy, since it does nothing to deal with the 3000 Wal-Marts open across the country.

However, the problem with just letting WalMart into such areas is that they undermine existing high-wage, unionized retailers. But the solution, as I've argued for as a participant in these local legislative debates, is to welcome all large retailers into the city, but establish a minimum wage and benefit standard in the industry. The model for this approach is the proposed Chicago ordinance to require a wage of $10.50 per hour plus benefits at all such stores.

Promoting Free Speech: The Chicago bill also has a pro-organizing provision to require such retailers to give the public access to sidewalks and parking lots to talk to customers and workers -- something that would tremendously assist union organizers. A version of this organizing provision has already been enacted into law in Hartford, Connecticut.

Now, WalMart can choose to avoid such cities to avoid the regulations, but I doubt if they are enacted widely that WalMart will. It's been willing to expand in Canada despite much tougher union laws there, so it fits the model of luring WalMart into a more favorable environment for unionization. I am especially a strong advocate for the rules protecting free speech on the sidewalks and parkings lots of large retailers (or basically all employers, frankly) as a tool for encouraging greater communication around issues of corporate abuses.

Phil says that "consumers vote with their feet" for Wal-Mart. One problem with such a neoclassical view of "choice" is that it ignores imbalances in information available to consumers, who often don't understand the downside of shopping at WalMart compared to the massive advertising budget by the company. Letting consumer and labor advocates have "equal time" right where WalMart customers are making their buying decisions is one way to make sure those are fully-informed choices. Phil as a believer in consumer sovereignty should be a big advocate of this kind of provision, shouldn't he?

Posted by Nathan at March 10, 2005 09:44 AM