Fear is Chicagoans will like Wal-Mart

Steve Chapman: Syndicated columnist

Some newcomers are planning to move to Chicago, and the invasion sounds as though it will be a grim affair. “They're a negative for the city,” said one fearful alderman. They’re guilty of “treating people wrong,” said an angry minister. They exploit a “slave mentality,” charged another clergyman.

You’d think Genghis Khan was riding in our direction, with his marauding hordes in tow. In fact, the would-be migrants are from Wal-Mart, whose chief crime is to become one of the most successful companies in American history. All the giant retailer is threatening to bring is a few hundred jobs and a lot of inexpensive products. But critics want the City Council to block the project.

If Chicagoans loathe everything Wal-Mart represents, of course, they can easily defend themselves by declining to shop there. But the people in the neighborhoods where the stores are planned (one on the South Side and one on the West Side) bear an uncanny resemblance to other Americans in (a) their desire for a bargain and (b) their preference not to have to travel far to get it. The danger, from the standpoint of the critics, is not that Chicagoans will detest Wal-Mart but that they’ll like it.

That’s been the case for most people in most places. The company didn’t climb to the top of the Fortune 500 list, sell nearly $259 billion worth of goods last year, and become the largest private employer in the country by failing to cater to ordinary Americans.

The complaints heard in the Chicago dispute are familiar ones. Wal-Mart, we are told, pays poorly, resists unions, skimps on health insurance and puts small retailers out of business.

It’s true that very few people get rich working for Wal-Mart, but the company says the average hourly wage for full-time workers in its Chicago-area stores is $10.77. It says the typical starting pay for an inexperienced worker at the new stores will be from $7 to $8 an hour (compared to the current minimum wage of $5.15). Some 60 percent of its employees get health coverage through Wal-Mart, with most of the rest getting it through spouses, parents or Medicare.

Does the company resist unions? Sure. But that doesn’t exactly make it unusual, since 92 percent of private-sector workers in the United States lack a union. Does it hurt small businesses? Only by offering consumers goods they want at lower prices than established retailers.

We used to fear large corporations because they would use their market power to overcharge. Now we’re supposed to fear a large corporation because it undercharges? Plenty of companies have been criticized for staying out of inner-city areas. Wal-Mart is getting flak because it wants in.

Local unions worry the new stores will put downward pressure on wages. But if Wal-Mart paid less than the market rate, it wouldn’t be able to hire workers. They’d go to work for some other employer.

Keeping these stores out of Chicago, in any event, won’t prevent city-dwellers from supporting Wal-Mart — it will only force them to trek to the suburbs to do so. Dwight Gunn, pastor of the Heritage International Christian Church on the West Side, says 99 percent of his congregants shop at Wal-Mart, even though the nearest one is several miles away.

Any downward pressure on pay is already present, thanks to the suburban stores. But the city suffers less from mediocre wages than from unemployment -- which, for most people, pays $0.00 an hour. By establishing 600 new jobs in neighborhoods that are not teeming with employment opportunities, Wal-Mart is likely to boost the wage level, not lower it.

In addition, the stores would offer inexpensive products to people who need to stretch every dollar. American workers lack many of the protections offered by the strong unions found in Western Europe, and Wal-Mart’s wages reflect that. But the higher wages in those countries translate into higher prices and fewer jobs.

Despite our economic troubles, the U.S. unemployment rate remains well below that in supposedly enlightened places like Germany, France and Canada.

Economist W. Michael Cox of the Federal Reserve Bank of Dallas has called Wal-Mart “the greatest thing that ever happened to low-income Americans.”

Anyone who thinks its arrival would be a bad thing for low-income Chicagoans should let them vote on these stores, with their feet.

Steve Chapman writes for Creators Syndicate.