A Place in the Neighborhood

Published in the Spring 2010 issue of SSA Magazine

Abstract: SSA’s Virginia Parks is conducting research on the fight against new Wal-Mart stores in Los Angeles and Chicago, a new organizing model that partners community activists and unions to improve the wages and working conditions of low-paid service sector jobs. The fight to bring back living wage jobs to poor urban communities has no easy answer, but Parks’ study documents how a neighborhood can take advantage of "spatially delimited markets," when a retail firm is interested in the profits from selling in a specific community, to get some leverage in bringing employment to the area.

Local fights against new Wal-Mart stores offer lessons for urban organizers working for economic justice

Residents of Inglewood, Calif., made national news in 2004 when they defeated a ballot referendum that would have permitted Wal-Mart to build a "supercenter" in the community. Conventional wisdom says that urban areas like Inglewood—a low-income community of color that is completely surrounded by the City of Los Angeles—should fight for the jobs a retail behemoth like Wal-Mart provides. And it certainly says that if the community does fight against the world's largest retailer, the community loses.

"Usually, in these kind of referenda, if you've got money you win," says Virginia Parks, an assistant professor at SSA. What made the difference in Inglewood was an unusual coalition of community groups and organized labor that mobilized hundreds of people to knock on doors and distribute flyers urging voters to keep Wal-Mart out. They argued that the arrival of the nonunion company would provide only low-paying jobs and undermine the wages and benefits at other local stores, thus weakening families and the neighborhood.

For Parks, the battle of Inglewood, along with similar fights against new Wal-Mart stores in New York City and Chicago, offer a roadmap to how local efforts can have an impact on fighting poverty. "Community residents are organizing around low-wage work and see it as a threat. That's fairly new," says Parks, herself a former community organizer. She and Columbia University colleague Dorian Warren are studying the trend for a book about the Chicago and Inglewood anti-Wal-Mart campaigns.

The new labor-community partnerships are trying to improve the wages and working conditions of low-paid service sector jobs. "This is an evolution in how low-income urban communities of color are working to be sure they have access to decent jobs," Parks says. "Policy innovations have emerged from these fights; new campaigns and new coalitions are being created."

Between 1979 and 2003, the bottom fifth of American households measured by income distribution saw their after-tax income essentially stay the same, increasing by just 4 percent total over those 24 years, according to Census figures. For the wealthiest fifth, however, income rose nearly 60 percent—and for very the top one percent, their after-tax income more than doubled.

There are a lot of reasons for this rising disparity, but a big one is the changing nature of the American economy. In urban communities of color, this trend has been exacerbated by the disappearance of union manufacturing jobs and reductions in federal, state and local government, which employed disproportionate numbers of the African-American middle class. In 2009, 12.3 percent of American workers were in a union, according to the federal Bureau of Labor Statistics, down from 20.1 percent in 1983.

These well-paid jobs have been replaced by work in home health care, retail and other service-sector industries that pay much lower wages—in 2009, full-time unionized workers had median usual weekly earnings of $908, while those who were not represented by unions had median weekly earnings of $710. And unemployment is higher among African Americans, in part because of a disparity in education levels. At the start of the current recession, white unemployment stood at 4 percent and had risen to 8.8 percent by February 2010, according to the Economic Policy Institute's analysis of Bureau of Labor Statistics data. For African Americans, it started at 8 percent and had risen to 15.8 percent.

"In this country, we have the least effective programs for reducing inequality and at the same time we have the greatest inequality because of our labor market arrangements," says Evelyn Brodkin, associate professor at SSA. She points out that mid- 1990's welfare reform reduced benefits and access to the social safety net, producing an increase in families that are living well below the poverty line. Brodkin describes what this "deep poverty" looks like in terms familiar to social workers on the front lines: "doubling up in housing, getting evicted and moving all the time, staying in bad relationships, moving into worse neighborhoods than you were already in, running out of food by the end of the month."

To keep the urban economy afloat, the general theory of development in cities has been to "attract capital at all costs or go the way of Detroit," says Robert Fairbanks, an assistant professor at SSA. "That means forfeiting demand-side regulations— reasonable wages, benefit structures—and it means providing tax breaks to major corporations, which ultimately diminishes potential budgets for city services or social service delivery."

The seeds of the 2004 referendum defeat in Inglewood were planted a year before, when the pressure across California from a plan to build 40 new Wal-Mart supercenters—stores of more than 200,000-square-feet that sell groceries as well as other items—led to a push for wage and benefit cuts by other Southern California grocery chains. When grocery worker unions went on strike, many neighbors respected the picket lines.

Meanwhile, the Inglewood City Council had rejected the retailer's proposal to build a supercenter on a 60-acre site near the Hollywood Park racetrack. Wal-Mart responded by creating a ballot measure that, if approved, would have permitted it to develop the site without any governmental oversight, sidestepping the council and the established development process, including environmental impact review.

Energized grocery workers threw themselves into the campaign to defeat the Inglewood ballot referendum. This time, they were joined by neighbors, church and civic leaders. "People were working on this at least a year before this actually came to a vote," Rev. Altagracia Perez of Inglewood's Holy Faith Episcopal Church told Democracy Now. "Slowly, [they were] joined by churches and local businesses and politicians."

Although opponents were badly outspent, the referendum was defeated by a 2-1 margin on April 6, 2004. "They sent out five pieces of mail a day, TV ads every day with people of color saying how much they love to work in their stores," says Roxana Tynan, deputy director of the Los Angeles Alliance for a New Economy (LAANE), an advocacy group that works for low- and moderate-income neighborhoods throughout Southern California. "But people finally had enough. I remember this middle-class African-American couple saying, 'This is plantation economics.' People got bent out of shape that there was this lack of respect."

In Chicago, a similar story played out to a different conclusion. Wal-Mart's first foray into the city in 2002 went nowhere after the retailer asked for $18 million in public subsidies to open a store in the South Loop. "Am I buying the company?" Mayor Richard M. Daley cracked at the time.

By the fall of 2003, Wal-Mart was back with a new proposal to build two stores in low-income communities, on the West Side neighborhood of Austin and on the site of a former steel plant on the South Side. As in California, the wage gap between disappearing union jobs and the Wal-Mart galvanized local residents to build bridges with unions. The new coalition began by lobbying the City Council to deny Wal-Mart's requests for zoning changes. Their pressure forced the Council to a split decision—yes to the Austin store, no to the South Side proposal.

Next, key coalition members like Chicago ACORN and the community-labor partnership Jobs With Justice mobilized to support a Big Box Living Wage Ordinance, requiring stores of 90,000 square feet or more, owned by retailers with more at least $1 billion in sales, to pay their workers at least $10 per hour. It was the first ordinance in the country to set wages for a specific subset of the retail industry within a city.

"We may not match the $20 an hour somebody made at a factory, but we must make sure they're at least paid a living wage. People really resonated with that," recalls James Thindwa, the former executive director of Jobs with Justice, who now organizes Chicago teachers in charter schools.

Neighborhood leaders met with their aldermen and spoke before the City Council to lobby for the ordinance. "We used local, indigenous leaders in those wards—five, six, seven, 10 people who visited aldermen. We did a lot of training and talking points," Thindwa says. Welfare reform was still new, and single mothers and Wal-Mart employees from nearby suburbs made the case that Wal-Mart wages weren't enough to get them out of poverty.

Although the living-wage ordinance passed the City Council in July 2006 with a veto-proof majority, by September 2006 Mayor Richard M. Daley was able to push three aldermen to change position, and he then vetoed the measure, his first veto since taking office in 1989. The Austin store opened without having to pay the higher minimum wage. "The fact that Mayor Daley had to issue a veto suggests there was a limit to his power to wrangle votes on this particular issue," says Parks' co-researcher Dorian Warren.

There are a handful of major stores in Chatham Market, as the South Side shopping center on the former steel plant is now known, but the land that Wal-Mart had its eye on still sits vacant. As this issue went to press, the City Council's zoning committee, union leaders and Wal-Mart representatives were negotiating over what it would take to open the store.

"I don't want Wal-Mart here," William Blackman said on a cold mid-February afternoon. Out foraging for scrap metal, Blackman makes a case against Wal-Mart and globalization worthy of the most ardent trade unionist. "They aren't going to give nothing but minimum wage, if that. Everything at Wal-Mart mostly comes from China. They're putting Americans out of work."

Travel a few blocks away, though, to Mather's Café and More east of the Dan Ryan Expressway, and you'd be hard-pressed to hear a word against Wal-Mart. "I believe in the union," said Mary Blackwell, a retired member of the Chicago Teachers Union. "But I also think some people need a job. Something is better than nothing. With things as hard as they are now, everybody needs a job." She went on to make a textbook neoliberal case for Wal-Mart. "They have some good bargains," she said, and added that she would prefer to shop Wal-Mart in Chicago than have all the money from sales go to Evergreen Park, a nearby suburb.

How long do you hold out for better jobs when it means no jobs? When residents don't have many places to shop, should a neighborhood fight against a new store that doesn't buy much from U.S. producers? Those aren't easy questions to answer, and Parks says that differences of opinion within the Chicago communities were one reason Wal-Mart was able to open the Austin store. "The poverty rates in the Chicago neighborhoods were higher than in Inglewood in LA, and Wal-Mart was able to cast the issue as any job is a good job," she says. "To make a community campaign like this work, all the local voices have to be saying that we don't want these low-wage jobs, and in Chicago that wasn't the case."

To Parks and Warren, however, the biggest lessons from the Wal-Mart campaigns are about what can happen when a community does speak with one voice. The central insight is the power of what Parks calls "spatially delimited markets." When a retail firm is interested in the profits from selling in a specific community, there aren't many location options. That gives the community leverage. "These businesses need the city. They want those local consumer dollars," Parks says.

At the same time, the jobs that come from a new retail development are positions that can't be outsourced or moved. Someone in Kentucky or India can't stock the shelves at a local grocery store or run the register. And that means that these are jobs worth fighting for, because once they arrive in a community, they'll stay.

Parks points out that in these Wal-Mart struggles, the new coalitions of community activists and labor unions also found a new arena to battle against low-wage work—municipal legislation and regulation. Historically, labor used its muscle to change state and federal law and policy, such as minimum wage laws. But many large cities have home rule and are able to legislate creatively, giving activists a new opportunity to advance wage and other forms of labor market regulation.

The fights have birthed or advanced a number of innovative policies designed to ensure that a new development will bring some benefits to residents of the community, including first source hiring rules, living-wage campaigns and community benefit agreements (See "In the Contract"). "It isn't unprecedented to have important policies being created by grassroots activists—the Community Reinvestment Act is one example— but it is rare. Right now, there is a lot going on at this grassroots level," Parks says.

SSA Associate Professor Robert Chaskin sees these kinds of organizing efforts as critical in shaping community development, some strands of which have backed away from open power struggles over the past several decades. "It's an important set of new alliances that crosses organizational boundaries and operates at different levels of action," Chaskin says. "It has some real promise to influence policy and create change at the community level."

The successes and failures of the Wal-Mart battles have not gone unnoticed. In Los Angeles, many of the grassroots leaders involved in the Inglewood victory went on to join the Campaign for a New Century, an organizing effort to improve communities along Los Angeles' Century Boulevard, the primary artery serving the Los Angeles International Airport. In December 2004, the campaign won the largest community benefits agreement ever approved: $500 million for environmental remediation, local hiring, job training and money for local schools in exchange for supporting airport expansion.

In Chicago, a version of community benefits agreements between community groups and the city was woven into Chicago's failed bid for the 2016 Summer Olympics. In January, a proposal by powerful alderman Ed Burke to tie approval for the South Side Wal-Mart to an ordinance requiring retailers with more than 50 employees and receiving "direct or indirect city subsidies" to pay workers at least $11.03 per hour failed.

Community-labor partnerships around the country have taken up the idea of leveraging local development. In Pittsburgh, for example, a new stadium for the NHL Penguins has given a coalition of more than 130 organizations an opportunity to negotiate for quality jobs, training for local residents, a full service grocery store in the area, LEED certification for the arena, and creation of local parks and open spaces. A national nonprofit, the Partnership for Working Families, now provides local labor-community groups with information and technical support around these kinds of community benefits campaigns.

The groups are even starting to take the local policy innovations to the federal level. Tynan says LAANE worked with national allies Green For All and the Partnership for Working Families to try to to link community hiring and job standards to federal stimulus money, and was able to attach workerrelated standards to last year's Waxman-Markey environmental bill. Though the measure failed, Tynan says the experience helped LAANE learn the ropes in Congress, and that they'll be back.

In this tough economy, the leverage of communities isn't as strong as in the boom times. "The pressure for jobs and the consumer pressures may be just too much to overcome," says Warren about Chicago's ongoing South Side story. On the other hand, local politicians are anxious to show constituents that they were able to get things accomplished. "I could also see a deal being cut where Burke and the Mayor and others agree to some kind of living wage ordinance in exchange for Wal-Mart being able to open more stores. I think the timing is good for the labor and community groups to mobilize on this, because the election clock is ticking."