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Are the Walmart prices worth it?

William Reed-160If you don't know about it, there is an ongoing fight between Walmart and the union movement.

The political battle being played out in Washington, D.C. is over the "living wage bill." But that is just the latest ploy in a longer war in years to come between the retail giant and America's primarily-black, Democratic-and-union-controlled urban enclaves.

The retail behemoth won its game of chicken with the D.C. City Council over a living wage bill it had passed requiring large retailers operating in the District to pay its workers a "living wage" minimum of $12.50 an hour (minimum wage in D.C. is $8.25 an hour).

Despite strong ties with unions, Mayor Vincent Gray vetoed the council's bill on the premise Walmart will open six stories there, creating an estimated 1,800 much-needed jobs. The promise of jobs, even low wage ones, and cheap consumer goods proved more attractive to D.C. residents than the wage issue.

Depicted as the Grinch who stole Christmas, Walmart is simply a successful business operation that has been subjected to criticism by numerous groups and individuals. Among these are labor unions, community groups, grassroots organizations, religious organizations and environmental groups that have spent years protesting against the company's policies and business practices, including charges of racial and gender discrimination.

A major factor in the issue is that Walmart currently faces its most serious unionization threat since its founding in 1962. For decades, the company's strategy of placing stores in small towns and rural areas kept it largely free of union pressure. But in recent years, Walmart has been pushing into the heavily unionized supermarket industry, as well as into big cities where workers are more pro-organized labor.

In 2009, Walmart generated 51 percent of its $258 billion sales in the U.S. from their grocery businesses. In the grocery business, union members average $30,000-a-year wages and benefits. In 2005, labor unions created new organizations and websites to influence public opinion against Walmart, including Wake Up Wal-Mart (United Food and Commercial Workers) and Walmart Watch (Service Employees International Union).

Walmart is a dominate force in the world. Walmart has 8,500 stores in 15 countries, under 55 different names. Walmart is the largest private employer in the U.S., with nearly 1.4 million workers in 4,602 stores. The company's efficiency in stores and throughout its supply chain has remade the retail industry. The company is a success because it sells products that people want to buy at low prices.

However, Walmart's critics argue that Walmart's lower prices draw customers away from other smaller businesses, hurting the community. They also claim that Walmart hurts the U.S. economy because of excessive reliance on Chinese products.

Wal-Mart Stores, Inc., branded as Walmart. The company was founded by Sam Walton in 1962 and is headquartered in Bentonville, Ark. Walmart is primarily a family-owned business, with the Walton family owning a 48 percent stake. The company operates in three business segments: Walmart U.S., Walmart International, and Sam's Clubs. The Sam's Club retail warehouses in North America are under the leadership of an African woman, CEO Rosalind Brewer.

When will blacks realize that there are bigger stakes for them in entrepreneurship than squandering resources on "minimum wage" entry-level jobs? It's a matter of mindset. Instead of protesting Walmart, wouldn't it make sense to invest in the world's fastest-growing retailer?

Black investment clubs may find that Walmart is a good place for their money. During the late 1980s and early 1990s, Walmart rose from a regional to national giant. By 1988, Walmart was the most profitable retailer in the U.S. and by October 1989 it had become the largest in terms of revenue.

Unions and the Democrat Party are frequently allied in urban settings, but "living wage" minimums are not economic development strategies that will yield the kind of benefits urban residents need or desire.

(NNPA columnist William Reed is head of the Business Exchange Network.)


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