Description: As readers of BigCitiesBigBoxes.com know, I oppose allowing the suburban big box stores into New York City without imposing legal constraints that would make them fit into New York City's traditions. My position is conservative. The two participants in the debate on Sunday, September 4, on the Opinions page of the New York Daily News, "Does New York City Need Wal-Mart?" took very different positions. A vice-president of Wal-Mart, Margaret Daniel, debated the president of the New York State AFL-CIO, Denis Hughes. Read the two sides here and here. It was as though there were two separate debates going on. Speaking for Wal-Mart, Ms. Daniel used crowd psychology, she appealed to New Yorkers' hearts, their sense of belonging to the group as well as their love of a bargain, and she tried to stigmatize the unions and separate them from everyone else. Speaking for the unions, Mr. Hughes argued economics, saying that higher wages benefit everyone.
MARGARET DANIEL. Wal-Mart attacked from the get-go, calling opponents "special interest groups." What do most New Yorkers want? Said Wal-Mart, they want Wal-Mart. "According to a recent survey," said the Wal-Mart representative, "56 % of New Yorkers shop outside the city, with Wal-Mart their No. 1 destination."
In addition, according to Ms. Daniel, "New Yorkers want to work at Wal-Mart." She added, categorically, that "Wal-Mart offers good jobs at good wages." In "metropolitan areas like New York, this average hourly wage equals $10.38. That's twice the federal minimum and 73% above the state minimum." Perhaps referring to the same survey as before, she said that "75% of city residents say that Wal-Mart pays a 'fair and decent wage.'" In Oakland, California, 11,000 job-seekers applied for 400 positions. In Ms. Daniel's view store openings in New York will also attract large numbers.
As to employee benefits, Ms. Daniel stated emphatically: "Wal-Mart offers competitive benefits, including health care with affordable employee contributions." Now, I know that for some months substantial evidence has been coming out, from California, Georgia, and other states, that Wal-Mart employees are so poorly paid that they must apply for government subsidies, including Medicaid, so I was keenly interested here in how Ms. Daniel might back up that assertion. However, Ms. Daniel said only:
Historically, Wal-Mart has covered about two-thirds of the cost of employee medical coverage, insuring more than 568,000 associates and more than 948,000 people in total.
Without adding anything more about the vexed subject of employee benefits, Ms. Daniel stated that Wal-Mart offers opportunities for promotion and economic development. In addition last year, "Wal-Mart purchased $11 billion of goods and services from New York State-based companies, including," she said, "hundreds in the Big Apple."
Returning to the theme that opponents are out of the mainstream, Ms. Daniel concluded by saying that:
Special interest groups should step aside and respect the rights of New Yorkers to shop where they want to shop--to reduce their cost of living through low prices--and to respect New Yorkers' proven desire to shop at a Wal-Mart right here in town.
DENIS HUGHES. Mr. Hughes, speaking for theAFL-CIO, framed the issue entirely differently. He took on the economic questions. Wal-Mart, as the world's largest retailer, said Mr. Hughes, is setting the standard for America's workplaces. It's "a standard based on inadequate health care and retirement benefits, low wages, attacks on workers' freedom to form unions and repeated violations of workplace rights." No one can afford to have "the Wal-Mart wage" become the norm. Not only that, but "Wal-Mart's actions are subsidized by taxpayer dollars."
On Wal-Mart's wages, Hughes had several points. First, Wal-Mart's average wage is $9.64 an hour for full-time employees. This is "just more than $17,000 a year and well below the federal poverty level for a family of four." Note, here, that Ms. Daniel gave a different hourly wage, saying it was for an urban area. Hughes asked a more general rhetorical question: "Should we support a business where women earn an average of $5,000 less a year than men for doing the same jobs?" He then moved from looking at the employee to looking at the effect of Wal-Mart's low wages and low prices on taxpayers and at the entire community.
First, the averge Wal-Mart costs taxpayers an estimated $108,000 a year for its workers' children who are enrolled in state health insurance programs."
Second, low wages affect entire communities. When Wal-Mart employees have less to spend, "they can't support local merchants--and everyone's income and spending eventually drops."
Third, for every $1 wage cut, local economies lose $2.08 as less money circulates through the local economy. "If union grocery workers' wages were slashed to match the wages of Wal-Mart workers, their communities would lose between $1.6 billion and $3 billion annually."
Fourth, Wal-Mart's procurement policies pressure its suppliers into replicating its model. It forces them to cut costs and move operations overseas. By purchasing $18 billion in goods from China last year alone, "Wal-Mart accounted for one-eighth of the trade deficit with that country. If factory jobs are going overseas, America is left with Wal-Mart jobs--jobs that Wal-Mart has itself said are not designed to support a family."
Finally, "when Wal-Mart execs calculate that my underpaying employees and providing inadequate health care they can sell cheaper products, it forces its competitors to do the same.
In short, Hughes concluded, "Wal-Mart's method of lowering prices lowers the standard of living for working families, our communities and taxpayers."
ANALYSIS OF THE DEBATE. Clearly, Mr. Hughes took the high road and argued all economics, all the time. Ms. Daniel appealed to the emotions. Wal-Mart's calling opponents a "special interest group" is classic propaganda. Separate off your critics from their neighbors, call them self-interested, try to make the group hate them. And be sure to give the larger group words to express how they feel, here, that Wal-Mart is good, and they want low-prices, and even Wal-Mart jobs. This approach to propaganda worked in Bosnia, and it worked in Nazi Germany. Wal-Mart obviously hopes it will work in New York City, too.
Almost all of Ms. Daniel's assertions were unexplained. Although I follow this subject closely, I do not know where to go to check her facts. When Ms. Daniel said that 56% of New Yorkers wanted Wal-Mart, she did not explain who conducted that survey, or where, or how many people responded. Nor did she attempt to explain why complex questions of economics and city planning should be decided by a direct vote. This is another classic of propaganda.
In sum, Ms. Daniels had the gut arguments, and she wielded classical tools in making them, including making flat assertions with no facts. Mr. Hughes's arguments are far subtler and more complex. However, they do not go to the reader's gut the way the Wal-Mart arguments do. They are intellectually persuasive but emotionally flat.
I think it is time for opponents of Wal-Mart to figure out how to win the hearts of New Yorkers as well as their minds.
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