Wal-Mart Not the Cure for What Ails Urban Food Markets
This June the City of Chicago approved Wal-Mart's bid to open up dozens of new facilities, beginning with grocery stores in the city's chronically underserved South side. Just a month earlier the company committed $2 billion dollars to fight hunger in the U.S. But behind the high profile donations is a decidedly less charitable story repeating itself throughout corporate America.
In large part fueled by Michelle Obama's goal to eliminate food deserts in seven years, Walmart has set the PR machine in motion around its new battle cry: "The Great Grocery Smackdown" :
"If you've always lived near a grocery store or fresh market, here's something you've probably never considered: There are neighborhoods across the United States where it's nearly impossible to find fresh produce. These places are called "Food Deserts" and Walmart is committed to removing them from our communities." The Walmart proposal for Chicago has been framed as "the beginning of a major private-sector effort to address the food desert problem on the South Side."
Wal-mart sees Chicago's South side as the key to the rest of the city--in fact as the key to all cities. According to the Chicago Tribune, in a recent meeting with Mayor Daley Wal-mart offered to open grocery stores in food deserts in exchange for access the other, more desirable locations. "We have very small market share in the large cities within the United States, so we see a big opportunity for us to grow in those urban markets," said Hank Mullany, who runs Wal-Mart stores in the Midwest, Northeast and mid-Atlantic regions.
Not only will the company bring fresh produce in smaller grocery stores, the employer claims it will bring 12,000 jobs to Chicago.
A recent study out of Loyola University in Chicago focusing on the impact of a Wal-mart that opened on the west side of Chicago in 2006 indicates that the new facility cost the local economy as many jobs as it created. The Loyola University study also examined tax revenues for 18 months before and after the retailer opened its doors and found no evidence of increased local economic activity.
In 2008, Wal-mart settled 63 cases of wage theft for a total of $352 million. Even when the company does pay the agreed upon wage, workers still come up short. According to Good Jobs First, taxpayers subsidize Wal-Mart stores through numerous forms of public assistance--Medicaid, Food Stamps, public housing--that often allow workers to subsist on the company's low wages. A report by the House Education and Workforce Committee conservatively places these costs deferred by the retail giant at $420,750 per store; the Wal-Mart Foundation's per-store charitable giving is just 11 percent of that amount ($47,222). Now adding to the pot of public funds to be had, Michelle Obama and other well intentioned groups concerned with food deserts may have made these areas much more profitable than they once were. As part of her Let's Move campaign the First Lady has pledged $400 million/year to ensure that all Americans have access to affordable food. In the words of Brahm Ahmadi, founder of People's Grocery in West Oakland,
"We're seeing a lot of funding being rolled out, but also what we're seeing is the corporate retail industry who literally two to three years ago wouldn't even talk to you about this [food deserts], now almost salivating over the opportunity for the windfalls that will come from free public money, essentially. Even though they could easily finance themselves to open stores in the inner city neighborhoods, why should they when the administration is perfectly happy to give them more money to do it?"
Wal-mart is not the only major grocery chain salivating at the thought of public subsidies: Tesco, Target, Safeway and Supervalu have all announced plans to open stores in urban centers.
But hunger and food security stem from poverty, that in the US comes from unemployment and poor wages. The solution to food security in America must come through a revitalized food economy - one that pays workers a living wage, that includes worker and minority owned businesses, and that keeps food dollars in local communities. Walmart does none of that.
Seventeen percent of American jobs are in the food system, and those jobs are among the lowest paid in the country. If food industry leaders are serious about improving food access, they need to start by tackling food insecurity where it starts - with sub-poverty wages. No amount of fresh produce will cure America's food and health gap unless it comes with a commitment to fight its root causes - poverty and inequality. To really fight food deserts, the Obamas should start by supporting living wages for workers and support the food businesses that create true economic development in the communities that need it most.
(With Annie Shattuck and Zoe Brent)
© 2010 Huffington Post