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This page contains a single entry from the blog posted on June 23, 2005 3:30 PM. The previous post in this blog was Game 7. The next post in this blog is The best part. Many more can be found on the main index page or by looking through the archives.

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Thursday, June 23, 2005

Sam and Than

Portland Commissioner Sam Adams's website apparently includes a capsule description of each of the 100 businesses that the commish visited in his first few months in office. Interestingly, one of the fearless entrepreneurs that it lists is none other than "Than" Clevenger, the guy whose extremely odd public relations contract with the Portland Development Commission led to the infamous brouhaha on Portland Communique. Funny thing, though, the post about Than on the Adams site is dated May 16, which was after all the negative press about him (and his self-inflicted wounds) had hit the wire.

Anyhow, the Adams crew said at that point: "Currently, Than's public relations firm works through multiple clients through the PDC." Whatever that means.

I'll have to keep leafing through the Adams roster of business stars. What next? "Tracy has a prosperous management coaching business going.... Anthony is toughing it out through his third bankruptcy.... Since his career as a consultant has been interrupted, Neil and his wife have devoted more time to their winery..."

Adams is so comical. He heads up his "100 businesses" page with his "I hate Wal-Mart" screed. That will rake in the jobs for Portland, eh? Why not just say, "Corporate America, we will regulate and tax the h*ll out of you. Stay out"? Straight out of the Vera Katz Economic Development Playbook (which Adams wrote, of course.)

Comments (28)

Maybe I'm missing your point, but "I hate Wal*Mart" seems completely compatible with "I love local business".

Wal-Mart does create minimum wage jobs that are considered full time at 28-32 hours a week, and provide benefits that eat up to 33% of the paycheck if the worker has a family, but at the same time Wal*Mart destroys local businesses (and their employees) that can't compete when the giant sells merchandise below cost.

It seems to me that in order to really support local business, one almost has to oppose the infiltration of Wal*Marts and the like.

Nader, you're wrong. The average, full-time Walmart hourly wage is $9.98 nationwide -- above Oregon's minimum wage of $7.25. Walmarts' hiring, employment and benefits are comparable to other non-union retailers right down the line.

Has the influx of national chains like Lowe's, Home Depot, Costco, Border's, Bed Bath and Beyond, JC Penny, Sears and Krispy Kreme destroyed local Oregon communities? I think not.

Uh oh... and here comes IKEA (the nations largest home furnishings retailer) I hope Sam Adams and company are against this, too:

http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/111952064419160.xml&coll=7

Chris: I don't know where you pulled that average hourly wage for Wal-Mart employees, but I'll just assume you're accurate on that.

But I would also assume that the figure averages the wages of all Wal-Mart employees regardless of seniority. I still submit to you that the starting wage of a Wal-Mart employee is far below that $9.98/hr figure you quoted; which by the way calculates to roughly $14,970 (gross) annually.

And one last point: I never said that Wal-Mart and similar stores have "destroyed Oregon communites" - rather, that they have destroyed local businesses. Just ask your local independent pharmacist (if you can find one) whether Wal-Mart has hurt them.

Right, you can't find one. Because Fred Meyer and Safeway killed them off long ago. It ain't WalMart.

They weren't all gone long ago, as Isaac Laquedem points out.

Besides, I never suggested that Wal-mart was the sole threat to local businesses; it's just that they perfected the art. Wal-mart is now one of the largest corporations in the world, so the economic clout they can bring when engaging in predatorial market practices (such as selling far below cost) is far beyond what any preceeding corporation was able to get away with. Far more destructive than Safeway or Freddies have been.

If one's defense of Wal-mart is that, "hey everybody is screwing local businesses", I'm sorry but that's just not that convincing when you look at the scale of Wal-mart.

Or the scale of Walgreen's, or Rite-Aid, or Albertson's, or McDonald's... Wal-Mart is just capitalism, which in case you haven't noticed, has prevailed over socialism. And having a city commissioner leading off the "business" page of his website with "Stay out, Wal-Mart" is easily translated by most big employers (rightly or wrongly) as "Stay out, big business." So much for economic development. Better build an aerial tram, you guys are all hot for that.

Portland is closed to big business. There's a reason why there are no Fortune 500 companies here. Portland doesn't want them, and so they don't want Portland. Win-win.

They weren't all gone long ago, as Isaac Laquedem points out.

Gimme a break. There haven't been more than handful of small independent pharmacies in Portland for more than a decade. And there are truly precious few now, even before WalMart has arrived. The point was WalMart, remember?

They weren't all gone long ago, as Isaac Laquedem points out.

Actually, I was trying to say that long ago Portland (and most cities) had many independent pharmacies, but not today, and that the Nob Hill Pharmacy was among the last of its kind. The other two Portland pharmacies I named closed about 20 years ago.

The average Wal-Mart salary is nice to know, but it's kinda misleading for this debate. What we really need to know to talk about this sensibly is the median income. So far as I know, Wal-mart does not release this data. Anyone have it?

Apparently the folks in Sellwood, Ardenwald, Eastmoreland and other nearby neighborhoods are girding their loins and preparing to start the fight in opposition of the dreaded new location for Walmart. Check out their website - http://nosellwoodwalmart.com

As to neighborhood pharmacies, the little southeast neighborhood of Brooklyn still has one, aptly named Brooklyn Drugs. the governor was recently there to request the expansion of the Oregon Prescription Drug Purchasing Program. I can only wonder how long they can survive should WalMart locate within a couple of miles of them?

Forgive me, but I still have not seen a clear case of how WalMart hurts the majority of the people. Each Walmart parking lot is full because people know they can get stuff cheaper at WalMart.

How about considering the benefits to consumers? If nothing else, having a one-stop big store saves people from travelling/burning gas at 20 different places. If these are so terrible, then why are they so popular?

If it changes businesses in the surrounding area, maybe that is just change that is going to happen. If not, maybe we can start a movement for unemployed farriers (I think that is what you call horse shoers) displaced by the automobile.

As far as Mr Adams - Having someone who has never had a job NOT on the public dole, saying he knows how to make private enterprise grow is laughable. They really have no idea of how the real world of competition works.

This is off-topic, but i haven't seen much on this subject lately and I have a question:

Is it, in fact, illegal for the city of Portland to own PGE? I seem to recall some story in the O or somewhere that cited a law (city or state, I don't recall) that prohibited governments from purchasing private corporations. If so, wouldn't that be a deal killer?

Sorry to disrupt the thread, but I'm trying to get an honest answer.

Steve-

Here's how Wal-Mart is harming you: health care. Wal-Mart is notorious for not providing adequate health care to its employees.

In Georgia, more than 10,000 children of Wal-Mart employees are in the state's health program for children at annual cost of nearly $10 million to taxpayers.

www.ajc.com/business/content/business/0204/27walmart.html

currently there are several states attempting to pass legislation to force corporations like WM to provide health insurance to its employees.

also check out:

laborcenter.berkeley.edu/lowwage/walmart_response.pdf

In a previous post, Jack wrote: "I don't like Wal-Mart, but I also don't like Portland's reputation as being inhospitable to business."

So is this simply a PR issue? Or is it about supporting the "right kind" of business (small local business vs. mega international corporation?)

This whole "employer-provided health care" business isn't working well anyway. Maybe WalMart is really the Vanguard of the New Progressive Movement to UHC.

I'll borrow a "heh."

So am I in the unusual situation of having two independent pharmacies in walking distance to my place of residence? That is Fairley's at 72nd and Sandy/Fremont, and the one the one at 43rd and Sandy (which name escapes me). Both seem to be doing quite well, judging from the lines I frequently have to wait in.

In addition, they are staffed by nice folks, and each has a functioning soda counter.

In the interest of full disclosure, I am not affiliated with either of them.

Well, not FULL disclosure, since I ain't really Ambrose Burnside.

Here's the deal -- I run a business here in Portland. Locally owned. I'm wondering if Sam Adams would be kind enough to join the fight to keep all national competition away from me? Yeah, right. Fact is, if I can't provide service, price and availability to people here -- REGARDLESS of competition -- I don't deserve to be in business. And I don't want Adams' help in making it work because he obviously doesn't know anything about business in the first place.

Doug/Sally

1) I thought the topic was more about the siting of a WalMart and being too close to other businesses, so medical insurance seems a non sequitir.
2) If medical insurance coverage is how you want to decide to allow businesses in, then I suggest you do a sweep of all of the small businesses in the area and see how many don't offer coverage to their employees (I would guess most) and boot them out.
3) I talked with a couple of WalMart employees (disclaimer - Yes, I buy at WalMart) and they said they do get medical insurance thru WalMart. This is only anecdotal, so I don't know the quality of coverage.

I think its quite clear the Wal-mart has helped a majority of the people, at the expense its workers, unions, competing firm's workers, and its suppliers workers. Wal-mart has been a tremendous force for capitalism and has reduced the prices of consumer goods. It does this by aggressively cutting costs from its suppliers and its own employees.

Wal-mart has been an amazing catalyst for efficiency in consumer products. Capitalism’s only ideology is profit-seeking. However, I object morally to enriching yourself on the backs of your employees. Walton family members are numbers 4 through 9 on the richest people in America in 2004 according to Forbes (http://www.forbes.com/400richest/). I believe that this is the reason for the Wal-mart backlash, and I believe that it is justified. Wal-mart clearly does not care about its labor force. The problem is, responsible employers that do care for their labor force, simply cannot compete on price. Wal-mart is too efficient in extracting profits wherever they exist and passing its costs on to other parties (the insurance example above is especially apt).

From: http://www.economist.com/displaystory.cfm?story_id=2593089

How big can it grow? Apr 15th 2004

"According to A.T. Kearney, Wal-Mart's three-biggest sources of cost advantage are low corporate overheads, the efficiencies of its supply-chain and, above all, its low labour costs. A newly hired “associate”, as Wal-Mart calls its employees, could earn as little as $8 an hour, some 20-30% less than unionised workers at rival supermarkets. Union members might also have benefits, such as health-care insurance.

There are several reasons to suppose that this labour-cost advantage might begin to erode. One is falling costs elsewhere as Wal-Mart squeezes its competition. In February, for instance, unionised grocery-store workers in southern California agreed to wage and benefit reductions following a five-month-long strike. This strike began after local supermarkets proposed to cut wages and benefits in preparation for Wal-Mart's entry into the market.

A second reason might be slowing staff turnover at Wal-Mart itself, as the firm struggles to renew its 1.4m-strong workforce. In recent years, staff turnover at Wal-Mart has fallen from over 60% to 44%, close to industry averages. Yet even with a turnover rate of 44%, the firm has to hire an astonishing 600,000 people every year simply to stay at its current size. As the company grows and employs yet more people, that task will become even more difficult, suggesting that Wal-Mart will want to push turnover lower still. That might put pressure on costs, as workers gain tenure, pay rises and better benefits.

Another force working to slow Wal-Mart down is the company's mounting legal and labour-compliance problems. At any moment, Wal-Mart faces about 8,000 lawsuits. The vast majority of these are personal-injury claims from employees. More material, given the sheer numbers of people that Wal-Mart employs, are employee suits seeking class-action status. Among other suits, Wal-Mart's most recent annual report lists 33 putative class-action suits alleging violations of the Fair Labour Standards Act, including forcing employees to work “off the clock” and failing to provide work breaks; eight further putative suits alleging that the firm failed to pay overtime; and a suit that could prove costly alleging discrimination against its female employees. The potential size of this class alone is 1.5m plaintiffs."

See also:
http://www.economist.com/displaystory.cfm?story_id=3706455 (Wal-Mart closes first North American store to unionize).
http://www.economist.com/displaystory.cfm?story_id=2797105 (Wal-Mart's sex discrimination suit).

One of the best or most common arguments against WalMart, Steve, is the one about medical insurance. Going from memory (of a handful of months back), most WalMart employees are not provided medical insurance, and the cost falls to community government and agencies.

You are correct that an increasing number of small businesses cannot afford medical insurance for their employees.

See what a great Vanguard WalMart can turn out to be? WalMart will lead the way for "progressives" to forward the cry for (single payer) Universal Health Coverage for the forsaken.

And to think, yesterday the "liberals" on the SCOTUS advanced property seizures in the public's economic interest.

It will only get better.

If you follow the links, Adams himself (or his webmonkey, whatever) posts a nice set of bullet points regarding Wal-Mart and its dostorting effects on local economies:
http://www.commissionersam.com/sam_adams/2005/06/the_case_agains_1.html

As Matt Song points out, the question is not whether WM sells stuff at lower prices, or is more efficient at all levels of production and distribution. It does. The question is the impact on the quality of life of both people who shop at WM and those who don't. In other words, at what price do we get those low, "rolled-back" WM prices? Steve, Chris and Jack seem to say that (1) the domination of WM is the simple and inevitable culmination of 250 years of capitalistic Darwinism and (2) capitalism is good good good (cf. Gordon Gekko), ergo (3) there's nothing wrong with WM. There are legitimate arguments with both of those predicates.

It's also wrong to equate opposition to WM as opposition to business qua business. Politicians are right to talk about the need to attract quality, living-wage jobs, which WM does not provide. Do we want more Intels, Nikes, and Adidases? Of course. More big-box retailers? Not necessarily, and definitely not WM.

Jack says:
Or the scale of Walgreen's, or Rite-Aid, or Albertson's, or McDonald's... Wal-Mart is just capitalism, which in case you haven't noticed, has prevailed over socialism.

Let's leave the straw man out in the barn, shall we? Speaking for myself alone, I have not endorsed socialism, and if you think there is only one brand of capitalism then you haven't look outside our borders very much.

Without delving too deeply into economics (because I'll soon be out of my depths there) capitalism in general, left unchecked, leads to monopoly which defeats the fundamental principal of capitalism: Competition.

So what's the best way to support competition/inhibit market concentration? Well antitrust laws are one way. But I submit a more attractive way is to support competition, particularly local and small businesses. THAT is good for the economy, promotes entrepreneurship, and good for the community as well.

Local and smaller businesses are more responsive to the demands of their customers, and typically compensate their employees better than "big box" employers.

There are hordes of other reasons to oppose Wal*Mart. The fact that they impose their own morality on their customers by refusing to fill prescription medications when they clash with the "values" of the conservative right is yet another.

And again, don't try to sell me the standard wal-mart apologists line: "But Wal-Mart is no different than Walgreens, Rite-aid, Alberson's, McDonalds..."

In 2000 Wal-Mart was the 2d largest corporation on the planet with nearly $US 200,000,000,000 in revenues. None of the other corporations cited are even in the top 25. So please, don't tell me it's just a matter of degree. Wal-Mart has the resources to completely destroy small and local businesses.

Quick question regarding the whole health care costs issue...

If the person wasn't working at WalMart, who would be paying for his or her health care?

It seems to me that to the extent that WalMart provides net job creation (and not just taking jobs from existing employers who must go out of business), then pretty much by definition they are employing people who were not previously employed.

So if you have a person without a job (and therefore without employer-paid health care), give them a job (where they may pay some taxes), and still don't give them employer-paid health care, how exactly is that a net increased expense for government?

OK, so that was two questions, and the second one wasn't quick... ;-)

Oh yeah... and as others have pointed out, those small local businesses from whom WalMart may to some extent draw employees, may not be getting employer-paid health care now (I'm sure some do, I'd guess most do not). So again, replacing one employer who doesn't pay for health care with another wouldn't seem to me to be a net loss to government.

I read somewhere that almost all Wal-Mart employees are eligible for food stamps because they make so little.

General Burnside, FYI there is also a small independant pharmacy at 17th & E. Burnside (no soda fountain tho.)

While this issue has been pretty adequately beaten, I did want to correct one other misstatement in Nadar's original post, that Wal-mart "sells merchandise below cost". Wal-mart's after-tax profit for the year ended 1/31/05 was $10 billion. You don't make profit by selling below cost.

Nice job on the Blog Jack.

BobW


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Anthony Holden - Big Deal
Robert J. Spitzer - The Spirit of Leadership
James McManus - Positively Fifth Street
Jeff Noon - Vurt

Road Work

Miles run year to date: 315
At this date last year: 168
Total run in 2013: 257
In 2012: 129
In 2011: 113
In 2010: 125
In 2009: 67
In 2008: 28
In 2007: 113
In 2006: 100
In 2005: 149
In 2004: 204
In 2003: 269


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