Um, Ever Hear of Plan 9?

The RTD today devotes nearly half its editorial space to commenting on the demise of the Tower Records chain and the imminent closing of its branch in the Willow Lawn shopping center on Broad Street. (In case you haven’t been by there lately, they’re in the midst of a going-out-of-business sale with everything 10-30% off.)

The RTD editorialists seem particularly disturbed that this means there’s no longer a great place to buy classical music in the Richmond area. Fair enough I suppose, though (as the editorial acknowledges), this is surely largely down to the growth of Internet retailers who can send classical connoisseurs any recording they want within days. (Other sites offer instant downloads of recordings, and there are also free online classical radio stations.)

But the RTD leaps to an illegitimate conclusion when it writes, “Once upon a time Tower and other record stores served as community centers and gathering spots . . . . No more.”

Um, ever hear of Plan 9 Music? The locally-based retailer’s Cary Street store serves exactly that purpose. There’s an extensive collection of rock and other contemporary music, rock videos, music magazines from around the world, posters, and most of the other accessories you could find in a Tower. Plus, there’s a strong emphasis on promoting local musicians and concerts, and periodically concerts are actually held in the store.

Beyond all that, the store is a hang-out spot and something of a community center, with its checkout desk doubling as a billboard for upcoming local events. Without question, Plan 9 is a key Carytown landmark for anyone between 14 and 35. Maybe the RTD editorialists might check it out sometime (though it has to be admitted that the store’s a little weak on classical).

The truth is, big chain record stores located in strip malls were only ever going to serve as meaningful community spaces incidentally. Plan 9, located in the city’s signature district for the locally-owned and the original, does it by design.

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Published in: on October 19, 2006 at 1:28 pm  Comments (5)  

One Step Forward, One Step Back

In the last couple of days, the RTD editorialists have seen fit to revisit a couple of issues previously blogged about in this space.

On the issue of gun control, the RTD, noting that New York City has reduced its crime rates while maintaining tough gun laws, has backtracked remarkably from its August editorial. The RTD now says that one can cite evidence for or against gun control’s effectiveness. This is hardly a sophisticated social science position, but it represents progress. (See our original post on gun control here.)

On the other hand, Tuesday’s RTD takes up the Chicago Wal-Mart ordinance again; the Chicago Board of Aldermen narrowly failed in its effort to override Mayor Daley’s veto of an ordinance to require large big-box retailers to pay a living wage. The RTD congratulates Daley on dashing the ordinance, using arguments no more impressive than its original August editorial on the matter. That big-box retailers threatened to scale back plans to expand in Chicago is not a strong argument for not implementing this ordinance. As noted in our earlier post on this topic, claims for strong employment gains resulting from big box expansion need to be taken with a grain of salt.  Moreover, there is good evidence that in urban economies, total retail earnings actually decline when big box stores move in, as local retailers are displaced.

But perhaps more annoying than the RTD’s position on that particular ordinance is its insistence on speaking of a “so-called living wage” and on mocking efforts to improve the wages of working people in the U.S. The RTD gives little if any indication that there is anything wrong people working full-time and not being able to make ends meet or provide their families a measure of security; in the RTD’s reckoning, the interests of the millions of working poor in the U.S. (and the many thousands in Richmond) can be ignored, or simply brushed aside as a fact of life not worth the effort to correct.

Published in: on October 3, 2006 at 1:49 pm  Leave a Comment  

President McGovern (!), Wal-Mart II, Drug Policy

It might seem ungracious to say anything too critical on a day the RTD saw fit to publish most of the letter on Iraq I submitted ten days ago. (Good for them!) So we’ll limit this post to three relatively brief comments.

First, the main news section carried an interesting “big ideas”-type piece on retrospective voting, based on a recent Ohio U. Poll: If they could do it all over, who would Americans have voted for in Presidential elections dating back to 1960, knowing what they do today? The dominant trend is that Americans tend to retrospectively identify with winners, irrespective of party. Kennedy, LBJ, Reagan, and Clinton all “win” by much larger margins in the present-day polls than they did in real life, as do Carter against Ford in ’76 and Bush (41) against Dukakis in ’88. The exceptions to this rule? Richard Nixon and George W. Bush. The poll shows George McGovern actually beating Nixon in ’72, and Al Gore and John Kerry each rather comfortably defeating W in the past two elections. That can’t be comforting news for the president. (Interestingly, despite a well-known liberal backlash against Ralph Nader after the events of 2000, the Green candidate actually pulls much higher support in the recent “votes” than he did at the polls 2000 and 2004.)

Second, over in the business section Bob Rayner serves up a very simplistic defense of Wal-Mart. The core argument goes like this: because people shop and work at Wal-Mart in great numbers, it must be good for society. Well, maybe. People produce and consume tobacco in large quantities too, but I’m not sure that’s so good for society.

The question of whether Wal-Mart’s prices justify its other social costs deserves its own treatment which I’m sure we’ll have occasion to take up in this space before too long. For now it’s enough to note that just because an outlet has low prices doesn’t mean it’s providing a service to society; to take an extreme example, no one (I hope) would say that an outlet store that specialized in selling stolen goods and/or goods produced by slaves at low, low prices is doing a society a favor.

Today let’s look at the labor argument Rayner offers. He writes, “The long lines of would-be workers whenever a new Wal-Mart prepares to open suggests that many American believe it’s a good employer.” Well, not necessarily–those lines are a better indication of how desperate many Americans are for any employment than they are a comment on Wal-Mart.

A better indicator of Wal-Mart’s fitness as an employer is its turnover rate. It’s estimated that 70% of Wal-Mart employees leave within the first year, and that overall annual turnover in the company is around 50%. In addition, Wal-Mart is the target of the nation’s largest ever class action sex discrimination lawsuit and has been charged with violating child labor law in multiple states, forcing employees to work off the clock, illegal anti-union activities, and myriad other violations of labor laws. No wonder so many employees seem anxious to leave.

Rayner also writes that Wal-Mart appears to have good pay and benefits compared to other retailers. Three points here: first, he could only possibly mean compared to other discount retail chains–but this is probably not the right question to ask. Instead, we should compare wages at Wal-Mart compared to wages at the independently owned hardware stores and the like which it displaces. In fact, a 2005 study found that opening a Wal-Mart in an urban or suburban area tends to reduce wages in that area’s overall retail sector; a new Wal-Mart in rural areas has no net effect on local wages (since fewer higher paying jobs are being displaced).

Second, as is well known, the retail chain Costco pays much higher wages than Wal-Mart. It’s not surprising that Costco also has a turnover rate about half that of Wal-Mart, but it might be a surprise that as a consequence of its policies, Costco actually has lower labor costs as a percentage of sales than Wal-Mart.

Third, according to a 2005 UCal-Berkeley study, Wal-Mart’s low wages require its employees to rely on a various forms of public assistance, estimated to be $86 million a year in California alone. That’s not the “free market” at work–it’s a public subsidy to a low-wage employer.

Finally, whatever else you might think about the RTD, be glad that it carries Neal Peirce, one of the best-informed writers on state and local issues out there. Peirce does what a columnist should do: he engages with the best empirical evidence and most creative thinking and practice on a given topic, and focuses on constructive steps as much as on criticism. Today he weighs in on the failures of America’s war on drugs and possible alternative strategies; I’ll add a link to it in this space as soon as it’s available.

“Boxed Out”

Today the Times-Dispatch editorial writers decided to provide advice to the Chicago city council. At issue is a recent council ordinance that will require large retailers within the city to meet a living wage standard of $10/hr + $3/hr in benefits, to be phased in over several years.

The essence of the RTD argument seems to be that the ordinance may jeopardize Wal-Mart and Target’s expansion plans in the Windy City. Well, that’s precisely the point: the city leaders don’t want Chicago’s vast retail market captured by a handful of big box enterprises who compete for market share and try to drive out competitors on the basis of low wages.

Not all “economic development” is healthy for a locality. When an employer says it’s going to come in and create x number of jobs, that claim needs to be taken with a grain of salt. Even if the promised jobs do materialize (not always the case)–if a Wal-Mart really does come in and hire 2,000 new people, for instance–this does not mean that the local economy has in fact gained 2,000 net new jobs.

From that figure of 2,000 we need to subtract the following, for starters: jobs lost by competitors to the new business, who may find themselves out of business; the proportion of the Wal-Mart jobs that will go to outsiders, rather than current Chicago residents; and jobs not created by firms who might have invested in Chicago but will stay away rather than go head to head with a Wal-Mart.

Even if Wal-Mart’s arrival in the city led on a full accounting to a net gain in jobs, there still would be sound reasons to oppose this form of development if the quality of these jobs turn out to be significantly worse than the jobs it displaces, or if the employer’s presence helps under-cut labor standards throughout the city. It’s perfectly possible that a Wal-Mart coming to town could increase total employment but lead to a reduction in the total wages and benefits paid to workers. That’s not economic “progress” in any meaningful sense–that’s shifting from a high-road to a low-road model of economic development.

It is often claimed that Wal-Mart has made the American economy more “efficient.” But squeezing workers and suppliers is not efficiency at all–it’s redistribution from one sector of the economy to the other. If Wal-Mart were truly efficient in the sense of being able to technically organize retail better than competitors, it should be able to thrive without needing to squeeze workers below locally prevalent wage standards.

Finally, some analysts of the Chicago ordinance believe that the Chicago market for retail is so strong that having to pay workers a higher wage will not deter Wal-Mart or others from seeking access to the city. These analysts note that living wage laws in Santa Fe, NM and San Francisco have not deterred employment growth in the retail sector in those cities.

High-road economic development strategies are, of course, largely alien to the historic practices of the Southern states, whose approach to economic development has largely consisted of suppressing labor and writing large subsidy checks to mobile corporations. But it’s not quite that way everywhere in the country. A good journalistic approach on this issue would be to investigate the range of living wage ordinances that have been implemented around the country and attempt to sort out their effects on wages and employment–or at least to survey existing studies.

Here are two good examples: The Los Angeles Living Wage Study, chaired by a UC-Riverside economics professor, and a study of the Santa Fe living wage by economists at the University of New Mexico. Both studies found that the laws produced minimal negative effects on employment. A 2006 literature review of existing studies by the Economic Poilcy Institute provides further corroboration of that conclusion.

It would not take too long for a smart editorial writer to familiarize him or herself with such studies. Until then, to paraphrase Bob Dylan, the RTD should refrain from criticizing what it doesn’t understand.

Published in: on August 21, 2006 at 6:55 pm  Leave a Comment