LA Council Backs Anti-Wal-Mart Measure
Tue Aug 10, 2004 06:46 PM ET
By Gina Keating
LOS ANGELES (Reuters) - The Los Angeles City Council on Tuesday gave preliminary approval to a proposed ordinance that could hamper plans by Wal-Mart Stores Inc.(WMT.N: Quote, Profile, Research) to build supercenters within city limits.
The council overwhelmingly endorsed a proposal that would require Wal-Mart and other retailers to show that their nonunion discount stores would not hurt jobs, wages or businesses in the surrounding area, as union leaders and competitors claim.
The vote comes after a nearly five-month strike by unionized grocery workers in Southern California who said the looming threat of Wal-Mart's superstores forced down wages and gutted health benefits at supermarkets. Wal-Mart did prevail in its efforts to stop an outright ban on supercenters.
Bentonville, Arkansas-based Wal-Mart has prospered by locating its nonunion stores near small towns and suburbs. But plans to expand into urban U.S. markets have met resistance from lawmakers and labor activists who accuse the world's largest retailer of paying poverty-level wages and encouraging its workers to apply for welfare and state health services.
State Controller Steve Westly and other Democrat leaders had urged the Los Angeles council to pass the measure, citing a University of California study that concluded that low-wage Wal-Mart jobs cost the state $86 million a year in social services. In a letter to the council, Westly said he was concerned about "a race to the bottom" as Wal-Mart jobs displace better paying positions at retailers that are forced to cut wages to compete or are put out of business by the superstores.
Wal-Mart spokeswoman Cynthia Lin called the vote "a huge victory" for consumers and the retailer, which she said had been battling union-backed efforts by to pass an outright ban on supercenters in the city of Los Angeles. "This ordinance ... in no way restricts the sale of groceries at supercenters," she said. "In our opinion, this ordinance, in reality, is redundant."
In April, residents of the blue-collar city of Inglewood rejected a bid by Wal-Mart to locate a sprawling shopping center in the heart of their town without conducting planning studies or public hearings. The Inglewood City Council had opposed the superstore plan on the grounds that it would put local mom-and-pop stores out of business and pay lower wages to its employees.
posted by Richard at
Tuesday, August 10, 2004
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