Posted on 12-8-2004

LA City Council Anti-Wal-Mart
11.08.2004

LOS ANGELES - The Los Angeles City Council on Tuesday gave preliminary
approval to a proposed ordinance that could hamper plans by Wal-Mart
Stores Inc to build super-centres within city limits.

The council overwhelmingly endorsed a proposal that would require Wal-Mart
and other retailers to show that their non-union 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 unionised 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
super-centres.

The measure applies to retailers larger than 9290sq m that sell general
merchandise and groceries, but exempts warehouse clubs such as Costco or
Sam's Club.

Final approval is expected by next Wednesday, said a spokesman for Council
Member Eric Garcetti, the measure's sponsor.

Bentonville, Arkansas-based Wal-Mart has prospered by locating its
non-union stores near small towns and suburbs. But plans to expand into
urban US markets have met resistance from lawmakers and labour 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 US$86
million ($133.5 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 super-centres in the city of Los
Angeles. "This ordinance ... in no way restricts the sale of groceries at
super centres," she said. "In our opinion, this ordinance, in reality, is
redundant."

If the measure becomes law, Wal-Mart plans to ensure that it "is applied
consistently across the board since it applies to all the superstore
formats," Lin said.

Lin disputed claims that the superstores would drain the state's stretched
finances, saying Wal-Mart annual wages are "almost identical to unionised
labour workers" and adding that the retail giant paid US$650 million in
sales taxes last year.

In April, residents of the blue-collar city of Inglewood rejected a bid by
Wal-Mart to locate a sprawling shopping centre 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.