New York should learn to love Wal-Mart: The low-cost retailer is good for the nation's priciest city

Originally published in the New York Daily News

There may be more to life than cheap underwear, as Pat Purcell of UFCW Local 1500 said in a recent Fox News interview. But what about the poor people who need it? Should they be forced to buy expensive personal items, groceries and furniture to appease union activists and those seeking an "authentic" urban experience?

That's the real question on the proposed Wal-Mart in Brooklyn's Gateway II shopping center. But you won't hear that issue raised by Purcell, his labor union brethren, community organizers and some local politicians who oppose the giant retailer using the same recycled arguments they first employed when the company tried to break into the five boroughs years ago: They're anti-union. They're anti-worker. They're anti-small business. They're bad for the environment. Their stores produce lots of traffic and change the character of neighborhoods. You name it.

None of those complaints ultimately holds up to scrutiny - as the addition of other big-box stores from Target to Costco to IKEA has proven - or overrides the basic reality that Wal-Mart serves a pressing need: supplying affordable goods to an often-unaffordable city.

No matter. The tenor of the debate is so hostile you'd think developers are trying to open a nuclear waste dump instead of a discount store during a recession.

"They will have the fight of their lives if they try to bring Wal-Mart out here. It's not going to happen," Councilman Charles Barron (D-Canarsie) told The Brooklyn Paper last month. "No one exploits workers more than Wal-Mart. To exploit workers the way they do is unconscionable."

If Barron and supporters win, the only people exploited will be his constituents, especially the poorest ones. Food prices in inner cities are the highest in the nation. Many poor people do not have cars, so they do not have options other than convenience stores or the tiny, often dirty supermarkets with wilting produce and high prices.

And it's not just poor people who need help in New York, it's everyone. The cost of living makes New York City the poorest big city in America, according to Eamon Moynihan of the Cost of Living Project. Largely because of expensive housing, someone making $100,000 in New York City has the same standard of living as someone making about $63,000 in Washington, D.C., and $51,000 in Chicago, he wrote in a 2009 issue of City Journal.

That's probably why wealthier people love to shop at Wal-Mart, too. The store is one of the top beneficiaries of residents of New Canaan, Conn., which according to Bundle.com, a spending comparison site funded by Citigroup, Morningstar and Microsoft, is home to some of the biggest chargers in the country. The average New Canaanite spent more than $140,000 in 2009 on all items not including mortgage and rent - and Wal-Mart was among the chief beneficiaries.

No doubt New Yorkers in other boroughs would do the same - flocking to the site near Starrett City from as far away as the Bronx to shop in the new store when it opens.

In Baltimore, where I live, Wal-Mart first arrived in 2002 without much fuss into a formerly abandoned rail yard. The store is serving the people - and that's why residents are now for the most part welcoming a second Wal-Mart slated to open in 2011 in the Remington neighborhood in the northern section of the city. The biggest debate has been saved for the design of the new complex in which the store would be a tenant, and the hours of operation, not whether it should be here.

The lack of protest comes in part from the fact that the slowly decaying city has few food and retail options. Case in point: there are so few places to buy food in this city of 635,000 that the library system recently brokered a deal with Santoni's Super Market in Highlandtown. Two library branches now serve as drop-off points for online grocery orders from the store, giving the city's overwhelmingly low-income residents access to fresh, affordable food they would not be able to find otherwise.

And many people are excited for the jobs with official unemployment 10.6% and actual even higher.

"The fact that they [the development] can offer all these jobs is impressive. I mean, you've got a truck loading area. That means midnight shifts!" city resident Betsy Childs told a local reporter at a recent meeting about the new development that includes the second Baltimore Wal-Mart.

Oral and Lochnee Singh, who own a block of properties rented to small businesses across from the proposed Wal-Mart, also welcome the store. "There is no good shopping here," said Oral. He says he has to drive about a half hour north to Hunt Valley for supplies to repair to his buildings.

The couple welcomes the extra traffic the complex will bring as it gives their tenants more of a chance to thrive. "It gives us more potential to grow rather than suffer the agony that we are going through," said Oral. And he said it would help reduce tax burdens of the few businesses still alive in a city that has been losing population and jobs for decades.

If Brooklyn leaders are smart, they will welcome Wal-Mart for the same reasons. When the biggest question for many people is not about earning a "living wage," but any wage, with unemployment at 10% in New York City, the store is expected to hire hundreds. Would Barron rather constituents drain welfare payments from a broke city rather than work?

Retail developments blocked over wage debates do not help job seekers - or taxpayers. For example, Kingsbridge Armory in the Bronx, which could have generated about 1,000 construction jobs and 1,200 permanent jobs, sits vacant because tenants behind the project could not support the requirement to pay both construction and retail employees a living wage of $10 per hour. As a result, the city earns no sales, property or income taxes from the facility and must spend money to maintain a structure built almost 100 years ago. Other businesses in the area are not benefiting from spending generated by the wages earned at the complex.

Is nothing really better than not perfect? Besides, As Wendell Cox, co-author of the "Wal-Mart Revolution," said, "Wal-Mart will not have employees if they are not paid enough."

And Wal-Mart wages aren't that low. According to a company fact sheet, the average full-time wage is $11.75 per hour; more in urban areas. Other chain stores including Target and IKEA pay similar wages according to a search of jobs on employment websites.

Cox says the U.S. should not strive to be more like Europe, where unemployment is chronically higher because of wage restrictions. He cites France as an example of where minorities and immigrants suffer the most from high unemployment because entry level jobs like those of grocery bagger don't exist as employers can't afford to pay them wages demanded by law.

Demonizing an employer who wants to hire people during one of the worst economic crises is like refusing to feed a starving person because the food isn't organic.

Facts are facts. Wal-Mart helps those not earning a living wage to live better. And it will generate desperately needed tax revenue for the city and state. The question should not be if Wal-Mart should come, but how quickly it can start hiring.

Mossburg is a fellow at the Franklin Center for Government and Public Integrity and a senior fellow at the Maryland Public Policy Institute. She lives in Baltimore.