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Employment divide Wal-Mart's impact on job market in question By JOE COOMBS,
Sun staff writer Gainesville Sun
July 07, 2003
So what's worse? A low-wage job, or no job at all?
That's the question that is often at the core of the argument of whether or not to welcome Wal-Mart into a community.
Retail jobs, at least at the entry level, don't pay well compared to other industries. A Wal-Mart supercenter may bring hundreds of jobs to a town, but many of those come with salaries that aren't much higher than minimum wage.
For community leaders, it becomes a question of turning down a plethora of low-paying positions or making every effort to create some basic employment for out-of-work residents.
"It's hard to turn down jobs, period, even if they don't pay as well as other jobs," said Brent Christensen, president and chief economic development officer of the Gainesville Area Chamber of Commerce. "What interests me is that some of those jobs will offer health insurance, and that's what is sorely needed for residents in this area."
Florida has no minimum wage law and operates by the current federal standard of $5.15 per hour. Wal-Mart would not reveal specific starting salary levels for their hourly workers, but they vary according to the market and are "always higher than minimum wage," according to company spokeswoman Sarah Clark.
Wal-Mart has plans to replace its two Gainesville-area stores - on NW 13th Street and in Butler Plaza on Archer Road - with supercenters, which sell more merchandise and services than Wal-Mart's traditional discount stores. Consequently, supercenters have larger staffs and average 350 employees, compared to an average of 150 workers at discount stores.
After rejecting the company once, the Gainesville City Commission is waiting on a revised application from Wal-Mart to build a supercenter at NW 13th Street and NW 53rd Avenue, which would replace its store on NW 13th Street. The company is exploring other locations in Gainesville to replace its store in Butler Plaza with another supercenter.
Aside from the supercenter proposals, Wal-Mart already has approval to construct a 1.2-million-square-foot distribution center in Alachua. The facility is expected to create 600 jobs with starting pay of at least $9 an hour, and more than 90 percent of those jobs will be full-time, Clark said.
While the distribution center would create all new jobs at better wages, it's unclear how many new jobs would be added to the local economy as a result of the supercenters. Wal-Mart would likely transfer the staffs from its current stores to the new supercenters, and then add positions according to the level of revenues at the larger stores.
Even then, the sales that the supercenters steal from other local businesses could result in a "net zero" gain for jobs in Alachua County, said David Denslow, an economist at the University of Florida.
"Adding a (supercenter) would create no new jobs, at least not in the long run," Denslow said. "The jobs it creates would eventually be lost by competing stores. The chief advantage of a (supercenter) is the lower prices. What has to be weighed is whether the lower prices are enough to offset whatever disadvantages the supercenter might bring."
Competitive salaries
Wages vary from town to town, but Wal-Mart's salaries and benefits are competitive "in each community we serve," Clark said. And there's room to move up in the company, as more than two-thirds of Wal-Mart's managers started off as hourly employees, she said.
One of those people, Maureen Asberry, is the general manager at Gainesville's Sam's Club, which is owned by Wal-Mart. Asberry joined the company in 1985 in St. Louis, when she took a job earning $5 an hour at a Sam's Club in that city.
"My husband had just lost his job, and we needed money. I didn't even know what a Sam's Club was," Asberry said. "On my first day, I walked into a big warehouse full of boxes. They gave me a box cutter and a pricing gun and said, 'Work your way to the back.' "
Asberry eventually worked her way to the top of the store's management team. Shortly after getting hired, she became a cashier supervisor, and after three years in that post Asberry became an assistant manager.
Following a short stint as a co-manager of the store, Asberry took the general manager's position at the Sam's Club in St. Louis. In April she came to Gainesville, where she supervises a larger store with 160 employees and a team of six managers.
"I have no college education, and everything I've gotten, I've worked for," she said. "This company doesn't owe me anything. I was able to buy a house when I came here, and I'll be able to successfully retire when the time comes, because of the 401(k) and profit-sharing programs."
Employee turnover has been Asberry's biggest challenge as a general manager. College students frequently come and go at the Sam's Club in Gainesville, but Asberry said many local residents rely on the store for their full-time jobs.
"We have a few associates from High Springs who drive in for work, and others come from the Ocala area," Asberry said. "It's not easy for a lot of people to find a job around here, since there's not a lot of industry."
Company benefits
Full-time Wal-Mart associates work 34 hours or more a week, and more than three-fourths of the company's 1 million domestic jobs are full time, Clark said. Part-time hours vary, but all workers are eligible for health insurance, no matter how many hours they put in per week, Clark said.
Whether that insurance is affordable for every employee is debatable. But Clark said roughly 50 percent of Wal-Mart's associates are enrolled in the company's major medical plan. Another 40 percent of Wal-Mart's employees already have some form of health insurance, she said.
Those workers include college students who belong to their parents' health plans, senior citizens who are covered by Medicare and people with second jobs who have health insurance through their primary employers, Clark said.
Cost breakdowns vary depending on the level of coverage, but Wal-Mart associates can enroll for family medical coverage for $57 per bi-weekly pay period, and associate-only insurance can be obtained for $13 per bi-weekly pay period. Wal-Mart pays two-thirds of the overall costs, and associates pay one-third of the costs.
Wal-Mart's benefit package includes profit-sharing and 401(k) plans, stock ownership, health care and discounts on items sold in Wal-Mart stores. All employees are eligible for a limited medical plan on the date of their hire, Clark said.
Despite its penchant for providing a quick boost to local job markets, Wal-Mart is also in the midst of several court battles that have questioned the company's methods of paying its employees. In late 2002, a federal jury in Oregon ruled that Wal-Mart forced hundreds of employees in that state to work unpaid overtime between 1994 and 1999.
More than 400 employees from 24 of Wal-Mart's 27 Oregon stores brought the class-action suit, accusing the retailer of violating federal and state wage laws. A separate trial is ongoing to determine how much Wal-Mart will pay in damages.
Another suit filed in 2001 in New York alleges that Wal-Mart has denied pay for time worked off-the-clock, through lunch or rest breaks and overtime. That suit was filed on behalf of about 80,000 current and past Wal-Mart employees in New York state, and its class-action status is pending in court, said Rachel Geman, an attorney with Lieff Cabraser Heimann & Bernstein LLP, the law firm representing the employees.
Lieff Cabraser is also pursuing a class-action suit against Wal-Mart on behalf of its employees in Washington state, Geman said. In other legal proceedings, Wal-Mart is a defendant in a California lawsuit that alleges the company discriminates against women in promotions, pay, training and job assignments.
While those lawsuits are a concern, Christensen said the Gainesville region will still benefit from the jobs created by Wal-Mart's growth. In some respects, he said, Wal-Mart isn't much different than past retail giants who evolved in the 1960s and 1970s.
"Did we go through the same conversations when Sears or JC Penney came to town and started to put the 'mom-and-pops' out of business?" Christensen said. "Today, those stores are viewed as icons, and it's sad when they go out of business. I wonder if there will ever be a day when we're longing for a Wal-Mart."
Joe Coombs can be reached at coombsj@gvillesun.com.
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