Good for the 'hood? Wal-Mart is touting not just lower prices but racial equity in its push for expansion into poor, urban communities.

At the corner of Grand and Kilpatrick Avenues in Chicago, the Reverend Joseph Kyles addressed a rally last May. "Tomorrow morning," he said, "we need you to pray for the City Council to vote for Wal-Mart in this community." That Rev. Kyles would be preaching the virtues of a corporate retail behemoth was no fluke. It was part of a strategy by Wal-Mart executives to cultivate support among black city council members and church leaders for building two stores in Chicago--each about the size of ten football fields. It is also part of a broader strategy to bring Wal-Mart to the 'hood--touting not just lower prices but also racial equity.

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Having built its base in rural areas in the 1960s and extending to suburban markets in the last two decades, Wal-Mart began approaching poor, urban neighborhoods most noticeably in 2003, when it tried to open a store in Inglewood, a poor city near Los Angeles. From there, the company moved to Chicago and New York City. Initial plans to open a store in Queens, New York were dropped earlier this year, but Wal-Mart executives say they are determined to find another site in New York. With over $280 billion in annual sales and 3,500 stores across the United States, the company is now selling itself as a solution to urban racial inequality.

The pitch goes like this: Wal-mart is good for poor people of color because they get jobs and also get to buy cheap goods. What executives don't mention is that the jobs come with notoriously low wages and that the company has cracked down on union organizing. But Wal-Mart executives know that poor people of color are in no position to be picky about who brings what jobs to the community. As the largest private employer in the United States, with over 1.2 million workers, Wal-Mart is also the leading employer of African American and Latino workers.

Using race as a selling point for economic development projects in distressed urban areas is not just the handiwork of Wal-Mart. In 2001, developers promoted the Staples Center sports complex in Los Angeles as a boon for a hurting local economy, insisting that it would create jobs for people of color who lived nearby. A 450-foot-tall Marriott hotel is going up on 125th Street in Harlem, and Ikea is planning to open its biggest U.S. furniture store in Brooklyn. All make the same argument: they are helping poor people of color.

Amidst this urban gold rush for developers, communities of color are forced to choose between the very real need for jobs and having a voice in economic development.

Lessons from Inglewood

Willie Cole, a middle-aged black mother, knows firsthand the economic hardships that face the poor neighborhoods of Los Angeles. She was unemployed for two years until she landed a cashier job at a Wal-Mart that opened in Crenshaw in 2003. Although her position typically pays less than $20,000 annually, she stuck with it and was promoted into a management-training program a year later.

Cole represents Wal-Mart's best public relations argument for opening stores in poor urban areas. In fact, the company featured her in a television commercial promoting its contributions to these communities. "When Wal-Mart came in," she says in the ad, dressed in her store uniform and standing near Crenshaw High School, "they let us know that they cared." The spot has been broadcast nationally, and it received heavy airplay in Inglewood leading up to a special election there in April 2004. Wal-Mart had collected signatures for a local ballot initiative that would have exempted the company from the standard environmental reviews and public hearings required to open a store.

In Inglewood, where 47 percent of the residents are black and 46 percent are Latino, Wal-Mart claimed it would create several hundred much-needed jobs. That was attractive to a small city with an official unemployment rate that was approaching double digits. What the massive retail chain failed to mention was that its entrance has been blocked in over 200 so-called "site fights" in states such as Virginia, Vermont and Oregon. Critics, led forcefully by labor unions, denounce the company for paying low wages, providing inadequate health care benefits, displacing local businesses and contributing to undesirable sprawl. The average Wal-Mart salary is at the federal poverty level for a family of four. A study at the University of California, Berkeley estimates that California pays $86 million in public benefits to Wal-Mart employees whose low incomes qualify them for food stamps, health care and subsidized housing--programs that are funded by taxpayers. Recent studies have identified Wal-Mart as the leading employer of workers receiving public health benefits in Alabama, Connecticut, Georgia, Tennessee, Washington and West Virginia.

When the company gathered the necessary signatures to force a special election in Inglewood, the Los Angeles Alliance for a New Economy (LAANE) formed the Coalition for a Better Inglewood with labor, religious and community allies. "We began organizing grocery workers and local small business owners to present the case against Wal-Mart to community leaders," says Tracy Gray-Barkan, senior research analyst at LAANE. The community-based organization already had some experience with local economic development issues. In 2001, it helped broker a deal with the Staples Center, getting the developers to sign a Community Benefits Agreement that required them to hire local residents, provide living-wage jobs and construct parks. Organizers in Inglewood walked into a tough fight with Wal-Mart. Just a month before the April 2004 election, polling showed residents supporting Wal-Mart's plan by a two-to-one margin, and one of its most prominent supporters was the town's black mayor, Roosevelt Dorn. Over the following weeks, the Coalition for a Better Inglewood reached out to community residents with information on the quality of Wal-Mart jobs and its effect on local business. In this heavily black and Latino city, the groups brought attention to allegations of racial discrimination in hiring by Wal-Mart, as well as a gender discrimination lawsuit that had been filed against the company, covering 1.6 million female Wal-Mart employees.

Although black Congresswoman Maxine Waters and the Reverend Jesse Jackson both lashed out against Wal-Mart's labor practices, many traditional civil rights groups stayed away. John Mack, president of the Los Angeles chapter of the Urban League, which received $65,000 over two years from Wal-Mart, told the Los Angeles Times, "I'd rather have a person on somebody's payroll--even if it isn't at the highest wage--than on the unemployment roll." Wal-Mart, by its own account, has made donations to the NAACP, National Council of La Raza, the Congressional Black Caucus, the Organization of Chinese Americans and the League of United Latin American Citizens.

Despite over $10 million spent on the initiative by Wal-Mart, including a newspaper advertisement that publicized its financial support of black and Latino organizations, Inglewood voters rejected the initiative 61 percent to 39 percent. The store would have been the first Wal-Mart Supercenter in a major urban area.

Ultimately, it may have been Wal-Mart's own brashness that helped organizers. The debate in Inglewood was not simply over whether Wal-Mart jobs are good or bad. The company was asking to skip the standard review procedures that normally require the city to consider the impacts of a development project. By bringing attention to Wal-Mart's attempt to circumvent the development process, organizers also framed the fight around the principles of how decisions in Inglewood are made about economic development. "The issue was about community control and community voice," says Gray-Barkan of LAANE.

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The Inglewood initiative provided a spark for the Los Angeles City Council to consider an ordinance proposed by a coalition of labor groups, clergy and community organizations. In August 2004, the Council passed the ordinance, which requires a study of the economic impacts of any proposed superstore and allows the community to weigh the potential benefits and costs of the project. Whereas the Inglewood fight was a reaction to a plan initiated by Wal-Mart, "the Los Angles City Council ordinance is a proactive process for residents to have a say in what gets developed in their communities," says Gray-Barkan.

A Harder Challenge in Chicago

Last May, just two weeks after the special election in Inglewood, the Chicago City Council met to discuss proposed zoning changes that would allow the construction of a Wal-Mart Supercenter on the South Side and another on the West Side. It was a heated debate since Wal-Mart employed many of the same tactics it had used in Inglewood. "It brought the same seductive claims of jobs and low prices to black communities," explains Dorian Warren, an expert on race and organized labor who is currently a postdoctoral fellow with University of Chicago's School of Public Policy.

Just as it had done in Southern California, the company appealed to black church leaders and City Council members. "Any job is better than no job," the Reverend Ronald Wilks said at the time.

While the City Council debated, a coalition formed, led by Jobs With Justice, a national workers' rights organization. It included unions and progressive black church leaders who decided that it might not be politically feasible to ban Wal-Mart from Chicago, given how much residents needed jobs. Instead, the groups began pushing for a Community Benefits Agreement that would require Wal-Mart to pay higher wages and hire local residents.

To promote its position, Wal-Mart organized a town-hall meeting with religious leaders in the Austin neighborhood, the potential site of the South Side store, and flew out a black executive from its Arkansas headquarters. The ministers presented a demand that surprised the company: hire ex-offenders, a growing population on the West and South Sides that are excluded from employment opportunities. While Wal-Mart promoted its jobs as valuable opportunities for local residents, it made no promises to hire ex-offenders. Instead, Wes Gillespie, the black executive, presented himself to the church leaders as an example of the opportunities provided by Wal-Mart. And Alton Murphy, a black Wal-Mart district manager, quoted from the Bible when asked about the quality of Wal-Mart jobs. "Whatever you do," he recited from Colossans 3:23, "work at it with all your heart, as working for the Lord, not for men."

Despite the company's efforts to build support, not all of the ministers were sold on the plan. The 8,500-member Trinity United Church of Christ on the South Side became a center of opposition to Wal-Mart, and its leaders directly linked the store's attractive low prices to its low-paying jobs. "Whenever price means more to you than principle," wrote Trinity's pastor, the Reverend Jeremiah Wright, in the church newsletter, "you have defined yourself as a prostitute." Wright charged that Wal-Mart's backers among the City Council and the black religious community were "pimping" black residents and their economic hardships.

While Wal-Mart was reaching out to the black community, the United Food and Commercial Workers Local 881 could not easily build a coalition across race lines. According to Chicago labor expert Warren, "a few unions--particularly in the building trades--had historically excluded black men from well-paying union jobs by keeping them out of apprenticeship programs." In the minds of many black leaders, the rapid deindustrialization of the inner city combined with the racism of some building trades unions was largely responsible for the severe joblessness on the South and West Sides.

So when the union spoke of fighting Wal-Mart, it only stirred more resentment. "Some of these same unions never say a thing about the lack of African Americans in the trades," Alderman Isaac Carothers of the West Side complained at a City Council meeting.

Organizers opposing Wal-Mart also faced a more difficult challenge than in Inglewood. Where the company had asked to circumvent the standard review process in Inglewood, in Chicago the debate was over whether Wal-Mart was a good or bad option for residents. More importantly, perhaps, the two Chicago neighborhoods where Wal-Mart proposed its stores and whose residents are more than 90 percent African-American, face an employment crisis even worse than Inglewood. And organizers in Chicago did not have the benefit of taking the issue directly to local residents, since it was not an initiative to be decided by the voters. It was a City Council vote, and that made the fight over Wal-Mart vulnerable to council members who historically do not vote against an economic development proposal in another member's district if that alderman is in favor of the project (the practice is so prevalent that it's known as "aldermanic perogative").

As it did during the Inglewood fight, Wal-Mart made contributions to the local NAACP and gave a $5,000 contribution to City Council member Emma Mitts, who loudly voiced support for the construction of a Wal-Mart in her West Side district. In what was apparently an attempt to demonstrate its support of the community, the company donated 50 calculators to Austin High School in the district.

The morning after Rev. Kyles asked residents to pray for the approval of the two Wal-Mart stores, the City Council gave a split decision. It rejected the South Side location and approved the proposed store on the West Side. The approval of one store and the rejection of the other had much to do with the politics among members of the City Council, but it also reflected the tensions between the real need to create any jobs and the demand that these actually be good jobs. In what had been described as the most controversial City Council issue in two decades, all but two black aldermen supported the West Side Wal-Mart.

After the vote, a coalition of labor, religious and community groups began pushing for a local ordinance that would attach certain standards to the jobs at large stores like Wal-Mart. It would require so-called "big-box stores" to pay a $10 living wage, provide health benefits and remain neutral in efforts by its workers to form a union. The ordinance, which is still being debated by the City Council, is "a way to regulate the terms on which these stores will come in to the community," explains Chirag Mehta, a researcher at the Center for Urban Economic Development at the University of Illinois at Chicago. In response, the Reverend James Demus, director of the Chicago South-side's NAACP that received a donation from Wal-Mart, testified against the ordinance in early hearings.

Unfinished Business

While Martin Luther King's 1963 "I Have a Dream" speech is the most familiar refrain of the civil rights movement, the full title of the rally was the "March on Washington for Jobs and Freedom." That is, King viewed the struggle for civil rights as linked to economic justice. In many ways, the enduring racial economic inequality since then is the unfinished business of the civil rights movement.

"It has been one of the weak links of racial justice organizing over the last three decades," says Warren, the University of Chicago expert on race and labor. "We have been unable to answer what our fundamental demands are around economic justice," he adds, "and how they relate to racial justice."

Since the rhetoric of race is being used strategically by developers, economic development is now the only area of urban policy that emphasizes issues of race--however hollow that talk may be. There is no similar discussion from local politicians when discussing education or health disparities.

All the economic development plans underway in New York, for example, require buy-in from poor communities of color. Developers are even going to absurd lengths to use race as a selling point. One proposal for the redevelopment of the Victoria Theater--a few doors down from the legendary Apollo Theater--includes a "Harlem-themed restaurant" with a menu that includes such items as a "Zora Neale Hurston salad ... Miles Davis omelette and a Denzel burger."

For now, Wal-Mart has lost in New York City. Following the battles in Inglewood and Chicago, Wal-Mart's urban strategy continued east to Queens, New York. The proposed site there would have given Wal-Mart a store in nine of the ten largest U.S. urban markets. (The only city being left out is Detroit, which has been dealing with its own economic devastation.) But early reports of Wal-Mart's plans to open in Queens provoked an immediate outcry from labor groups that made a difference in a city where labor still yields power. By the end of February, the developer had dropped the Wal-Mart store from its proposal.

Recognizing that the promise of low-wage jobs is often being promoted to win the support of communities of color, New York City Councilman Charles Barron explains, "We need to distinguish between economic development and economic exploitation." In Barron's district, which includes some of the poorest sections of Brooklyn, a cinema complex recently opened with the promise of jobs for community residents. "All we got was a bunch of popcorn-selling jobs," says Barron.

Pitching proposals to poor communities who are desperate for jobs, private developers are able to exploit the failure of public policy to create jobs in these communities. "There are plenty of other ways to create jobs," says Councilman Barron, who argues for increased investment in public infrastructure such as hospitals and schools to revitalize poor areas like his Brooklyn district. "Private developers," he continues, "manipulate the race question for their financial gain."

In response to Wal-Mart and other development projects, groups in urban communities around the country are using a variety of tools to broker deals that also address other vital areas of economic development, such as housing. Some organizations are pushing for "inclusionary zoning," a regulation that requires developers to set aside residential units in a new development as affordable housing. Other community groups, including ones in New York, want to attach standards to jobs at Wal-Mart if it does open a store somewhere else in the city. Besides its low wages, the lack of adequate health care provided to workers places an unfair burden on the public health care system, many critics charge. A coalition of labor, community groups and responsible employers has sponsored a bill in the city council called the Health Care Security Act, which would require businesses in certain industries to either provide health coverage to their workers or pay fees that the city would use to provide public care to the workers. If passed, the bill would cover any Wal-Mart Superstores that would open in the city.

Organizers view Community Benefits Agreements and related tools as a critical first step in laying the groundwork for a long-term goal of redefining the terms of economic development.

"As long as private developers set the agenda and groups respond by asking for Community Benefits Agreements or inclusionary zoning," says Dorian Warren, the expert on race and labor from the University of Chicago, "we may just be trying to get a piece of the pie. We need to ask, 'What does a different pie look like?'"

Anmol Chaddha is a policy researcher at the Brennan Center for Justice at the New York University School of Law.