by JD Adler…

At the monthly luncheon of the Key West Business Guild, member Owen Trepanier of Trepanier & Associates introduced representatives from Walmart with whom they are collaborating on a plan to be the anchor tenant at the shopping center being developed for Rockland Key. Michelle Belaire, a senior manager of public affairs and government relations for Walmart, spoke to the membership for roughly 10 minutes and took questions afterward.

“Walmart has operated in the state of Florida for 33 years. We’ve probably been rumored to come into the Keys for that same time.” She joked, excitedly describing their significant footprint in Florida. In Miami-Dade alone, she proudly announced, they have 19 stores employing nearly 6000 associates. Ms. Belaire went on to affirm their plans for Rockland which they hope to have open in 2017, “We have signed a letter of intent with the developer that Owen [Trepanier] represents, David Garfunkel, and we hope to bring a smaller sized footprint supercenter, in fact it’s about a 123,000 square foot store, to anchor that shopping center.” She described the estimated investment for this “smaller sized” operation as being roughly 30 million dollars, pausing for impact.

 Cost of Living

As part of her prepared statements, Ms. Belaire addressed payroll early on, “I understand that starting salary is important, and hourly wage is important… of the nearly 96,000 employees statewide… the average salary is $13.07, statewide, today.” Though that is for full time employees, for part-time employees the average is $10.00 per hour according to VP Carol Schumacher in this CNN article on the subject. Belaire then trumpeted Walmart’s recent decision to increase pay, nationwide, for their hourly employees, pointing out this put them above the national and state minimum wages, “…Starting this month, every associate in our entire fleet, in the US, will be making, bare minimum $9 an hour. By 2016, every associate will also start at $10.00 an hour. That is across the country. We believe we are leading the discussion on wages, but for us it is not about wages, it is about opportunity.”

An internet search on “Walmart Raises” will produce numerous economists and talking heads espousing theories that this decision was less altruism and more a response to protests, economic forces, and/or a need for employees to be able to buy more product. When asked about a Forbes article that cited a scientific study showing Walmart employees held 18% of all food stamps and other costs to taxpayers due to low wages and low hours, Belaire dismissed the article as inaccurate and suggested employees choose their situation. In post talk discussions with representatives, it was again stated that people choose to work part-time or not take benefits.  This same study found that, “a single Walmart Supercenter cost taxpayers between $904,542 and $1.75 million per year, or between $3,015 and $5,815 on average for each of 300 workers.” This as a result of corporate tax breaks, employee needs for benefits, and myriad other costs to the community.

Affordable Housing

During the question and answer period that followed, several members asked how Walmart intended to contribute to alleviating the affordable housing issues in the Keys. Ms. Belaire insisted they hoped to contribute but did not believe they could, or should, be responsible for trying to alleviate the problem independently. She believes the wage levels will help, they are talking with the local Habitat for Humanity to see how they can contribute, and working with local government.

A follow up question by a member pointed out that Walmart would have to bring in more people to fill all of the positions created, which would create more demand on limited housing supply, thereby driving up rents, how did Walmart plan to offset that? Ms. Belaire said they would be meeting with leadership from the Boca Chica Key Naval Airforce Base because of the large civilian population there, as one way “to try and figure out how not to do what your hotel association so often does, which is bring in people from the mainland to the Keys.”

She proudly touted a statistic from Washington, DC that showed area residents who were spending $7300 per year on groceries managed to save $1300 per year due to utilizing Walmart. Implying that the presence of Walmart in the community would reduce the cost of living for the Keys. Though she did not mention what happened to those businesses that used to receive that $7300 dollars per household per year.

Local Contributions

Ms. Belaire also discussed several ways Walmart intended to contribute locally. Apparently they have already been donating to local charities for several years, including Grace Jones, Star of the Sea, and she named Habitat for Humanity more than once during the conversation. She emphasized that Walmart considered helping to reduce hunger a philosophical pillar.

For local businesses, they intended to introduce local products into their store in order to provide local Keys flavor. Their logistics teams are also considering, according to Ms. Belaire, “Back Halls” which means utilizing the empty Walmart trucks going back north to carry the products of local businesses in order to help them offset costs. In response to an earlier question from a member about effects on traffic, she had estimated 2-4 trucks per day. Though Walmart is apparently looking into increasing storage options for this facility due to the unique shipping issues related to the Keys.

Equality

The most well received statements of the afternoon came from the discussions on equality. When asked about a recent law passed by the Arkansas legislature, Walmart’s home state, called the Religious Freedom Act, which anti-discrimination groups consider extremely bad for gay rights. When Ms. Belaire announced that the CEO of Walmart had published a letter asking the Governor to veto that law, she was rewarded with resounding applause. She went to point out that Walmart had recently added to its benefits policy any and all domestic partners. Following up, afterwards, with one of the plethora of executives who joined her, it was explained that an employee just had to name their domestic partner, regardless of gender, as a beneficiary, and the company simply accepted that in the role traditionally expected for spouse. The person who explained this is currently utilizing this benefit for his male partner.

[Note: the Governor did request changes to that law, it was amended to reflect federal law, and has since been signed.]

Flip Side

Perhaps what goes unrecognized in some of this discussion is the unique nature of life and economics in the Keys. For much of the workforce population living and working in Key West and Stock Island, owning a car is not necessary. Therefore, shopping in Rockland is not exactly convenient. Even for those who do own cars, a ride up the Overland Highway is not a party. Meanwhile for snowbirds and tourists, a stop at Walmart on the way down can significantly reduce their seasonal costs (consider the $1300 in annual savings Ms. Belaire cited, above). This will decrease income for the local shops that supply groceries, cleaning supplies, toiletries, etc. This, in turn, means increased costs for those who live here year round but do not find Rockland to be readily accessible. Add to that an increased workforce adding demand to limited housing and cost of living does not appear to be getting alleviated.

If Walmart follows through with plans to place local products in store, this is only a partial problem solver. How many (for example) hammock shops would thry realistically buy from simultaneously? How will those sell compared to the hammocks they currently have for $30-$80? Walmart has several adult bikes in stock for less than $100, how will that affect myriad local businesses? If they buy enough local fish to keep their shelves stocked, how much supply will exist for restaurants and local groceries? If instead they import at prices their buying power affords, what affect will that have on the local market?

In most major cities in the US there are “food deserts” where usually (but not always) low income people live because they cannot afford to travel to the full sized grocery stores, and the local, corner stores/ fast food restaurants only carry junk food that is actually overpriced. This actually does not just pertain to food. In every facet of the economy, the neighborhood population only receives access to the lesser quality for greater cost, because better choices are out of convenient reach but are a factor in driving up costs for their local stores.

While Walmart’s job is not city planning, and due credit should be given for charitable works, benefits and increased employment, for those whose job it is to plan our community, some consideration should be given to the dominoes they are setting up.