Instead of Corporations, Why Not Invest in People?

August 7, 2013 86 comments Open printer friendly version of this article Print Article

Should we be investing in people instead of corporations? Progressive Editorialist Robert Montgomery suggests it may be time for a change in our priorities.

Recently in Washington, DC an interesting battle went on between its City Council and “big box” retailer Walmart over a living wage ordinance that would demand that the company, long known for paying poverty wages to its employees, pay a minimum of $11.75 an hour to its employees.

Walmart mounted an aggressive campaign to defeat the legislation. On the table in DC is what is called “The Large Retailer Accountability Act” sponsored by City Council Chairman, Phil Mendelson and Vincent Orange. The bill would require that large retailer operating a store at 75,000 square feet, and whose corporate parent has sales of $1 billion, pay a living wage plus benefits to its employees. That living wage would also be indexed to the local consumer price index each year.

In a “stunning” move Walmart argued that forcing them and other large retailers to pay a high wage would stunt economic growth – a rather interesting statement considering Walmart's well known record of moving into small towns and obliterating small businesses by operating at a lower profit ratio than small companies can compete with. They also brought up another interesting point that companies such as Safeway – who has a unionized workforce – aren't mentioned in the legislation. In other words Walmart feels it has no responsibility to a community or the people it employs within it to do anything other than to extract as much money from it as possible.

In Jacksonville, Florida there are many big box retailers who employ thousands of people in the area in low paying jobs, often on a part time basis, and certainly without health benefits. On the Westside around the 32254 and 32205 zip code areas the amount of people now living at the poverty rate is at 29%(according to census figures) while companies such as Lowes, Walmart, Home Depot, and two major grocery store chains operate in the area. Many of these people are struggling to etch out a living while these large corporations pull huge profits out of our community.

As the city struggles to pay its bills, due mostly to a lack of revenue, the Mayor and the City Council want to bring in more corporations offering them money to come in and hopefully employee a few local people in the process. For example, the city will be kicking in $360,000 to Deutsche Bank with the state paying the remainder of $1.8 million in QTI money. In return Deutsche Bank has said it will rent additional office space in Butler Plaza III on Belfort Rd. This should be very good news for the 370 people laid off by Homeward Residential in February and those who will be laid off with Everbank as they will probably be competing for the 300 jobs coming out of the deal not to mention the commercial property manager who will do very well renting out the additional office space.

But what about people all over the city who paid the taxes that their local and state government is gifting Deutsche Bank? What are they getting in return? On the Westside, Downtown, and the Northside people notice the generous amount of attention that goes to the Southside heavily infested with corporations. How do small business owners benefit in these areas filled with people who cannot afford their goods and services west of the river?

It's simple. They don't get much in return. While corporations over in the Southside pay reasonably well there are as many big box retailers even there who don't. Over in the areas west of the river a lot of lip service is paid, with as many promises, as the schools get worse, libraries are threatened with closing, as well as other essential services threatened to be cut off. A trip down any thoroughfare past the charming trappings of Riverside/Avondale and part of Springfield yields the realities of areas falling into neglect while revenues are being directed elsewhere in the city.

Recently the Jacksonville Business Journal added to their ongoing banter and corporate cheerleading an article denouncing the idea of a $15 an hour minimum wage and how it would run companies out of town. They wouldn't hire new people as the labor costs would make it prohibitive. They included this article for a reason as there is labor unrest around the country. People are beginning to feel the brunt of wage stagnation. Companies such as McDonald's have employees fighting right now for higher wages as they make billions a year yet only pay their employees the minimum they can get away with paying them.

In Jacksonville there needs to be a serious discussion about income inequality. After years of state “right to work laws” citizens in the city are now starting to see the problems of waiting for a trickle down from their corporate masters. They know it isn't coming but their only alternative to continued exploitation is homelessness.

But there is something that can be done and the leaders of our city can for once take the lead in improving the lives of many people hovering at the poverty rate. The city can for once do the right thing in addressing the problem of severe income equality in Jacksonville by passing a local living wage ordinance similar to the one DC is fighting for.

What will a living wage ordinance accomplish? For one it will create a wider pool of taxpayers who will pay more consumption taxes. More people paying taxes levels out tax burden among everyone an will enable us to do what 36 other cities around the country right now can't to; pay for essential services.

More people in the area who make more money also stimulates more consumer spending. In areas where large corporations aren't as interested in moving(such as any place not around Baymeadows and Deerwood areas) small businesses will see more local customers who can afford their goods and services as they will have more disposable income. Walmart, though they will “cry poor” in the beginning will also see more consumer sales in the area as other big box retailers will.

As many companies will see more sales due to more money circulating in the area they will need to hire to meet the demand. Also there will be more self-sufficiency as people will be able to save or move into a more expensive apartment. As the implementation of a living wage will bring more people off of food stamp and welfare rolls as the raise of the standard of living of more people will disqualify them from participation in those programs.

For decades we have tried repeatedly in this area to bring decent “corporate citizens” here yet our situation never really improves. For decades we tried the same old “public private partnerships” that have done nothing but line the pockets of small-time crony capitalists in the area and what kind of value has the city and it's people gotten in return? Well that rather expensive courthouse comes to mind as a shining example of “public-private partnerships”, poor priorities, and many more could be named almost ad infinitum. So why not for a change try a new priority; people over profits!