1 1 CLEVELAND HEARING ON WAL-MART 2 3 - - - 4 BE IT REMEMBERED, that upon the hearing of 5 the above-entitled matters, held at the 6 Cleveland State University School of Law, 1801 7 Euclid Avenue, Cleveland, Ohio, before 8 Representative Sherrod Brown, Representative 9 Stephanie Tubbs Jones and State Senator Bob 10 Hagan, and commencing on Monday, the 19th day of 11 September, 2005, at 10:06 o'clock a.m., at which 12 time the following proceedings were had. 13 - - - 14 15 16 17 18 19 20 21 22 23 24 25 2 10:06:40 1 P R O C E E D I N G S 10:06:42 2 MR. BROWN: Good morning. I'd 10:06:44 3 like to welcome all of you here on behalf of my 10:06:46 4 colleagues in Washington, Dennis Kucinich, 10:06:49 5 Stephanie Tubbs Jones will arrive shortly, 10:06:54 6 Senator Bob Hagan from Youngstown, who has 10:06:57 7 always fought, as Dennis has, for economic 10:06:59 8 justice issues in our state and around the 10:07:01 9 country. He is also joining. 10:07:04 10 I also want to make a special 10:07:07 11 introduction -- I think about doing this -- but 10:07:09 12 Colleen and Freddie in the back and others from 10:07:14 13 City Year. You will notice, I wear a City Year 10:07:16 14 watch. My daughter was in City Year in 10:07:20 15 Philadelphia about two years ago, and I welcome 10:07:22 16 all of you because I know that you're getting 10:07:24 17 started in the right way, dedicating your lives 10:07:29 18 to the right things. So I want to thank those 10:07:30 19 of you sitting here. 10:07:34 20 You can look around and see that 10:07:36 21 there's just -- many people in this room are 10:07:38 22 just older versions of you sitting here. 10:07:41 23 Now, this event will be conducted -- 10:07:45 24 on my right, Dennis will go after me. Dennis 10:07:48 25 has about 12 things on his schedule today and he 3 10:07:51 1 can't stay, but we know where he is and how hard 10:07:54 2 he's working on these issues. 10:07:55 3 This event will be conducted like a 10:07:58 4 Congressional hearing. We'll adopt the 10:07:58 5 procedures the Congressional committees use to 10:08:00 6 make things run smoothly and efficiently. There 10:08:01 7 will be opening statements by each of us limited 10:08:04 8 to five minutes, and statements from the four 10:08:06 9 witnesses on this panel, limited also to five 10:08:10 10 minutes. Total question and answer time for 10:08:13 11 each member in each panel will be limited to 10:08:16 12 five minutes. Timekeeping will be the 10:08:18 13 responsibility of my staff. 10:08:19 14 Who is doing the timekeeping? Ed in 10:08:21 15 the back? No, Judy is down front. Judy is a 10:08:26 16 volunteer intern for us, does terrific work. 10:08:29 17 When there are 2 minutes, 30 seconds 10:08:32 18 remaining, she will show the green card, one 10:08:34 19 minute she will show the yellow card and when 10:08:37 20 the five minutes is expired, the red card, and 10:08:40 21 we will come after you. 10:08:42 22 To ensure we stay on schedule, 10:08:45 23 audience members are invited to submit written 10:08:48 24 questions on index cards available through my 10:08:49 25 staff and at the mike in the back. 4 10:08:52 1 Everyone here today can offer 10:08:54 2 question and commentary to my website at 10:08:54 3 www.house.gov/sherrodbrown. 10:08:58 4 No need to take notes. A 10:09:01 5 transcripted web cast will be published 10:09:04 6 electronically within a few days of the hearing. 10:09:05 7 The hearing should -- the rundown for the whole 10:09:07 8 hearing shall be no more than 90 minutes. We'll 10:09:09 9 have you out of here close to 11:30, and we 10:09:14 10 thank you for being here. 10:09:15 11 Wal-Mart is a huge force in America's 10:09:18 12 economy and society. The numbers speak for 10:09:20 13 themselves. The super-retailer posted sales of 10:09:22 14 $288 billion last year, a figure "Fortune" 10:09:26 15 magazine called astonishing. During a year when 10:09:29 16 most retailers flailed through a soft holiday 10:09:32 17 season, Wal-Mart's profits jumped 13 percent to 10:09:37 18 $10 billion. 10:09:38 19 Make no mistake about it. The 10:09:41 20 behemoth from Bentonville is the 800-pound 10:09:43 21 gorilla in the room of our economy. Because of 10:09:45 22 its sheer size, Wal-Mart has eclipsed the 10:09:47 23 archetypical American corporations in the past. 10:09:49 24 General Motors, IBM, Boeing, General 10:09:52 25 Electric. These are the corporate 5 10:09:54 1 standard-bearers as America rose during the 10:09:57 2 middle of the last century to a position as the 10:09:59 3 world's only economic superpower. 10:10:01 4 Though each was distinctive, these 10:10:03 5 firms had a few essential things in common. 10:10:05 6 They made things. They created goods that 10:10:08 7 improved the standard of living for every 10:10:10 8 American. 10:10:11 9 They paid well. They adopted Henry 10:10:13 10 Ford's maxim that a consumer society -- a 10:10:18 11 consumers' economy can be sustained only when 10:10:20 12 the workers who produce the nation's goods can 10:10:24 13 afford to buy them. The workers share in the 10:10:27 14 wealth they create for their employer. 10:10:29 15 They invested in America. These 10:10:31 16 companies enlisted America's best and brightest 10:10:32 17 minds to find the inventions that revolutionized 10:10:36 18 our economy. They invested in American 10:10:38 19 factories and American workers to take those 10:10:40 20 ideas from the drawing board to the production 10:10:42 21 line, the consuming public. 10:10:43 22 Like America itself, these companies 10:10:45 23 were not perfect, but they exemplified a 10:10:47 24 corporate model that hitched the company's 10:10:51 25 success to the success of the nation and its 6 10:10:52 1 people. 10:10:52 2 When -- some 50 years ago, Defense 10:10:55 3 Secretary Charles Wilson testified to Congress 10:10:57 4 that "What is good for GM is good for America." 10:11:00 5 While many didn't appreciate that comment, the 10:11:03 6 former GM president was stating the simple fact 10:11:06 7 that, for corporate executives of his time, the 10:11:09 8 company and the American people were 10:11:12 9 inextricably linked. They sunk or swam 10:11:16 10 together. 10:11:17 11 Though GM, Boeing and GE and other 10:11:19 12 venerable corporate citizens of the 20th century 10:11:21 13 remain, they are no longer the economic leaders 10:11:23 14 they were a generation ago. 10:11:24 15 Today, the new paradigm for corporate 10:11:28 16 America wears a smiley face and offers a 10:11:31 17 devastatingly simple business model - Always the 10:11:32 18 Low Price, Always. 10:11:33 19 The Wal-Mart business model is very 10:11:35 20 different from the prototypes of corporate 10:11:37 21 America past. Wal-Mart doesn't make things. 10:11:40 22 Its innovations are not revolutions of 10:11:43 23 mechanical engineering or chemistry. They are 10:11:47 24 innovations of supply chain globalization and 10:11:47 25 supplier manipulation. 7 10:11:51 1 Wal-Mart doesn't pay well. Not by 10:11:53 2 comparison to other retailers, not by comparison 10:11:56 3 certainly to GM in the '50s. 10:11:57 4 GM in '48 and '50 reached agreements 10:12:00 5 with UAW that ushered in both the most 10:12:02 6 significant economic surge in American history, 10:12:05 7 and allowed, for the first time, the income of 10:12:07 8 the Americans in the bottom 10 percent bracket 10:12:09 9 to grow as quickly as income for those in the 10:12:12 10 top 10 percent. 10:12:13 11 Wal-Mart's approach to labor is 10:12:15 12 exactly the opposite. The retail giant 10:12:18 13 vigorously and viciously fought to prevent its 10:12:21 14 workers from bargaining collectively. Its wages 10:12:22 15 and benefits are well below what other 10:12:24 16 corporations offer. And while the corporate 10:12:26 17 leaders of the past saw investment in America as 10:12:29 18 the path to everyone's success, the Wal-Mart 10:12:31 19 business model relies on a supply chain 10:12:35 20 globalization that encourages the decline of 10:12:38 21 American manufacturing and the exporting of 10:12:40 22 American jobs. 10:12:41 23 Though the retail giant once marketed 10:12:44 24 with the buy-American message, Bentonville now 10:12:47 25 downplays the rhetoric of corporate patriotism. 8 10:12:47 1 Nowhere have the effects of this 10:12:52 2 paradigm shift been felt more dramatically than 10:12:53 3 our state of Ohio. Our state is where many of 10:12:57 4 the things that made America work were 10:12:58 5 manufactured. And our state has lost more than 10:13:00 6 170,000 manufacturing jobs just in the last four 10:13:03 7 years. 10:13:04 8 There's good reason for Ohioans and 10:13:06 9 every American to wonder whether the old truism 10:13:09 10 about GM may have become a bitter irony. There 10:13:13 11 is good reason to wonder if what is good for 10:13:14 12 Wal-Mart may, in fact, be very bad for America. 10:13:18 13 The purpose of today's hearing is to 10:13:20 14 explore these issues. We're fortunate to have 10:13:22 15 an excellent panel of witnesses offering an 10:13:22 16 academic perspective on the consequences of 10:13:26 17 Wal-Mart's global supply chain, a view from 10:13:28 18 national labor leadership to Ohio-focused 10:13:31 19 research perspective on the public costs, like 10:13:34 20 Medicaid and others, with Wal-Mart's private 10:13:37 21 success, the experience of a local small retail 10:13:39 22 business playing the role, if I may, of David to 10:13:42 23 Wal-Mart's Goliath, and the real-life stories of 10:13:47 24 American workers. 10:13:47 25 I appreciate their joining us today. 9 10:13:49 1 I look forward to their testimony as we seek to 10:13:51 2 answer the question, "Are Americas shopping 10:13:53 3 themselves out of a job?" 10:13:55 4 I will turn to my friend from -- are 10:14:00 5 you in the fifth district now? Close enough. 10:14:03 6 MR. KUCINICH: Close enough. 10:14:05 7 Thank you very much, Sherrod Brown, I 10:14:07 8 want to express on behalf of the community to 10:14:10 9 you our appreciation for you holding this 10:14:13 10 hearing, and for your tireless efforts on behalf 10:14:16 11 of the workers' rights, on behalf of fair trade 10:14:19 12 and human rights. 10:14:21 13 I can tell you, as a member of the 10:14:22 14 United States Congress, Sherrod Brown is 10:14:24 15 respected across this country as somebody who 10:14:27 16 raises these economic issues, and holding this 10:14:29 17 forum here is consistent with his commitment. 10:14:33 18 When we speak of Wal-Mart as a 10:14:36 19 business model, we are going to be presented 10:14:38 20 with evidence today that shows that this is a 10:14:42 21 business model that is not sustainable for the 10:14:43 22 United States of America, that Wal-Mart has 10:14:49 23 promoted low prices, but underneath its vaunted 10:14:55 24 stand for standard low prices is a company which 10:14:59 25 has systematically degraded the positions of 10 10:15:03 1 workers around this nation. 10:15:08 2 Wal-Mart has taken a business model 10:15:16 3 that we understood from the turn of the century 10:15:19 4 when huge trusts were developed, but it becomes 10:15:23 5 so powerful that they've just smashed smaller 10:15:25 6 businesses. And they've done it by driving down 10:15:29 7 wages and knocking out benefits. 10:15:31 8 If we had serious antitrust 10:15:35 9 enforcement in this country, we wouldn't be here 10:15:38 10 today, because the history of Wal-Mart is about 10:15:44 11 anticompetitive practices. Cut prices, run 10:15:48 12 their competition out of business, and then, 10:15:51 13 when they have the major holding place in the 10:15:55 14 market, that's when workers have no one to turn 10:16:01 15 to. That's when workers are at their mercy. 10:16:04 16 And we've seen that low prices now 10:16:06 17 equal low wages. Low prices now equal little or 10:16:10 18 no healthcare. Low prices now equals a weakened 10:16:16 19 position in the workforce for women and others. 10:16:20 20 Low prices now means that Wal-Mart is able to 10:16:23 21 lay off into the federal government many of the 10:16:26 22 expenses for healthcare that any reputable 10:16:31 23 corporation would make sure that their employees 10:16:36 24 recover it. 10:16:37 25 So, Sherrod, this hearing today, I 11 10:16:40 1 hope, is the new beginning for an effort that 10:16:48 2 not only inspects the Wal-Mart model, but also 10:16:51 3 asks: What is an appropriate model? What are 10:16:54 4 the changes we need to make in American society 10:16:57 5 today? Not only to affirm workers' rights and 10:16:59 6 human rights and environmental quality 10:17:02 7 principles, but also, what are the changes that 10:17:04 8 we need to make in American society today to 10:17:06 9 make sure that there is an increased awareness 10:17:09 10 on the part of not only business and government, 10:17:11 11 but on the part of consumers? 10:17:14 12 Because this is not only our 10:17:17 13 responsibility to analyze, we need to share this 10:17:20 14 information with consumers across this country 10:17:22 15 so that people can know the economic and moral 10:17:26 16 consequences of their own economic activity, of 10:17:30 17 their own purchases. 10:17:32 18 So, this is a good beginning, Sherrod 10:17:36 19 Brown, and I'm, again, grateful for your 10:17:39 20 leadership in this area. I know that we've been 10:17:41 21 joined by our colleague Congresswoman Stephanie 10:17:45 22 Tubbs Jones, in whose district we are. And 10:17:47 23 Cleveland does have a very strong representation 10:17:51 24 on these issues in the house, and I'm very 10:17:53 25 honored to have the opportunity to share it, so 12 10:17:56 1 ever briefly, this dais with my colleagues and 10:18:00 2 also with State Senator Hagan. 10:18:02 3 So thank you very much, and, Sherrod, 10:18:06 4 have a good hearing. 10:18:07 5 MR. BROWN: I will now call 10:18:09 6 on -- thank you very much, Congressman Kucinich, 10:18:12 7 for your always standing up for working 10:18:16 8 families. 10:18:16 9 I would like to call on State Senator 10:18:20 10 Bob Hagan from Youngstown, who is our 10:18:22 11 representative in the Mahoning Valley for many, 10:18:24 12 many years. Senator Hagan. 10:18:27 13 MR. HAGAN: Thank you, 10:18:27 14 Congressman, and thank you, of course, for your 10:18:29 15 leadership on this issue. I'm honored to be 10:18:32 16 here, a member of this panel in a couple of 10:18:37 17 ways. And the first and foremost, this is an 10:18:40 18 issue that, that you had mentioned, jumps out at 10:18:42 19 us that in almost every city and every juncture 10:18:46 20 and every opportunity that some of these 10:18:49 21 corporations have to take advantage of these 10:18:51 22 savings. 10:18:51 23 But even more so, I think that the 10:18:53 24 scary thing that we seem to forget is that -- 10:18:58 25 the devastation that it causes over a certain 13 10:19:01 1 amount of years. I remember 10 years ago I was 10:19:04 2 invited to Alliance, the City of Alliance, to 10:19:07 3 cut the ribbon for a Wal-Mart just outside of 10:19:09 4 the city, and I refused to go because of the 10:19:13 5 implications of what it would do to that small 10:19:16 6 town of Alliance. 10:19:17 7 And, in fact, 10 years later, there 10:19:20 8 are empty stores in the City of Alliance. But I 10:19:23 9 am from Youngstown. I'm used to the empty 10:19:25 10 stores. And the people that are left, we are a 10:19:27 11 city that at one time was 170,000, is now down 10:19:30 12 to 80,000. Almost 78,000, actually. And we 10:19:35 13 have seen that struggle, and we have seen the 10:19:37 14 devastation where corporations cut and run, take 10:19:41 15 their profits and move away. 10:19:43 16 And one of the reasons why I 10:19:44 17 introduced the Senate Bill 103, which is in the 10:19:49 18 Ohio Senate, is for those reasons. So many 10:19:51 19 people have suffered at the hands of 10:19:53 20 corporations. 10:19:56 21 Now, I'm moved by the fact that CEO 10:19:58 22 Scott Lee made $17 million in total compensation 10:20:03 23 last year, nearly twice the average of 10:20:06 24 $9.6 million for leading CEOs in the United 10:20:10 25 States. I come from Youngstown. We all come 14 10:20:12 1 from this northeastern Ohio section where, if 10:20:16 2 you're lucky, the median income is 28 to $30,000 10:20:22 3 a year. We really struggle. And we've seen 10:20:24 4 that struggle over and over again. 10:20:26 5 The reason why I introduced -- again, 10:20:27 6 the importance of introducing legislation like 10:20:29 7 this, and the reason why we introduce it is not 10:20:31 8 just to discuss it, but, in fact, to have an 10:20:34 9 impact on the way that we're doing things in the 10:20:38 10 State of Ohio. 10:20:39 11 I sent a letter almost a year and a 10:20:43 12 half ago to Governor Taft asking him to 10:20:45 13 determine what the Medicaid costs were related 10:20:50 14 to some of the corporations, particularly 10:20:52 15 Wal-Mart, in State of Ohio. We passed that 10:20:54 16 along to the Department of Jobs and Family 10:20:56 17 Services. They said that their computer system 10:20:58 18 was not capable of computing all of the money 10:21:01 19 that was being spent for healthcare in the State 10:21:04 20 of Ohio. 10:21:04 21 Think about that. They did not 10:21:06 22 understand exactly how much the cost would be 10:21:10 23 and exactly what the cost would be towards 10:21:12 24 Medicaid. If it's a job killer, if it's -- the 10:21:14 25 healthcare costs are killing us at this rate, we 15 10:21:18 1 should be able to make that determination. 10:21:22 2 I'm struck, too, by what was said in 10:21:23 3 "The New York Times" that says Wal-Mart says it 10:21:27 4 spends about $1.3 million of its $256 billion in 10:21:34 5 revenue last year on employee healthcare to 10:21:35 6 insure about 570,000 people, or about 45 percent 10:21:39 7 of its workforce. Wal-Mart says that 23 percent 10:21:42 8 of its employees are not eligible for coverage, 10:21:45 9 but it covers 58 percent of those who are. This 10:21:48 10 is unconscionable. 10:21:49 11 When I came to the legislature 17, 10:21:52 12 almost 18 years ago, there was 1.2 million 10:21:55 13 Ohioans without health insurance. Congressman, 10:21:57 14 now there are 1.4 million Ohioans without health 10:22:00 15 insurance. This is out of control, and 10:22:02 16 corporations have been a big part of that. Some 10:22:05 17 have been respected in what they have done for 10:22:08 18 some of their workers; but by and large, our 10:22:11 19 Medicaid rolls have grown, poverty rates have 10:22:14 20 increased and people have taken advantage of the 10:22:17 21 taxpayers in this state. 10:22:18 22 I'm glad to be here. I'm glad to 10:22:20 23 join and listen to -- join with you and listen 10:22:22 24 to some of the testimony from some of the people 10:22:24 25 that I think will help us make further 16 10:22:27 1 determinations on rectifying the situation. 10:22:29 2 Thank you. 10:22:29 3 MR. BROWN: Thank you. 10:22:30 4 We're also joined -- as you saw a 10:22:32 5 moment ago, she walked in -- Congresswoman 10:22:34 6 Stephanie Tubbs Jones, my colleague from this 10:22:37 7 district and mostly east of here and my 10:22:39 8 long-time friend. Stephanie is always out 10:22:41 9 front, as she was on the Wal-Mart issue earlier. 10:22:44 10 She's been at this a long time. She's always 10:22:47 11 out in front on issues that concern 10:22:48 12 socioeconomic justice, especially for working 10:22:50 13 families and working -- the working poor who are 10:22:52 14 left out of all of these equations all too 10:22:55 15 often. Congresswoman Tubbs Jones, welcome. 10:22:57 16 MS. TUBBS JONES: Thank you, Sherrod. 10:22:59 17 I'd like to thank my colleague 10:23:02 18 Sherrod Brown for his leadership on this issue. 10:23:04 19 He's on the Congress committee where we had an 10:23:06 20 opportunity to address many of the issues that 10:23:09 21 face our community. It's wonderful to have a 10:23:11 22 working relationship with him and Dennis 10:23:15 23 Kucinich and the Northeast Ohio Congress folks. 10:23:18 24 And I'm also glad to see my good friend 10:23:21 25 congressman Hagan -- how do you like that, 17 10:23:23 1 Congressman Hagan -- representative Hagan here. 10:23:26 2 My colleague Sherrod Brown raises the 10:23:33 3 issue, "Are Americans shopping themselves out of 10:23:35 4 a job?" It's a prolific statement. And we 10:23:38 5 think about the shopaholics as you walk around 10:23:41 6 on a Friday or Saturday in any community pretty 10:23:44 7 much in the United States of America, people are 10:23:47 8 just shopping. And they shop and they want the 10:23:50 9 best deal. But do they think about what the 10:23:52 10 best deal means for them? Do they think about 10:23:55 11 what it could actually mean to be able to pick 10:23:58 12 up a shirt and see it says "Made in America," 10:24:01 13 and what impact that has on the ability for us 10:24:04 14 to move forward? 10:24:05 15 Consumer education is one of our 10:24:06 16 greater challenges in developing strategies to 10:24:10 17 address the Wal-Mart trafficdom. Ohio, and 10:24:14 18 therefore America's, competitive edge is 10:24:16 19 inextricably tied to our ability to digest 10:24:19 20 critical information and to then develop an 10:24:21 21 action plan that moves us all forward. 10:24:24 22 I welcome today's opportunity to 10:24:25 23 further our collective education of Wal-Mart's 10:24:29 24 business practices, as well as the types of 10:24:31 25 actions we must take to be smart consumers and 18 10:24:34 1 informed advocates. 10:24:36 2 I'm opposed to Wal-Mart's superstore 10:24:38 3 in Steelyard Commons. Here's a few reason why 10:24:41 4 I'm opposed to the superstore, and I will 10:24:44 5 outline them briefly. Too often the retail 10:24:46 6 giants force local businesses to close and 10:24:47 7 reduce worker wages and benefits. Big-box 10:24:50 8 retailers such as Wal-Mart may believe they have 10:24:54 9 good intentions, but many times they tear apart 10:24:57 10 the economic infrastructure of communities. 10:24:59 11 I'm for economic development, so I 10:25:01 12 don't ever want you to think that I don't want 10:25:03 13 jobs, or jobs for the City of Cleveland, and 10:25:04 14 that I'm not going to be willing to do what it 10:25:07 15 takes to be able to bring those jobs. But I 10:25:09 16 believe in what many describe as higher economic 10:25:12 17 development, which can be done by providing 10:25:15 18 workers the wages and benefits necessary to 10:25:17 19 support a decent lifestyle. Yet working people 10:25:21 20 across the country, in Ohio and certainly in 10:25:23 21 Northeast Ohio have been devastated by dramatic 10:25:26 22 shifts in the global economy. 10:25:28 23 According to Nelson Lichtenstein, a 10:25:32 24 professor at the University of California, 10:25:34 25 Wal-Mart has reversed a hundred-year history 19 10:25:37 1 that has a retailer dependent on the 10:25:39 2 manufacturer. Now, the retailer is the center, 10:25:41 3 the power, and the manufacturer becomes the 10:25:44 4 serf, the underling who has to do the bidding of 10:25:47 5 the retailer. That's a new thing. 10:25:49 6 Another troubling factor that I know 10:25:52 7 today's panel will explore more fully is the 10:25:55 8 intimate connection between Wal-Mart and the 10:25:57 9 nation of China, and how that nation is 10:26:00 10 undercutting the living standards of workers 10:26:00 11 both in China and here in the United States. 10:26:04 12 The U.S. had a $162 billion trade deficit with 10:26:07 13 China in 2004, and is projected a 2 billion 10:26:11 14 deficit in 2005. 10:26:12 15 I know we're running out of time, so 10:26:14 16 I won't go through all the logistics. One of 10:26:15 17 the things I want to raise as well, however, is 10:26:17 18 Ohio's gender/racial disparities in employment. 10:26:20 19 They've become more pronounced in recent years, 10:26:24 20 and that's something we must pay attention to. 10:26:27 21 While Wal-Mart cannot be blamed for 10:26:30 22 discrimination, their track record as America's 10:26:32 23 number one private employer is not very 10:26:35 24 encouraging for those who are desperately trying 10:26:37 25 to improve their life's opportunities. 20 10:26:40 1 I want to acknowledge my appreciation 10:26:43 2 to Amy Hanauer, the Executive Director for 10:26:48 3 Policy Matters Ohio, for her work she has done, 10:26:49 4 including her report. I want to join with my 10:26:51 5 colleague Dennis Kucinich in sending a letter to 10:26:55 6 the President, calling on him to encourage 10:26:58 7 companies receiving government contracts to 10:26:58 8 rebuild the Gulf Coast region to hire local 10:27:02 9 residents. 10:27:02 10 And I'm also delighted to see 10:27:04 11 Mr. Saltzman, the president of Dave's 10:27:07 12 Supermarket. He has been the infrastructure for 10:27:10 13 retail grocery stores in our community when 10:27:13 14 people deserted the inner city of Cleveland, and 10:27:16 15 it will be a shame that we will allow someone 10:27:18 16 else to come into our community and devastate 10:27:20 17 his business. He's been there for our community 10:27:22 18 and we need to be there for him. And so I'm so 10:27:25 19 glad to see you here, Mr. Saltzman, and I look 10:27:27 20 forward to hearing your comments. 10:27:29 21 Again, I want to thank all of my 10:27:30 22 colleagues for calling this hearing. I'm glad 10:27:32 23 to be a part of it. Thanks, Sherrod, I'm done. 10:27:36 24 MR. BROWN: Stephanie, thank 10:27:37 25 you. 21 10:27:38 1 And I should have added in the 10:27:40 2 introduction, Stephanie is a member of the Ways 10:27:42 3 and Means Committee, which is the committee that 10:27:45 4 writes tax laws and really has major impact on 10:27:47 5 all of these kinds of corporate decisions that 10:27:50 6 have driven Wal-Mart's behavior. And if we had 10:27:53 7 more Stephanie Tubbs Joneses, we would see a 10:27:55 8 very different kind of committee. Do you agree 10:27:55 9 with that, Stephanie? 10:27:59 10 MS. TUBBS JONES: Of course. I'm 10:27:59 11 going to be president next. 10:28:06 12 MR. BROWN: We have two panels, 10:28:08 13 four witnesses will begin. Heather Boushey is 10:28:11 14 an economist with the Center for Economic and 10:28:14 15 Policy Research. Bob Baugh is the Executive 10:28:16 16 Director of the AFL-CIO Industrial Union 10:28:17 17 Council. Amy Hanauer is the Executive Director 10:28:20 18 of Policy Matters Ohio, and Burton Saltzman is 10:28:23 19 owner and chief executive of Dave's 10:28:26 20 Supermarkets. 10:28:27 21 We will begin with Heather for five 10:28:28 22 minutes, and anything you have written beyond 10:28:31 23 the five minutes will be submitted. 10:28:36 24 MS. BOUSHEY: Thank you very 10:28:37 25 much. 22 10:28:38 1 My name is Heather Boushey, and I'm a 10:28:38 2 research economist at the Center for Economic 10:28:41 3 and Policy Research, a nonpartisan research 10:28:43 4 institute in Washington, D.C. My job is to 10:28:47 5 examine how the current economy is or is not 10:28:49 6 benefitting American workers and their families 10:28:51 7 and the role of government in promoting a strong 10:28:53 8 labor market and ensuring a safe and decent 10:28:56 9 standard of living. It is truly an honor to be 10:28:58 10 here on this panel today to speak with you about 10:29:00 11 my concerns about Wal-Mart and their business 10:29:03 12 model. 10:29:03 13 As Americans, we typically think of 10:29:06 14 Wal-Mart as a benevolently -- or as a behemoth 10:29:11 15 eating up jobs. It's been reported that nearly 10:29:13 16 four out of five of us shopped at Wal-Mart last 10:29:16 17 year. But while we may like the low prices that 10:29:18 18 Wal-Mart offers, its way of doing business does 10:29:21 19 not lead to stable, well-paid employment for 10:29:23 20 many of the U.S. workers it hires, or those in 10:29:27 21 China and around the world who manufacture its 10:29:30 22 products. 10:29:30 23 Wal-Mart's business model is to offer 10:29:32 24 the lowest prices and the largest selection to 10:29:35 25 their customers. While this model is working 23 10:29:37 1 for Wal-Mart in the short term, in the long 10:29:40 2 term, it is unsustainable. Wal-Mart's low 10:29:42 3 prices mean ever-decreasing prices for its 10:29:45 4 suppliers, and low wages and few benefits for 10:29:47 5 its workers. 10:29:48 6 This model is destroying the kinds of 10:29:51 7 businesses that can pay a living wage, and, in 10:29:53 8 the process, the lives of workers here in the 10:29:55 9 United States and also around the world. 10:29:57 10 Wal-Mart's business model of "always 10:30:02 11 low prices" is achieved by cutting costs in all 10:30:05 12 aspects of their trade. They've effectively 10:30:08 13 focused on increasing their productivity, 10:30:10 14 keeping wages low for their employees, 10:30:12 15 maintaining pressure on suppliers to keep their 10:30:14 16 prices down and critically lobbying government 10:30:17 17 at all levels for increased access to 10:30:20 18 international suppliers and limited regulation. 10:30:22 19 They've increased their productivity 10:30:24 20 internally by keeping its doors connected to 10:30:26 21 distribution centers and suppliers. Further, 10:30:29 22 they keep inventories at a minimum by requiring 10:30:32 23 its suppliers strictly maintain their scheduling 10:30:35 24 deliveries. 10:30:35 25 By now, it is common knowledge that 24 10:30:37 1 Wal-Mart employees are paid relatively low wages 10:30:40 2 and offered few, if any, benefits. And I'll 10:30:42 3 leave it to my colleagues on this panel to 10:30:44 4 expand on this. And I, instead, will focus on 10:30:47 5 the effects upon Wal-Mart's suppliers. 10:30:49 6 Low wages and lack of benefits are 10:30:53 7 not only a problem for Wal-Mart workers here in 10:30:56 8 the retail businesses in the United States, but 10:30:59 9 Wal-Mart's business practices foster lower wages 10:31:01 10 for workers also abroad in industries that 10:31:05 11 supply their products. By trying to keep supply 10:31:08 12 costs down, Wal-Mart is continually putting 10:31:11 13 pressure on suppliers to cut prices and require 10:31:14 14 that they adopt Wal-Mart's business model as 10:31:16 15 well. 10:31:17 16 It's been reported that Wal-Mart 10:31:19 17 demands that the pricing must fall each year for 10:31:22 18 products that do not change, creating the need 10:31:24 19 for constant productivity gains for their 10:31:26 20 suppliers and falling prices that they can 10:31:29 21 demand. 10:31:30 22 Suppliers do not often benefit from 10:31:31 23 this relationship. In a recent study of 38 10:31:35 24 companies with high exposure to Wal-Mart, those 10:31:37 25 selling more of their product to Wal-Mart have 25 10:31:40 1 lower profit margins relative to those who 10:31:42 2 provide less of their business to Wal-Mart. 10:31:44 3 At home, this has led to ongoing 10:31:49 4 discussions about the effects of 10:31:51 5 Wal-Mart -- Wal-Mart's low wages on retail 10:31:53 6 workers. And then we have found that Wal-Mart 10:31:57 7 does bring prices down; however, Wal-Mart's 10:32:00 8 business model also has a host of undesirable 10:32:03 9 effects. The entry of Wal-Mart into a community 10:32:06 10 is associated with, among other things, loss of 10:32:08 11 small family-owned businesses, higher growth of 10:32:12 12 poverty or slower declines in poverty reduction, 10:32:15 13 greater expenditure of public benefits for 10:32:18 14 low-wage workers and environmental degradation. 10:32:20 15 The business model also has a 10:32:23 16 profound effect on manufacturing production and 10:32:23 17 labor conditions both here and abroad. Wal-Mart 10:32:27 18 has been accused repeatedly of using sweatshops 10:32:29 19 to supply its goods. "Dateline NBC" aired a 10:32:33 20 segment in 1993 exposing goods made by child 10:32:37 21 workers in Bangladesh. They did a similar story 10:32:40 22 this past June exposing the exact same problem. 10:32:43 23 Ironically, from 1985 until '93, 10:32:47 24 Wal-Mart had promoted its "Buy American" 10:32:50 25 campaign in the midst of growing consumer 26 10:32:52 1 anxiety about imports. But as late as 1992, 10:32:55 2 Wal-Mart CEO David Glass told "Business Week" 10:32:55 3 that he would pay up to a 5 percent premium for 10:32:59 4 U.S.-made goods. However, today's reality is 10:33:02 5 that Wal-Mart is now China's eighth largest 10:33:05 6 trading partner and accounts for 10 percent of 10:33:10 7 China's imports into the United States. 10:33:11 8 It is estimated that 70 percent of 10:33:12 9 Wal-Mart's products are now produced in China, 10:33:15 10 and about half of these are direct while the 10:33:18 11 rest come through the suppliers. 10:33:21 12 Wal-Mart's business model depends on 10:33:24 13 limited government regulation of its labor 10:33:26 14 practices and business methods, along with the 10:33:29 15 subsidies for its infrastructure development to 10:33:31 16 support the living standards of its poorly paid 10:33:33 17 workers. 10:33:34 18 Wal-Mart actively pursues a 10:33:36 19 Wal-Mart-friendly policy in national, state and 10:33:39 20 international capitals in its attempts to 10:33:42 21 undermine locally- and nationally-controlled 10:33:45 22 regulatory structures. It's been reported that 10:33:47 23 Wal-Mart spend $4.6 million lobbying Congress 10:33:51 24 between 1998 and '04, spending 1.2 million in 10:33:55 25 2004 alone. 27 10:33:56 1 As Wal-Mart looks to expand 10:33:58 2 internationally and increasingly import their 10:34:01 3 goods, they focused on international trade 10:34:03 4 agreements and lobbying the U.S. Trade 10:34:06 5 Representative's Office to reduce quotas on 10:34:08 6 textile imports from China. 10:34:11 7 Critically, Wal-Mart does not 10:34:13 8 recognize that its customers are workers and 10:34:15 9 that a business model based on squeezing wages 10:34:19 10 limits demand for the very products that these 10:34:21 11 workers produce. 10:34:23 12 Wal-Mart shoppers need a bargain, but 10:34:26 13 creating an economy based on low wages is not a 10:34:29 14 bargain in the long run. Because of its 10:34:31 15 prominence as an employer and a retailer, 10:34:34 16 Wal-Mart's business model, both its labor 10:34:36 17 practices and its relationship with suppliers, 10:34:38 18 are likely to be emulated by other companies out 10:34:40 19 of necessity or admiration unless we do 10:34:43 20 something to increase regulation or to stop 10:34:45 21 them. Thank you. 10:34:47 22 MR. BROWN: Thank you, 10:34:48 23 Ms. Boushey. 10:34:49 24 Mr. Baugh? 10:34:50 25 MR. BAUGH: Good morning. I 28 10:34:51 1 would like to thank the members of this 10:34:53 2 committee for holding this hearing. It's very 10:34:55 3 important to make sure the connection between 10:34:57 4 the business practices of Wal-Mart and what has 10:35:00 5 happened to that outsourcing of American jobs. 10:35:04 6 My name is Robert Baugh. I'm the 10:35:07 7 Executive Director of the AFL-CIO Industrial 10:35:11 8 Union Council. And the unions in this council 10:35:12 9 represent the major manufacturing unions in the 10:35:14 10 United States. We're representing millions of 10:35:15 11 manufacturing workers across the country. 10:35:18 12 Our unions and our members have grave 10:35:21 13 concerns about the future of manufacturing in 10:35:22 14 the economy. There's something fundamentally 10:35:25 15 flawed with the business practices of our 10:35:27 16 largest corporations. 10:35:29 17 Over the past decade, a dominant 10:35:31 18 business model supported by government tariffs 10:35:33 19 and trade policy has emerged in the American 10:35:37 20 economy that promotes outsourcing and 10:35:40 21 off-shoring of American manufacturing. The loss 10:35:41 22 of our manufacturing capacity, intellectual and 10:35:44 23 technical capacity to make things, is a profound 10:35:47 24 threat to the nation's economy and the national 10:35:50 25 security. 29 10:35:50 1 Wal-Mart, the largest corporation in 10:35:52 2 American, has been a leading practitioner and 10:35:54 3 developer of this model. In a report that's 10:35:58 4 been submitted this morning, "Wal-Mart Imports 10:36:00 5 from China, Exports Ohio Jobs," documents the 10:36:02 6 costs of these practices to the State of Ohio 10:36:04 7 and profiles the experience of four Ohio 10:36:07 8 manufacturers: Huffy, Rubbermaid, Mr. Coffee 10:36:10 9 and Thomson Industries, that used to make RCA 10:36:15 10 TVs. 10:36:16 11 The cause of this flawed business 10:36:17 12 model, these firms, when we talk about what's 10:36:20 13 happened to them, represent a tidal wave of 10:36:22 14 manufacturing job losses that occurred in Ohio 10:36:25 15 and across the country. Over the past four 10:36:28 16 years, the U.S. lost more than 2.9 million 10:36:32 17 manufacturing jobs. 170,000 of these were lost 10:36:34 18 between January 2001 and July of 2004 in the 10:36:37 19 state of Ohio alone. Seventeen percent of your 10:36:39 20 manufacturing jobs disappeared. One in six of 10:36:42 21 them. 10:36:44 22 Cleveland alone lost 40,000 10:36:46 23 manufacturing jobs in that same period. And 10:36:48 24 believe me, there's a direct relationship, as 10:36:51 25 the Senator pointed out, between the loss of 30 10:36:53 1 good manufacturing and the opposite to provide 10:36:56 2 healthcare and those that don't. 10:36:58 3 The trade picture tells the other 10:37:00 4 side of the story, and that's a disaster. The 10:37:04 5 666 billion overall trade deficit in 2004, 10:37:07 6 headed towards 700 billion this year. More than 10:37:11 7 6 percent of our gross domestic product is 10:37:11 8 outrageous, it's unsustainable and is absolutely 10:37:16 9 dangerous to our economy. 10:37:16 10 And over the past five years, our 10:37:18 11 so-called free trade policies with the Chinese 10:37:20 12 government has resulted in the largest bilateral 10:37:22 13 trade deficit between any two countries in the 10:37:24 14 history of the world. The Economic Policy 10:37:27 15 Institute estimates it cost us 410,000 10:37:30 16 manufacturing jobs in the last two years. 10:37:34 17 And in 2004, as Congresswoman Tubbs 10:37:38 18 Jones pointed out, we've lost. It's cost us 10:37:41 19 $162 billion in a deficit there that is now 10:37:44 20 headed to exceed $200 billion. 10:37:46 21 None of this should come as any 10:37:48 22 surprise. China's entry in the world trade has 10:37:51 23 been built on an export strategy supported by 10:37:54 24 systematic violations of workers' rights, weak 10:37:57 25 environmental standards, currency manipulation 31 10:37:57 1 and illegal subsidies. All of these illegal 10:38:00 2 under our own laws. And the U.S. government 10:38:04 3 chooses to ignore these violations while 10:38:06 4 Wal-Mart and other large manufacturers exploit 10:38:08 5 them. 10:38:09 6 The Wal-Mart model, as others have 10:38:11 7 already discussed, they used to advertise they 10:38:13 8 made things here. Well, today, over 60 percent 10:38:16 9 of their products are made in China. In 2004, 10:38:19 10 $18 billion worth of imports were brought in by 10:38:24 11 China and represented nearly 12 percent of the 10:38:27 12 trade deficit. They required different vendors 10:38:27 13 to manufacture overseas to supply their products 10:38:30 14 at lower prices. 10:38:30 15 Huffy, Rubbermaid, Mr. Coffee and 10:38:33 16 Thomson and many more Ohio firms have felt this 10:38:36 17 squeeze. And they squeeze their workers the 10:38:38 18 same way. They lower wages and benefits, fewer 10:38:41 19 workers are insured there. They must pay for 10:38:44 20 more of their premiums than other firms of 10:38:47 21 comparable nature, and the company spends less 10:38:49 22 than half than what most firms do for health 10:38:52 23 insurance. And they also make sure they keep it 10:38:54 24 that way by aggressively opposing any organizing 10:38:54 25 efforts domestically and internationally. 32 10:38:57 1 Just recently in Canada, they closed 10:38:59 2 a store that organized. And to quote last week 10:39:02 3 in "Business Week," Li Qiang, the head of the 10:39:07 4 government-sponsored All China Federation of 10:39:07 5 Trade Unions, which is sponsored by the 10:39:09 6 government, was quoted as saying, well, their 10:39:12 7 workers aren't willing to join the union because 10:39:14 8 they're not willing to risk their employment 10:39:16 9 with Wal-Mart. They will oppose any efforts of 10:39:18 10 workers to organize here and abroad. They will 10:39:23 11 impose the Employee Free Choice Act, which is 10:39:23 12 currently before Congress. 10:39:25 13 And I would like to thank the 10:39:26 14 Congressional representatives that were here 10:39:28 15 this morning because you have signed on in 10:39:30 16 support of that act. It will support any 10:39:32 17 attempt to enforce their own trade laws under 10:39:34 18 section 301 of the Trade Act, and they will not 10:39:37 19 support any enforceable labor standards in our 10:39:40 20 trade agreements. 10:39:42 21 It is such a big company that holds 10:39:44 22 the fate of the country in its hands. That's 10:39:47 23 been pointed out by numerous academics. And 10:39:50 24 that is the Ohio story. With Huffy in Celina, 10:39:53 25 Rubbermaid, Wooster, Mr. Coffee in Glenwillow, 33 10:39:57 1 Thomson in Circleville, World Kitchen in 10:39:59 2 Massillon and many, many others. They're all 10:40:02 3 casualties to the Wal-Mart way of doing 10:40:04 4 business, and it is a story that is repeated 10:40:06 5 across the country. 10:40:08 6 It seems that the Wal-Marts in the 10:40:11 7 world dictate our national interest, but no one 10:40:14 8 wants to ask the big questions. And here they 10:40:16 9 are: Should free market ideology throughout the 10:40:19 10 common sector, the exploitation of workers from 10:40:20 11 one side of the globe to the other, morally, 10:40:23 12 economically be a justified business model? 10:40:25 13 Does this business model work for this state, 10:40:28 14 for this country? I would argue they do not. 10:40:29 15 We are investing because of this seed 10:40:32 16 corn of our future in other nations. The loss 10:40:35 17 of our R&D capacity, the loss of our ability to 10:40:39 18 make things, the loss of our ability to 10:40:42 19 innovate, the loss of those skills. Not just 10:40:44 20 the frontline jobs, but all of the system means 10:40:47 21 the next investment, the next best idea, the 10:40:50 22 next product generation, the next innovation 10:40:52 23 will be made someplace else, and the investment 10:40:55 24 will be made someplace else. And that is a 10:40:58 25 threat to our economy and the nation's future. 34 10:41:00 1 It is the seed capital. 10:41:02 2 We have a few recommendations that I 10:41:03 3 would quickly like to make. 10:41:05 4 One, stronger trade laws domestically 10:41:08 5 and internationally to prevent employer 10:41:11 6 suppression of workers' right to organize and 10:41:13 7 bargain here and abroad. Here is the Employee 10:41:16 8 Free Choice Act. Abroad, it's enforcement of 10:41:19 9 our own trade laws in section 301 and the 10:41:23 10 strengthening of those laws and strengthening of 10:41:23 11 our trade agreements. 10:41:24 12 By revision in our tax codes that 10:41:26 13 would eliminate the incentives to employers to 10:41:29 14 move production overseas and punish those that 10:41:31 15 do. Make it costly. We don't. We incent these 10:41:34 16 activities. It's insane. It makes no sense. 10:41:37 17 But that is what is happening in our economy. 10:41:40 18 Action at the state and federal level 10:41:42 19 to require these large employers to pay their 10:41:44 20 fair share of health costs. It's ridiculous, 10:41:47 21 this has become a competitive action against 10:41:50 22 American workers. 10:41:50 23 Fair trade policies to ensure that we 10:41:53 24 bring down the trade deficit and immediate 10:41:57 25 intervention to address the unfair trade 35 10:41:59 1 practices of China and other nations, including 10:42:01 2 legislation to ensure China meets international 10:42:05 3 obligations regarding fair trade. Particularly, 10:42:06 4 House Resolution 1498, sponsored by your fellow 10:42:09 5 Congressman Tim Ryan from Ohio and Duncan 10:42:15 6 Hunter, a Republican. It's a bipartisan effort 10:42:17 7 that's WATO compliant and it has to make sense 10:42:21 8 if we can do it in this Congress. 10:42:21 9 In summary, this nation is suffering 10:42:22 10 from outsourcing of the business model in the 10:42:25 11 Wal-Marts of the world. It is flawed, it is 10:42:27 12 wrong, it is dangerous and it is a threat to our 10:42:30 13 national security. Unless something is done, 10:42:31 14 the casualty list of Ohio manufacturers and 10:42:34 15 workers who have lost their jobs will continue 10:42:37 16 to grow. It is time to act. Thank you. 10:42:38 17 MR. BROWN: Bob, thank you. 10:42:42 18 MS. HANAUER: I wanted to just 10:42:43 19 start by thanking Congressman Brown, Stephanie 10:42:46 20 Tubbs Jones and Senator Hagan for holding this 10:42:48 21 hearing on this very vital issue and for 10:42:49 22 generously inviting me to testify. I'm very 10:42:51 23 honored to be in the company of this insightful 10:42:55 24 panel. I've learned a lot from both Bob and 10:42:55 25 Heather and the panel of leaders. 36 10:42:56 1 Policy Matters Ohio is a nonprofit, 10:42:58 2 nonpartisan policy research institute, 10:42:58 3 headquartered in Cleveland with an office in 10:42:58 4 Columbus, and our studies can all be found on 10:43:00 5 the web at www.policymattersohio.org. 10:43:04 6 We have long discussed the difference 10:43:06 7 between what we call the high road and the low 10:43:09 8 road to economic development. High road 10:43:11 9 companies, as Congresswoman Jones mentioned, pay 10:43:14 10 relatively high wages for their sectors, they 10:43:17 11 provide benefits, including health insurance and 10:43:19 12 retirement benefits. They're receptive to 10:43:21 13 unions and other workers' organizations and they 10:43:24 14 provide training and they tend to be rooted in 10:43:26 15 their communities. 10:43:28 16 Low road companies pay less than 10:43:29 17 their competitors, they provide inadequate 10:43:31 18 benefits, they seek to compete always on price 10:43:34 19 instead of on quality. They actively fight 10:43:36 20 unionization efforts. They don't train their 10:43:37 21 workforce. They're less rooted in their 10:43:39 22 communities and they often seek to extract 10:43:41 23 concessions from their communities in the forms 10:43:43 24 of tax breaks or relaxation of zoning, 10:43:48 25 environmental or other standards. 37 10:43:48 1 When any business enters a community, 10:43:50 2 it contributes some resources and it uses 10:43:53 3 others. And the main resources it contributes 10:43:56 4 are wages paid to employees and taxes. But 10:43:59 5 businesses use many resources as well. They use 10:44:01 6 water, oil, land, natural resources and 10:44:03 7 sometimes they pollute heavily. They use human 10:44:06 8 resources, and they use infrastructure like 10:44:08 9 roads, bridges, electricity, telephone, public 10:44:10 10 services like fire and police protection, 10:44:13 11 garbage collection and waste disposal and the 10:44:15 12 education system. So it's always a tradeoff. 10:44:17 13 And if a company compensates 10:44:19 14 employees well and contributes significantly to 10:44:22 15 the tax base without imposing huge environmental 10:44:25 16 costs, then it provides a clear benefit to the 10:44:28 17 area economy. For companies that pay very 10:44:29 18 poorly, pollute excessively or avoid taxes, the 10:44:33 19 contribution is much murkier. 10:44:36 20 I believe that public policy should 10:44:37 21 help to close off the low road and help pave the 10:44:40 22 high road so that our resources are devoted to 10:44:43 23 helping those companies that train, that 10:44:44 24 compensate, that show commitment to their 10:44:46 25 workers and that contribute in other ways to the 38 10:44:49 1 public good. 10:44:50 2 Job quality, in particular, matters, 10:44:52 3 and poor jobs really do have public costs. We 10:44:56 4 as a society provide some basics through the 10:44:58 5 public sector if they're not provided through 10:45:01 6 employment. And you are all very familiar with 10:45:03 7 these things. These include cash assistance 10:45:06 8 through the Temporary Assistance to Needy 10:45:08 9 Families program, health insurance often through 10:45:11 10 Medicaid, food stamps, on heating bill 10:45:13 11 assistance, subsidized school lunch, child care 10:45:15 12 and housing vouchers. These are some examples. 10:45:16 13 And it's important to note that not 10:45:18 14 all families qualify for all of these, so, many 10:45:20 15 people who are in need don't get these programs. 10:45:23 16 But -- and even those who are eligible don't 10:45:26 17 always get them because sometimes they're not 10:45:28 18 fully funded. But these are some safety net 10:45:31 19 programs that exist, and they're one way that we 10:45:34 20 can quantify the cost to our public society of 10:45:37 21 having employers like Wal-Mart. 10:45:38 22 And I just should also point out that 10:45:41 23 it's important these programs continue to exist. 10:45:42 24 If these programs did not exist, things would be 10:45:45 25 much worse. But they are one way that we can 39 10:45:47 1 cut down and sort of quantify what Wal-Mart 10:45:49 2 costs us. 10:45:49 3 Employers that compensate poorly have 10:45:51 4 workers who have to rely on these programs to 10:45:53 5 meet basic needs. So on some level, other 10:45:56 6 employers or other citizens are subsidizing 10:45:59 7 these employers. Those employers that are 10:46:00 8 paying taxes and also paying for healthcare for 10:46:03 9 their workers are helping to subsidize a company 10:46:07 10 like Wal-Mart. 10:46:08 11 Wal-Mart made $10.38 billion in 10:46:10 12 profits last year, or $20,000 a minute. Some of 10:46:12 13 these profits come with high costs for the 10:46:15 14 public. Time doesn't permit me to say all of 10:46:17 15 the examples, but my written testimony is out 10:46:18 16 there on the table outside. It documents that 10:46:21 17 most Wal-Mart employees don't get healthcare 10:46:23 18 through work, that tens of thousands of Wal-Mart 10:46:26 19 employees in other states are on Medicaid and 10:46:28 20 cost us tens of millions of dollars to stay 10:46:28 21 covered. 10:46:31 22 And if Senator Hagan's bill passes, 10:46:35 23 we will be able to perhaps say what that costs 10:46:37 24 the State of Ohio. 10:46:37 25 The Wal-Mart employees are paid less 40 10:46:39 1 than other retail and much less than non-retail 10:46:41 2 jobs. The average compensation for an hourly 10:46:43 3 employee at Wal-Mart is just $17,000 a year. I 10:46:46 4 also discuss how Wal-Mart has been accused or 10:46:49 5 found guilty of making employees work off the 10:46:51 6 clock, failing to provide breaks, firing those 10:46:54 7 who try to unionize, suppressing accident 10:46:57 8 reports and Workers' Comp claims, discriminating 10:47:01 9 on the basis of race, disability and gender. 10:47:02 10 And in this last one, they are the 10:47:04 11 subject of what could be the largest employment 10:47:06 12 class action suit in U.S. history, violating 10:47:09 13 child labor laws by having children operate 10:47:11 14 dangerous machinery and work long hours, and 10:47:14 15 having subcontractors that broke the minimum 10:47:18 16 wage laws. 10:47:19 17 Finally, separate from these 10:47:21 18 violations, as Heather outlined, Wal-Mart has 10:47:24 19 often driven suppliers to shift production to 10:47:24 20 low-wage countries, and that's obviously of 10:47:26 21 special concern to states like Ohio. 10:47:29 22 In sum, Wal-Mart has received many 10:47:33 23 hundreds of millions of dollars in public 10:47:34 24 subsidies nationally, including more than 10:47:35 25 $40 million from Ohio projects. Despite having 41 10:47:38 1 more than $10 million in profits last year, it 10:47:40 2 has failed to provide its employees with 10:47:42 3 adequate compensation, forcing many of them to 10:47:45 4 turn to the public sector for basic needs like 10:47:47 5 health insurance. 10:47:48 6 Wal-Mart has driven out local 10:47:49 7 manufacturing and local retail employers and 10:47:53 8 contributed to suburban sprawl and reduced urban 10:47:57 9 vitality. This is not the kind of model we 10:47:59 10 should be subsidizing or embracing. 10:48:02 11 Thank you for inviting me to testify 10:48:03 12 today, and I'll be happy to take questions at 10:48:05 13 the end. 10:48:06 14 MR. BROWN: Thank you 10:48:08 15 Ms. Hanauer. 10:48:08 16 Mr. Saltzman? 10:48:10 17 MR. SALTZMAN: I also would like 10:48:11 18 to thank you for giving me the opportunity and 10:48:13 19 the interest you have shown in this subject that 10:48:18 20 is very close to Dave's Supermarkets. I am the 10:48:20 21 owner and chief executive officer of Dave's 10:48:24 22 Supermarkets. 10:48:25 23 With me today is my son Danny, who I 10:48:27 24 recently appointed as president of our company. 10:48:30 25 I am also in business with my younger son 42 10:48:33 1 Steven. Dave was my father, and he joined my 10:48:37 2 grandfather, Alex, some 70-some years ago. So 10:48:42 3 actually, we're the fourth generation right now, 10:48:45 4 and Danny's son started working for us part 10:48:48 5 time, so actually, we're five generations, which 10:48:51 6 is not too bad. 10:48:52 7 We operate seven stores in the City 10:48:55 8 of Cleveland, one in Euclid, one in the City of 10:48:59 9 Akron. Since 1993, we at Dave's have invested 10:49:03 10 over $30 million in first-class supermarkets in 10:49:07 11 Cleveland -- Cleveland's neighborhoods, spurring 10:49:10 12 further investment in both housing and retail 10:49:14 13 business. 10:49:15 14 A typical example of this is our 10:49:17 15 store in Ohio City. I remember when Mayor White 10:49:20 16 called me and I said, "Oh, my God. What does 10:49:23 17 Mayor White want from me?" And he said, "I want 10:49:26 18 you to build a store in Ohio City." 10:49:29 19 And, you know, we went down to that 10:49:30 20 area and we looked, and there was really nothing 10:49:33 21 there then. I mean, it was like -- but the 10:49:36 22 mayor wanted it, so I talked to my son and 10:49:39 23 somehow, with the help of the city and that, we 10:49:42 24 built that store in Ohio City. And I challenge 10:49:46 25 any of you to go down to Ohio City today and 43 10:49:48 1 look. 10:49:49 2 My only mistake, I should have bought 10:49:51 3 some property around there when I -- when we 10:49:55 4 built the store. But right outside of our store 10:49:57 5 there are condos selling for half a million 10:49:59 6 dollars. And if somebody would have told me 10:50:02 7 that when we owned the store, I would have told 10:50:04 8 them good luck. But it goes to show you that a 10:50:08 9 food store, food shopping in any type of 10:50:10 10 neighborhood is the nucleus of what brings out a 10:50:13 11 neighborhood. 10:50:14 12 We have been in business for more 10:50:16 13 than 75 years. We have catered to the unique 10:50:20 14 needs of the urban neighborhoods it serves. We 10:50:23 15 treat all customers with respect and dignity, 10:50:26 16 whether rich or poor, black or white, Chinese, 10:50:32 17 Asian, Spanish. We have always -- that has been 10:50:36 18 our -- our motto, trying to cater each store to 10:50:40 19 the type of neighborhood that we serve. 10:50:42 20 We at Dave's Supermarket believe 10:50:50 21 quality food shopping is an essential ingredient 10:50:53 22 in the ability of Cleveland's neighborhoods to 10:50:55 23 retain and attract residents. Recognizing this 10:50:57 24 need, the City of Cleveland itself has invested 10:51:00 25 in several of Dave's initiatives. Wal-Mart's 44 10:51:03 1 entrance at the Cleveland's urban market 10:51:06 2 promises to cause consolidation among current 10:51:09 3 operators, among us, while further deterring 10:51:14 4 future investments in already challenging 10:51:18 5 environments. 10:51:19 6 Yet we realize that there are 10:51:20 7 neighborhoods that need more food shopping 10:51:27 8 and -- before this Wal-Mart deal came into 10:51:29 9 being, we were looking at some of these 10:51:31 10 neighborhoods, the Collinwood area, an area in 10:51:35 11 East Cleveland. We know that our type of store, 10:51:39 12 a small neighborhood store, would be great, but 10:51:41 13 with Wal-Mart coming in right now, that puts a 10:51:44 14 big question mark. We have to wait and see what 10:51:47 15 our future will bring. 10:51:50 16 In addition -- in addition to quality 10:51:53 17 services Dave's Markets has brought to Cleveland 10:51:56 18 neighborhoods, it employs nearly 1,000 people. 10:52:00 19 Currently, Dave's Markets will pay its employees 10:52:02 20 over $14 million in wages in 2005. We 10:52:07 21 contribute almost $2 million to their employee 10:52:11 22 health and welfare fund, and close to a half a 10:52:14 23 million dollars to their pension funds. 10:52:16 24 As a union employer, Dave's workers 10:52:19 25 are provided both a fair wage and benefits. We 45 10:52:24 1 at Dave's carry an ever increasing financial 10:52:27 2 burden of health insurance for its -- for its 10:52:29 3 employees. The costs of this is not 10:52:33 4 passed -- is not passed on in any way to any of 10:52:36 5 our employees. 10:52:37 6 Bringing Wal-Mart to our already 10:52:39 7 impoverished city will result in the imminent 10:52:44 8 loss of union jobs, good-paying jobs, and does 10:52:47 9 nothing to raise the standard of living among 10:52:49 10 the Cleveland residents. 10:52:51 11 We at Dave's Market believe in the 10:52:54 12 healthy competition a capitalistic society 10:52:57 13 promotes; however, Wal-Mart's predatory 10:53:01 14 practices are designed to eliminate and 10:53:03 15 obliterate competition. Short-term consumer 10:53:06 16 benefits would be lost in the absence of future 10:53:09 17 competition. 10:53:10 18 Cities and municipalities across the 10:53:13 19 country have enacted legislation designed to 10:53:17 20 promote responsible economic development. 10:53:20 21 Without such steps, the fabric of our community 10:53:23 22 may be negatively impacted forever. 10:53:28 23 We at Dave's, though -- if you look 10:53:32 24 at the study across the country, you know, 10:53:36 25 we -- maybe we're small compared to many of the 46 10:53:39 1 businesses, but look at what Wal-Mart has done 10:53:42 2 to major food chains across the country. They 10:53:45 3 are no longer here. We are peanuts compared to 10:53:47 4 them. Whether we're going to be able to sustain 10:53:52 5 ourselves in the future remains to be seen. 10:53:55 6 We have always been proud. I was 10:53:58 7 always proud to be, you know, the backbone of 10:54:02 8 the city, and things have finally been going 10:54:05 9 good. It was always fun to compete against 10:54:08 10 another employer that pays union wages, that 10:54:12 11 pays health and welfare. But to compete against 10:54:15 12 this animal, we don't know yet. And our future, 10:54:21 13 remains quite in question. We hope that with 10:54:26 14 your help and with the help of our customers, 10:54:29 15 we'll be able to compete and stay around. Thank 10:54:33 16 you very much. 10:54:34 17 MR. BROWN: Thank you, 10:54:35 18 Mr. Saltzman. I'd like to start with you, 10:54:37 19 Mr. Saltzman, if I could. The way we will do 10:54:41 20 this, I will ask questions for five minutes, and 10:54:44 21 Congresswoman Tubbs Jones will and Senator Hagan 10:54:46 22 will. Any of you can jump in on any of these 10:54:50 23 questions if you like. But I would like to 10:54:51 24 start with Mr. Saltzman. 10:54:54 25 I -- Ms. Boushey talked about the 47 10:54:57 1 Wal-Mart business model of everything from 10:55:00 2 squeezing suppliers to paying lower wages to, 10:55:02 3 under most cases, not paying health benefits. 10:55:05 4 You've obviously run a company now for four or 10:55:08 5 five generations. With paying decent wages and 10:55:14 6 benefits, having a relatively low turnover, from 10:55:17 7 my understanding, and what -- where does -- up 10:55:23 8 against this business model that you talked 10:55:25 9 about, competing with this animal, as you said, 10:55:28 10 what should government both in the local and 10:55:30 11 federal level do to try and level the playing 10:55:35 12 field so it is like you're competing with people 10:55:38 13 who are paying decent wages and benefits? 10:55:41 14 MR. SALTZMAN: Well, we're union, 10:55:44 15 our employees are all union. We wouldn't mind 10:55:49 16 competing against a Wal-Mart if they were on the 10:55:52 17 same playing field. I mean, we know that they 10:55:54 18 can buy better than us, we know that they can 10:55:56 19 control a lot of your people that they do 10:56:00 20 business with; but at least, you know, bring the 10:56:02 21 healthcare and the pension where they would be 10:56:07 22 paying their people the same as we're paying our 10:56:10 23 people. That would level the playing field 10:56:12 24 somewhat. 10:56:13 25 Of course, it's still a big 48 10:56:15 1 disadvantage, but at least it's something that 10:56:17 2 we know that we're somewhere, you know, not here 10:56:22 3 and here, but maybe here and here. 10:56:25 4 (Indicating.) 10:56:25 5 And, you know, the only thing that we 10:56:29 6 can control in our stores is wages. We've got 10:56:31 7 to keep the lights on, we have to -- we have to 10:56:35 8 pay gas, we have to pay everything. But, you 10:56:38 9 know, to at least bring wages where somehow 10:56:42 10 we're in the same playing field with them and 10:56:45 11 the health and welfare, we're -- you know, what 10:56:48 12 we pay an average employee, they pay an average 10:56:52 13 employee. Then at least we will know that we're 10:56:55 14 somehow, you know, close to the same. 10:56:58 15 MR. BROWN: Mr. Baugh, as you 10:57:03 16 know, about a month ago, month and a half ago, 10:57:06 17 Congress, in the middle of the night -- votes 10:57:09 18 we're now famous for, they rolled over it for an 10:57:12 19 hour -- passed CAFTA, the Central American Free 10:57:15 20 Trade Agreement, 217 to 215, which is, 10:57:15 21 seventy-one voted and just wanted it switched, 10:57:19 22 signed and defeated. 10:57:20 23 You talked a lot about trade policy. 10:57:23 24 Give -- both in terms of trade policy the U.S. 10:57:28 25 has passed and especially the bilateral trade 49 10:57:30 1 policy with China, give me one or two examples 10:57:33 2 of what Congress should do, what the USTR should 10:57:36 3 do in enforcing and invoking section 301 and 10:57:39 4 what we should do in Congress in terms of better 10:57:42 5 trade policy, especially with China. 10:57:45 6 MR. BAUGH: Well, Congressman, 10:57:46 7 as you may know, we actually had participated in 10:57:48 8 two trade cases in the last year for worker 10:57:51 9 rights in China, section 301, which the 10:57:54 10 administration threw out and ignored. 10:57:57 11 In the currency manipulation case 10:57:59 12 against the Chinese government with a huge 10:58:02 13 coalition of businesses, that the administration 10:58:02 14 threw out and has ignored promising a better 10:58:04 15 way. Nothing has changed. And Congress 10:58:07 16 actually tried to take action, and we remember 10:58:09 17 you supported a currency manipulation case. But 10:58:13 18 these things are going to come back. 10:58:15 19 One thing Congress can do I already 10:58:17 20 mentioned, is support and pass House Resolution 10:58:20 21 1498. That really focuses on this currency 10:58:24 22 issue. And it applies not only on China but to 10:58:28 23 all countries. This is a big, big, serious 10:58:30 24 issue. 10:58:30 25 I think the second issue that is just 50 10:58:31 1 as costly with all the business partners we have 10:58:34 2 talked to to get them to understand, that as 10:58:38 3 Mr. Saltzman just pointed out, you've got to 10:58:42 4 think about enforcing trade standards around 10:58:44 5 worker environment, around worker rights in 10:58:46 6 these countries and in trade negotiations that 10:58:49 7 we negotiate. I mean, Mr. Portman is out there 10:58:51 8 doing this. 10:58:52 9 And we passed CAFTA, and each one of 10:58:55 10 you stood up and voted no. Because you 10:58:58 11 objected, you understand the connection between 10:58:58 12 the lack of worker rights and the fundamental 10:59:03 13 Keynesian economics that says workers have the 10:59:04 14 right to organize, they will take care of their 10:59:07 15 wages and benefits in the long run. And that's 10:59:09 16 how you do base those things. So I think that's 10:59:12 17 an important step you can take. 10:59:13 18 I think there's other things around 10:59:15 19 tax policy that, in fact, undergirds, 10:59:18 20 underscores the trade policies we have in place. 10:59:21 21 With trade policies in place that encourage job 10:59:23 22 outsourcing and allow this, and at the same 10:59:26 23 time, our tax policies that encourage businesses 10:59:29 24 to do that and related issues. So I think 10:59:31 25 there's a number of ways you can attack these 51 10:59:34 1 things, and we have. We're going to continue to 10:59:37 2 fight on these issues in Congress. We have to. 10:59:37 3 It's for the sake of the nation that we do. 10:59:40 4 MR. BROWN: Thank you. 10:59:40 5 Quickly, Ms. Hanauer, Congress has 10:59:45 6 proposed $10 million in Medicaid cuts. Katrina, 10:59:48 7 its aftermath, they're only going to make the 10:59:51 8 squeeze on Medicaid even tighter. There are -- 10:59:54 9 my understanding is that from Senator Hagan's 10:59:57 10 bill, I'd like you to speak for a moment about 10:59:59 11 that, because we know that in Arizona, 2,700 11:00:02 12 workers who worked at -- who work at Wal-Mart 11:00:05 13 and Alabama, 4,700 children whose parents work 11:00:09 14 at Wal-Mart all are getting their own state 11:00:10 15 Medicaid. What can you tell us about Ohio right 11:00:11 16 now? 11:00:12 17 MS. HANAUER: We can't, 11:00:13 18 unfortunately, tell you whether Ohio 11:00:16 19 employees -- how many of them are on Medicaid 11:00:18 20 and how many of their children depend on 11:00:20 21 Medicaid, because the state has not made that 11:00:22 22 information available. We've requested it. So 11:00:24 23 I think that the legislation is important, 11:00:26 24 because I just think as a research organization, 11:00:29 25 we just feel it's important to understand what's 52 11:00:30 1 going on, and then we can make informed 11:00:33 2 decisions going forward. 11:00:34 3 Maybe it's the case that there are no 11:00:36 4 Wal-Mart employees in Ohio depending on 11:00:38 5 Medicaid. I doubt that highly. 11:00:40 6 MR. BROWN: So we don't 11:00:41 7 list -- I'm sorry, I'm over my time. Sorry 11:00:43 8 about that. 11:00:46 9 Do we not list -- in Ohio, we don't 11:00:48 10 know the name of the employer when someone's on 11:00:51 11 Medicaid, or they just haven't gathered them by 11:00:55 12 categories in this state? 11:00:56 13 MS. HANAUER: You know, it's 11:00:57 14 complicated, so I'm not sure that I can give a 11:00:59 15 clear answer. I just know that the department 11:01:01 16 has informed us that they can't give us that 11:01:04 17 information. 11:01:05 18 MR. BROWN: All right. 11:01:06 19 Ms. Tubbs Jones. 11:01:08 20 MS. TUBBS JONES: Thanks, Chairman 11:01:13 21 Brown. You like the way that sounds? Good, 11:01:15 22 good. 11:01:16 23 Let me start with Mr. Saltzman. The 11:01:20 24 largest expense for you as a store owner is, in 11:01:22 25 fact, wages and healthcare benefits; is that 53 11:01:25 1 fair? 11:01:26 2 MR. SALTZMAN: Yes, ma'am. 11:01:27 3 MS. TUBBS JONES: So therefore, just 11:01:28 4 so we can firm up the record, if you are dealing 11:01:33 5 with another -- or a competitor who has that 11:01:36 6 same expense, then you're able to deal with the 11:01:39 7 competition otherwise in the business? 11:01:41 8 MR. SALTZMAN: Yes. 11:01:42 9 MS. TUBBS JONES: And how long have 11:01:43 10 you been in business in Cleveland once again for 11:01:45 11 the record? 11:01:46 12 MR. SALTZMAN: Too long. 11:01:49 13 MS. TUBBS JONES: Don't say that. 11:01:51 14 MR. SALTZMAN: Well, we as a 11:01:53 15 family have been in business over 70 years. 11:01:56 16 I've been in business full time since 1959 when 11:02:02 17 I graduated from college. 11:02:04 18 MS. TUBBS JONES: So for the record, 11:02:05 19 can we have your son stand up so we know who he 11:02:08 20 is? Okay. Great. The new president. Next 11:02:10 21 generation. 11:02:12 22 Let me get my names right here. 11:02:17 23 Hanover? 11:02:17 24 MS. HANAUER: "Hanauer." 11:02:20 25 MS. TUBBS JONES: "Hanauer." Let's 54 11:02:21 1 talk for a moment about the impact of having a 11:02:23 2 living wage and healthcare provided to workers 11:02:26 3 in a community. What impact does that have on 11:02:29 4 the economic viability of the community? 11:02:35 5 MS. HANAUER: That's a great 11:02:37 6 question. Workers who are paid a living wage 11:02:37 7 have more money to spend in their local 11:02:39 8 communities, more dollars get recycled into the 11:02:41 9 community. But more -- equally importantly, 11:02:43 10 workers who are paid a living wage have a better 11:02:45 11 ability to support their own families. 11:02:47 12 As you know, with poverty come a host 11:02:50 13 of social problems in terms of children having 11:02:52 14 inadequate nutrition, in terms of stability of 11:02:55 15 people's housing, in terms of the ability of 11:02:57 16 children to succeed in school. So if parents 11:03:01 17 are well compensated, children are brought up in 11:03:04 18 a more secure environment and are more likely to 11:03:08 19 be successful themselves. 11:03:10 20 MS. TUBBS JONES: Hopefully as a 11:03:11 21 result of what has happened in the Gulf Coast 11:03:13 22 and our country's attention to poverty and 11:03:17 23 racism, this will not only be an opportunity to 11:03:19 24 help the victims of Katrina, but to help all the 11:03:22 25 homeless, all the poor, all the downtrodden in 55 11:03:25 1 our country as a result of these changes. 11:03:29 2 MS. HANAUER: One would hope. 11:03:30 3 MS. TUBBS JONES: I guess I'm an 11:03:33 4 optimist. 11:03:34 5 My last question, because I'm running 11:03:35 6 out of time, to the AFL-CIO. One of the things 11:03:38 7 that's always discussed -- and let me for the 11:03:39 8 record say I want to thank the AFL-CIO and their 11:03:42 9 leadership, John Ryan, here in our community and 11:03:46 10 for all the work that they do. But my question 11:03:47 11 to you is, there is always this question that as 11:03:49 12 we go through this process, the relationship 11:03:51 13 between labor and management may have to change 11:03:55 14 as the economy continues to change. What's your 11:03:58 15 response to that question or statement? 11:04:02 16 MR. BAUGH: Well, I actually 11:04:03 17 think that the relationship between labor and 11:04:05 18 management actually has changed over the last 20 11:04:07 19 years. In particular, we responded very 11:04:11 20 strongly to the encouraging change in markets in 11:04:13 21 the late '70s and early '80s where there was 11:04:16 22 imports of products from other countries coming 11:04:18 23 in competing with ours, and there was a lot of 11:04:20 24 work. You know, the labor and management 11:04:22 25 partnership programs inside the auto industry, 56 11:04:23 1 inside the steel industry where people 11:04:25 2 struggled. 11:04:25 3 I worked directly in that industry. 11:04:27 4 I worked with those folks both as a consultant 11:04:30 5 and helping do these changes to work together, 11:04:32 6 to save our businesses, make them more 11:04:35 7 productive and efficient. I think we have to 11:04:37 8 continue to do that. 11:04:38 9 But I think the reality we're up 11:04:39 10 against is the fact that products that are 11:04:42 11 coming in now are from our own firms overseas 11:04:45 12 that makes the products there and ship them 11:04:48 13 back. I mean, we've met the enemy and they are 11:04:51 14 us. 11:04:52 15 Let me give you one statistic that's 11:04:52 16 absolutely startling. I use the throwaway line 11:04:53 17 in speeches that says if empty cargo containers 11:04:56 18 would be a product, they would be our largest 11:04:59 19 export to China. I'm not kidding. 11:05:01 20 The port of Long Beach, the main 11:05:04 21 port, is the main port of entry in the United 11:05:05 22 States for imports from China. Listen to this 11:05:05 23 number. The number of empty cargo containers 11:05:09 24 that left the port of Los Angeles in July of -- 11:05:10 25 over the course of last year, July 2005 figures, 57 11:05:14 1 194,000. The number of cargo containers that 11:05:19 2 came in full, 352,000. A very graphic picture 11:05:23 3 of what has happened. And each one of those 11:05:25 4 cargo containers that comes in full and each one 11:05:29 5 that leaves empty represents investment in the 11:05:31 6 American economy, in American jobs. 11:05:34 7 MS. TUBBS JONES: If I could just 11:05:35 8 quickly ask one more question to Ms. Boushey. 11:05:38 9 Is that correct? 11:05:39 10 MS. BOUSHEY: "Boushey." 11:05:40 11 MS. TUBBS JONES: "Boushey." Okay. 11:05:41 12 I apologize. 11:05:43 13 Regional economic development is now 11:05:44 14 being defined by some, a 13-county area that 11:05:48 15 stretches from Lorain in the east to Ashtabula 11:05:51 16 in the east down -- in the west -- from Lorain 11:05:53 17 to the west to Ashtabula County in the east down 11:05:56 18 to Wayne, Stark and Columbiana. With that 11:06:00 19 geography in mind, what kind of retail economic 11:06:02 20 development strategies do you see as being 11:06:04 21 particularly viable? 11:06:05 22 And you don't have to restrict it to 11:06:07 23 the area, but as we're talking about regionalism 11:06:09 24 and the very issue that we're raising with 11:06:11 25 Wal-Mart, what viable force -- what do we need 58 11:06:13 1 to be talking about? 11:06:14 2 MS. BOUSHEY: Well, I think I 11:06:16 3 would bounce off the ideas that Amy Hanauer was 11:06:20 4 talking about about the high road economic 11:06:22 5 development. I think you need to create retail 11:06:25 6 strategies that encourage employers to -- and 11:06:27 7 make it possible for them to offer health 11:06:29 8 benefits and to pay living wages, because that 11:06:31 9 will help revitalize communities, because you'll 11:06:33 10 have well-paid employees who can both contribute 11:06:36 11 to the tax base, as well as contribute to what 11:06:38 12 we economists like to call effective demand. 11:06:41 13 That is, demand backed up by money in your 11:06:45 14 pocket so you can go out and help sort of keep 11:06:47 15 the economy moving. 11:06:49 16 MR. BAUGH: Can I offer a point 11:06:51 17 on that? I actually used to help run economic 11:06:54 18 development. And one of the big things here is 11:06:56 19 really looking hard at the public investments 11:06:59 20 that are made by state and local government, and 11:07:01 21 that is a high road strategy. There is no need 11:07:04 22 to give these kind of breaks to big-box 11:07:06 23 retailers if, in fact, it's just going to 11:07:07 24 undermine the rest of the community. 11:07:09 25 I think you need to have a set of 59 11:07:10 1 standards by which investments are made. 11:07:13 2 There's an actual return in terms of employment, 11:07:13 3 good employment, employment that has standards 11:07:15 4 around what wages and benefits, that starts to 11:07:17 5 get at those issues. 11:07:18 6 MS. BOUSHEY: If I could just -- 11:07:20 7 yeah, you know, studies have shown time and time 11:07:23 8 again that big-box retailers, while they may 11:07:27 9 increase employment in the very short run, 11:07:29 10 usually lead to declining employment and 11:07:32 11 declining overall wages in the community in the 11:07:34 12 long run. So zoning and thinking about economic 11:07:37 13 development strategies that don't subsidize, 11:07:40 14 that would certainly be the way to go. 11:07:43 15 MS. TUBBS JONES: Thank you. 11:07:47 16 MR. BROWN: Thank you, 11:07:47 17 Congresswoman Jones. 11:07:48 18 Mr. Hagan? 11:07:48 19 MR. HAGAN: Ms. Boushey, it 11:07:50 20 would seem to me that the nonpartisan effort on 11:07:52 21 your part, you probably have discovered -- maybe 11:07:54 22 it's my term or not -- you're the corporate 11:07:57 23 welfare or the corporate responsibility of many 11:07:59 24 of our corporations. You hit on one issue that 11:08:02 25 has been prevalent in Ohio, and that is campaign 60 11:08:07 1 contributions for -- what did you say, 11:08:08 2 $4.6 million in campaign contributions? 11:08:11 3 Have you been able to break it down 11:08:14 4 into committees and been able to break it down 11:08:16 5 into what parties and been able to break it down 11:08:19 6 into what states and been able to break it 11:08:21 7 down -- 11:08:22 8 MS. BOUSHEY: No, I have not done 11:08:24 9 that work. But there are a couple things that I 11:08:26 10 would like to add to that that I think are 11:08:28 11 relevant. 11:08:28 12 You know, Wal-Mart, in particular, 11:08:32 13 has lobbied very hard in particular communities 11:08:34 14 throughout the country for economic development 11:08:35 15 subsidies to take money away that could go to 11:08:38 16 other retailers that are paying federal wages, 11:08:38 17 but they've also been doing the same kind of 11:08:40 18 things abroad, using the WTO, the World Trade 11:08:45 19 Organization's legal mandates that the United 11:08:48 20 States has signed on to to limit zoning policy 11:08:51 21 in other countries, and also this has an effect 11:08:55 22 on the suppliers that they use. 11:08:58 23 So although that doesn't answer your 11:09:00 24 question about where the lobbying dollars go 11:09:02 25 here specifically, but it is important to 61 11:09:04 1 recognize that they are not just lobbying local, 11:09:08 2 state Congress folks like people -- and state 11:09:12 3 legislators like yourself, but they're also 11:09:14 4 lobbying to decrease international regulation on 11:09:18 5 their business practices. 11:09:19 6 MR. BAUGH: If I may, it's the 11:09:21 7 same business model that they apply 11:09:23 8 internationally as they apply domestically, 11:09:26 9 always lower wages and benefits, always. And 11:09:29 10 get rid of and oppose any laws that will address 11:09:32 11 those type of issues. Always on incentives, 11:09:37 12 always subsidies, always get away from the 11:09:41 13 environmental standards that may interfere. 11:09:43 14 Always. Whether it's here or it's abroad. 11:09:46 15 And we need to understand that this 11:09:49 16 is how it's being promoted. This is 11:09:49 17 international and domestic, and they're one and 11:09:52 18 the same. 11:09:53 19 MR. HAGAN: Let me -- let me 11:09:55 20 couple back onto what you just said there. Is 11:09:57 21 it -- is it something that they are running free 11:10:02 22 rein with? Are they able to do this in every 11:10:06 23 country and, in fact, are we -- you know, it's 11:10:10 24 really funny, being from Youngstown, you get 11:10:14 25 called all kinds of names. And I remember 62 11:10:16 1 someone saying to me, "You know, Hagan, you're a 11:10:19 2 little bit too far left." 11:10:20 3 And I said, "Well, do you shop at 11:10:22 4 Wal-Mart?" 11:10:22 5 And they said, "Yes." 11:10:24 6 And I said, "Well, you're buying off 11:10:26 7 the communists." And I'm wondering, too, if 11:10:30 8 we're losing this -- this edge a little bit and 11:10:34 9 not articulating the real issues that are behind 11:10:37 10 it, behind this whole thing. And corporate 11:10:39 11 America seems to have lost their patriotism. 11:10:42 12 MR. BAUGH: I think you've 11:10:44 13 actually hit a major point here. The business 11:10:47 14 model seen by Wal-Mart is being practiced by 11:10:49 15 numerous corporations as they go overseas. In 11:10:52 16 particular, we even zeroed in on China, because 11:10:55 17 it's the fastest growing section of the budget, 11:10:57 18 the trade deficit that we see out there. 11:10:59 19 And I just want to come back and talk 11:11:02 20 about the outsourcing of this work on our 11:11:06 21 future. It is the intellectual, technical 11:11:09 22 capacity to make things. And you cannot solve 11:11:11 23 the trade deficit unless you make things to 11:11:12 24 trade. It's that simple. It's simple math. 11:11:17 25 You can't fix it unless you make things to 63 11:11:19 1 trade. 11:11:20 2 And what we're losing with those 11:11:22 3 empty cargo containers we're shipping out there 11:11:25 4 is the research and development capacity, the 11:11:30 5 engineering capacity, the design capacity, the 11:11:30 6 skills, manufacturing capacity. The very seed 11:11:31 7 corn of our future is being invested in someone 11:11:34 8 else's economy. That is a big picture. 11:11:36 9 And that's not just Wal-Mart, 11:11:39 10 although they represent over 10 percent of the 11:11:41 11 deficit with China. It has to do with the 11:11:43 12 practices of America's largest corporations. It 11:11:46 13 is the medium- and smaller-sized firms that are 11:11:48 14 here. It's the Saltzmans of the world that are 11:11:52 15 investing domestically in their communities that 11:11:54 16 want to stay here and do business. That's who 11:11:57 17 we work with in these business alliances. The 11:11:59 18 others have adopted the other model. 11:12:01 19 MR. HAGAN: Ms. Hanauer, have 11:12:03 20 you -- have you seen an increase in the 11:12:05 21 corporate welfare in some of your studies that 11:12:09 22 have really had a detrimental effect to those of 11:12:12 23 us, particularly in this area? 11:12:14 24 MS. HANAUER: I think in 11:12:15 25 particular, we've seen a tax structure at the 64 11:12:17 1 federal and at the state level that has shifted 11:12:20 2 to -- away from corporations paying taxes and 11:12:23 3 towards individuals paying taxes, and away from 11:12:25 4 higher-income individuals paying those taxes 11:12:28 5 towards middle- and lower-income individuals 11:12:30 6 paying a greater share of that burden. So I 11:12:33 7 think in that sense we have seen an increase in 11:12:36 8 welfare. 11:12:37 9 And I think in another sense, we have 11:12:39 10 given massive tax breaks and tax abatements to 11:12:42 11 companies like Wal-Mart and to other kinds of 11:12:44 12 developments. And sometimes those may be well 11:12:46 13 placed. But when I cite that, you know, the 11:12:50 14 State of Ohio has given away massive tax 11:12:54 15 abatements to Wal-Mart for building distribution 11:12:57 16 centers, for building retail establishments, 11:12:59 17 there's no reason for that. I mean, there's 11:13:01 18 just -- there's no possible reason that that 11:13:04 19 would make sense in our economy, because not 11:13:06 20 only does that -- it deprives us of resources 11:13:09 21 that we need to then pay the healthcare for the 11:13:09 22 employees they don't provide healthcare for. 11:13:13 23 So it really is not a model that 11:13:14 24 makes sense. It weakens the public sector and 11:13:17 25 it strengthens these big corporations at the 65 11:13:19 1 expense of locally-owned retail. 11:13:21 2 MR. HAGAN: Thank you very 11:13:22 3 much. Thank you. 11:13:22 4 MR. BROWN: Thank you, sir. We 11:13:24 5 have one question submitted. I would actually 11:13:27 6 like to ask you to take a prerogative of the 11:13:27 7 chair to do this. 11:13:32 8 Schuyler Cook, this is a good 11:13:32 9 question. He asks -- and I think I would like 11:13:34 10 to ask you, Ms. Boushey, this question. 11:13:36 11 In order to educate consumers, should 11:13:39 12 the FTC require that retailers add information 11:13:43 13 to their price tags and ads as to the Medicaid, 11:13:44 14 food stamps and other costs consumers will not 11:13:46 15 pay in the stores, but will pay in higher taxes 11:13:48 16 or fewer services to their fellow citizens? 11:13:53 17 MS. BOUSHEY: I think that's a 11:13:55 18 brilliant idea, but I would add to that, you 11:13:59 19 know, companies externalize their costs in many 11:14:02 20 ways. 11:14:02 21 One is through paying very low wages 11:14:04 22 and requiring the state to come in and provide 11:14:06 23 health benefits and food stamps and other 11:14:10 24 subsidies for these workers. They also lobby to 11:14:13 25 decrease tariffs on trade and increase their 66 11:14:17 1 benefits that way. I mean, if we're going to 11:14:20 2 have them document what kinds of state subsidies 11:14:24 3 they get, we might also ask them to document 11:14:27 4 what the -- where the goods are coming from. 11:14:29 5 Wal-Mart, I think, is still known as 11:14:31 6 a very patriotic company, and I think many 11:14:34 7 Americans would be shocked to find out that 70 11:14:36 8 percent of the goods are coming from overseas 11:14:38 9 and they aren't creating good jobs. And I think 11:14:40 10 that kind of labeling could be very important. 11:14:42 11 So often what Wal-Mart has been 11:14:45 12 accused of has been lying on their labels and 11:14:47 13 saying their goods are made here when, in fact, 11:14:47 14 they're made abroad. 11:14:49 15 But one last thing, if we're going to 11:14:51 16 ask companies to document their subsidies, we 11:14:54 17 should also ask them to document the 11:14:55 18 environmental degradation that many of these 11:14:58 19 companies cost, in particular, Wal-Mart. 11:15:00 20 MR. BROWN: Thank you. 11:15:01 21 Mr. Saltzman, thank you, Ms. Hanauer, thank you, 11:15:04 22 Mr. Baugh, thank you, and, Ms. Boushey, thank 11:15:06 23 you. 11:15:07 24 MS. TUBBS JONES: I just want to put 11:15:08 25 one thing on the record, Mr. Chairman. I mean, 67 11:15:11 1 it's very interesting that we see that the State 11:15:13 2 of Ohio has subsidized Wal-Mart, and in the 11:15:16 3 State of Ohio, sent $1 billion back to the 11:15:20 4 federal government for money that would have 11:15:22 5 assisted Medicaid and Medicare folks in Ohio at 11:15:25 6 a time when we have a city who used to be the 11:15:28 7 highest city with the highest poverty rate. 11:15:31 8 I think that one of the things that 11:15:33 9 we are really going to have to do in addition to 11:15:35 10 dealing with Wal-Mart is to deal with the State 11:15:38 11 of Ohio and its policies and practices that 11:15:41 12 don't support working people and businesses as 11:15:45 13 well. I just want to put it on the record for 11:15:48 14 that. Thank you. 11:15:49 15 MR. BROWN: Thank you, first 11:15:50 16 panel. 11:15:51 17 I would like to call forward the 11:15:52 18 second panel. And certainly, the four panelists 11:15:55 19 are free to stay. 11:15:58 20 Carla Henthorn, John Letner, Tina 11:16:02 21 Burton, Maggie Namaskara. 11:16:36 22 Carla Henthorn is a former Rubbermaid 11:16:40 23 worker and a United Steelworkers of America 11:16:42 24 member. Carla. 11:16:44 25 John Letner, I know which one he is. 68 11:16:45 1 One, I know him, second, he's here to tell -- 11:16:48 2 John Letner, Vice President of Bakery, 11:16:51 3 Confectionery, Tobacco Workers and Grain Millers 11:16:53 4 International Union Local 19. John, welcome. 11:16:55 5 Tina Burton, a retail worker at Value 11:16:58 6 City and United Food and Commercial Workers 11:16:59 7 member, and Maggie Namaskara, a retail worker at 11:17:02 8 Reserve Square and United Food and Commercial 11:17:05 9 Workers member. I will -- I will do the order I 11:17:09 10 just read. 11:17:10 11 Carla Henthorn, you may begin. You 11:17:12 12 have approximately five minutes. 11:17:13 13 MS. HENTHORN: Thank you. I 11:17:16 14 worked at the Rubbermaid plant in Wooster, Ohio, 11:17:18 15 from 1995 to 2004, until the global economy 11:17:22 16 stole my job. We made trash cans, hampers, 11:17:27 17 laundry baskets and other everyday items that 11:17:29 18 you can find in your home. 11:17:31 19 The plant closed and more than a 11:17:33 20 thousand people lost their jobs because greedy 11:17:35 21 retailers like Wal-Mart forced Rubbermaid to 11:17:39 22 sell their products for less than it costs to 11:17:40 23 produce them. 11:17:40 24 In the mid-'90s, the price of resin, 11:17:43 25 which is the main component which goes into 69 11:17:45 1 plastic manufacturing, increased about 80 11:17:47 2 percent, so Rubbermaid had to, in turn, increase 11:17:50 3 their costs of their products. Wal-Mart reacted 11:17:53 4 to this increase by telling the executives at 11:17:55 5 Rubbermaid, and I quote, "Yes, you may be 11:17:59 6 Rubbermaid, and you're big Rubbermaid, and 11:18:02 7 you've got the great name and all that, but 11:18:04 8 you're not going to tell us what to do. We're 11:18:07 9 not going to take your price increase and we 11:18:09 10 don't care what it does to you." 11:18:10 11 In other words, Wal-Mart pressured 11:18:12 12 Rubbermaid to fire everyone earning a living 11:18:15 13 wage, including me, so Wal-Mart could make a 11:18:18 14 larger profit. 11:18:19 15 The plant was shut down because the 11:18:22 16 workers made a living. Our average wage was 11:18:24 17 about $14 an hour with decent benefits. I was 11:18:30 18 shocked, angry and saddened. What outraged me 11:18:33 19 the most was I couldn't take my skills and get 11:18:35 20 another job in manufacturing in northeast Ohio 11:18:38 21 without taking about a 50 percent cut in pay and 11:18:40 22 benefits because corporations and politicians, 11:18:44 23 present company excluded -- 11:18:45 24 MR. BROWN: Thank you. 11:18:47 25 MS. HENTHORN: -- have sent too 70 11:18:48 1 many good-paying jobs to foreign countries. 11:18:50 2 The threat coming from corporate 11:18:52 3 America today is produce products at a lower 11:18:56 4 wage, or we'll exploit people in another country 11:18:59 5 to make them for us. 11:19:00 6 I was trained at the plant to be a 11:19:01 7 material handler. I was responsible for making 11:19:04 8 sure that 21 machines received plastic pellets 11:19:08 9 and liquid color to produce high quality 11:19:11 10 products. I wasn't rich, but I earned a 11:19:14 11 comfortable living. I put food on my table, 11:19:16 12 clothes on my back and a roof over my head. I 11:19:17 13 was happy. 11:19:17 14 Then all of a sudden, my life was 11:19:20 15 turned upside down by Wal-Mart, our growing 11:19:23 16 global economy, and my job was gone. 11:19:26 17 These are the stories we hear more 11:19:27 18 and more every day. I'm not alone in this. 11:19:30 19 Nearly 400 of my co-workers have given 25 years 11:19:35 20 of their lives working at Rubbermaid. The brass 11:19:40 21 ring was in sight, and all of a sudden, it was 11:19:42 22 gone and they were forced to start all over 11:19:44 23 again. 11:19:44 24 But I didn't just lose my 11:19:47 25 family -- my job, I lost family. They may not 71 11:19:49 1 have been blood related, but they were a part of 11:19:52 2 my family. Now they're just voices on the other 11:19:56 3 end of the phone, with the exception of one 11:19:59 4 person who meant a lot to me. I lost him 11:20:01 5 forever. 11:20:02 6 A couple weeks after the closure 11:20:03 7 announcements, my brother, Charles Shaffer, had 11:20:06 8 a heart attack due to the stress of the upcoming 11:20:09 9 loss of his job and the loss of the other 11:20:11 10 employees at our plant. He was our union 11:20:14 11 president. He took it upon his shoulders, all 11:20:17 12 the stress he could from the rest of us, and it 11:20:20 13 cost him his life. 11:20:23 14 I remember vividly a conversation he 11:20:26 15 and I had one night a day or two after we found 11:20:29 16 out we were losing our jobs. I was sad because 11:20:31 17 we were all being split up, and I told him I 11:20:34 18 feel like I'm losing my family. And his 11:20:37 19 response to me was no matter what happens and 11:20:43 20 wherever we go, we will always have each other. 11:20:44 21 And now he's gone, and I have to wait until I 11:20:47 22 walk through the pearly gates up above to talk 11:20:49 23 to him again. 11:20:51 24 I'm so angry about what I experienced 11:20:53 25 that I actually went to work for the 72 11:20:55 1 Steelworkers Union organizing citizens across 11:20:58 2 the country to fight back. At the present time, 11:21:01 3 we are running a grassroots effort and campaign 11:21:06 4 in support of Senate Bill 13, which Senator 11:21:09 5 Hagan is one of the cosponsors of, to help put 11:21:12 6 restrictions on taxpayer assistance, the 11:21:15 7 outsourcing of jobs. For more information, you 11:21:18 8 can visit www.fighback05.com. 11:21:23 9 We are asking regular people to join 11:21:24 10 us in sending a strong message to the 11:21:28 11 politicians and the greedy corporations that 11:21:30 12 we're not going to take this anymore, and we're 11:21:33 13 fighting. And I want to thank the panel for 11:21:35 14 asking me here today. 11:21:36 15 MR. BROWN: Thank you. Thank 11:21:38 16 you very much. 11:21:42 17 MR. LETNER: I would like to 11:21:43 18 thank the panel for inviting me here today. I 11:21:46 19 especially would like to thank Congressman Hagan 11:21:49 20 for taking up this charge. You know, it was 11:21:51 21 back in February when he began, and he has ever 11:21:54 22 since then. I appreciate that. 11:21:55 23 Mr. Chairman, I am here today to 11:21:56 24 speak out on the demise of the middle class, and 11:21:59 25 what I believe to be an out and out assault on 73 11:21:59 1 the American way of life, and for that matter, 11:21:59 2 the American dream. 11:22:02 3 Various companies, Wal-Mart in 11:22:03 4 particular, are spearheading the elimination of 11:22:05 5 the middle class. They have partnered with 11:22:07 6 China and corporate America to bring the working 11:22:10 7 man to his knees. Wal-Mart not only is the 11:22:13 8 biggest supporter of Chinese goods in the 11:22:14 9 country, they also manipulate American 11:22:16 10 manufacturers to move their companies overseas 11:22:18 11 to eliminate thousands of American jobs. 11:22:20 12 When it comes to my job of trying to 11:22:22 13 negotiate a decent standard of living for the 11:22:25 14 bakers that work at -- in Giant Eagle, Tops, 11:22:30 15 Dave's Supermarkets, et cetera, I am given the 11:22:30 16 response, "We cannot afford to give a decent 11:22:33 17 standard of living while Wal-Mart exploits their 11:22:36 18 workers with lack of healthcare and substandard 11:22:36 19 wages," which is not only the people I 11:22:38 20 represent, but every worker who has to pay part 11:22:41 21 of their healthcare. 11:22:42 22 And here's how. Number one, they 11:22:44 23 play -- Wal-Mart plays a shell game with their 11:22:47 24 own healthcare. They say they provide it, but 11:22:50 25 the average employee can't afford it. 74 11:22:53 1 Number two, they force into 11:22:55 2 bankruptcy or closure their competitors. For 11:22:57 3 example, Winn Dixie. So those people lose their 11:23:00 4 jobs, subsequently their healthcare. 11:23:02 5 And by the way, from what I'm told, 11:23:07 6 Winn Dixie went into bankruptcy with 1,500 11:23:07 7 stores. If they come out, they'll have 500. 11:23:10 8 Number three, they drive 11:23:11 9 manufacturers out of the country, causing those 11:23:14 10 workers to lose their jobs and healthcare. 11:23:16 11 Now, you have these three entities 11:23:21 12 still getting sick, still needing healthcare. 11:23:21 13 So what do they do? They walk into Metro 11:23:24 14 Hospital and say that they don't have healthcare 11:23:26 15 coverage and they need to be taken care of. By 11:23:28 16 law, Metro Hospital must attend to them. 11:23:31 17 Now, Metro has two ways of recouping 11:23:34 18 that cost. Number one, taxes, and, number two, 11:23:36 19 pass on that cost to insurance carriers, who, in 11:23:39 20 turn, raise our premiums anywhere from 12 to 25 11:23:44 21 percent per year, who then place that burden on 11:23:47 22 employers who want to be decent to their 11:23:48 23 employees. 11:23:49 24 For example, this year alone, 11:23:50 25 Cuyahoga County will give Metro Hospital over 75 11:23:53 1 $40 million -- they've already given it to 11:23:55 2 them -- for indigent care. So we also end up 11:23:59 3 paying for it in our taxes, too, combined with 11:24:02 4 our premiums. 11:24:03 5 In closing, Mr. Chairman, this 11:24:05 6 country was built on our economic strength, and 11:24:07 7 we, because of greed, are giving it away. If we 11:24:11 8 lose our economic might, where will we be then? 11:24:16 9 You know not -- I've said this a lot. You know 11:24:16 10 not every terrorist comes with camouflage and 11:24:20 11 bombs. We're fighting terrorists all over the 11:24:23 12 world. If you want to destroy the country, 11:24:26 13 destroy the economy. And that is what companies 11:24:27 14 like Wal-Mart are doing. 11:24:29 15 What they are promoting will cause us 11:24:31 16 to be at the mercy of every nation on the 11:24:32 17 planet. What do we tell our kids then? 11:24:36 18 Remember, thousands of Americans -- 11:24:38 19 and I'm touching on something that hasn't been 11:24:39 20 touched on enough. Thousands of Americans 11:24:42 21 either died or came home crippled from wounds, 11:24:46 22 including my dad. And now we're saying 11:24:50 23 communist China is okay. China's agenda is the 11:24:53 24 same. They haven't changed. The United States 11:24:55 25 has lost their agenda, and if we do not get it 76 11:24:58 1 back, our kids and our grandkids are going to 11:25:01 2 pay for it. Thank you. 11:25:03 3 MR. BROWN: Thank you. 11:25:04 4 Ms. Burton? 11:25:04 5 MS. BURTON: Greetings and 11:25:11 6 blessings. I am Vercina Burton. 11:25:11 7 MR. BROWN: Just move the mike 11:25:13 8 next to you. 11:25:14 9 MS. BURTON: Greetings and 11:25:16 10 blessings. I am Vercina Burton from Value City 11:25:20 11 108 in Warrensville Heights. I have been 11:25:23 12 employed there for almost 26 years this November 11:25:27 13 17th. 11:25:30 14 I'm just your regular, average 11:25:33 15 employee, but I have been blessed over my 11:25:36 16 26-year tenure to have good medical coverage, 11:25:41 17 eye care, dental care, et cetera. But I'm here 11:25:45 18 today to speak about a past co-worker of mine 11:25:49 19 who left Value City and went to Wal-Mart. 11:25:55 20 She went there with beautiful big 11:25:58 21 rose-colored glasses. She was all excited. She 11:25:59 22 was making more money, she would be able to care 11:26:01 23 for her four children and she was moving on in 11:26:04 24 life. She was getting a new house. 11:26:07 25 Upon getting to Wal-Mart, it was 77 11:26:11 1 lovely for the first couple of months, she said, 11:26:14 2 but soon she found out she had a small amount of 11:26:18 3 medical coverage for herself, but none for her 11:26:21 4 children. 11:26:22 5 She soon found out that if her 11:26:26 6 children had problems in school and she needed 11:26:28 7 to leave Wal-Mart to take care of her children, 11:26:31 8 she couldn't because they would fire her. 11:26:34 9 They made a practice of calling you 11:26:37 10 on your day off if they needed you, and if you 11:26:40 11 didn't come in, they would fire you. She had 11:26:43 12 nothing to fall back on like we fell back on -- 11:26:47 13 like we fall back on at Value City. There was 11:26:51 14 no arbitration, there was no -- nothing. 11:26:54 15 So I come to say the least, that 11:26:58 16 today she has moved on with her life. She has 11:27:01 17 switched jobs, she has quit. She's -- she's 11:27:04 18 doing quite well. But I've seen many changes in 11:27:08 19 retail in the years that I have been there. And 11:27:13 20 everybody is changing to adjust to Wal-Mart. 11:27:20 21 Wal-Mart is taking over. Pretty 11:27:23 22 soon, there will be nowhere else to shop. We're 11:27:28 23 now putting up with many different contract 11:27:32 24 changes. They are not coming on time the way 11:27:36 25 they're supposed to. And that's about all I 78 11:27:39 1 have to say. Thank you. 11:27:41 2 MR. BROWN: Thank you, 11:27:42 3 Ms. Burton. 11:27:43 4 Ms. Namaskara? 11:27:44 5 MS. NAMASKARA: Yes. Hello. It's 11:27:47 6 wonderful to be here today, and I've learned a 11:27:49 7 lot from the first panel, a lot of very 11:27:53 8 well-informed people. 11:27:56 9 My name is Maggie Namaskara, and I've 11:27:59 10 worked at Reserve Square Market for the last 11:28:01 11 nine years as a full-time employee. Currently, 11:28:05 12 I work as a cashier, but have held other 11:28:08 13 positions at the store. 11:28:09 14 About four years ago, my co-workers 11:28:10 15 and I chose to make our working conditions 11:28:12 16 better, so we organized with the UFCW Local 880. 11:28:17 17 Now, thanks to our efforts, we have a contract 11:28:19 18 with our employer which guarantees our wages, 11:28:22 19 benefits and working conditions. Something we 11:28:24 20 all value and don't take for granted. We make 11:28:27 21 decent money and have employer-paid benefits and 11:28:30 22 a pension. 11:28:32 23 As far as public money being used to 11:28:33 24 pay for Wal-Mart's health insurance, it is 11:28:36 25 outrageous to ask taxpayers to subsidize 79 11:28:39 1 Wal-Mart's benefits. Those who make less than a 11:28:42 2 living wage still pay taxes to help pay for 11:28:44 3 this. Let Wal-Mart, a company with billions in 11:28:49 4 profits, take care of its own workers. 11:28:52 5 I fear the effects of a Wal-Mart 11:28:54 6 moving into our city would be highly negative. 11:28:56 7 My concerns range from my hours being cut due to 11:29:00 8 the lack of business, to the effort Wal-Mart 11:29:03 9 would have on the good-paying retail jobs the 11:29:05 10 city has. I don't want to have to drop my 11:29:08 11 standards to those of a Wal-Mart worker who has 11:29:10 12 to co-pay for benefits and rely on tax subsidies 11:29:14 13 from the rest of us. 11:29:16 14 Wal-Mart should be a better employer 11:29:17 15 and set higher standards for itself and its 11:29:20 16 employees. If Wal-Mart moves in with its lousy 11:29:26 17 benefits, low wages and poor pensions, we will 11:29:29 18 all become poor, maybe even have to start using 11:29:32 19 the free clinic again. 11:29:34 20 What I would like to see is for my 11:29:36 21 friends and co-workers who work full time to be 11:29:39 22 self-sufficient and not eligible for Voucher 11:29:42 23 Choice, Ohio Direction and other government 11:29:44 24 benefits. We want to be overqualified for those 11:29:48 25 benefits. 80 11:29:50 1 Wal-Mart is big and powerful, but 11:29:52 2 doesn't care about its workers. Congress needs 11:29:55 3 to help cities like ours hold giants like 11:29:57 4 Wal-Mart accountable. 11:30:00 5 I would also like, at this time, to 11:30:02 6 introduce into evidence a decision from the 11:30:04 7 National Labor Relations Board finding Wal-Mart 11:30:07 8 guilty of several unfair labor practice charges 11:30:11 9 which occurred as a result of an attempted 11:30:13 10 organizing campaign at a New Castle, 11:30:17 11 Pennsylvania, Wal-Mart. 11:30:19 12 MR. BROWN: Thank you. 11:30:21 13 MS. NAMASKARA: Do I need to bring 11:30:23 14 that -- 11:30:26 15 MR. BROWN: Thank you, 11:30:27 16 Ms. Namaskara. I appreciate that very much. 11:30:28 17 MS. NAMASKARA: Thank you. 11:30:29 18 MR. BROWN: Because her work 11:30:31 19 never stops, Stephanie Tubbs Jones has an 11:30 11:30:35 20 news conference on predatory lending, which I 11:30:38 21 understand she opposes, she will -- she will go 11:30:42 22 first. 11:30:43 23 MS. TUBBS JONES: I just want to 11:30:44 24 thank each and every one of you for coming in 11:30:47 25 and testifying today. Our ability to bring this 81 11:30:50 1 whole issue to light comes as a result of a 11:30:53 2 hearing like this. I want to thank my colleague 11:30:55 3 for hosting this hearing and giving us each an 11:31:00 4 opportunity to be heard. 11:31:01 5 Also for -- we have to say hi to all 11:31:03 6 my City Year people out there. We're glad to 11:31:07 7 have you here. We want you to keep on doing the 11:31:09 8 work that you do. 11:31:10 9 But I won't ask any questions, but I 11:31:12 10 do hope that you will continue in your arena to 11:31:19 11 bring to the attention of workers the impact 11:31:22 12 that a Wal-Mart has not only on their jobs, but 11:31:26 13 also the community, the economic development of 11:31:29 14 our area. And I'm glad to have had an 11:31:34 15 opportunity to hear each and every one of you. 11:31:36 16 And as Sherrod said, predatory 11:31:38 17 lending, this is an opportunity for dollars to 11:31:41 18 be given to people who have been victims of 11:31:45 19 predatory lending to help them through the 11:31:47 20 process. So from my former banking committee 11:31:50 21 service, I have to run. And thank you so much, 11:31:53 22 thank you, Sherrod, and thank you, 11:31:55 23 Representative Hagan, as well. 11:31:56 24 MR. BROWN: Thank you, 11:31:57 25 Ms. Tubbs. Thank you for activism and your 82 11:32:02 1 outspokenness and especially your -- what you're 11:32:03 2 organizing now. That's so, so important. Thank 11:32:05 3 you for that. That all matters for the future 11:32:08 4 of our country. 11:32:09 5 I want to start with reading 11:32:10 6 something I got from someone in the audience who 11:32:13 7 didn't sign it, and you should understand in a 11:32:15 8 minute why, perhaps. But for Mr. Letner, I 11:32:18 9 would like you just to comment. He or she 11:32:21 10 writes, "Playing devil's advocate." But I want 11:32:24 11 to read the statement and then ask your 11:32:26 12 response. 11:32:28 13 "Some would say that Wal-Mart should 11:32:28 14 be given credit for keeping inflation down, both 11:32:31 15 by keeping its own prices low and forcing 11:32:33 16 competitors to do likewise. Millions of 11:32:35 17 American families benefit from low prices for 11:32:38 18 essential goods. Higher prices would harm those 11:32:41 19 families that can't afford to pay more, who do 11:32:44 20 not have the luxury of shopping in stores that, 11:32:47 21 perhaps because they pay for workers more or 11:32:49 22 simply because they are less efficient, charge 11:32:52 23 more for these goods." 11:32:53 24 Respond to that, if you would. 11:32:55 25 MR. LETNER: I would respond to 83 11:32:57 1 that saying that, you know, from what I see -- 11:32:59 2 and I grew up in Cleveland. Most of the people 11:33:01 3 that are, for lack of a better word, depending 11:33:04 4 on a Wal-Mart, have gotten themselves in a 11:33:06 5 situation where they can't afford it between 11:33:09 6 everything that's going on. But you've got a 11:33:11 7 never-ending spiral. 11:33:13 8 You know, I talked about the American 11:33:14 9 dream. You can't tell somebody that, "Here, I'm 11:33:17 10 going to give you a $7 an hour job with no 11:33:19 11 healthcare," and the average median price of a 11:33:22 12 house is $150,000 and a car is $2