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Company store: Pullman to Wal-Mart

Wal-Mart’s effort to move into Pullman invites a comparison of the 21st century company store with the 19th century version.

“The parallels are almost too obvious too mention,” said Jeff Helgeson, a Pullman resident who teaches labor studies at the University of Illinois-Chicago.  “There’s a sense in which [Wal-Mart] is very much like the model community of Pullman.”

Built by George Pullman as a planned community for workers at his railroad car plant, the town of Pullman was “celebrated internationally as a utopia,” but “within 15 years was the scene of one of the largest labor strikes in U.S. history,” Helgeson said.  He’s one of a group of neighborhood residents who’ve organized Labor Day celebrations to mark Pullman’s history.

Like Wal-Mart, the Pullman Company paid lower wages than other employers. (In 2004 a University of California-Berkeley study found Wal-Mart’s wages for non-managerial employees were 31 percent lower than the average retail wage; Chicago’s Center for Labor and Community Research estimated that Wal-Mart wages were $2 to $3 below those of its competitors.)

Both companies banned trade unions.  Both companies are known for spying on their workers to prevent any stirrings of organization.

The Pullman Company also owned every home, every store, every school, and every church in the town – even the town library – until the Illinois Supreme Court ordered the sale of all non-manufacturing property in 1898, ruling that company towns are “opposed to good public policy and incompatible with the theory and spirit of our institutions.”

A low-income cycle

Wal-Mart has commonly been called a “company store” because, in economist R.J. Eskow’s words at Huffington Post, “Wal-Mart lowers your living standards then sells you cheap goods that are all you can afford.”

“Wal-Mart has created and perpetuated a low-income cycle of worker/consumer,” said Al Norman of Wal-Mart Watch in an interview with Grist.  “Wal-Mart’s 1.5 million workers have to shop at the company store because they can’t afford to shop elsewhere. It’s a great closed-loop system, akin to a plantation where the field workers went to the company store with their day’s wages.”

“In a chilling reversal of Henry Ford’s strategy, which was to pay his workers amply so they could buy Ford cars, Wal-Mart’s stingy compensation policies…contribute to an economy in which, increasingly, workers can only afford to shop at Wal-Mart,” wrote Liz Featherstone in the Nation in 2004.

A couple years later Barbara Ehrenreich wrote of “signs… that Wal-Mart was beginning to be priced out of the reach of its own employees.”  Workers getting $8 or $9 an hour buy their clothes at thrift stores, she pointed out, and the store’s electronics and lawn and garden products “weren’t even on the distant horizon.”

In at least one other country, an old-school solution was attempted – company scrip.  But in September 2008, the Mexican Supreme Court ordered Wal-Mart’s Mexican subsidiary to stop paying its employees in vouchers redeemable only at Wal-Marts.  (The company called the program its “Social Welfare Plan,” according to one report.)

The court held that the practice was “similar to what happened in old company stores” that were outlawed by the constitution of 1917, Reuters reported.

Food stamps: a double boost

Another approach may be on view in Wal-Mart’s store on Chicago’s West Side.  Employees there interviewed by Chicagoist said “the company purposely cut worker’s hours [so they] can remain eligible for the Link Card,” the state’s food assistance program.

“There’s a lot of workers on Link,” says one employee, and when workers’ hours are cut, their Link Card allocation goes up.  And “shoppers that use their Link card at Wal-Mart include many Wal-Mart employees,” according to Chicagoist.

The use of public assistance programs like food stamps and Medicaid by underpaid Wal-Mart employees has long been an issue.  In 2004 California Assemblywoman Sally Lieber released Wal-Mart’s “Instructions to Employees” telling them how to sign up for food stamps and health assistance.  “Public assistance is very clearly part of the retailer’s cost-cutting strategy,” Featherstone wrote.

But with Wal-Mart supercenters now selling food – and accepting Link Cards – the company gets a double boost to its bottom line.

The old company store merely recouped the wages the employer had paid out.  In this innovative twist, the money paid by taxpayers to supplement Wal-Mart’s low wages can now be spent at Wal-Mart, contributing even further to the Walton family’s riches.

It gives an entirely new meaning to the term “corporate welfare.”

Pullman split on Wal-Mart

With a proposed Wal-Mart in Pullman on the agenda for Wednesday’s zoning committee meeting, public opinion in the community remains divided, as an unsuccessful effort to  win an endorsement by the Pullman Civic Organization shows.

It was only a week and a half ago, at a meeting of the civic group, that residents learned that Wal-Mart has signed a tentative agreement to anchor Pullman Park, a massive development project south of 104th Street and west of the Bishop Ford Expressway.

At the end of a long meeting, a vote in favor of the project was moved, but Wal-Mart skeptics won a vote to postpone a decision.

Buses are being provided for residents who support the Wal-Mart to come downtown for the zoning meeting en masse.

But some Pullman residents are asking how well the project has been marketed to other retailers, why economic development assistance isn’t flowing to small businesses in the area, and whether the rush to close a deal will foreclose an opportunity to impact Wal-Mart’s employment policies.

“They say nobody else is going to come but Wal-Mart, and we’d better take it or we won’t get anything,” said longtime Pullman resident Tom Shepherd.  “Why don’t we try a little harder?”

Developers have said that Jewel, Dominick’s, Target, Costco, and Ikea have turned down the spot.  But spokespersons for several of the companies told the Chicago Reader last week that they hadn’t been contacted.

David Doig of the Chicago Neighborhood Initiative told the Reader he’d worked through brokers, though reports on those contacts weren’t provided.  Alderman Anthony Beale told the Reader that he’d contacted retailers about a development at 115th and Michigan and assumed that if they turned that down, they wouldn’t be interested in Pullman Park.

Resident Ellen Garza would prefer to patronize small businesses, and thinks economic development should support that sector.  “Beale has done nothing for small business,” she said, mentioning commercial strips along 115th and 111th where “small businesses are limping along.”

“Where’s the economic development that would promote them and help them grow?” she asks, arguing that “small businesses help the community, make the community richer.” [Newstips explored this issue in 2006.]

Garza objects to the argument that any job is a good job, especially in economically-depressed minority areas. “Why are African Americans always treated like second-class citizens?” she asked.  “They don’t need unions, they don’t need a living wage, they don’t need benefits – it’s racist.”

“I think it’s a terrible idea to have a Wal-Mart in our neighborhood,” she said, calling the company “the worst employer on the face of the earth.”

Another resident, Jeff Helgeson, says Chicago has an opportunity to influence Wal-Mart. The company is “not a lost cause,” he said.  “They have changed – they stopped locking employees in their stores overnight, for example – and they did that in response to public pressure.”

“If they want to come into this market, they need to be kept to Chicago standards, not bring Chicago down to the level of other places,” he adds.  He’s afraid that “we might be giving in at a moment when we have some leverage.”

It’s been a long haul for the Pullman Park proposal since Park National Bank acquired the old Ryerson Steel site for $24 million in 2008.  A series of meetings seeking community input for development plans were held; PNB talked about building 1,000 single-family homes in keeping with the architecture of the Pullman Historic District, along with big box and smaller retail, a hotel, senior housing and a community center.

But the bank was seized by the FDIC last October and sold off to U.S. Bank, the nation’s sixth largest bank.  Not until this March did U.S. Bank announce that the PNB’s development efforts would be spun off in the Chicago Neighborhood Initiative.

“Park National Bank was really responsive to the community,” says Helgeson. “They were trying to do it without going to Wal-Mart. When U.S. Bank came in, suddenly Wal-Mart is the only option.”

Also subject to change is the financing of the project.  Before U.S. Bank and Wal-Mart, city financing through a new TIF zone passed last summer was said to be crucial to the feasibility of the project.  Now, according to residents who attended the presentation at the PCO meeting, developers say that phase one of the project – building the Wal-Mart store – will only use private funds.

This could avoid getting the project tangled up in the Finance Committee – or, perhaps, coming under the sway of a proposed ordinance that would require that beneficiaries of city subsidies pay a living wage.  Wal-Mart has consistently rejected such a requirement.

Labor Day in Pullman

Franklin Roosevelt will make a special appearance to mark the 75th anniversary of the New Deal — and local musicians will mark the 40th anniversary of the first Pullman Love-In — at a Labor Day celebration in the historic Pullman community.

Actors depicting Roosevelt and figures from Pullman labor history — Eugene Debs, A. Philip Randolph, and “local hero” Jennie Curtis — will give performances in the clock tower of the Pullman factory, and James Thindwa from Jobs With Justice will speak on challenges facing labor today.

Afterward local musicians who played at the 1968 Pullman Love-In and have continued jamming and gigging through the years will play, as families picnic in the park across the street and tours of the historic neighborhood are offered.

The program starts at 2 p.m. at the Pullman Clock Tower at 11035 S. Cottage Grove.

The day’s events begin with the fourth annual Labor Day bike ride from Pullman to Marktown in East Chicago, Indiana. Like Pullman, Marktown was a planned industrial community housing employees of the then-booming steel industry. Modeled on English Garden Cities and designed by Chicago architect Howard Van Doren Shaw in 1917, the community was saved from demolition in the 1950s. Today the Marktown Preservation Society is working for the community’s preservation and restoration.

Participants in the bike ride will leave from Pullman’s Hotel Florence at 9 a.m. and travel to Marktown and back, stopping for brief presentations at labor history sites including the site of the 1937 Memorial Day Massacre at Republic Steel.

Cast of Characters

Jennie Curtis was a young seamstress at the Pullman Company and president of the “girls’ local” of the American Railway Union there, and she was among the speakers at the ARU’s June 1894 convention who convinced delegates to back a strike by Pullman workers. In the Depression of 1893 Pullman had slashed wages by 25 percent and cut 2,000 jobs — while maintaining high rents and prices in the company town and stores where employees were required to live and shop.

Debs founded the ARU, the first industrial union in the United States, and 125,000 railroad workers refused to move trains with Pullman cars. The union was virtually destroyed by the strike after federal troops were called in to replace workers and union leaders were jailed. Debs served six months in jail for violating an injunction which prohibited him from communicating with union members during the strike. Upon his release he declared himself a socialist; he ran for president on the Socialist ticket five times, the final time as a prison inmate, incarcerated for speaking against World War I.

A. Philip Randolph organized Pullman porters into the Brotherhood of Sleeping Car Porters, the first union led by African-Americans to receive a charter in the AFL. Randolph and Brotherhood members across the country provided leadership to the civil rights movement through the 1930s, ’40s and ’50s. The Pullman neighborhood is home of the A. Philip Randolph Pullman Porters Museum, 10406 S. Maryland.

Roosevelt’s New Deal provided protection for labor organizing which finally allowed the Pullman Porters and workers at the Pullman factory to win union contracts.


Black History Month in Pullman

The links between the historic neighborhood of Pullman and the black labor movement will be highlighted in a program this Friday on A. Philip Randolph and the Pullman Porters, the first of a series of Black History Month events sponsored by the Pullman Civic Organization.

The 2002 film “Ten Thousand Black Men Named George,” which deals with the organizing of the Brotherhood of Sleeping Car Porters in the 1920s and ’30s, will be shown this Friday, February 1 at 7 p.m. at the Historic Pullman Visitor Center, 112th and Cottage Grove. Sam Greenlee, author of “The Spook Who Sat By The Door,” will lead a discussion on the film.

It’s the first of four events for the month, marking a growing collaboration between the Pullman group and the Bronzeville/Chicago Black History Society, said Tom Shepherd. The groups are discussing holding tours later this year showing where Pullman factory workers lived, in the company town of Pullman, and where Pullman porters lived, in Bronzeville.

On Sunday, February 10, the Underground Railroad will be discussed by author Glennette Tilley Turner, who has spent 35 years researching the Underground Railroad in Illinois (3 p.m. at the Hotel Florence, 11111 S. Forrestville Ave.) Local activists are seeking support for reconstructing the Jan Ton farmhouse, home of a Dutch farmer who sheltered runaway slaves, as an educational center just south of Pullman.

Tuskegee Airmen veterans will be on hand to discuss a movie about their historic role in World War II, Friday, February 15 at 7 p.m. at the Pullman Visitor Center. The month’s events conclude with a historical gospel concert, featuring music from pre-Civil War through modern times, at Greenstone Church, 11201 S. St. Lawrence.

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