Treading Carefully, Wal-Mart Enters Labor's Turf

By Stephen Kinzer
Tuesday, January 4, 0602

CHICAGO, July 3 - The rusting hulk of the former Ryerson Tull steel fabricating plant in South Chicago is a remnant of the days when tens of thousands of workers made this city a world center of steel manufacturing and other heavy industries. Several miles away, a shuttered factory that once produced Helene Curtis cosmetics is one of scores of light manufacturing plants that were the economic backbone of Chicago's once-thriving West Side.

These two buildings are ghosts from a lost era, but they may represent the future of the United States economy. In May, the Chicago City Council approved Wal-Mart's application to open its first Chicago store, on the site of the Helene Curtis plant. This month, it is to consider the giant retailer's proposal to build a store on the site of the Ryerson Tull plant.

The transformation of these industrial sites into Wal-Mart stores would reflect sweeping changes that are reshaping the economies of Chicago and much of urban America. It may also lead Wal-Mart to reassess some of the corporate practices that have earned it huge profits but also drawn criticism from labor and community groups across the country.

"In Chicago, you have to be willing to step out of your so-called comfort zone and what you're used to doing," said John Bisio, a spokesman for Wal-Mart. "We recognize that there are experiences there that are different from other places. Organized labor is very strong there. We know we're going to be subject to great scrutiny, and we really want to adhere or conform to the spirit of how things are done in Chicago."

Mr. Bisio said that in Chicago, Wal-Mart would work with local leaders in choosing some of its employees and buy products and services from local and minority-owned businesses. He said he doubted the company would soften its opposition to labor unions, "but that's not to say there won't be times when criticism or scrutiny might make you better focus on what you really need to do for your own people."

For more than a century, giant South Chicago mills and thriving West Side factories absorbed waves of penniless immigrants, first from Europe and then from the Deep South, and gave them the steady income that allowed them to begin sharing the American dream.

"These factories played the pivotal role of giving people spending money, which was something many of them had never even imagined before," said Leslie F. Orear, president of the Illinois Labor History Society. "After paying for food and rent, they had money left for a movie or an ice cream cone or better clothing, and after a while even for a car or a vacation or a little house. People also organized themselves, learned leadership skills, learned how to speak in public. They became more sophisticated, more comfortable with politics and with defending their interests.

"This was how they entered the mainstream of American life."

Since 1980, according to the Bureau of Labor Statistics, the number of manufacturing jobs in the United States has fallen by about 25 percent, to 14.4 million from 19.3 million. Some companies consolidated their operations in automated plants that require far fewer workers. Others moved their production lines overseas.

Among the workers who lost jobs in this process were about 1,000 Chicagoans who worked at the Helene Curtis and Ryerson Tull plants. The plants survived waves of corporate downsizing but finally succumbed in 2002.

As these and dozens of other Chicago factories closed, communities collapsed with them. Huge areas of South Chicago, once home to plants like U.S. Steel's giant South Works, which included 100 buildings and employed 20,000 people, now stand eerily still.

West Side neighborhoods near the Helene Curtis plant, largely poor and African-American, are plagued by unemployment, drugs, gang violence and other forms of social decomposition. Wal-Mart's decision to open stores on the sites of the shuttered factories set off an intense debate. Aldermen who represent both neighborhoods were thrilled by the prospect of hundreds of new jobs.

But other local leaders began a fierce campaign to block Wal-Mart, which they describe as a predatory company that pays low wages, offers minimal benefits, vigorously opposes efforts at unionization and crushes small businesses.

Mr. Bisio, the Wal-Mart spokesman, disputed that view. "You hear people saying we pay minimal wages and give no benefits, but that's so not so," he said. "People don't realize or recognize that our track record is a lot better than what our detractors say about us.''

If manufacturing was once the bedrock of the American economy, globalized service and retail businesses have now assumed that role. Wal-Mart, which has dominated the market for many consumer products through its purchasing power, is now the largest private employer in the United States.

"It's no accident that Wal-Mart picked two neighborhoods that are desperate for economic development as the places to start their move into Chicago," said David Ranney, an economist who has worked as a consultant for labor unions and community groups here. "They're taking the path of least resistance."

Supporters of Wal-Mart paint a very different picture.

"It's not an end, but it's a beginning," said Alderwoman Emma Mitts, who represents the neighborhood where the West Side Wal-Mart is to be built. "For a lot of people, this will be their first job of any kind. This is where they'll learn that in the world of work, you have to show up on time, you have to look good, you have to be helpful and courteous. Our young people are going to learn how to stock shelves, how to answer customers' questions, how to make change.

"Don't underestimate what it will mean to our community to have a place where young people can learn skills like these."

Alderwoman Mitts and other supporters say that once the stores open, they will press the company to provide higher pay and more benefits to workers than it provides in the more than 3,500 stores it now operates across the United States.

"Wal-Mart is used to operating in the South and in rural areas, but they're going to find that Chicago is different," said Al Sams, manager of a filling station near the old Ryerson Tull plant. "Maybe they'll have to do some things here that they never had to do in other places."

Around the corner from the former Helene Curtis plant, opinion about Wal-Mart is divided. Sharaf Ihmud, manager of a variety store that sells items as diverse as rugs and greeting cards, said he was certain that his store would be forced out of business soon after Wal-Mart opens. "It's going to kill us," Mr. Ihmud said. "It's bad for us and for all businesses around here."

Wal-Mart is entering Chicago at a time when it faces a number of unaccustomed challenges. In April, voters in Inglewood, Calif., rejected the company's effort to build a so-called supercenter there. Last month a federal judge admitted a class-action suit on behalf of 1.6 million of the company's past and present female employees who, according to the suit, were victims of systematic sex discrimination. Wal-Mart has denied discriminating against women and vowed to fight the lawsuit.

Some leaders of the A.F.L.-C.I.O. are urging that the labor movement make Wal-Mart the target of an organizing campaign bigger than anything it has undertaken in a generation. "They say you can't organize Wal-Mart because it's too big, but they also said that about U.S. Steel," Ed Sadlowski, a former leader of the United Steelworkers of America, said as he stood among the weeds that have sprouted through the asphalt at the Ryerson Tull plant.

If Wal-Mart and its opponents are to reach some kind of accommodation, that process could start in Chicago.

"The issues that Wal-Mart raises are just starting to come onto the political radar screen," said Nik Theodore, director of the Center for Urban Economic Development at the University of Illinois at Chicago. "Outsourcing is a big issue now. So is the question of how government policies encourage American companies to move overseas or buy from overseas suppliers.

"The debate over Wal-Mart here in Chicago has raised a lot of questions and opened a lot of eyes. I don't think this story is over yet - far from it."