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Ex-Clinton Labor Secretary Robert Reich rips Wal-Mart in Santa Rosa speech

Published: Monday, February 25, 2013 at 3:00 a.m.
Last Modified: Tuesday, February 26, 2013 at 11:05 a.m.

Economist and former Labor Secretary Robert Reich gave a standing-room-only audience Monday in Santa Rosa a crash course in how the nation's economy went sour.

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Robert Reich

AP FILE

With the backdrop of a movement in Sonoma County to stop Wal-Mart from expanding its local presence, Reich used the nation's top employer as an example of how big companies have outsized power to set poor standards for wages and workplace conditions.

"This isn't about blaming Wal-Mart, it's about blaming the system," Reich told about 400 people at Santa Rosa's Glaser Center.

The global retailer is a "net job destroyer" when it arrives in communities, Reich said.

"One of the tactics of Wal-Mart is to suck jobs out of a community," the former Clinton administration official said. "For every job gained, 1.4 jobs are lost."

The Living Wage Coalition hosted the speech. It has staunchly opposed Wal-Mart's bid to expand in Sonoma County, including adding a grocery department to its Rohnert Park store.

Wal-Mart has said expanding the store would add about 85 jobs.

But that ultimately would mean the city would lose 119 jobs, according to Reich's assertion that the company drives out competitors.

"Wal-Mart is not a job creator, it is a job killer," said Martin Bennett, co-chairman of the Living Wage Coalition and an instructor at Santa Rosa Junior College.

Reich outlined a journey of the typical American worker starting just after World War II when the disparity between the highest and lowest wage earners was significantly lower.

During the 1950s, when General Motors was the country's largest employer, the average worker made about $50 an hour including benefits, a figure Reich said was adjusted for inflation to reflect current dollars.

About 30 percent of workers belonged to a union.

Today, fewer than 6.3 percent of workers in the private sector are unionized.

And the typical worker at the nation's largest employer Wal-Mart makes $8.81 an hour, Reich said.

"Where did the money go? It went to the top," he said.

Corporate executives now are paid about 300 times more than the typical worker, he said.

"Wal-Mart is emblematic," he said.

Wall-Mart has been trying to expand its Rohnert Park store to include a grocery department, but in 2010 the city Planning Commission rejected the company's environmental impact report and said a Wal-Mart expansion likely would hurt grocery stores already in the city.

The issue led to contentious hearings packed with Wall-Mart employees and big-box store opponents.

Last month, the commission, with three new members, approved Wal-Mart's revised environmental impact report without addressing any effects the store would have on other grocers. Instead, commissioners said that was beyond their purview.

Opponents have filed an appeal, and the issue likely will go before the City Council.

Bennett said he invited all Rohnert Park City Council members to attend Monday's speech. City Councilman Jake Mackenzie was the only member of known to have attended.

Reich is chancellor's professor of public policy at UC Berkeley and served as the labor secretary from 1993 to 1997 under President Bill Clinton.

He told the crowd that to boost the economy, the country needs fair wages for the typical worker.

Ninety percent of minimum wage workers are older than 20, half are parents and "they are the breadwinners," Reich said. "They need a raise."

Raising the minimum wage essentially gives 15 million Americans a raise "and they turn around and buy stuff," he said.

The issue of stagnant wages struck a chord with Erin Beard, 28, of Santa Rosa, who just finished a master's degree in library science.

She was encouraged that Reich emphasized that citizens can demand that the system change.

"I like how said, 'Let's start talking about what we can do,' " Beard said. "It's uplifting."

You can reach Staff Writer Julie Johnson at 521-5220 or julie.johnson@pressdemocrat.com. On Twitter @jjpressdem.

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