April 5, 2004
Wal-Mart (NYSE: WMT) is so huge, news stories often report that the firm would be in the top 20 economies of the world, if it were a country and not a corporation. Oddly enough, if things go well for Wal-Mart tomorrow, it will take a step toward becoming an autonomous political unit, at least in Inglewood, Calif.
If ballot measure 0-4A passes, the world's biggest retailer will win the right to build a supercenter -- one of the firm's flagship grocery and retail megastores -- that would cover an area the size of 14 football fields. Inglewood is one of several California towns where elected officials have attempted to keep out big box retailers.
In a region already scarred by the recent grocery strike, a coalition of organized labor and community activists is squaring off against Wal-Mart with familiar arguments about low wages and a dearth of benefits, and the effect that the company's non-union workforce has on grocers like Safeway (NYSE: SWY) and Albertson's (NYSE: ABS). Wal-Mart counters that the economic trickle-down will be good for a city with high unemployment, where close to one-fourth of the population lives below the poverty line.
So while it's unusual to see a private corporation go straight to the voters for an end-run around the legislative process (and spend about $1 million in the process), there are some even stranger provisions in the ballot initiative. The 71-page measure would authorize the construction to proceed without public hearings and without traffic or environmental reviews. But the kicker is this: Any changes to the project would require a separate election and a two-thirds vote by residents.
Very clever. The folks who run Wal-Mart didn't just bounce off the turnip truck. They obviously realize how easy it is to sway 51% of the electorate, thus the higher threshold for future changes. If 0-4A passes, the company will not only have a license to make its own rules, but it will be all but impossible for Inglewood's citizens to regain control of this enormous piece of development. This precedent for corporate autonomy might be great for Wal-Mart shareholders, but I'm not so sure about the rest of us.