A couple of weeks ago, City Commissioner Steve Novick issued a press release highlighting the first phase of the city of Portland's divestment of bonds issued by Walmart.
Last year, city council passed a resolution prohibiting any future investments from the city's $1 billion portfolio in Walmart bonds. When the resolution passed, the city held $36 million in Walmart bonds. A quarter of those bonds matured this month and Novick wanted to call attention to that fact.
“From what I can tell, no other U.S. city has looked at socially responsible investing in quite the same way as Portland,” Novick said in a May 15 statement. “I’m hopeful other cities and states take note and adopt similar investment principles to hold companies accountable and align our investment policies with our values.”
Walmart has been a convenient City Hall whipping boy for years. Former Mayor Sam Adams built part of his reputation around his staunch opposition to the giant retailer expanding its local footprint.
There are plenty of reasons to dislike the company: it makes life difficult for smaller stores trying to compete and the massive profits that make the founding Walton clan America's richest family are in part a function of low compensation for Walmart employees.
There's been less examination of the flip-side of Walmart: for instance, the retailer generates a lot of taxes and offers shoppers a vast array of bargains. Those are big benefits, particularly in a state such as Oregon where per capita income lags the national average significantly and governments struggle to fund local services.
The New Yorker magazine yesterday published a nuanced look at Portland's decision to kick Walmart to the curb.
Living with Walmart is complex—sort of like living with an assertive, charismatic, and powerful family member. Research from Jerry Hausman, an economist at M.I.T., shows that, when Walmart enters a new market, it drives down grocery prices in general; to compete with Walmart’s low prices, other stores lower their own prices. Low-income families benefit most, because they spend a greater proportion of their wages on food. But Walmart’s presence can also hurt those same families, because it tends to reduce overall retail employment—perhaps by driving out smaller stores, which typically employ more workers per dollar of sales. On the one hand, Walmart helps the city, county, and state budgets; it pays various taxes, and its employees pay income tax. (Oregon has no sales tax.) On the other hand, as the nation’s largest private employer, and one that offers mostly low-wage jobs, its workers are prime beneficiaries of food stamps and Medicaid, funded by taxpayer dollars.