Can Wal-Mart Scale L.A.'s Great Wall of Regulation?

Opponents claim local Asian-Americans oppose the big-box store. Locals tell a different story.

Some of the most powerful unions in Los Angeles want to make sure that Wal-Mart doesn't have a chance of opening anytime soon in Chinatown. Perhaps they should meet some of the Chinese senior citizens who support it. I did—and with the help of a translator and my own rusty Chinese, I learned that "fresh fruit," "always low prices," and "cheap stuff" sound good in Mandarin and Cantonese, too, especially to those immigrants and seniors living near the poverty line or in assisted living centers. 

For decades, there's been nothing on the vacant first floor of the apartment complex where Wal-Mart wants to open its Chinatown store—which it hopes will be the first of many "neighborhood marts" in Los Angeles County. Slightly smaller than a Whole Foods supermarket and only one-fifth the size of a typical Wal-Mart, the 33,000 square-foot store on West Cesar Chavez Avenue would offer fresh fruits and groceries, beauty products, and—most crucially for the seniors I spoke with—a pharmacy. 

Right now, Chinatown has only one grocery store and a highly priced CVS drugstore to serve its nearly 50,000 residents. The lack of competition allows these stores to charge even more than the area's high-priced small markets for what should be cheap products like aspirin. 

In addition, many residents worry about the quality of the meat at some of the Chinese shops that Los Angeles city officials say a Wal-Mart will undercut. Indeed, all of the Chinatown residents I spoke with emphasized that at some of the Chinese markets, meats and other items are displayed on the sidewalk, exposed to the air and heat. 

During a recent visit, Ming-Sheng and Lindsey Hu invited me into their home and offered "tea eggs," a traditional Chinese delicacy, after I took off my shoes. The Hus, immigrants from China, are excited that a Wal-Mart may finally open up nearby. After showing me pictures of her grandchildren, Mrs. Hu—a lively 82 years old—proudly took me to her bathroom to see all of the Target and Wal-Mart products. Although inexpensive, they weren't easy to buy. Mrs. Hu must be driven 30 minutes by car to the Target in Alhambra, or wait for her children to take her—more than 40 minutes by car—to Rosemead's Wal-Mart. A new Wal-Mart in Chinatown would be more convenient, especially for her 86-year-old husband, who has limited mobility, and for the other residents of the Grand Plaza Senior Apartments, next to the planned Wal-Mart. 

While Rep. Judy Chu (D-Calif.) has decried Wal-Mart's "ability to…drive all other competitors away" with rock-bottom prices, many Chinatown residents, suffering for years from gouging by the local markets, would probably say "good riddance." In what must frustrate the unions most, the typical argument that products "Made in China" are inherently inferior doesn't work in Chinatown. "I come from China, too!" one of the old Chinese ladies protesting in favor of Wal-Mart said. "We Chinese are cheap!" another pro-Wal-Mart elderly lady told me. 

The neighborhood Chinese stores charge "whatever they think they can get," another senior said. Another problem is that most Chinatown residents must cross a busy thoroughfare to get to these markets. The Wal-Mart, in contrast, would be on the same side of the avenue—a safer, more convenient trip, especially for those with limited mobility. A resident of the Grand Plaza apartments explains that having a Wal-Mart nearby might even help save taxpayer dollars. He notes that city social workers have to come and help many of the seniors buy groceries, taking time from their other duties. In addition, the man told me through a translator, "Nobody wants to be a drain on the public."

To the Los Angeles City Council, size matters, and in this case large is bad. City Hall's anti-business attitude comes at a cost. While the City of Angels' deficit for next fiscal year is a whopping $220 million and counting, local politicians have ruled out so-called Big Box retailers.  

So Wal-Mart's proposed small neighborhood store actually complies with the city's unrealistic anti-superstore ordinance. This law, enacted in 2004, forces big-box retailers who want to open a store larger than 100,000 square feet to provide a costly economic analysis showing whether it will depress wages or harm nearby businesses. (So much for Schumpeterian creative destruction!) 

Despite the planned Chinatown store's compliance with the strict size limit, the council in late March unanimously approved a motion that would block it—suggesting that sponsor Ed Reyes and his colleagues are really against Wal-Mart, not just large outlets. Wal-Mart, however, outmaneuvered the council by obtaining its needed building permits the day before the vote. Naturally the unions, allied with the left-wing Los Angeles Alliance for a New Economy (LAANE), have vowed to appeal those permits. "They've got to review the permits to determine if any errors were made," James Elmendorf, LAANE's deputy director, told the Los Angeles Times. 

LAANE and councilmembers Reyes and Eric Garcetti may search for "errors," but the move is so transparently unfair that even the Times' editorial page has come out against it. "Rather than presenting potential businesses with reliable rules and allowing those businesses to judge whether they can or will comply, every deal in the city is subject to negotiation," the editorial board wrote. The paper might have added that unions and allies like LAANE get to decide the terms of these negotiations. 

Part of LAANE's opposition to Wal-Mart comes from its support of what it calls a "living wage," but what they mean by that isn't at all clear—and deliberately so. According to Charles Crumpley, editor of Los Angeles Business Journal, the starting wage for a non-managerial Wal-Mart worker is $12.69 an hour. In Long Beach, LAANE wants to force hotels to pay their staffs a "living wage" of just $13 an hour. The tiny difference suggests that the organization is nickel-and-diming companies it doesn't like in the service of its union funders and allies, like the United Food and Commercial Workers Local 770 (whose members get $15.41 an hour—before dues). 

To one Taiwan-born Chinatown resident I spoke with, the whole notion of a "living wage" is ridiculous. "Anyone can live, and live well, in America. Even the homeless here are fat," the now retired restaurateur told me with a laugh, pointing to the homeless hangout spot on Cesar Chavez. To those who came to America with nothing or very little, the notion that you can't get ahead here is offensive and false. 

Anyone who opens a retail store will tell you: It's all about location, location, location. A little poking around reveals that only one of the main opponents of the Chinatown Wal-Mart actually lives there, which makes it hard to believe LAANE's argument that it is motivated by the "neighborhood's quality of life." Sissy Trinh, head of the Southeast Asian Community Alliance, lives in Pasadena, while Chu and her husband, Democratic State Assemblyman Mike Eng, live in affluent Monterey Park. James Elmendorf and his boss, Roxana Tynan, the deputy director and executive director of LAANE, live in the Mount Washington and Highland Park neighborhoods. The "Keep Chinatown Local" slogan is a hollow one, especially when it comes from people who live where trendy grocery stores like Fresh & Easy and Trader Joe's are seemingly on every corner. 

One of the most frequently quoted anti-Wal-Mart residents is Christilily Chiv, a 2011 graduate of the University of California-Riverside, who majored in Asian Studies and now works with the leftist group Public Allies Los Angeles. "She believes in viewing the world through critical lenses and to not take everything for just the way it is," her Public Allies bio explains. That is, unless it is Wal-Mart. That's when the critical thinking seems to end. 

The strongest remarks against Wal-Mart have come from Chu, the member of Congress who has long opposed the discount giant. In 2004, while she was in the State Assembly, Chu put up a fight against a Wal-Mart in Rosemead. 

At the time, Chu decried Wal-Mart's "bad reputation" and claimed that local Asian-Americans and endangered small businesses were united against the retailer.

The Wal-Mart ended up opening despite Chu's efforts. The result?

"Wal-Mart helped generate $148.7 million in Rosemead citywide taxable retail sales in 2007, a $21,000 increase in such sales from the year before the store opened," Rosemead Mayor Steven Ly wrote recently in the San Gabriel Valley Tribune. "Rosemead saw an increase of 9.4% in new retail permits [near Wal-Mart]." In addition, the company has been generous to Rosemead's charities, giving more than $52,000 in 2011 to the local Boy Scouts, the town's Regional Food Bank, the American Diabetes chapter, Rosemead High School, and the Rosemead Kiwanis Foundation. 

And what about Mrs. Hu? She has strong words for the people "pretending to speak for Chinatown." Sitting up straight in her chair at the mention of local Chinese-American politicians, she said: "Judy Chu and Mike Eng don't live like we do. They don't know what it's like to live here, and they don't speak for me." 

Charles C. Johnson is a writer in Los Angeles and author of a forthcoming biography of Calvin Coolidge.