The Kmart store in the eastern Iron Range city of Virginia, Minnesota, will close in April, joining a host of other retailers in or near Virginia to close early this year.
Kmart also closed stores in Superior, Wisconsin, and Ironwood, Michigan.
The Mesabi Daily News reported last Sunday that the Hallmark store in the Thunderbird Mall will also close, along with Suzanne’s Jewelry, Falkowski’s grocery on Virginia’s North Side and the K&B Drive-in south of Eveleth.
Bill Hanna’s Mesabi Daily News editorial page is also interpreting these closures as caused by the ongoing downturn in the Iron Range mining downturn, along with other factors. A recent editorial declares that tariffs on foreign steel would help prevent more losses, and extolls shame upon the White House for inaction.
I’m pretty mad about what’s happening, too, but there’s not much the White House could have done to keep Kmart open, I assure you.
The mining downturn sure isn’t helping. It’s certainly pushing vulnerable businesses over the edge. But to me this is another reminder that we’ve been living in a very fragile economy on the Iron Range this whole time. In addition to the lost buying power of laid-off miners, there are other equally troubling factors.
For instance, it’s become quite rare for a retiring Iron Range business owner to find a buyer to keep the business going. Unless they’re handing it off to a kid, retirement usually means the end of the business. Since most business owners are of retirement age, this problem will get worse.
Malls are dying. They’ve been dying for 15 years for myriad reasons, including retail trends, real estate practices, and age. The Thunderbird Mall in Virginia, where Kmart is an anchor tenant, had been enduring much better than its counterparts in Hibbing or Grand Rapids. Nevertheless, the trend is catching up. The Irongate Mall in Hibbing is a good example of what happens when the failure ball starts rolling.
Box stores kill everything. Small town centers like Virginia, Hibbing and Grand Rapids got Wal-Marts. Little towns like Chisholm and Aurora got dollar stores. Add to that all the people buying key staples online. The way retail was conducted when I was a kid playing on the typewriters at the Virginia Kmart is gone. Gone, baby, gone, gone, gone.
That’s why I view our problem as being bigger than mining. Mining is a huge factor in our economy, but even had three mines not been idled this year I don’t know that all of these businesses would have survived. Our economy’s problem is dependence on mining as the primary source of significant income and outside investment. About 70,000 people are depending on an industry that can only employ about 4,000 in good times, perhaps twice that in ancillary industry.
Most experts agree we won’t see 4,000 in mining employment here ever again. We might see untold tonnage, but far fewer workers.
Note, that doesn’t mean throw mining under the bus. Trade should be fair. If tariffs will help, good. But subsidies or protections to keep an industry going does not inherently strengthen a community. Only we can do that, with our shopping habits, our personal investment of time and dollars in a community. Never mind who’s president. Never mind which party wins Congress. Never mind what the editorial page says.
This problem is our problem, and we are the only people who can truly create a permanent sustainable economy in Northern Minnesota.
The more efficient low-cost big box stores put the high-cost main street family stores out of business. The lower cost Amazons are now putting the formerly low-cost big box brick & mortar stores of out of business. The quicker we can get high-speed optical internet to all, the quicker we can buy more stuff on-line and put ALL these big box employers out of business. These evil boxes that “kill everything”… arrgh!
Let’s hope the new, non-mining, sustainable, diverse, yet to be defined, Iron Range economy kicks in soon.
With the world (including the Range) in turmoil, people making less than they did 8 years ago, racial relations on edge, our health care system in disarray with costs rising like crazy, more citizens of working age not working than ever before, cops being demonized like never before, immigration laws being ignored by those sworn to enforce them, promotion of class warfare of all kinds…not to mention the vast majority of citizens (76%) saying the country is on the wrong track…and in this ever shrinking world you say “never mind who’s president”, that elections don’t have consequences? You claim the problem is US… me, you and our neighbors? Holy Cow Aaron!! You’re correct in one regard. We keep electing the same self-centered, narcissistic idiots.
Bob, I think it was pretty clear that I called “us” the solution, not the problem. The talking points you refer to, all of which are fodder from recent speeches and cable newscasts, mean less to the Iron Range now than whether people are willing to spend time and money on their own communities. If they aren’t, it doesn’t matter who is elected. Elections matter, but they matter less than human innovation and effort. I don’t know that we disagree about this, do we? I do know that I’m not going to argue with you about 18 different soundbites from your various political newsletters. No time.
I will argue about one soundbite, since it is so spectacularly wrong:
Although the latest year of data does show health care costs rising faster than in the past five years, they actually are still rising more slowly than any year from 1998 to 2009. The rise in the last year is, in fact, predominantly due to rising costs of prescription drugs, especially the cost of the new hepatitis C treatments — over $80,000 per patient with millions of patients treated. Drug prices are the one part of health care untouched by the Affordable Care Act, since pharmaceutical companies are specifically protected by the laws passed by Bush and his GOP Congress from price pressure, competitive bidding, and other cost containment attempts by the government.
Otherwise, health care costs are actually doing much better than anytime in previous history. That is especially true in MN, where insurance costs are substantially lower than in other states, including our neighbor Wisconsin. In the meantime, over 17 million previously uninsured people now have insurance and access to care, a number that would be much higher if the Medicaid expansion feature of the ACA, the biggest factor in expanding access to care, had been adopted by all states instead of being rejected by many, including some of those where people would benefit most.
In addition to depriving millions of access to care, this exclusion is actually a factor in driving costs up for the rest of us, since many costs related to providing care to the uninsured are passed through to people who have insurance. The poor performance of Wisconsin in health care costs compared with Minnesota is one example of what happens to costs, payers, and insured people when a state turns its back on its own citizens to make a political point.
Gerald S…You must have gotten the Obama promised $2,500 rebate or premium reduction. If so, I’m happy for you. I not only didn’t get mine but to the contrary, my costs have gone up dramatically..
BS! Our family monthly premium went from $637 a month to $942 per month for 2016. Thanks Obama care!!!!! What a joke, a sad joke.
Sorry about your premiums. However, individual experience is no substitute for data.
My premiums went up from $515.40 to $538.80.
Medicare premiums did not go up at all.
None of those personal experiences mean anything in the overall data. The overall rise was between 6 and 7%.
The fastest rises in medical costs occurred from 2002 to 2008. The recent year had higher raises than the last five earlier years, which showed little or no rise in real dollars after general inflation. As I said, this rise is mostly due to increased drug costs.
One other big cost impact this year was the defunding of the Obamacare “risk corridors.” Risk corridors were designed to reduce the cost impact of requiring that insurers accept people with pre-existing conditions and charge them the same rates as other people — over 75% of Americans approve that change when asked in polls. The risk corridor program was funded by taking money from insurance programs that experienced unusually low claims and shifting it to programs with unusually high claims experience due to insuring large numbers of the higher risk patients. When Congress — Marco Rubio is bragging about his role in this — cut the program by over 85%, some insurers were forced to increase premiums to cover the increased cost of insuring high risk patients, cost previously covered by the risk corridors rather than by your premiums.
Your premium change is more the result of Rubiocare (risk corridors) and Bushcare (forbidding negotiation for drug prices) than Obamacare.
Blaa, blaa, blaa, Gerald. Sorry my a**! Address the $2,500 Obama promised me, dang it!! And don’t tell me Independents case is an exception, it’s not. My and a many of my friends experience is similar. So..my costs go up $3,660 a year, not down $2,500. That means I’m out $6,160 the first year of this Obamacare crap and $3,660 PLUS forecasted double digit rate increases each year thereafter. And you’re out there trying to peddle some “defunding” B.S, what a crock.
Nice try. As you would expect after I opened our invoice for January and saw the ridiculous increase I immediately and repeatedly have called our provider Blue Cross to understand what is going on and if there are any options for me to reduce our premium and have been told that the average increase in Minnesota for individual health insurance plans is about 35% this year. Before “Obama Care” I was able to easily provide health insurance for my family. Now without any health issues whatsoever with anyone in our family we get slammed with a $305 dollar increase every month! I am starting to think that I am a sucker to keep working 12 hours a day to provide for my family and pay taxes… for what! I think a lot of folks are going to be surprised in the upcoming election cycle. I think the silent majority is about to get a little louder.
The number I gave is for the entire insurance market, including employer programs and ACA exchange programs. It makes sense that you are in the individual market, since that market has the worst problem with high risk patients and enrollees have the lowest power to negotiate rates. My much lower rate change — for the same company — reflects being in a much large pool of enrollees.
You also are insured by the company that raised rates the most this year.
In Northeast MN, the average rate rise in the individual market is 15%. Statewide, rates vary by company from as low as a 14% rise for Medica to as high as 49% for Blue Shield.
http://www.startribune.com/regulators-approve-premium-jumps-averaging-as-much-as-49-percent-in-minnesota/330275391/
The individual market is the most severely affected by rate rises due to the risk corridor reimbursement changes, since the individual market is most prone to actuarial imbalance due to high percentages of enrollees being in high risk classes — low risk people in the individual market are the most prone to deliberately choose to not buy insurance, creating a bias in favor of high risk enrollees. Without the risk corridor adjustments, many insurers experienced losses on many programs, and consequently raised rates for all contracts.
You have personally been affected by the decision by Congress to drop this protection that for the first three years of Obamacare helped hold rates down by offering a reinsurance program for high risk enrollees who added to insurance companies’ costs, covering losses that are now being passed on to all enrollees.
My advice would be to look at all the companies offering insurance in your market to see if any companies are underselling BC/BS, and also to consider enrollment through MNsure, since in some cases their rates for the same insurers are lower, even if you do not qualify for a subsidy, since they are negotiated for a substantial group of enrollees by the state government.
The real tragedy here is that insurance rates in MN are still well below national averages, and as I noted earlier, substantially lower than WI. Many people are worse off, but that is little consolation.
It is also interesting to note that Medicare has held rate rises to zero for about the fifth consecutive year, despite insuring the most expensive group in the market, seniors. Medicare, of course, is able to hold prices down to do that through their power to set payment rates for providers and hospitals. It would be nice if that sort of negotiating power were extended to all insurance programs.
Where’s my $2,500 Gerald?
Gerald you started by saying the increases were only about 6-7%. One post later you are saying in NE MN that is varies from 14-49% with an average of 15%. Are you an accountant in the insurance industry?
The increase for ALL health insurance is between 6% and 7% on average. The increase for the individual market BY ITSELF is 14-49%, depending on the company you buy from and the area you live in.
The individual market is a small percentage of the TOTAL health insurance market — only about 6%. Consequently the large rises in the individual market are highly diluted by the more stable prices in other markets (like my insurance, which rose about 5%) and have relatively little affect on overall numbers.
So although the individual markets have seen very large rises as a result of Rubiocare, the affect on the overall market is relatively small.
The facts (which become political when you refer to them as talking points) are facts Aaron. I don’t receive any political newsletters, but do read the DNT, Grand Rapids Hearld, Mesabi Daily News, Hibbing Daily Tribune, WSJ, NYT, Time, the RedStar, St. Paul Pioneer Press, Mpls/St. Paul Business Journal and some on-line news aggregation sites regularly. (Geez, you’re correct, most all news sources toady ARE political newsletters…sigh).
Regardless, they ALL say it’s a troubled world (Range) and most all troubles are exacerbated by government actions..or inactions. We agree, there are at least 18 issues needing discussion/resolution. Take ’em one at a time.
You say us Rangers must change our spending habits and spend our money on our own communities. Nice & noble, however…the Rangers I know are increasingly facing the need to spend only on basic needs…and search for the best price/value possible, whether it’s in Cherry, Chisholm or China. We don’t have the luxury to do otherwise…in large part due to personal life choices but greatly enhanced by debilitating government policies.
And what I’m saying is that what you’re proposing (vote for the right people and wait) is the same “solution” we’ve been fed for generations just with a different logo. The world economy is changing, irrespective of political parties. We can localize our economy, spend time and effort on our own communities. Or we can wait for the desperation to rule our thinking even more than it does now. Go ahead, vote in the rascals of your choice. Good luck. Won’t change the Range until we change the Range. I’ve found several great examples of small town/regional rebirth in this country. Some are in Democratic cities and some in Republican. Failures, too, can be found in any political swamp.
If we don’t include quality of human life in Northern Minnesota into our equations, we will never be the “cheapest” option. Our economic situation is far more debilitating than our government. But this is where I again say if you want an 18-point debate on the role of government, the comments section of a blog is probably not going to resolve anything.
I’ve never said “wait” Aaron, that’d be an ingrained DFL trait…but I have said Rangers voting for the same party for over 60 years and expecting different results is insane. And on that, we seem to be in agreement….along with the 10’s of millions of others supporting Trump and Carson, logo-less citizens promoting common sense leadership. We’re only two votes though..
To Aaron and the many other voices who’ve been screaming into the howling wind for years, I empathize. And there a lot of others I do also. Kmart’s problems are not just necessarily the Range’s. The owner, a hedge fund acolyte who actually believes Ayn Rand’s fairy tale world, including setting departments at each other’s throats within the same store, is as much to blame as anything else. And Walmart is a monster. But it is very hard for me to listen to the whining and begging of a group of people whose work life consisted of being connected and maybe working a four day bitching about how their life is screwed, considering what the rest of the country has gone through. Most sat up there fat, ignorant and sassy for decades bitching about the rest of the world while complaining about the damned evildoer outsiders. And now, as is the norm, those who loved capitalism in 2008 now come begging for socialist alms in the form of unemployment extensions. There were none, of course, for others, and I noticed that rangers weren’t clamoring for anyone else who was suffering when things were running. As Pawlenty said, and believe me I was no fan, the only words out of the Range seem to be ” Send Money.” How many have put all their energy into pushing Polymet for years, while at the same time watching the same circle of thieves extract the cream of the mining tax revenue. Maybe you should go ask Mr. Micheletti and the that gaggle of thieves you call legislators ….9.5 million would go a long way. This has been a large scale problem for years..as long as a group of white, blue collars get theirs, they promptly go off and drive their boats and forget about anyone else. Well…you are reaping that now, except you forgot you are the wheat. Enjoy the combine and the flour mill.
Yes Grand Rapids is getting hit too…Embers/Bridgeman’s is closed, the Dollar store in the Mall just closed, as well as Reed’s and today I was in there and the Scrubs store is closing also…the mall is pretty much empty….I did hear that Culver’s was coming to Rapids, in the old Kmart parking lot, and Aldi’s was supposed to be coming too…but I will believe it when I see it…
Bridgeman’s and the Mall dollar store closed because of retirements, and no interest by anyone in buying them. Reed’s closed because the pharmacy company pulled out ,with no advance warning. The Scrubs owner has had a very questionable business background
No question unemployment impacts businesses all along the range. Makes me very sad whenever a business closes, for whatever reasons.
Jackie….this presents what a wonderful opportunity for you! With all these businesses closing, it means less competition, a greater chance of success.
It’s an opportune time to open one of those diverse businesses Aarons been talking about.
It’s a chance to get in on the leading edge of the new Iron Range economy…AND, to personally demonstrate how much you support the minimum wage wave by starting your employees out at say $20 / hour or so? At least go with something 50% higher than what Reed’s, Bridgeman’s, Kmart or the Dollar store was paying….just to show your sincere commitment to increasing the minimum wage. What dya think?
I’ll make a point to be there for your Grand Opening!
At age 82, I don’t think i have the energy or finances to start a business, but I do try to support the local businesses whenever I can.
I understand Jackie…check with the more energetic of your circle of friends/family. Somebody’s gotta take the lead. It’s a wonderful opportunity to start paying higher wages than those tightwads that are closing.
Ranger, unless your talking to someone who has actually put everything they own on the line to open their own business and work 80 hrs a week to keep things going they are so delusional that they probably can’t pick up on even your heavy sarcasm. Remember they have been taught that business owners are just greedy and we could all pay every entry level position $15/hr but we screw everyone over and swim in pools of money every evening at their mansions.
Gerald, 1/16/2016 – “So although the individual health care markets have seen very large rises…the overall is relatively small”.
Your “relatively” is obviously are not a Ranger’s “relatively” Gerald. I doubt if you’re from the Range. ‘Cause for ALL Rangers, none of whom have seen their $2,500 promised by Obama, any increase at all is “relatively” large. Just ask a Ranger.
Again, where’s our $2,500? That’s real money. It’s amazing, for being so detailed, and wordy, yet not one word from you on the elephant in the room, the missing $2,500.
You’re coming across like that Jonathan Gruber guy, you remember him, the wordy MIT professor, the architect of Obamacare..the guy who said -“Yeah, we lied to the American people to get it passed”. I’ll bet your from Boston also..
Math:
If 6% of people pay a 30% increase, and 94% of people pay a 5% increase, what is the overall increase?
6 X 30 = 180
94 x 5 = 470
470 + 180 = 650
650/100 = 6.5
The overall rise is 6.5%
Therefore, the rise for those unfortunate Rubiocare victims causes a 1.5% increase in the overall increase of costs. 1.5% seems pretty small overall, less than our current very low rate of inflation, although I will readily grant that for the unfortunate few the individual rise is large.
Independent should definitely write Rubio and tell him to stop screwing up his health insurance in order to try to score political points, and tell him to reinstate the risk corridor program that previously prevented those sharp rate rises in the individual market.
More words…yet still no mention of our $2,500 reduction.
Here’s the real math Gerald, some Iron Range math….
According to Investors Business Daily – “average family premiums have climbed a total of $4,865. The difference between going down $2,500 and going up is $4,865 is $7,365″. Independants real increase was $6,160…close to mine.
However, I expect by your Bostonian logic, we’re really saving $1,205 ($7,365-$6,160)? Plug the $2,500 into your math and see how it works out.
Again, where’s my $2,500?
As you know, Investors Business Daily is not a real news source, but part of the right wing noise machine. Quoting the IBD is not at all reliable — it’s like citing Ann Coulter.
The $2500 has been one of your long term, off repeated bits of misinformation, and I have ignored it here because it has been thoroughly debunked on past threads. On the off chance that there are people now reading who have not already heard all of your standard talking points, I will recap what has been said several times before.
The $2500 you are citing comes from Obama’s announcement of the results of part of the ACA, a provision requiring that insurance companies found to be overcharging enrollees be forced to refund excess charges. In the first two years of the ACA, there were a significant number of insurance programs around the country found in violation. As Obama announced at that time, the average refund forced on the policies was $2500. This refund always applied only to people found to be overcharged, and there were very few overcharges in MN for the simple reason that MN has already had a program guarding consumers against insurance overcharges in place for many years, so the legal changes from that part of the ACA did not have much impact here. In many states, there was a big impact, hence the $2500 average.
Somehow, you seem to be either again misinformed about this or have forgotten the details. This may have been a brief topic in right wing sources, but it has been dropped even in the noise machine since it is so clearly wrong.
Perhaps you either picked this up from some right wing source and held on to it, or perhaps you just didn’t read the articles about it all the way through.
No, there is no $2500, nor was there ever a promise of it, unless you were overcharged that amount. And yes, the average rise in premiums IN THE ENTIRE INSURANCE MARKET this year has been a bit under 7%. Yes, people in the MN individual market have faced much higher charges, especially if they are Blue Cross customers and especially in some parts of the state. Others have faced much lower rate increases, as I did, and Medicare enrollees once again had no increase at all.
In the time the ACA has been in place, medical costs and insurance rates have increased, as all things do, but have increased at historically low rates, so much so that the life of the Medicare Trust has increased by more than 15 years. This year has seen more rapid increases than in the other years, but overall still below historic levels from the pas†. As I noted earlier, most of the increase in health care costs has come from increased prices of prescription drugs. The biggest increases in insurance rates have come from those added costs, but most dramatically from the impact of ending the risk corridor program. That program, Rubiocare, forced insurance companies to cover their costs from increased premiums rather than from the program designed to help them deal with the increased costs of allowing people with pre-existing conditions to buy insurance. Buyers in the individual market in MN are paying the price, literally.
Gerald the Bostonian, 1/16/2016 – “No, there is no $2500, nor was there ever a promise of it..”. My God Gerald, check your internet connection!
“We’ll lower premiums by $2,500 for a typical family per year…by the end of my first term as president.” – Barack Obama, June, 2008. (plus numerous other times hence)
You must either be light-headed due to your deflated-ball Patriots man handling the Chiefs or you’ve had one too many Good Morning Boston stouts.
Either way, its best you let your head clear, go to church tomorrow, think about what you’re just written…then offer a retraction. If not, as Joe Wilson said – “you lie!”
In the mean time, I’ll have a Guinness as I look forward to the Packers advancing with a legally inflated ball, patiently wait for your retraction and….my promised $2,500.
Take a look at the date on your quote. That was a campaign promise about a proposed program, including a public option tied to Medicare, not about the ACA as it was passed. That original proposal was blocked by a group of conservative senators, including both Democrats and Republicans — the famous “gang of six.” Many of the concessions implemented by the gang of six were directly related to a futile attempt to get Republicans to agree to the idea of making health insurance more available to all Americans and to lower cost, which the Republicans steadfastly refused to do, sticking to the principle that health care is a commodity, not a right, and that if you can’t afford it you don’t deserve it.
Unfortunately, even a politician with a majority cannot always get exactly what they want. Ask John Boehner and Paul Ryan about how that works. After all, if Bush II had been able to get what he wanted, working with a majority in both houses, Social Security would have been privatized just in time for the Bush economic crash.
The Obama quote about the $2500 that occurred after the passage of the ACA had, as I said above, to do with the part of the ACA that forbade insurance company excess profiteering.
The rapid rises in the individual market this year, alluded to by you and your sources, is, for one last time, primarily due to the impact of the Rubiocare law to abolish the risk corridors program that protected insurance buyers from the impact of higher claims in companies that ended up with a lot of people with pre-existing higher risk.
In fact, not only have rate changes remained moderate for most of us, but thousands of Minnesotans are getting health insurance for the first time — cutting the rate of uninsured by half since the start of the ACA in MN, and many, many people who use the exchanges have benefitted from the lower rates and subsidies in the program to pay much less than they have before or would now, and get better quality insurance to boot. Some Minnesota families are paying less than $50 a month, if they make less than $55,000 per year.
In addition, to repeat, average rate rises under Obama, even including the affect of the rate rises in the individual market this year, remain much lower than under Bush II, Bush I, and Reagan.
I am sorry to hear that you think that anyone who is well informed and understands what is going on cannot possibly be a Ranger. There are many people up here who know what’s what — just look at the election results.
Gerald the Bostonian….I prayed for you at church this morning and forgive you for continuing to mislead (lying). That said…
You know Obama promised to reduce our premiums by $2,500 many, many times, before and after Obamacare was passed knowing full well he knew he wouldn’t – he lied.
You know that Obama promised we could keep our doctors while all along he knew we wouldn’t be able to – he lied.
You know Obamacare has complicated our health care system. It’s reduced our health care choices, increased our costs, decreased the quality of our health care and increased the wait times for getting health services.
You know the full negative impact of Obamacare on our lives has yet to be felt, it’s still kicking in and kicking us in the butt.
You know the CBO has raised its estimate of the cost impact of Obamacare from $1.5 trillion to over $2 trillion. Obama knew the cost impact of less than a $1 trillion as he promised was a lie at the time he said it.
You know there have been over 150 new government health care boards and agencies since Obamacare passed, many of which are failing. They were set up to assure the government could skim off health care dollars while offering no value…which in large part is why they’re failing.
You know that after 5 years since Obamacare was enacted, the majority of people, including those on the Range, always have and for ever-increasing reasons hate it. The chickens have not only come home to roost, they’re crapping all over.
The reason Rangers continue to elect folks who support Obamacare is because they’re human…and in favor of getting stuff for nothing. The irony is they’re smart people…they know it’s wrong, they know nothing is free and they know electing these folks has cost them dearly over the past 50 years.
The human frailty of buying into political promises of getting something for nothing is tough to overcome. Through faith, hope and love it can and will be done..
Where’s my $2,500??
Did you really pray for Gerald, Bob? I mean, really? Did you pray for God’s will. Did you pray peace and love to all mankind, the way Jesus advised? Or is this another attempt to make people feel bad because they disagree with you? I’d hate for it to be the latter.
Speaking only for myself, I’d be a lot more receptive to your arguments if you actually considered what people said and addressed them with respect instead of repeating the same arguments you brought in the door, blended with ever-more insults and innuendo. I cannot believe the amount of time you spend on spite. All you really want is the last word. I hope that’s some comfort for you. It’s maddening to watch. Maddening.
Amen, Aaron!
Aaron…If I said I prayed for Gerald, of course did. As you well know, I strive to speak only the truth. Lying about anything is not wise.. But lying about prayer…well that would be essence of evil.
Aaron – Somewhere in this post you mention “Big Box stores kill everything”.
Well, we’re making progress. We’re on a path to rid the earth of this scourge. Actually, more than a 100 at a time, excluding the Kmarts!
Walmart Closes LA Store Over $15 Minimum Wage
Los Angeles residents of impoverished Chinatown were shocked to learn on January 17 that the Walmart they pleaded for years to get would be shut down at 7 p.m. Sunday evening due to the city’s new $15 minimum wage ordinance, and union harassment.
The closure was a one of 154 closures recently announced by Walmart.
Immigrant Hispanic and Asian residents of central Los Angeles campaigned for years for a “big box” retailer to locate in their economically depressed neighborhood to compete against liquor stores that sold a limited number of food items at very high prices. In September 2013, Walmart finally opened a 33,000-square-foot grocery and drug store in the Chinatown area.
Crowds flocked to the store for lower food costs, substantially cheaper pharmaceuticals, and even ethnic offerings. But labor leaders immediately started protesting against the store for refusing to unionize, even though the majority of Walmart employees refused to sign union cards.
According to the labor leader organizer Brooke Anderson, “As people deeply committed to environmental and climate justice, we condemn Walmart as a climate criminal and we stand side-by-side with Walmart’s workers organizing for $15 per hour, full time work, and the respect they deserve.”
During last summer’s union-led “Fight For 15” minimum wage movement in Los Angeles, Walmart was demonized on giant banners proclaiming, “Walmart Wages War on Workers” and “Walmart Wages War on Planet Earth.”
But after succeeding in pushing through a minimum wage that was set to start on January 1 at $10 an hour and jump in steps to $15 in 2018, unions and liberals have begun to panic that spiking wages might actually cause the 15 percent rate of unemployment among those with a high school diploma or less to rise.
The non-partisan Congressional Budget Office’s most recent in-depth analysis on minimum wage hikes estimated that President Obama’s proposed federal minimum wage increase from $7.25 to $10 an hour would kill 500,000 existing jobs.
Liberals piously called this negative impact a “reasonable tradeoff worth embracing,” whereas conservatives and business owners called it proof that government interference destroys jobs and puts more people on welfare.
Walmarts wages put people on welfare. They require full time workers and pay them poverty wages which then require them to ask the govenment for help in meeting their basic needs. Contrary to popular talking points most of these employees aren’t high school students, they’re adults who work full-time and aren’t able to make enough money to meet basic needs much less stimulate our economy or better their situation. And all some of us can do is preach disingenously while ingnoring the plight of the poor and even speaking with contempt of any attempt to improve their situation.
I’m reinforcing your point Taylor. Shut ’em down, shut ’em all down. You should be celebrating as these evil stores close, not bad-mouthing their decision to close…But then you, Jackie and Aaron must walk the talk. Start up your own businesses to re-employ these laid-off folks and pay them a wage you think is right….starting somewhere in the neighborhood of $20/hour or so? But I highly doubt you’ll do that.
What you’ll most likely do is wait for someone else to start a business then complain the day they hire their first employee…bitching ’cause they’re being underpaid. In the meantime you’ll push for disincentives such as extending unemployment forever and / or increasing welfare. And good folks who might otherwise think of moving to where the jobs are, or maybe starting a small business of their own are more likely to sit back and say – hmmm, no need.
The article quoted is from the Breitbart News, and given the source not surprisingly has its own right wing spin and only minimal attention to real facts as it spins off into its own agenda.
The real story is that the move has little or nothing to do with wages, and similar closings are occurring around the country in communities with minimum wages that have not increased in years.
Walmart is changing its retail strategy to reflect the times, closing smaller stores and stores with less business. At the same time, they are opening hundreds of new stores, many with larger formats. Here is coverage of the issue from a clipping service, including a detailed article, quoting from Walmart’s own releases, explaining the strategy, and reprinting not only the Breitbart piece, but also accounts from two other cities affected.
http://www.ellinghuysen.com/news/articles/181059.shtml
Also, for anyone who knows LA, closing a Walmart in Chinatown is not at all surprising, since the area is gentrifying rapidly and land values shooting through the roof. The famous law of highest use would dictate that a low rise sprawling discount store would be an attractive target for being torn down and replaced by a higher rise building or buildings with business use on the ground floors and condos on higher floors, catering to the upwardly mobile young (and to some extent the prosperous retired) who are flocking to the center of LA as it gentrifies rapidly. Downtown LA and Chinatown have gone from a slum to a “preferred address” in just a few years, with developers tripping over each other to fill the demand. If you follow LA news, the real concern of most of the “residents of impoverished Chinatown” is being forced out of LA and into the Valley by crowds of Yuppies descending on their neighborhoods and buying it up at prices the original residents can’t afford.
Economics grinds on, here and elsewhere.
Gerald the Bostonian, 1/19/2016 – “The real story is that the move has little or nothing to do with wages..” Oh really? Aaron will get upset if I say you’re lying but saying you’re simply misleading just doesn’t seem strong enough…
WaPo, Jan. 15, 2016
“Walmart abruptly announced Friday that it was abandoning plans to build stores in Washington’s poorest neighborhoods, an agreement that had been key to the deal allowing the retailer to begin operating in the nation’s capital.
The giant retailer cited increasing costs for the new projects. But news that Walmart would pull out of two supercenters planned for east of the Anacostia River, where its wares and jobs are wanted most, shocked D.C. leaders.
“I’m blood mad,” D.C. Mayor Muriel E. Bowser (D) said at a Friday news conference. “This is devastating and disrespectful to the residents of the East End of the District of Columbia.”
Walmart had been blocked by liberal politicians and unions from its next frontier, remaking retail in the nation’s urban core. But in the District, Walmart won the right to open stores surrounding the U.S. Capitol — and a symbolic victory for its belief that low-price goods help its poor customers more than low-wage jobs hurt its workers.
Pushed by labor unions, a majority of the D.C. Council at first pushed back against welcoming Walmart to the city. Opponents cited Walmart’s refusal to let workers unionize, as well as its reputation for low wages.
Council member Jack Evans (D-Ward 2), head of the council’s finance committee, sat in on the meeting Friday morning with Walmart officials.
Evans said that, behind closed doors, Walmart officials were frank about the reasons the company was downsizing. He said the company cited the District’s rising minimum wage, now at $11.50 an hour and possibly going to $15 an hour if a proposed ballot measure is successful in November.
“The optics of this are horrible; they are not going to build the stores east of the river, in largely African American neighborhoods? That’s horrible; you can’t do that,” Evans said.
Speaking to reporters, Bowser was more muted. She said she was disappointed but stressed that the District’s three existing Walmarts were not on the closure list.
It’s kind of a humorous story. First the liberals are angry and no way do they want the Walmarts, then they want them and Walmart builds three…then comes the government mandated $25 per hour minimum wage, then Walmart says we’re not building the remaining two, we’ll lose money. Then the liberals get mad again for not building enough Walmarts. Ya gotta chuckle..
Where’s my $2,500??
The problems of Walmart and other big box discounters have little to do with the minimum wage, except in a way I will come to in a minute.
As indicated in the articles I posted, almost all of the closing of Walmart stores is occurring in places where the minimum wage has not budged for years. Wages may be part of the package, along with moving into poor neighborhoods that are predominantly racial minorities, that is discouraging Walmart in DC, but overall it has absolutely nothing to do with anything aside from a small local issue, since the Walmart’s national decisions are related to market issues that wages do not impact.
Except possibly in one way. For years, Walmart actually endorsed raising the stagnating national minimum wage, until they were browbeaten out of that position by the Chamber of Commerce this last year. Walmart’s thinking was pretty transparent: they felt that if a uniform increase in minimum wage affected all retailers equally, they could outcompete their competition, then as now. They also believed that the minimum wage population was a market Walmart dominated. Consequently, higher minimum wage would put more money in their tills, while they continued to outcompete their competition on a level playing field. This addresses a major part of the problems of Walmart and other retailers, besides the competition from on line companies: shrinking demand caused in part by shrinking incomes in the lower 90% of the workforce, despite economic growth that is exceeding the previous decade, with most of the money ending up in the pockets of the top 10%, 2%, 1%, and 0.1%. This has actually continued since 1980, and has improved very slightly in the last two years of the recovery. The 1% rarely shops at Walmart.
The specific issues with closing of stores on the Range is of course part of the continued shrinking of the Range extraction economy, magnified just now by the world wide collapse of commodity pricing and associated closing of mines. I will leave it to Aaron to continue his ongoing discussion of what needs to be done to avoid yet another round of shrinking economy, shrinking population, and shrinking opportunity. Suffice to say, the most important factor for a “business friendly” environment for retailers is having a lot of customers with money in their pockets.
If you actually care about the factors affecting Walmart and causing it to change its strategy, including closing many stores, here is an in depth analysis from the NY Times business section, using the Walmart changes as a kickoff to discuss the whole sector.
http://www.nytimes.com/2016/01/16/business/walmart-to-close-269-stores.html?em_pos=large&emc=edit_nn_20160119&nl=morning-briefing&nlid=21220917
Council member Jack Evans (D-Ward 2), head of the council’s finance committee, sat in on the meeting Friday morning with Walmart officials.
Evans said that, behind closed doors, Walmart officials were frank about the reasons the company was downsizing. He said the company cited the District’s rising minimum wage, now at $11.50 an hour and possibly going to $15 an hour if a proposed ballot measure is successful in November.
Still no $2,500 from Obama in the mail as of yesterday..I sure could use it..
R-47, the mini-happenings in some DC neighborhoods are not relevant to the events throughout the US. Walmart is closing over 150 stores, most in parts of the US where raising the minimum wage has never even been discussed.
DC minimum wage may be an issue in Walmart thoughts about opening new stores in DC, but DC minimum wage is not an issue in Louisiana and over a hundred and fifty other places.
No matter how you twist, it, the minimum wage is not an issue in the Walmart national (and for that matter international) policy change, simply because raising the minimum wage is not an issue in the overwhelming number of places where the closings are occurring. Just repeating your idea over an over again does not make it true.
Walmart is responding to changes in the marketplace, including both decreasing demand and competition from on line players. These problems are having an impact on Target, on K-Mart, and on many other discount retailers who are seeing their market disappear.
I am certain anyone who has any sense has left this thread a long time ago. I am going to follow them. Say whatever you like.
Gerald the Bostonian – What the NYT’s article says is what I stated in my initial comment days before the NYT’s covered it. I said it more clearly and with a lot fewer words:
Ranger47, 1/13/2016 – “The more efficient low-cost big box stores put the high-cost main street family stores out of business. The lower cost Amazons are now putting the formerly low-cost big box brick & mortar stores of out of business”. You’re not paying attention.
This whole evil Walmart, evil big box phenomenon is amusing…
Shoppers buy and workers work at Walmart because they decide to. No one is forced to do either yet 100 of millions do both….while those that do neither complain about those that do either. Then they cheer when a Walmart doesn’t get built or is closed…claiming they’re causing unemployment and lack of access to low-cost goods sorely needed by the middle class. Insanity Gerald, DFL insanity.
Ranger, with less competition, empty buildings to rent and plenty of people seeking jobs, this would be an opportune time for you or you and some other entrepreneurs pooling together to start up a business. After all, that’s how our Iron Range grandparents and great parents did it.
I’ve considered just that kissa, but the Range comes up short as a place to set up shop.
You see, when someone is going to invest their time, talent & resources…location is very important. Many factors come into play but….at the end of the day, the chances of success are much greater if the location is “business friendly”.
The Range has a number of pluses…minerals, trees, lakes, wildlife, four seasons, an envious, proud “small town” atmosphere, access to adequate educational resources…and a surplus of human resources.
However, it has a number of negatives…not the least of which is an inherent “we (employees, politicians)/they (business owners/investors)” attitude. Quite simply, the Range has a long history of treating & looking at “businesses”…as Aaron would say, a “killer”, the enemy. All existing employers can do is shake their head and go on busting their butt to keep things afloat. But statements like that don’t go unnoticed by potential employers.
Starting a business is tough enough, and getting tougher due ever increasing government inference. I’d be foolish to add to the difficulties by locating in a place that long term will be less “friendly” towards me than others. No?
No guts, no glory, Ranger.
It’s so sad….
Kissa halusi sanoa jotain järkevää, mutta se ei voi olla, sigh..
Ranger, it is pretty sad to see how far a Finnish American can stray from his/her Finnish exemplary heritage and culture. The majority of your kin in Finland would be astonished and appalled at your teaparty, libertarian or whatever hodgepodge sort of ideology you espouse.
Kissa…One of a Finns greatest traits is sisu, from that I’ve strayed not very far. What does this have to do with Kmart closing??
Sisu is a fine quality meaning perseverance against great odds (without whining) but says nothing about the goal itself, if it is with merit or value or not. It’s not about the goal, it’s about the process, sticking to the course of action which you seem to be confused about.
Have you visited Finland, a socialist country that gives away a lot of “free” stuff to it’s citizens who seem to be quite happy with their system?
Correct kissa. Sisu = perseverance, resilience, guts…and I’m blessed to have this God given Finnish trait. No one ever said sisu was about….goals?? Regardless, and again, what the heck does my Fine Finnish background have to do with the topic of this post…Kmart closing??
If Aaron ever writes a column about Finland, I’d be glad to join in. Bought a Fine Finnish hand made puukko on one of my visits. I have some beautiful pics I could share. When my folks visited relatives during their trip, my Dad (bless his soul) was asked while in the sauna – “You speak perfect Finn, you’re enjoying yourself, the climate is kinda similar…why don’t you move here”? My Dad’s response? – “You’ve never been to Bovey, have you”
Anyway, we digress…please stay on topic – Kmart closing, and our missing $2,500!
To the glory days of yesteryear, which didn’t exist.
As Aaron said, people have always left if they wanted something different. That was true in the 50’s in my father’s generation ( He worked at the soon to be shut down natural ore mines, which many people glorify as they forget the winter layoffs and scary conditions). What you see now is the remnants of 1964-1981, and what was a cost-plus paid for boom. The times immediately before that were not salad days, they were simply better because of Roosevelt’s reforms. Since that ended, the method of dealing with it is occasional attempts at something different and to pour as much happiness, de facto regulation reduction and plain old cash back into the mining industry. Even now, the primary development energy is being expended on mining or the gifts to a few friends. I perfectly understand why people don’t want to leave home. It is not some conspiracy of outsiders forcing rangers out but merely that other people have been facing this reality for a very long time and the plea’s are getting old. There is also an island effect; there is failure to see what many other’s see, and that is the giant black hole of money that seems to disappear into the favorite son’s pockets. Or, for simpler language from a state employed auditor: ” Everyone outside the range knows the place is as crooked as Sh&t.” The ordinary people aren’t benefiting and I know most people aren’t engaged in it, but until that ossified group of vampires at IRRRB and the various lobbyists-appointments-officials who live like a revolving door of lamprey on the public’s neck, I just don’t see a change. Switching party affiliations would not solve anything. If you believe that look out west at places like Lincoln County, MT where all being red has resulted in is higher meth use, a bunch of right wing nuts enamored with the the Nazis and the same sort of rule. Even education is not often a way out anymore. It is like that everywhere other than a few countries as Neoliberalism, aka rule by corporate ownership, spreads. The range is simply discovering what others have gone through, sometimes at the point of a gun.
Paul
I fully agree with your colorful description of the IRRRB and their self-severing actions. However, the Iron Range GOP’ers are a lot smarter than those out west. Vote ’em in, give ’em a chance, what have you got to lose? The transformation will be amazing.
Ah, the usual pretense of not understanding…
I would have liked to been a fly on the wall on your visits with Finnish kin and seen their reactions if you had dared to share some of your, um, interesting views on the ills of society and how to fix them.
Kmart closing kissa…focus, Kmart closing..
With all the empty stores, how do we attract new residents, when the area doesn’t seem all that vibrant any more? Why do we want to attract new residents? To fill job openings. The local paper lists a number of job openings, mostly for jobs needing several years of education. I’ve also checked some on-line job postings for the Range. Ditto.
Second, it seems logical that some stores will close when these big box stores show up. This isn’t exactly a high population area. We vote with our feet and wallets. My husband was raised to shop locally, as his father managed a small town lumberyard. We follow that philosophy as much as possible. Some small businesses work hard to keep their customers. Others seem to have gone to sleep.
Thirdly, you CANNOT compare health insurance policies just by stating premiums. For example, I was on a COBRA policy after a job change, which was $540/month for just me (ditto for my husband who is never sick.) I had no deductible for most things, but $1700 deductible for surgery. Unfortunately, I had to have 5 surgeries, but because they were over 3 years, the deductible was 3x$1700. My good friend had independent insurance for over $500/month, with an enormous deductible that applied to everything. Since he was with the insurance company most well known, he didn’t bother to shop around, even after the insurance exchanges became available. He wasn’t open to suggestion.
When you get to be close to age 65, the insurance companies bombard you with sales pitches. That shows me that they expect to make money off of me even though I’m not in glowing health. I chose an inexpensive policy. I have friends who pay hundreds more per month than I pay. That just goes to show that there is more going on than simple math would suggest.
Loiej…Just curious, did you or your friend see a $2,500 reduction in your premiums or deductible cost as promised by Obama?
Oh, I’ve seen the 8th District republican meetings. Passing out Obama conspiracy printouts in the Tini building. The support meeting for Cravaack at the gun shop right before the 2012 election that looked like a friday afternoon nursing home social. The constant missives on deregulation, charter schools, the evils of health care, public health and vaccines. The lunatic racism. The only economic proposals involving giving corporations everything including the soul. A district chair who rants and raves about the federal government but never met a government subsidy he wouldn’t advocate or apply for. To solve a problem, one must live within reality and acknowledge there is a problem and define it, especially with something as complex as the socio-economic policy of an entire region. When your policy prescriptions consist of theories discredited three decades ago, I will pass.
Paul…You rant to no end of the mismanagement of the IRRRB, then pass, sit on your butt, when it comes time to do something like change it’s leaders. You should either take advantage of the Obamacare wellness visit or stay on whatever it is your on when you post your rants. Starting and stopping any drug is dangerous, makes you delusional. You’ve been added to my prayer list..