Wal Mart: New face on the Peninsula

• Dismal job market, economy give rise to debates about how Wal Mart impacts business climate

By Jenny Neyman
Redoubt Reporter
If finding a job tops the Christmas wish list for Kenai Peninsula residents this year, that may be a tall order to fill, as rising unemployment continues to plague the Kenai Peninsula.
The Kenai Peninsula Borough’s latest economic report noted the unemployment rate at 11 percent in October, with 2,871 people reportedly out of work. That’s higher than the statewide average of 8.3 percent, and higher than the borough’s unemployment rate in October 2008, which was 7.9 percent.
Winter is typically a slow time of year for employment, with seasonal job losses in fishing, construction, tourism and other industries finishing up in September and few new positions opening until spring. This year is further complicated by effects of the nationwide recession being felt locally, as well as oil industry job losses, including Chevron’s announcement in November that the company would be cutting an estimated 25 positions from its local oil operations.
“Quite honestly, we’ve been very busy,” said Val Ischi, employment specialist at the Peninsula Job Center in Kenai. “We’ve had a lot of job seekers in the Job Center looking for work, trying to get their resumes together, and that’s for any jobs that we’ve got coming in. And this time of year, it’s tough. It’s right before the holidays and I would say, as a general rule, in all the years I’ve been here, our job orders are limited at this time of year.
“Obviously we’ve had some significant layoffs in the area. We’re a seasonal area to begin with, and so that makes it even tougher, especially this time of year,” she said.
From that perspective, Ischi said the Job Center is looking forward to a blue-and-gold bright spot of the horizon —the new Wal-Mart supercenter in Kenai, slated to open this spring. Wal-Mart has said it expects the store to need between 200 and 300 employees.
“It’s always a positive when you’re going to have a mass hiring at this time of year because it’s the holidays and a lot of people aren’t really (hiring), because there’s not enough business or just vacations and things like that,” Ischi said. “So I guess this is a positive thing as far as people being in here. There are a lot of people looking for work.”
The employment rate doesn’t discriminate between types of jobs or industries that are creating work, whether they’re high-paying positions with full benefits or lower-wage jobs in the service industry, which would include Wal-Mart.
“The bottom line is it doesn’t matter who’s got job openings, we’re usually happy to see those and so are the community. I think employment is employment and it’s a good thing, regardless,” Ischi said. “As far as we’re concerned, we’re happy with any openings that come up. And as a state agency, we’re a neutral party. We’re just looking for employers who are needing employees and job seekers who are looking for openings.”
There has been speculation over the impact Wal-Mart will have on the community since the giant retailer announced it would be opening a store in Kenai in 2005. The city of Kenai is looking forward to increased sales tax revenue, but local businesses selling goods that Wal-Mart also will carry — like housewares, electronics, groceries, clothing, pharmacy and health care items — may see a decrease in business. Possibly to the point of having to close their doors.
There likely will be effects on service industry employment in the area, as well.
“I think there’s an impact anytime you have another business that comes in that’s in the service industry, and it definitely impacts the other employers in the area, because there’s always a shift that goes on with that,” Ischi said.
“All employers are probably feeling the same thing. It’s definitely going to impact their business, especially when they’re first starting up, because you always have that shift. Even in the best of times you worry about your most experienced employees wanting to make a change and things like that, and then trying to fill those positions and get people up to speed. You know, that’s a concern. But it’s a good thing for the job-seekers,” she said.
Wal-Mart’s positive effect on the local employment rate may be mitigated by other businesses shrinking or closing up from competition, in effect lowering the net number of new jobs created in the area, if other jobs disappear as a result of the store’s opening.
These concerns are not new or limited to Wal-Mart, Ischi said.
“Whether we can handle it all, I think people have been asking that ever since Wal-Mart decided to come in. I think they’ve been asking the same question when Home Depot and Lowe’s came in. Are we going to be able to do it? Are there enough people here who are interested in that kind of work and that kind of pay and those kind of benefits? Quite honestly, I’m going to have to say we’re all probably going to have to wait and see,” she said.
For someone searching for work, any job can be a good job. But from a community’s standpoint, some are better than others. Higher-paying, stable, full-time, year-round employment with benefits — health insurance and retirement — pay dividends to communities. People with those jobs generally buy houses, vehicles and other personal property, and so contribute to the tax base.
Wal-Mart has a reputation for a large chunk of its workers not being eligible for health insurance, although a company spokesperson has said that at the Kenai store, 70 percent of its positions will be eligible for benefits.
Heading the other direction in the food chain, what a competing corporation like Wal-Mart does with its health insurance coverage impacts competitors like Safeway and Kroger, which owns Fred Meyer.
“What it comes down to is the cost to the employer. Assume for Company A it’s costing $10 an hour to do business. And Wal-Mart, Company B, can do the same exact thing for $8.50 (by offering less health care coverage),” Boehlen said. “Well, they just have now a competitive advantage over me. Where they can choose to utilize that is in lower prices, let’s say, if their cost of business is less. And that’s really where the rub comes. I don’t think Safeway cares one way or another if everybody at Wal-Mart or nobody at Wal-Mart has health coverage, what they do care is ‘How … how do we stack up next to our competitors in the cost of doing business?’”
A representative from Wal-Mart did not return calls seeking comment for this story.

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