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The cost of living is a key issue in an election expected to end 14 years of Conservative Party governance.
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On the morning of Thursday, June 20, unionized nurses at Ascension St. Agnes Hospital in Baltimore held a rally outside the hospital to raise awareness of their efforts to secure a first contract and to show management that they’re not backing down from their core demands for safe staffing and an operational model that puts patients and patient care first. “St. Agnes nurses are calling on Ascension to accept their proposals to improve safe staffing and, subsequently, nurse retention,” a press release from National Nurses Organizing Committee/National Nurses United (NNOC/NNU) stated. “Nearly 20 percent of nurses at St. Agnes began employment at the hospital after January 1 of this year. Meanwhile, just over a third of nurses have more than four years of experience at the hospital… The Catholic hospital system is one of the largest in the country with 140 hospitals in 19 states and also one of the wealthiest, with cash reserves, an investment company, and a private equity operation worth billions of dollars—and, because of its nonprofit status, is exempt from paying federal taxes.” In this on-the-ground episode, we take you to the NNOC/NNU picket line and speak with Nicki Horvat, an RN in the Neonatal Intensive Care unit at Ascension St. Agnes and member of the bargaining team, about what she and her coworkers are fighting for.
Additional links/info below…
- National Nurses Organizing Committee/National Nurses United website, Facebook page, Twitter/X page, and Instagram
- NNOC/NNU Press Release: “Ascension Saint Agnes nurses demand hospital accept ‘Patients First,’ staffing enforcement policies“
- Angela Roberts, The Baltimore Sun, “Saint Agnes nurses rally for better pay, more patient protections“
- Gino Canella, The Real News Network, “An oral history of the 10-month St. Vincent Hospital strike“
- Gino Canella, The Real News Network, “Striking nurses hold the line against investor-owned healthcare giant“
- Robert Glatter, Peter Papadakos, & Yash Shah, Time Magazine, “American health care faces a staffing crisis and it’s affecting care“
- Maximillian Alvarez, The Real News Network, “Kaiser workers win big after largest healthcare strike in US history“
Permanent links below…
- Working People Patreon page
- Leave us a voicemail and we might play it on the show!
- Labor Radio / Podcast Network website, Facebook page, and Twitter page
- In These Times website, Facebook page, and Twitter page
- The Real News Network website, YouTube channel, podcast feeds, Facebook page, and Twitter page
Featured Music…
- Jules Taylor, “Working People” Theme Song
Studio Production: Maximillian Alvarez
Post-Production: Alina Nehlich
Transcript
The following is a rushed transcript and may contain errors. A proofread version will be made available as soon as possible.
Crowd chants:
What do we want?
Safe staffing!
When do we want it?
Now!What do we want?
Safe staffing!
When do we want it?
Now!What do we want?
Safe staffing!
When do we want it?
Now!Nicki Horvat:
Alright, so you know we’re all out here because essentially gave us a very underwhelming wage proposal and we’re just out here to show them that we know our work, that we are work more than they’re trying to make us settle for, that our patients and our lives and safety are worth fighting for. Our community. Our community, exactly. So let’s show them that we have solidarity among us, that we have community support and that we’re not going to back down until we win.
Maximillian Alvarez:
Alright, welcome everyone to another episode of Working People, a podcast about the lives, jobs, dreams, and struggles of the working class today … brought to you in partnership with In These Times magazine and the Real News Network, produced by Jules Taylor, and made possible by the support of listeners like you. Working People is a proud member of the Labor Radio / Podcast Network… if you’re hungry for more worker and labor-focused shows like ours, follow the link in the show notes and go check out the other great shows in our network. And please support the work we’re doing here at Working People because we can’t keep going without you. Share our episodes with your coworkers, friends, and family members, leave positive reviews of the show on Spotify and Apple podcasts, and reach out to us if you have recommendations for working folks you’d like us to talk to. And please support the work we do at The Real News by going to therealnews.com/donate, especially if you want to see more reporting from the frontlines of struggle around the US and across the world.
My name is Maximillian Alvarez and we’ve got another special on-the-ground episode of the show for y’all today. On Thursday, June 20, at 8 in the morning, unionized nurses at Ascension St. Agnes Hospital in Baltimore held a rally outside the hospital to raise awareness of their efforts to secure a first contract and to show management that they’re not backing down from their core demands for safe staffing and an operational model that puts patients and patient care first. St. Agnes Hospital is part of the Ascension Health network… Ascension is one of the largest private healthcare systems in the United States, and it is now the largest nonprofit and Catholic health system in the country.
In their press release about the action, the union, which represents over 500 registered nurses at Ascension, St. Agnes, stated:
“Registered nurses at Ascension Saint Agnes Hospital in Baltimore, Md. will rally on Thursday, June 20, in support of “Patients First” and staffing protections, which they have proposed to hospital management during contract negotiations. The nurses, who are members of National Nurses Organizing Committee/National Nurses United (NNOC/NNU), have been in negotiations since Jan. 18, 2024… “Nurses are fighting for ‘Patients First’ protections in our contract because they are essential safeguards for our patients and the community we serve,” said Nicki Horvat, RN in the Neonatal Intensive Care unit and member of the bargaining team… St. Agnes nurses are calling on Ascension to accept their proposals to improve safe staffing and, subsequently, nurse retention. Nearly 20 percent of nurses at St. Agnes began employment at the hospital after January 1 of this year. Meanwhile, just over a third of nurses have more than four years of experience at the hospital… Saint Agnes nurses’ “Patients First” proposal includes Ascension’s commitment to maintain all facilities and services within the community for the duration of the contract and that any replacement be “equally accessible.” It also includes patient protections against lawsuits for the resolution of billing disputes and against surprise billing or excess charges… A January 2024 report from National Nurses United found that Ascension cut a quarter of its labor and delivery units in the past decade amidst a nationwide rise in pregnancy- and childbirth-related mortality. These cuts drastically impacted metropolitan areas and areas with hater rates of low-income, Black, and Latine patients… In November 2023, Saint Agnes nurses voted to join NNOC/NNU, making Saint Agnes the first private-sector hospital in the city to unionize and the fourth Ascension hospital to unionize in 13 months. The Catholic hospital system is one of the largest in the country with 140 hospitals in 19 states and also one of the wealthiest, with cash reserves, an investment company, and a private equity operation worth billions of dollars – and, because of its nonprofit status, is exempt from paying federal taxes. Tax records indicate Ascension’s CEO took home more than $13 million in compensation in 2021.”
In response, as Angela Roberts reported at The Baltimore Sun, “Justin Blome, director of marketing at Ascension Saint Agnes, said in an email that patient and associate safety remains the hospital’s top priority. Thursday’s rally wasn’t a strike or work stoppage and did not affect patient care, he said. During contract negotiations, Blome said, the hospital has been focused on “setting a tone and tenor of collaboration and respect” as leaders bargain in good faith with National Nurses United. “We believe differences are best resolved at the bargaining table, rather than through public demonstrations, and look forward to continuing the work of reaching a tentative agreement on a mutually-beneficial contract that supports all,” he said.”
I was there on the ground at the rally for The Real News, and after the chants died down and the crowd disbursed, I got to sit in the shade and speak with registered nurse and bargaining team member Nicki Horvat about what she and her healthcare coworkers are fighting for.
Crowd chants:
Who got the power?
We got power.
What kind of power?
Nurses power!
Who got the power?
We got power.
What kind of power?
Nurses power!
Nicki Horvat:
Hi, I’m Nicki. I am a NICU nurse at Ascension St. Agnes here in Baltimore.
Maximillian Alvarez:
Well, Nicki, thank you so much for sitting down and chatting with me. I know you’ve had a long morning. We are here right out in front of Ascension St. Agnes Hospital here in Baltimore where y’all just held a rally and I wanted to ask if you could just tell folks listening a little more about who you are, who these folks are here and what brought y’all out to this street corner this morning?
Nicki Horvat:
So I am on, well first of all, we unionized. We formed the first nurses union in Baltimore back in November. We had our election and we won and we formed a bargaining team of which I’m a part, I lead the maternal child health division or I represent them. And so we rallied today to bring attention to mainly two things, which is safe staffing and our patient’s first language in the contract that we’re trying to bargain. And I’ll explain what that is after I say the next. So right now we’re in the process of bargaining our contract, which means that the five of us nurses who have been elected to represent our fellow nurses in the hospital, we sit at the bargaining table with Ascensions lawyers and their labor relations people with our lead negotiators and we negotiate the contract. So our goal is to get a strong first contract that has patient first language in it, which means that patients are the number one priority regardless of who they are, where they come from, what their situation is, and that they are not treated like commodities like patients very frequently are in this country. And that one of the main reasons we unionized was because we have been bringing up issues year after year collectively and they’ve kind of fallen on deaf ears.
Maximillian Alvarez:
Well, let me ask a little more about that real quick because I’ve been telling folks for the past four years, every interview I’ve done on this show is technically a covid interview and people are always asking me like, oh, what are you hearing from workers? What happened? How are folks faring after covid? And I was like, there are a lot of answers to that question, but I feel like one of the answers I always come back to is this country is not prepared for the crisis in healthcare and education that we are going through. That was greatly exacerbated by Covid.
Nicki Horvat:
Absolutely.
Maximillian Alvarez:
I wanted to ask if you could speak a little more to the issues that y’all were raising over and over again that you weren’t getting responses from management that ultimately led y’all to wage and win this unionization campaign last year.
Nicki Horvat:
So safe staffing is number one pretty much across the country. They maximize their profits by not staffing safely. Basically it’s like the basic concept. And so that is always our number one priority is making sure that nurses, you’ll hear the nurse to patient ratio, which is how many patients are assigned to one nurse. And we have so much research data that shows that high nurse to patient ratios lead to worse patient outcomes, poorer patient satisfaction, higher nurse burnout, increased risk for medical errors. And so you look at that data and you’re like, yeah, obviously nurses should have lower nurse to patient ratios. And logically yeah, you’re like, duh. But common practice is no, let’s give the nurses as many as we possibly can to maximize their profits.
Maximillian Alvarez:
This is the business school brain genius idea that every corporate boardroom has in every industry is let’s squeeze more work out of fewer workers…
Nicki Horvat:
Exactly.
Maximillian Alvarez:
I mean, I hear this from workers on the railroads. I hear this from retail workers at Macy’s or dollar stores who are systematically understaffed and there’s got to be a reason why this keeps cropping up in industries around the country. And I just wanted to ask if you could say a little more about what that translates to for you and your coworkers on a shift on a day-to-day basis. What does this corporate drive to pile more patients onto fewer nurses mean for you on a daily level?
Nicki Horvat:
Yeah. It means that we can’t spend the time or attention with every single patient that every single patient deserves. I mean, these are human lives that we’re talking about. And I mean, I said it before that patients should not be treated like commodities. And one of the main issues in this country is that healthcare is treated like a business. And so if you view people like commodities and put a price tag on them, you’re obviously not going to be prioritizing their health and their wellbeing. That’s one of the things that Ascension very clearly shows is that they have the resources to and the power to change the conditions that we work in. They have the money, they have a lot of cash reserves, they have a 41 billion investment arm, which ironically is invested in a lot of companies that exacerbate people’s health issues. But if we prioritize patient care and then we would have lower ratios, but having those higher ratios means that people aren’t getting individualized care. Every nurse is pulled in 5, 6, 7 different directions. If you’re in the ICUs and you’re tripled, you have three patients that are high acuity. That should be two to one is the ideal maximum ratio in ICUs. And most of them are honestly one-to-one with the care that they require. So frequent tripling, which has been happening a decent amount here, should not be happening.
Maximillian Alvarez:
A term was introduced to me a couple years back when I interviewed striking physicians out in the Pacific Northwest where they told me about the “retail health” model and how the more that our healthcare system has been taken over and dominated by corporate entities, wall Street entities, the more that again, it follows the corporate playbook pile more work onto fewer workers, decrease the quality of care to the bare minimum that you can get away with. And I bring that up because I know in the past, whenever nurses or other healthcare workers go on strike or try to unionize or try to raise issues at their job, like educators, they are pitted against their patients. Educators are pitted against their students and saying, oh, you guys are selfish. You don’t care about your patients. So if you did, you wouldn’t be out here on this street corner. You’d be in there taking care of ’em. So what’s your message to folks out there about how and why this is for patients? Because I feel like that may be a, I suspect that’s an easier case to make these days because more and more of us as patients have been feeling the decrease in the quality of care we’ve been getting ourselves.
Nicki Horvat:
Yeah. And I mean I think the answer is twofold to that because yes, there’s a component of we don’t want to be burned out. So there is the personal tie that we want better working conditions for ourselves, but no nurse gets into this field for money. No nurse gets into this field because they don’t like people. We all get into this field because we love people and we want to take care of them, and we want to be able to pour ourselves into helping people in their healing journeys and the amount of moral distress that we feel when we literally don’t have the resources or the bandwidth or the time to do that. And we’re worried that we’re going to make a mistake or that not having the proper time leads to a poor outcome for the patient. That’s a heavy weight to carry. And so prioritizing patients, this is how we do it, this is how we use our voices to advocate. Nurses are the number one advocate for patients in the hospital. So just as we advocate for patients at the bedside, so we’re advocating for them out in the street and showing management that the conditions that they have created within the hospital are unacceptable and that the patients deserve better care.
Maximillian Alvarez:
And this is almost word for word what your colleagues in Massachusetts at St. Vincent Hospital were saying two years ago when they waged the longest nurses strike in state history over very similar concerns. I mean like St. Vincent Hospital is owned by Tenant Healthcare, which is a healthcare giant housed out of Texas. And so they were talking about what it means to have, again, a corporate minded entity like take over their hospital, squeeze their workers, decrease the quality of pay, and they waged a month’s long strike over it and ended up winning. Now Ascension is also a private hospital. Can you say a little more about those conditions behind the scenes that folks average folks don’t see and how this is translating to what y’all are fighting for at the bargaining table?
Nicki Horvat:
Yeah, I think just overall we’ve seen the quality of supplies go down. There’s been shortcuts in supply manufacturers to ostensibly to lower their costs, but then that obviously impacts patient care because cheaper quality supplies mean that IV catheters don’t last as long, so you have to be stuck more or we don’t have the supplies that we need to perform certain tasks. We just went through a four week long cyber attack, in which case we had to deal with paper charting and the chaos of that with very little training, things like that that are just all of the things that we’re asking for are not unreasonable things. They’re kind of basic things that are needed to ensure high quality care. And it’s honestly, this whole process, it’s been kind of mind blowing to me that we even have to fight so hard for things that should be a basic necessity.
I think something else too that happens frequently is not having the other staff that we need to make our jobs easier. So if housekeeping doesn’t come around us nurses act as a housekeeper. If we don’t have a secretary, we have to act as the secretary. If floors don’t have a tech or don’t have enough techs, then nurses act as the tech as well. So not only are we doing the nurse’s primary job for a large number of patients, but we’re often doing three or four other roles that should not fall on us, but end up pretty frequently end up falling on us.
Maximillian Alvarez:
Well, and again, speaking to all of that, I know you are exhausted and you were leading this rally this morning, so I got to let you go in a second. I just wanted to ask, yeah, if you could give listeners an update on where things currently stand with bargaining and what folks around the city can do to stand in solidarity with y’all?
Nicki Horvat:
Yeah, absolutely. So right now we’re about six months into our bargaining. We have come to agreements in principle on a lot of the important but smaller issues. And we’re really at a place where we’re tackling our top priorities. So safe staffing, safe floating, which means nurses going from their home units to other units to help with the staffing, our wage proposal, some of the bigger, more substantial items that we’ve gotten pushback on. So today we held the rally to really show the solidarity we have and show the community support we have and to show them just that we’re not afraid that we’re not going to be intimidated and that we’re not going to back down until we win a good contract for our patients and for ourselves. And yeah, I guess what the community can do is to just come out and join us, wear Red talk to your hospital administrators, talk to, we’ve been trying to meet with specifically the Archbishop of Baltimore because we have a lot of Catholic backing. Part of Catholic social doctrine is very pro-union and pro-worker. And one of the things that really guts a lot of us nurses is that Ascension claims to be a Catholic nonprofit and really showcases its mission as a healing ministry of Jesus. And yet the hypocrisy that they show in not following that mission and prioritizing profit over patients is just really messed up and it really, really hurts a lot of us. And so us unionizing and winning a good first contract is a way to hold them accountable to the very mission statement that they say they live up to and to prioritize what should actually be a priority. So yeah, community involvement is always welcome. We always love seeing people in support as people drive by and honk. It’s super empowering and just really, really helps the efforts.
Crowd chants:
We will be back! We will be back! We will be back! We will be back!
Maximillian Alvarez:
Alright gang, that’s going to wrap things up for us this week. I want to thank our guest, Nicki Horvat for taking the time to talk with me, especially on such a busy and intense morning. And as always, I want to thank you all for listening and I want to thank you for caring. We’ll see you all back here next week for another episode of Working People. And if you can’t wait that long, then go subscribe to our Patreon and check out all the great bonus episodes that we publish for our patrons over the years and go explore all the great work that we are doing at The Real News Network where we do grassroots journalism that lifts up the voices and stories from the front lines of struggle around the world. Sign up for the Real News newsletter so you never miss a story. And help us do more work like this by going to the real news.com/donate and becoming a supporter today. It really makes a difference. I’m Maximilian Alvarez. Take care of yourselves. Take care of each other, solidarity forever.
This post was originally published on The Real News Network.
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This story originally appeared in Jacobin on June 30, 2024. It is shared here with permission.
Why has it been so difficult for students demanding divestment from Israel to catch their university administrations’ ears? Part of the answer is the specific content of the request: universities’ donors are more pro-Israel than their students. Schools hoping to both quell the protests and continue courting philanthropic support find themselves balancing competing and perhaps irreconcilable interests.
Equally important, however, is the nature of university investing itself, and the broader structural logic of university financialization. Over the last four decades, endowments have ballooned and become increasingly central to universities’ self-conception and function, with financial professionals proliferating throughout schools’ administrative ranks and assuming greater control of institutional priorities. For university administrators, the deeper and more existential risk emanating from the encampments is the breaching of the barrier that insulates investment decisions from the specter of politics, and the possible democratization of the financialized university itself.
Endowments are political objects, subject both to macrofinancial pressures and recurrent pressures from interested groups on campus. But they also represent a fantasy for universities looking to retreat from politics. This fantasy is both functional and formal.
Functionally, the endowment buffers the university from the political demands attached to other sources of funding, like taxpayers, students, and state legislators. So long as the principal isn’t spent down — which, by policy, it never is — then shrewd investment allows for a source of funding that seems to autogenerate, sustaining itself and by extension the university over time. Formally, meanwhile, the endowment is governed by a technocratic sensibility that treats divestment as an intolerable and exacting political threat but investment as an act somehow devoid of politics.
Insulating From Public Pressure, Opening Up to Private
In parsing the curious rise of university endowments, Henry Hansmann in 1990 argued that one of the early functions of turning to private funding streams at Harvard and Yale — both of which were initially funded heavily by their respective state legislatures — was to shield those schools from shifting political winds, ensuring more autonomy. “Private sources of funds were evidently successful in insulating both universities from serious public influence in their affairs for the remainder of the nineteenth century,” he writes. “On the other hand, both institutions fell under the strong influence of the groups that contributed to their endowments.”
Turning to the endowment does not allow the university to evade politics; it only reconfigures the relative power of the university’s inescapably political constituencies.
When financial markets began to liberalize in the 1970s and 1980s, the size and sophistication of university endowments also birthed a stratum of financial managers who came to wield enormous influence on their campuses. In Bankers in the Ivory Tower, sociologist Charlie Eaton traces the “social circuitry of finance,” the elite personal interconnections between Ivy League institutions and Wall Street in the 1980s that fed the growth of then new private equity and hedge funds being capitalized by endowment dollars. This investment philosophy, part of the “Yale Model” pioneered by David Swensen, led to the spectacular expansion of Ivy League endowments thanks to their privileged access to these burgeoning financial vehicles.
The apparent sophistication of this approach held special appeal for public institutions like the University of California (UC), where we study and work, as a model to be emulated amid broader state retrenchment and tax volatility beginning in the late 1970s. Here, it seemed, was a pool of money the university could nurture and grow without relying on state appropriations or the increasingly fickle and contentious tax revenues those appropriations required.
But turning to the endowment does not allow the university to evade politics; it only reconfigures the relative power of the university’s inescapably political constituencies. The same financial managers, consultants, and partners the university entrusts to grow the wealth in its endowment portfolios use the strength of those portfolios to assess the creditworthiness of the university and the terms on which it increasingly borrows. The effect is to remake university governance. Capital markets reward brand strength, endowment growth that outpaces operating expenses, a demonstrated ability to raise tuition, and the labor flexibility that comes from low rates of unionization and tenure on campus. In looking for a way to escape the whims of sometimes demanding campus constituencies, universities subject themselves to the whims of financial markets — which increasingly take on the appearance of natural laws.
Financial managers, with their unique technical expertise to interpret those laws, are granted sole authority to make investment decisions for the university. Any challenge to that authority is dismissed out of hand. A 2019 op-ed by University of California chief investments officer Jagdeep Bachher and chairman of the UC Board of Regents’ Investments Committee Richard Sherman illustrates the point. The UC’s announcement of its divestment from fossil fuels was hailed at the time by both student groups and in the national press as a win for the climate. Bachher and Sherman, though, wanted to be clear that student pressure was not to thank for their maneuver, asserting that it was simply good business sense. “While our rationale may not be the moral imperative that many activists embrace, our investment decision-making process leads us to the same result,” they wrote. “We believe there is money to be made. We have chosen to invest for a better planet, and reap the financial rewards for UC, rather than simply divest for a headline.” Here was a moment to extend an olive branch to student activists; instead, UC administrators had to deny such pressure amounted to anything in order to preserve the appearance of their sole discretion over investment decisions.
Divestment from South African apartheid, the paradigmatic case, offers an instructive historical parallel. The regents rejected calls for divestment through the 1970s, with UC treasurer Owsley Hammond telling the Oakland Tribune that “an extremely dangerous precedent would be set if the regents were forced to base their investment philosophy upon the political or moral beliefs of certain segments of the population.” But then, in 1985, responding to police crackdowns in South Africa, Berkeley students staged a weeklong sit-in that ended with police arresting 158 students. The repression helped to propel further action, and a year later — with political momentum finally building against apartheid South Africa both in California and nationally — the UC’s regents pulled $3.1 billion from companies doing business with the country.
In looking for a way to escape the whims of sometimes demanding campus constituencies, universities subject themselves to the whims of financial markets.
Years later, Nelson Mandela came to the UC and told students how instrumental their activism had been in bringing down the apartheid regime; alongside the Free Speech Movement, anti-apartheid organizing now forms an important moment in the university’s narration of its radical past. Yet even this easy victory was hard to stomach. In 1998, UC president David Gardner recalled that “we didn’t invest in South Africa because of apartheid; I thought we shouldn’t divest because of it. . . . We allowed the political rhetoric to dominate the debate, and the political rhetoric was, in effect, a bumper-sticker approach to the issue.”
The Threat of the Encampments
Asimilar outlook characterizes the university’s response to contemporary calls to divest. Two weeks after hundreds of police officers and sheriffs were mobilized to break up the Palestine solidarity encampment on our campus, the University of California, Los Angeles, with tear gas and rubber bullets, UC CIO Bachher went on the record to address just how much of the university’s money was connected to Israel. His answer, reported by Teresa Watanabe of the Los Angeles Times, was that of the UC’s $175 billion in assets under management, $32 billion would be affected by students’ divestment demands. This figure includes not just direct investments in firms and weapons manufacturers doing business in Israel, but also the university’s extensive investments in passive index funds like those offered by Blackrock and the nearly $12 billion it has parked in US treasury bonds.
On the one hand, Bachher’s inclusion of US treasury bonds indicates the real limits of “divestment” given the US government’s status as the world’s foremost supplier of arms to Israel. On the other, his comment drips with irony and condescension. Including treasury bonds in his accounting both inflates the appearance of the university’s financial connections to Israel and mocks student protesters’ inability to comprehend either the core geopolitical reality of the situation or the basic mechanics of the financial system. With protests still roiling the UC’s campuses and being met with extreme repressive force, Bachher demonstrated no interest in sincerely engaging with protestors, instead dismissing their grasp of the university’s finances as another “bumper-sticker approach.”
Such a characterization arrogates authority over university finances to a select few. That, after all, is the endowment’s structural function. The rapid growth of endowments both indexes and fuels the concentration of control of university life in the hands of a financial elite. That consolidation is part of the broader corporate turn within higher education, including increasing reliance on more precarious and low-paid non–tenure track academic workers; increasing tuition costs and consequent student debt; and the defunding of public education systems amid their turn to capital markets and the expansion of their investment portfolios.
To build systems of higher education that work in service of the public good will depend on clear-eyed organizing efforts able to challenge these longstanding structural transformations and allow input from on- and off-campus constituencies with whom universities interact. The wave of student protests demanding that their institutions divest from Israel’s war machine should properly be read as a crucial piece of the project to redemocratize the university.
This post was originally published on The Real News Network.
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Janine Jackson interviewed the Institute for Local Self-Reliance’s Kennedy Smith about the proliferation and impact of chain dollar stores for the June 14, 2024, episode of CounterSpin. This is a lightly edited transcript.
As the American Prospect (1/19/24) reports, Dollar General has also been fined by New York and sued by Ohio and Missouri for business practices that harm consumers.
Janine Jackson: Some listeners may have seen the story of Dollar General stores in Missouri being caught cheating customers by listing one price on the shelf, then charging a higher price at checkout. It’s a crummy thing to do to folks just trying to meet household needs. And yet it’s just one of many harms dollar stores—some call them deal destinations—are doing to communities across the country. What’s the nature of the problem, and what can we do about it?
Our guest has been tracking the various impacts of chain dollar stores and their proliferation, as well as what can happen when communities and policymakers fight back. Kennedy Smith is a senior researcher with the Independent Business Initiative at the Institute for Local Self-Reliance. She joins us now by phone from Arlington, Virginia. Welcome to Counterspin, Kennedy Smith.
Kennedy Smith: Thank you.
JJ: Well, dollar stores are sort of like fancy restaurants. If they aren’t part of your life, you might not even physically notice them. But they’ve been proliferating wildly in recent years. In 2021, as the Institute’s report, “The Dollar Store Invasion,” begins, nearly half of new stores that opened in the US were chain dollar stores, a degree of momentum with no parallel in the history of the retail industry.
Now, I want to talk through specific problems, but could you maybe start by talking about where these stores are and what’s giving rise to them, which connects directly to what they do?
KS: Basically, they are everywhere. They are in 48 states now. They haven’t quite made the leap yet to Hawaii and Alaska, but they began—the two major chains, Dollar General, which is headquartered in Tennessee, and Dollar Tree/Family Dollar, which is now in Virginia Beach, Virginia—began by radiating out from their headquarters. And so we see heavy concentrations of them sort of in the east and the southeast. They are now marching across the country and entering all kinds of markets.
And they have slightly different profiles. Dollar General tends to be a little more rural. They tend to go into smaller rural communities. Dollar Tree tends to be more suburban, and Family Dollar tends to be located primarily in urban neighborhoods.
And they are being fueled by a variety of factors, including consolidation in the grocery industry and people’s desire to find more affordable food and products in general are driving people to believe that dollar stores are offering them a better value.
And in fact, that’s one of the tricks that the dollar stores play on people, is that they actually are getting poor value and usually paying more in a per ounce or per pound basis than they might be if they were shopping at a traditional, independently owned grocery store or hardware store or office supply store, whatever it might be.
JJ: It sounds like they’re filling a need, like they’re reaching to an overlooked group of people. And it reminds me a little of check-cashing stores, where folks who are oppressed economically in terms of their wages, so they don’t get to bank in a regular way, and then these fill-in spots show up and it’s perverse, you know.
But it’s also just not how a lot of folks think things work. They see these things, oh, these are cheap stores. These are for folks who can’t afford as much as, you know, maybe some others. And this is filling their need. That’s exactly what it’s not doing.
So let’s start on this “17 problems” that you engage in a pullout piece of the Institute’s work on this. What are some of the big things you lift up as the harmful impacts?
ILSR’s report on dollar store impacts
KS: Well, I should mention, to begin, that these are 17 of the problems that we hear mentioned most frequently, but there are plenty of others. And there are slight variations around the country. For example, in areas of the country that are susceptible to flooding and to hurricanes, there’s a lot more concern about the environmental impact of these stores and what it might mean in terms of stormwater runoff, because one of the problems with dollar stores in general is that they tend to have a very thin operating model. They’re thinly staffed. They look for inexpensive land. They build cheap buildings if they’re building new buildings. And so they’re not likely to want to afford to put in stormwater retention basins and things like that. So there’s some regional variations.
But in general, the things that we find to be the biggest problems are, one, their economic impact on the community, and two, their sort of social impact on a community. In terms of the economy, they are a direct threat to independent grocery stores. And there are a number of studies now that have come out that have looked at what that impact is.
There’s one that the USDA did last year, which found that basically grocery store sales will decline by 10 percent when a dollar store enters the market. There was one that was done by the University of Toronto and UCLA in 2022 that found after looking at 800-some dollar stores, that when you have three dollar stores within a two mile radius of one another, they’re likely to kill a grocery store that’s there.
And that has a huge impact on a community because grocery stores are really community anchors in many ways and are responsible for providing their community members with healthy food as opposed to the sort of overly preserved things that you’re likely to get at a dollar store, like a box of macaroni and cheese or a box of sugary cereal or something like that. When a community loses its grocery store, it can be devastating.
And the same thing can be true for some of the other categories, industry categories on which dollar stores tend to compete, like hardware and like office supplies and school supplies. Those are important anchor businesses for communities that people don’t want to lose.
On the sort of social side of things, there are a number of problems and probably first and foremost is crime. Because they are so thinly staffed, dollar stores are easy targets for robberies. It’s very easy for someone to come in and just reach into the cash register, grab cash and leave. And communities complain about this all the time. I have literally hundreds of news articles that I’ve clipped about dollar store crime.
They also have poor labor practices. They pay their workers less than the independently owned grocery stores that they’re threatening. They tend to promote workers to assistant manager relatively quickly, which means that they’re then exempt from overtime, and they make them work 40, 50, 60, 70 hours a week. They’ve been sued several times, both of the major chains, successfully by groups of workers or former workers for wage theft for exactly that.
There are other things, too. One of the things that we have observed and a researcher actually at the University of Georgia in the Geography Department has reported on and written about is that they tend to target black and brown neighborhoods. Dollar General, for example, 79 percent of its stores tend to be located in majority minority neighborhoods. And we think this is a little bit parasitic. And we also think that they’re looking for places where the community is likely not to have as much influence at City Hall as somebody in another neighborhood. And we think that’s just despicable.
JJ: Well, if I could just bring you back to that economic impact for a second, because it’s not that they are able to deliver better things cheaper, just to spell that out. That’s not what they’re doing.
A More Perfect Union investigation found that Dollar General frequently charges more than its competitors for staple goods but “masks the high cost from consumers by stocking smaller pack sizes.”
KS: Correct. No, they’re selling similar products, but the packaging that they’ll sell them in tends to be smaller. And therefore, on an ounce-by-ounce basis, we find that the products are often actually more expensive for consumers to buy. It’s a practice called “shrinkflation.” There are a couple of other names that it goes by—”cheater sizes.”
JJ: So it’s not, well, they just build a better mousetrap. That’s how capitalism works. That’s not what’s going on.
KS: Yeah. You know, it’s funny that you mention capitalism because in communities that are where a dollar store has been proposed to be built and the community kind of comes out and opposes it, the people who tend to support the idea of the dollar store coming in tend to say, well, that’s just capitalism. That’s just free market economics.
It isn’t. Free market economics are based on having a level playing field. And that’s why all of our major antitrust laws were developed a century ago, because we wanted for small businesses to be able to compete on the same playing field as bigger businesses. One of the things that dollar store chains often do is that they will go to their suppliers, their wholesalers, and say, we want you to offer this product to us, but not offer it to our competitors, do not offer it to grocery stores. Or we want you to make a special size for us of a package that no one else can get. And we can price it the way we want.
Those are blatant violations of federal antitrust laws. And I think that on a federal level, we need to begin paying attention to that. And the same thing at the state level, while communities themselves are doing what they can to fight dollars for proliferation at the local level.
JJ: OK, I don’t shop at dollar stores. I’m just a taxpayer. Why should I care about the issue of dollar store proliferation as a taxpayer?
KS: Well, I think there are a number of reasons, but one of the biggest reasons I would think as a taxpayer is that tax revenue that would normally accrue to the community, and wages that would normally accrue to the community, are now leaving the community, and they’re going to a corporate headquarters where they’re being either reinvested in corporate expansion, or they’re being distributed to shareholders or being used to pay off their investors.
There’s an example that we cite in one of our reports about Haven, Kansas, which had a local grocery store that was there that was paying $75,000 a year in property taxes. So the city was getting that revenue. A dollar store came in, a Dollar General store came in, and within a couple of years, the grocery store couldn’t hold on anymore. The dollar store had eked away just enough of its sales that it couldn’t hold on. And so it closed. The dollar store was paying $60,000 a year in property tax. So the city right off the bat is losing $15,000 a year in property tax revenue that it had before.
But not only that, as a concession to attract the dollar store, the city council had agreed to basically rebate half of the municipal utility taxes that the dollar store developer would have paid for two years. That was $36,000. So now all of a sudden the grocery store is gone and the city is losing $51,000 a year in property tax revenue.
And that’s just an example of tax revenue. We’re not even talking about the wage differential and the fact that dollar stores typically only have one or two staff employed at a time, whereas a grocery store might have 30 or 40 people employed. And the dollar store, Dollar General, is at the rock bottom of the 66 largest corporations in terms of hourly wages. So the community is just losing right and left.
JJ: Right. Well, what happens when communities recognize that, and they resist these dollar stores? I know that the Institute tracks that as well.
KS: Dollar General tends to work with developers who build buildings for them that they then lease for 15 years, usually with three five-year expansion options. And the developer is going to try to minimize costs. And so the developer tends to look for inexpensive land, which tends to be land that is often zoned for agricultural use, or on a scenic byway, or in some kind of rural area, or maybe on the edge of a residential neighborhood.
And to do that, they have to go to the city generally and request a zoning variance. And that’s where the battles tend to develop, is people come out and say, no, we want this area to remain zoned like it is, because there was a reason for that, that we wanted it zoned that way. And we don’t want to change that. I’ve tracked 140 communities now that have defeated dollar stores. And in 138 of those, all but two, they’ve been defeated based on the city denying a zoning variance request.
The other two—it’s something pretty exciting that’s happened recently. In Tangipahoa Parish, Louisiana—which is where Hammond and Ponchatoula is, if you know Louisiana—last spring, a developer came to the Planning Commission and submitted plans to build a Dollar General store. It was an unzoned parcel of land. There was no zoning, so he wasn’t requesting a zoning variance. He simply had to have his building plans approved.
The Planning Commission turned him down. And they turned him down based on their police power to protect the health, safety and welfare of the community, which is a completely novel approach. We had not seen that happen before. The developer appealed that to the parish council. The parish council supported the Planning Commission.
The developer then sued. And last September, the trial took place. And then in November, the judge—in a, you know, this is a pretty conservative part of the country—the judge ruled in favor of the parish and said that they were completely correct in using their police power to protect the health and safety of the community by denying that developer the right to build a dollar store there.
JJ: Wow.
KS: This is a kind of groundbreaking thing. There’s another community that we found, Newton County, Georgia, used essentially the same approach. So we’re getting to have now sort of a body of case law that provides a precedent for a community saying, wait a minute, forget, I mean, zoning is one thing, but these stores are unhealthy for our community. They’re not good for the economy. They’re not good for jobs. They’re not good for the environment. They’re not good for crime. And we’ve had enough.
JJ: Well, it sounds as though that community involvement relies a lot on information and on advance information. They have to know that this is in the planning process to know about the points that they could intervene, which is wonderful. But it also suggests, as I know the work does, that there could be interventions from a higher level, including from the federal level. What do you see as potentially useful that could happen there?
KS: Well, at the federal level, we would, of course, like to see stronger and more vigorous enforcement of the antitrust laws that we already have on the books. The Robinson-Patman Act, the Sherman Act are all laws that are there to prevent exactly what’s happening with dollar store proliferation. And states can also adopt those same laws at the state level to provide some protection there. And that may be, in some instances, easier than getting federal attention.
States also are being pretty aggressive in looking at things like scanner errors, which you mentioned. In fact, the former attorney general of Ohio—well, first of all, the current attorney general of Ohio has investigated and fined Dollar General a million dollars for scanner violations. Basically, the price someone sees on the shelf is not the price they’re being charged by the scanner when they check out. The former attorney general of Ohio, a guy named Marc Dann, is now putting together a class action lawsuit against the dollar store chains for scanner errors, which he’s estimating Dollar General loan is making hundreds of millions of dollars annually in scanner errors because they’re so huge and they’re almost always in favor of the company and not the consumer.
The adage is, “the best time to plant a tree is 10 years ago.” And often communities don’t think about protecting themselves from this sort of proliferation, this kind of predatory business expansion until it’s too late. But for those who are seeing this happening around them in other communities and thinking about it, it makes a lot of sense to put some protection in place right away.
And some of the things that communities are doing are things like what we call dispersal ordinances, which basically say you cannot build a new dollar store within X distance, two miles, five miles of an existing store so that we don’t have the market crowded with them. Or they’re putting in place ordinances like just happened in a town in Oregon that I saw that has put in place a formula business ordinance saying we want to have retail diversity in the community. We don’t want to have 10 identical pizza places. We don’t want to have five identical grocery stores. We want to have diversity. So therefore, we are fine with one dollar store, but not with five.
JJ: Well, finally, information seems key to all of this—information of the actual impacts of dollar stores and then about the possible levers of potential resistance. And that brings me back to news media and reporting. The report itself on the dollar store invasion got coverage, absolutely. But of course, the implications go well beyond covering the report itself as an event. What would you like to see finally more of or less of from news media on this set of issues?
Kennedy Smith: “I would like to see more in-depth coverage of the impact of dollar stores once they’ve been in a community for a while…. I don’t see much looking back and saying, oh, yeah, we lost Ford’s grocery store and we lost the Haven grocery store, and these are the breadcrumbs that led to that outcome.”
KS: That’s a great question. I think I would like to see more in-depth coverage of the impact of dollar stores once they’ve been in a community for a while. I don’t see much on that. I don’t see much sort of looking back and saying, oh, yeah, we lost Ford’s grocery store and we lost the Haven grocery store, and these are the breadcrumbs that led to that outcome.
I’d also like to see more news media tying this to threats to democracy, because if we have major corporations that are able to basically extract this kind of money, this vast volume of money from communities and make it difficult for independently owned businesses to compete, then we’ve changed what the nature of capitalism is. And we need to get back to the roots of what democracy is about. And that really is about having a level playing field for small businesses, for every American to basically have the opportunity to create a business enterprise and thrive and reinvest in their community. And that’s being taken away from us.
JJ: Well, we’ll end it there for now. Kennedy Smith is a senior researcher with the Independent Business Initiative at the Institute for Local Self-Reliance. You can find a lot of work on dollar stores, along with much else on their site, ILSR.org. Kennedy Smith thank you so much for joining us this week on CounterSpin.
KS: Thank you so much, Janine.
This post was originally published on FAIR.
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