Wal-Mart Welfare - Tax Subsidies by Local, State and Federal Governments

     As any smart management team would, Wal-Mart executives seek to control its costs of operations and growth.  Part of their strategy is to vigorously ferret out and negotiate subsidies from all levels of government.  A report from Good Jobs First has shown state and federal governments have given Wal-Mart close to $4 billion in subsidies (Dicker 27).  And that doesn't count what the locals have kicked in.  Local governments often give incentives to Wal-Mart as enticement so its executives will decide to expand the company in their communities.  These include property tax breaks, paying for the store's infrastructure, and sometimes even free land.  Subsidies for retail outlets have reached up to $12 million and the distribution centers have fared even better - having gone as high as $48 million (Karjanen 158).  These numbers don't reflect other true costs that are incurred, like having to extend roadways to reach the store, and the maintenance that those roads will require, or having to pay for additional police and fire personnel and facilities. 
     Does Wal-Mart deserve to save billions of dollars a year to improve its bottom line at the taxpayer's expense?  Wouldn't those monies be more wisely used if spent on our own communities instead of ratcheting up Wal-Mart for the benefit of its shareholders?  Shouldn't Wal-Mart be paying us, the taxpayers, for the privilege of coming into our communities to earn profits off our land, labor and customers?  We have what it needs in order to grow.  So, let its expansion team entice us instead.  Let Wal-Mart come, but at a fair price for us, the taxpayers.  What can we do?  We can pass ordinances requiring cost of living wages to help our people make ends meet.  We can sell land at or above fair market value instead of giving it away.  We can collect the going rate for property taxes rather than offering tax breaks.  We can require payment of social responsibility taxes to help offset the costs incurred by us for healthcare, unemployment and public assistance.  And, rather than giving them sales tax rebates, we can keep all of the sales tax collected and put it to good use for the people who pay it. 
     Wal-Mart continues to grow and will for a very long time to come.  It is expanding globally, but still wants and needs growth here in the U.S.A.  In order to achieve continued growth the company must identify new markets and successfully move into them.  We don't need Wal-Mart, but it surely needs us.  We have trundled along in our small communities just fine for well over two centuries without Wal-Mart.  And during that time we had good paying jobs with good healthcare benefits that didn't cost the taxpayers absurd amounts of money.  Why should it now?  Let Wal-Mart come, but at its expense, not ours.  We cannot slay our Goliath, but perhaps we can at least get it off welfare.

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Wal-Mart Welfare - Healthcare and Unemployment Insurance

     Wal-Mart executives also state that the company offers excellent healthcare coverage because the company the company pays for catastrophic incidents and there is no lifetime limit (Dicker 84).  While all insured people would want this kind of coverage in their policies, it is not the kind of coverage needed most of the time by the majority of people.  Most of us need coverage to help pay for pre-natal care and childbirth, the occasional broken arm, and raising children who continually come home from school with the latest flu virus.  Wal-Mart insures only 48% of its employees, in contrast to 62% that other employers do (Clark 2).  On average Wal-Mart employees pay 42% of their premiums, versus 16% at other employers.  A report prepared by the Committee on Education and the Workforce of the House of Representatives showed that a single worker could end up spending around $6400 out-of-pocket - about 45% of her annual salary - before seeing a single benefit from the health plan."  Even if they elect to buy the insurance there is a six-month waiting period for eligibility (Dicker 83).  So many opt out, and guess who foots the bill for all those uninsured Wal-Mart employees?  We do.  In California alone the healhcare costs picked up by the state for Wal-Mart workers is $32 million per year (Karjanen 155).  Roll that out across the country and we're talking billions of healthcare subsidies for Wal-Mart every single year.
     A frequent argument that local governments use when selling their consituents on the idea of bringing Wal-Mart to town is that Wal-Mart creates jobs.  This is true.  In the U.S. alone Wal-Mart creates over 100,000 jobs per year.  That is an impressive number until one digs a little deeper into the effect those new jobs have on other jobs.  A study, by University of Pennsylvania economist Edward Shils, has determined that for every job created by Wal-Mart there is a loss of 1.5 jobs in the community, which nets out to a loss of .5 jobs (Karjanen 153).  The taxpayers again subsidize Wal-Mart by picking up the unemployment costs that shift to them for all those people that lost their jobs.

To be continued...

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Wal-Mart Welfare - Low Paying Jobs

     Just as Sam Walton did, I started my own business with a small investment, and then operated it on a shoestring budget to contain costs.  Over a decade it grew into a small chain of six stores operating in three states. During that time I was not offered, nor did I expect, any subsidies from local, county or state governments for bringing my business to the area.  Growth of the company was funded by reinvestment of profits generated by the business.  All the while, income taxes were paid on those profits.  There was no assistance offered for the construction of facilities, nor were there tax breaks for doing business that brought in additional tax revenues.  The company paid property taxes on all of its equipment, furnishings and leasehold improvements, thereby generating additional revenue for local governments.  As an employer, it paid fair wages commensurate to the level of responsibility held.  The company also provided a comprehensive benefits package that included healthcare, dental care, vacation pay, personal holidays and more.  The economy in which we participate is a capitalistic one. This means entrepreneurs who succeed should make it on the strength of their own talents and merits, and the ones that fail should do so as well.  My stores didn't cost the communities in which they operated one dime - in fact they contributed to all of them financially by producing tax revenues and good jobs with excellent benefits. This is all quite contrary to what Wal-Mart does, and claims to do.
      Wal-Mart representatives claim that the company provides good paying jobs. When Michael Duke, CEO of the Wal-Mart Stores division was interviewed in 2004, he stated, "People who write about the quality of jobs at Wal-Mart don't understand or know anything about our associates."  Continuing on to say "When you get to know our people, their dedication and loyalty, and you see firsthand their level of commitment, you realize these are quality jobs" (Dicker 30).  But is a good job defined by how loyal an employee is?  Typically, the better the pay, the better the job.  "According to Forbes, the average Wal-Mart in-store employee makes roughly $7.50 an hour" (Dicker 80).  With full time being classified as thirty-two hours per week the gross earnings of a full time employee would be under $12,500 per year.  This is several thousand dollars below the federally established poverty line for a family of four.  With earnings numbers like these, few people would define the jobs at Wal-Mart as good.  Yet Mona Williams, a Wal-Mart spokesperson, declared to Forbes in 2004 that it "is equal to what many union grocers pay and higher than at most other nonunion retailers."  This is contradictory to a workforces wage report in 2004 from the U.S. House of Representatives that showed the average grocery store employee made $10.35 per hour (Dicker 80). Because their earnings are so low, Wal-Mart staff make up a disproportionate number of users of welfare systems throughout the country.  As such, it is now estimated that for every two-hundred-person Wal-Mart, it cost federal taxpayers $2103 per employee (Karjanen 155).  We taxpayers pay for those systems with our hard earned money.  Why should we pay for Wal-Mart's employees to live above the poverty line?  It is Wal-Mart's responsibility to pay a living wage like other companies do.

To be continued...

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Wal-Mart Welfare

Wal-mart is coming to town. The battle has been fought and won. But unlike the story, Goliath has won. Won at the expense of all the little David taxpayers who unknowingly wanted, and in many cases supported, the behemoth Wal-Mart's entree into their communities. What is meant by unknowingly wanted? Well, there are almost always costs to us when Wal-mart comes to town. Taxpayers want the low prices Wal-Mart brings, but they do not understand the costs of getting those low prices. The average consumer may spend a few hundred dollars a year at Wal-Mart, and save as much by buying at low, low prices. What they don't realize is, the consequence of getting those low prices may actually be costing them more than what they are gaining in savings. There are some easily identified costs that come in the form of bond referendums, sales tax rebates, land grants and so forth. There are also costs we, as taxpayers, incur as low wage jobs created by Wal-Mart require the use of more government services from unemployment pay outs, to healthcare, to housing aid, to food stamps and welfare.

Wal-Mart's history is a classic one; it wholly represents the American dream coming to fruition for a small town business man. And for decades, America has reveled in the story of its founder Sam Walton. He was a man that, although having amassed billions in his personal fortune, still ambled around town in an old pick up truck (one with a bad muffler at that). Sam Walton is a folk hero who used concepts such as selling higher volume at lower margins, retail membership clubs, and cultivating business in small towns to grow his business; and in doing so changed the face of retail forever (Ortega 27).

Wal-Mart has grown to be the world's largest corporation and the United States largest employer. Its sales are well over $400 billion dollars a year and climbing (Wal-Mart.com). It is arguably the most successful company in the history of mankind. So, why is it that a company, with unbridled girth and immense profits, needs you and me to help it by subsidizing its growth? Why is it that the Wal-Mart legal team will fight the same battles against its advancement, in community after community, as it tries to conquer the world? It seems apparent that as Wal-Mart marches into more and more communities, markets and countries that its opportunities for growth may start to dry up. If that is the case, then doesn't it need us more than we need it? In negotiations, the party who has something the other one wants has the power. We have things Wal-Mart wants: land, labor and paying customers. If the executives at Wal-Mart want access to our assets, they should ante up their fair share of Wal-Mart's costs incurred as a resulit of its entrance into our communities; and we should stop surrendering to their demands in so many battles.

To be continued...

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Grammatically Correct - yeah, right

I've been contemplating starting a blog for months. A few months back I attempted to set one up on another website (not to be named) and found it cumbersome and frustrating. That set me back. But today I revisited the whole blog idea; after all I've got a few things I'd like to talk about.

Not that anyone would care. Not that anyone will even venture a look at it. But maybe, just maybe, I'll say something that could make a difference in someone's life or improve how a person interacts in the realm in which he or she lives or even bring about a conversation that drives a positive change in our society. Any of these would bring joy to me.

I have to admit, a blog reader I am not. I'm kind of old fashioned. On occasion I read the op-eds in the print edition of my local paper, however, only on weekends as my household just subscribes to the Saturday edition. When I do read them I get disgusted, roll my eyes and shake my head. Not with what people have to say, rather with how they say it. People who take the initiative to write are to be applauded (??). I simply wish they would voice their opinions in an intelligent manner.

Poor literacy in advertising, in the media and in publishing is rampant. It is appalling. When reading articles in the paper one would expect to see good grammar. Can you remember when companies would be embarrassed to publish pieces which had grammatical errors? I can. I'm not saying my blog will always, or even mostly, have acceptable grammar. No one is paying me to write and no one is publishing what I write in order to earn a profit. So, I'm off the hook on the grammar point. What I am saying is that we, as a society, have come to accept sloppy work and companies have lowered the standards of performance for their writers. It is disheartening to realize that we as consumers have allowed shoddy output to become the norm. The continued purchases of goods and services from these companies reflect our level of tolerance and only encourage them to produce more of it.

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