August 21, 2005

NPR on Teacher Boycott and Job Creation

Excellent audio stories from NPR.

Frank Langfitt discusses the teacher boycott on All Things Considered.

Also, here's a discussion with Greg LeRoy about his new book The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation. The skinny: tax breaks are a small portion of business cost, but are a large chunk of revenue lost to local governments. The interview doesn't even touch on Wal-Mart, but it's critical to understand the role and size of tax subsidies doled out by politicians to other companies, to understand the size and impact of Wal-Mart's feeding at the trough.

Posted by Kevin at 9:24 AM

January 18, 2005

And the Feds Keep Giving...

If you were a Wal-Mart executive, would you turn down the free money continually flowing from local and federal authorities?

PRINCESS ANNE - Wal-Mart Stores Inc.'s newest planned distribution center could receive up to $1.3 million in federal aid following approval of a Community Development Block Grant application by Somerset County Commissioners this month.

The bulk of the grant - $810,000 - would help fund Wal-Mart's purchase of land for the proposed center on Revells Neck Road in Westover. Currently, the land is owned by Mitchell Bonneville Jr., who operates a borrow pit on the site.

Why exactly are the Feds giving out money to fill holes in the ground?
Excavation typically leaves a shallow to moderately deep hole in the ground. If left in that condition, these pits can be a site of severe erosion and sediment runoff to adjacent streams and wetlands. They also can become breeding sites for mosquitoes. Borrow pits have notoriously been used as garbage pits in some neighborhoods. In other words, borrow pits can be an unattractive nuisance and an overall eyesore.
While WM might be getting $1.3 million, the Feds gave out $1.3 billion in similar State-based block grants in 2004.

(H/T Drudge)

Posted by Kevin at 4:51 PM

October 28, 2004

Tit for Tat

Jim Hightower takes on the subsidies given to WM:

The average payout to a Wal-mart store was $2.8 million. Imagine being an independent pharmacy, hardware store, grocery or other shop and having to compete with a multibillion-dollar giant that is then handed an extra $2.8 million taxpaid advantage over you.

The actual subsidy is much larger, for the center was able to look at only a portion of the 2,900 Wal-Mart stores. Also, the report covers only the direct development subsidies, not counting the huge, wage subsidy it gets. Wal-Mart pays at a poverty level and provides no health coverage for a majority of its workers, instead, counting on food stamps, emergency rooms, and other publicly-financed services to underwrite its workforce.

Sarah Clark, Director of Corporate Communications at WM, responds:

Finally, on health care and jobs, Wal-Mart will spend more than $4.3 billion for our associates´┐Ż benefits in 2004, including health coverage. That money will go to cover more than 500,000 associates and their families. In addition, Wal-Mart pays wages that are highly competitive in the retail industry, with an average hourly wage of $9.98 nationally and $10.38 in metro areas.

Wal-Mart always pays above the federal minimum wage, and provides a profit sharing/401(k) plan, company-paid life insurance, discounts on company stock and discounts on merchandise for associates. Thousands of people line up for jobs at Wal-Mart. Our turnover rate is one-third below the average for the retail industry. Clearly, associates find value in working here.

Folks, here's the truth. WM gets a lot in subsidies; so does everyone else. Does WM get more or less? We don't know. Does WM pay "poverty wages"? Yes, if you're an unskilled worthless drunkard with 12 children who can't keep any other position. And it will be your fault. Working as a stock boy or cashier at WM, it will be difficult to support your entire family. You should have thought of that a long time ago.

But, if you plan ahead, work hard and consisently, and show what you're worth, you will rise up in the ranks, and will not be earning "poverty wages".

Posted by Kevin at 12:56 PM

May 25, 2004

Subsidies Redux

Jeffrey Tucker at Mises Blog reads the background research supporting the $1 billion subsidy figure I discussed here:

In any case, a close look at the study shows that the supposed subsidies are mostly about many forms of tax breaks, which are not subsidies at all but refraining-from-stealing policies. Also involved here are reduced land prices (why not consider this a form of privatization?) and infrastructure development... The real cost is all the political capital Wal-Mart must expend in exchange for being tolerated.
Jeffrey provides all the relevant links, and more information. See also the intelligent and dissenting comments.

They make it clear that WM does not operate in a free-market environment.

Posted by Kevin at 12:35 PM

May 24, 2004

Subsidizing WM

The New York Times Barnaby Fedder gives us another anti-WM soundbite--a minimum of $1 billion in government largesse has been given to the company (over an unspecified time period). Disgusting.

However, WM seems to be fighting back more than its opponents would like. It directly responds to charges that it takes too much from government:

In the last 10 years, she said, Wal-Mart has collected more than $52 billion in sales taxes, paid $4 billion in local property taxes, and paid $192 million in income and unemployment taxes to local governments.

"It looks like offering tax incentives to Wal-Mart is a jackpot investment for local governments," she said.

That's an incorrect comparison. The question is whether, absent WM, the government tax revenue would have been the same--but without the subsidy. Sloppy thinking on all sides on this one.

WM also gives a new twist to the charges that it spends too little in wages:

Wal-Mart said its wages were "usually greater than those paid to other nonunion retail workers and virtually identical to those of unionized grocery workers."
To my knowledge WM has never claimed that it pays its workers wages "virtually identical" to those of unionized grocers.

Posted by Kevin at 10:09 AM