Having Their Subsidies, and Eating Local Business Too

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Over at TomPaine, Greg LeRoy, the executive director of Good Jobs First, provides a much-needed look into the billions of dollars in subsidies that Wal-Mart receives:

A Wal-Mart official once stated that the company seeks subsidies in about a third of its stores, suggesting that more than 1,100 of its U.S. stores are subsidized. A national survey by Good Jobs First in 2004 looked at 160 stores and all of the company’s distribution centers—and found that more than 90 percent of them have been subsidized. Altogether, 244 subsidized facilities in 35 states received taxpayer deals of more than $1 billion.

The full Good Jobs First survey, available here, also cites at least 40 instances where Wal-Mart enjoyed abatement on property-taxes. And critics of “eminent domain” laws can note that Wal-Mart too has leaned on that crutch by condemning Wisconsin cornfields and apple orchards to seize land for its stores.

The idea of public subsidies for a company with an economy larger than that of most countries is comical. But shaming tactics are unlikely to work against a corporation that’s willing to dissuade the unhealthy from working at its stores in order to cut costs, or one that’s happy to deny reports about working conditions in its South American subsidiaries. On the other hand, the new Wal-Mart movie, has at the very least goaded the company into spending millions on a public relations counter-attack. As a charmingly commonsensical letter to the NYT editor reads:

This might seem like a simple question, but instead of Wal-Mart’s investing in a “war room” to improve its public image, why doesn’t the company just raise salaries, allow unions and give its employees better health care? Then Wal-Mart wouldn’t need a war room. The money that the company is spending on its image should be spent to do the right thing. Doesn’t Wal-Mart see that?

One can agree with Cato Institute economist Brink Lindsey, who, in an interview with PBS, said:

Wal-Mart is doing what the American economy is all about, which is producing things consumers want to buy … offering consumers a wide range of goods at rock-bottom prices. It is meeting the market test.

And still disagree that “Wal-Mart is good for America,” as he goes on to say. It’s clear the company has undermined the original philosophy that served as the bedrock for its humble Bentonville origins, which predicated the store’s success not just on its famed “every-day low prices,” but also on an understanding that happy employees make happy customers, and an underlying culture of entrepreneurialism that perhaps has been diluted in its exponential expansion.

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