ABOVE: Wal-Mart promotes literacy at its Menomonie "Distrubution" Center
What motivates a private citizen - - with no ostensible ties to Wal-Mart - - to write a letter to the editor filled with mistakes and sloppy logic?
Big-box retailer has economic benefit
Letter writer Pamela Fendt made several incorrect assumptions about Wal-Mart ("Don't welcome store," May 13).
She incorrectly stated that Wal-Mart is using the state's publicly funded health insurance, BadgerCare. This program is not used by stores. It is set up for individuals. Being a Wal-Mart employee is not an eligibility requirement for BadgerCare, which is based on income and other factors. These folks would be getting BadgerCare whether or not they worked for Wal-Mart.
Being a Wal-Mart employee is not an eligibility requirement for BadgerCare. However, one goes with the other pretty snuggly; Wal-Mart employees use BadgerCare.
Quoting one of my earlier posts: In Arkansas - Wal-Mart headquarters - Wal-Mart is NUMBER ONE in Children of employees on publicly-funded State Health Care programs.
Quoting a story in the Arkansas Democrat-Gazette: "Georgia, Tennessee, Washington, Massachusetts, Wisconsin, West Virginia and Connecticut have also reported that Wal-Mart employees, or their children are a disproportionately large share of their state health rolls."
More: "A 2002 Georgia state survey showed that 10,261 of the 166,000 children covered by PeachCare for Kids (a Georgia state health program) had a parent working at Wal-Mart. That’s 14 times the number for the next highest employer, Publix grocery store, with 734."
Now, is that just because Wal-Mart employs SO MANY people that the numbers are skewed? I'm afraid not: Wal-Mart claims to have similar health care coverage as other large retailers. That's just silly. A recent Harvard Business School study (2002) shows that Wal-Mart spent an average of $3,500 a year on health care for each employee, compared with $4,800 for the average retailer and $5,600 for the average U.S. company. In Tennessee these numbers are even worse, with 3,700 of Wal-Mart’s 9,617 employees, or 26%, on state aid (according to the Chattanooga Times Free Press)!
When you are the biggest employer in the country, these practices CAN and DO cost the taxpayer money, putting ENORMOUS pressure on state health care systems. Just "good business"? It's irresponsible and simply shameful.
As an addendum: Wal-Mart has been shamed into marginally improving its health insurance offerings to employees, but the company is still far from a superhero.
Back to the letter:
While it's true that Wal-Mart has used public subsidies, Fendt ignored all the revenue it brings to the state through sales taxes. Without taxes, BadgerCare would not exist.
"While it is true that Wal-Mart has used public subsidies...". That's it? Talk about colorful understatement - - Wal-Mart is the patron saint of corporate socialism, and avails itself to our coffers on a gargantuan scale. From "Wal-Mart's Tax On Us" at Alternet:
The subsidies Wal-Mart lobbies for run the whole gamut: free or reduced-price land, infrastructure assistance, tax increment financing (TIF), property tax abatements or discounts, state corporate income tax credits, sales tax rebates, enterprise zone tax breaks, job training funds, and low-interest tax-exempt loans. The most deals and dollars were found in Texas (30 deals worth $108 million) and Illinois (29 deals worth $102 million).
And because of poor disclosure in most states, this could be just the tip of the iceberg.
More from the letter:
The claim is made that for every job Wal-Mart creates, 1.4 retail jobs are eliminated in the local economy. Economists have questioned this claim. At the University of Missouri, economist Emek Basker found that a Wal-Mart's move into a community increases employment.
Oops - I don't think the letter-writer read Basker's entire paper (neither did I). Other economists did; let's look at a passage from the testimony of Heather Boushey, Economist at the Center for Economic and Policy Research:
Wal‐Mart does create jobs. But, as I mentioned above these jobs are generally not well‐paid, and, the total number of jobs created, after discounting the local jobs destroyed, is actually quite small. In a recent paper, Emek Basker finds that Wal‐ Mart’s entry into a community in the United States increases retail employment by 100 jobs in the first year, but 50 of those jobs disappear over the next five years. Wholesale employment declines by approximately 20 jobs due to Wal‐Mart’s vertical integration, but no spillover effect is detected in retail areas that Wal‐Mart does not compete in.
Ms. Boushey, you see, read the whole paper - not just the "good parts."
We shouldn't forget the jobs created indirectly from Wal-Mart's distribution network. Many local businesses buy supplies from Sam's Club.
Er - wonderful, I guess. For reasons not explicated.
Successful economies are diverse. Big-box retailers like Wal-Mart contribute to that diversity.
Al Savastio
Milwaukee
Right-o, Mr. Savistio.
UPDATE: The Menomonie "Distrubution" Center pictured above cost the city $750,000. They subsidized half of Wal-Mart’s land acquisition costs through the use of tax increment financing. (Source: Shopping for Subsidies: How Wal-Mart Uses Taxpayer Money to Finance Its Never-Ending Growth, by Philip Mattera and Anna Purinton)
More on the Wal-Mart blight: The cost of doing business with Wal-Mart. George F. Will - "Condescending lectures by liberals RE Wal-Mart" What's wrong with having a Wal-Mart across the street? FAST COMPANY: The Wal-Mart You Don't Know (the article that became the book THE WAL-MART EFFECT Paul Soglin: "Your Wisconsin Tax Hell: Manufactured by WMC"
"Scamming the system" - More about corporate tax abuse
Property taxes: "Why am I paying so much?" PART 2
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