Wal-Mart Seeks Redemption

Wal-Mart has been taking lots of heat in the media for years now, most of it well-deserved. To fight back against the criticism, Wal-Mart decided to sponsor an independent conference to explore what effects they really have on local communities and the national economy. They hired independent consultant Global Insight to conduct the studies, who in turn vowed to select academic papers only for their academic rigor, not because they were pro Wal-Mart.

The results are in and they’re not what Wal-Mart expected.

Some of their findings, which a few of the researchers released before the conference, tend to confirm what Wal-Mart critics have been saying for years.

At least two concluded that Wal-Mart stores' pay practices depressed wages beyond the retail sector. Another found that states on average spent $898 for each Wal-Mart worker in Medicaid expenses.

One study concluded that Wal-Mart's giant grocery and general merchandise Supercenters brought little net gain for local communities in property taxes, sales taxes and employment; instead, the stores merely siphoned sales from existing businesses in the area.

The results also showed taxpayers came out losers when it comes to the retailer’s “Always Low Prices,” and the south suffered greatly from the presence of Wal-Mart too, where it has its greatest concentration of stores.

Michael Hicks of the Air Force Institute of Technology and Marshall University found that each employee of Wal-Mart caused "the average state to expend just under $900 a year in Medicaid benefits."

In a look at the Supercenters' effects on local businesses in Mississippi, Albert Myles and his coauthors found that a Supercenter's own community benefited from sharp retail sales increases — as much as 59% — though nearby towns suffered annual decreases. Any gains, the researchers found, came at the expense of local merchants.

"Many times the net increases are minimal as the new big-box stores merely capture sales from existing businesses in the area," they wrote.

Wal-Mart also benefits from more than taxpayer subsided Medicaid. In a study, How Wal-Mart Uses Taxpayer Money to Finance Its Never-Ending Growth - May 2004, findings revealed:

Walmart has received more than $1 billion in economic development subsidies from state and local governments across the country. Taxpayers have helped finance not only Wal-Mart stores, but also the company’s huge network of distribution centers, more than 90% of which have gotten subsidies.

Wal-Mart pays inadequate wages and health insurance for their employees, yet benefits from subsidies paid for by taxpayers. This is a company that made $285 billion last year and is owned by five members of the Walton family – who happen to be on the Forbes annual list of the richest people in the world. The best way to describe this company was succinctly put by Libby Spencer over at the DetNews:

It's a sham and a scam and it's a perfect illustration of the corporate mentality that has poisoned the concept of the free market. And it's immoral when the owners of the company collectively possess more wealth than the GNP of over half of the world's nations.

It is a sham and a scam. American workers are facing increasing pressure to hold on to the American Dream, but face downwardly mobile prospects daily from companies that continue to outsource, dump pensions, and reduce wages. We have Wal-Mart to thank for that to a large degree. Their “Always Low Prices” has translated to “Always Lower Wages” in the free marketplace.