Friday, June 13, 2008

Wal-Mart Propaganda and (Local) Media Lapdogs

Wal-Mart is trying to build new stores in Cudahy and Muskego. Citizens of both communities are fighting the development. Much of the “journalism” covering this subject could only be described as subdued boosterism. As noted in previous postings here, there really isn’t a development project some local newspapers won’t support. Taxpayer dollars being redistributed to thriving, profitable businesses to subsidize building their private stores, stadiums, museums, parking structures, convention centers, etc. is great public policy!?

Yet this same style “reporting” has the audacity to complain about entitlement program costs, the cost of maintaining parks, the possibility of light-rail, etc. The programs, projects, and infrastructure that benefit us all, or take care of the least among us, are an inefficient waste of public dollars? But a good public investment is subsidizing large profitable corporate interests even as our wages stagnate, our health care and retirement funding is cut, and such subsidies destroy our communities and social fabric?

We indeed have entered into a new era: labor is completely subservient to capital. Corporations are allowed to speculate, cut corners, use tax loopholes, and do anything to increase their profit while avoiding paying their fair share, acting responsibly, or showing any sense of commitment to anything other than profit. Often this corporate speculation is subsidized – done with taxpayer dollars. So even if they fail, the taxpayers are the ones forking over the money (our tax dollars…again…on top of the subsidies) bailing them out and assuming the risk for their poor management, judgment, and greed.

An illogical editorial in the Journal-Sentinel was published simply to say that officials shouldn’t be subjected to recall elections just because they have voted against the wishes of the citizens in favor of big box development [to subsidize and allow a Wal-Mart into the community] rather than against it. Officials are elected to represent and be the voice of their constituents. If those constituents don’t want a Wal-Mart and a public official votes to allow a Wal-Mart, they have every right to “throw the bum out,” in fact, it’s their duty as citizens.

A Google search of the City of Milwaukee reveals 5 Wal-Marts. Add in all the Targets, Kohl’s, etc. – just think off all that square footage of retail space, all the land it is gobbling up, the environmental devastation from the impermeable parking lot surfaces, and the inefficient replication of the same buildings performing the same services every mile or so throughout the region! Are we constructing these blemishes of infrastructure as a representation of our times, hopes, and dreams? Is this the built-environment legacy we wish to leave? Within a 30-mile radius of Milwaukee, there are 16 Wal-Marts! Not only is this development an economic loser, it's a visual, aesthetic disgrace.

Big box, mega-retail oriented development leads to a realignment of spending - away from a diverse set of owners, neighborhoods, mom-and-pop stores, and other community-linked businesses – toward Wal-Mart. Claiming building a new Wal-Mart will draw in customers from areas without a Wal-Mart is not the same as claiming growth will occur because of Wal-Mart. Such development actually just rearranges spending patterns within an area. The gains to the new host community are the losses of another community. And they will soon be the losses to the host community as well, as Wal-Mart begins to attract away customers from other existing businesses. (Here’s what this type of development and business practice does to encourage sprawl and devastate the environment.)

Think you’re getting a deal? Always the low price? Think again! The September 2005 issue of Consumer Reports exposed, “None of the major retailers outpriced the independents for ranges, refrigerators, and other large appliances…What’s more, readers found Wal-Mart no cheaper than other stores overall, despite it’s low-price slogan.” Categories like prices, service, selection, quality, and checkout ease were compared. Overall, the local stores outscored the big competitors by a considerable margin.

By saturating the market with subsidized stores, their strategy to control market share (by buying up all the competition and driving others out of business), Wal-Mart is being publicly financed to compete with similar, already existing businesses that provide the same services; whilst usually paying a lower wage and providing substandard, if any, affordable health care options. For every job a Wal-Mart creates, 1.4 retail jobs are eliminated from the local economy. Yet, we as taxpayers are subsidizing this loss of jobs, the lower wages, and the general degradation of our communities by allowing such renegade retail profiteers into our neighborhoods.

Twenty-seven percent of Wal-Mart associates’ children are on public assistance programs such as Medicaid or the State Children’s Health Insurance Program. Other research found Wal-Marts cause taxpayers to pay more than $2,000 per employee in social safety net costs. As detailed by Wal-Mart Subsidy Watch, “In June 2007, the State Department of Health and Family Services found that, of all employers, Wal-Mart had the largest number of workers participating in Badger Care, the state’s health insurance program for low-income families. In addition, 776 dependents of those workers were in the program. In total, the Wal-Mart workers and their dependents were costing the state about $3.7 million a year.”

Also, women make up 72 percent of Wal-Mart’s sales force but only 33 percent of its managers. As Liza Featherstone reports, gender discrimination is such an issue at the company, “…current and former Wal-Mart employees are charging the company with systematic sex discrimination in promotions, assignments, training, and pay.”

Some discord has arisen over the typical big-box design. There have been calls for more neighborhood-cohesive styling elements to the building. And - although big boxes are eyesores – as we’ve seen, the real dispute about Wal-Mart and big-box developments is over the seasonal, low-wage jobs lacking good healthcare, and the environmental and community impacts of such developments.

To meet Wal-Mart demands for low-prices, suppliers continually have to cut costs – which involves layoffs and/or outsourcing jobs. This exact problem doomed Milwaukee’s own Master Lock. In 1997, Master Lock began importing from Asia and opened a factory in Nogales, Mexico. As Charles Fishman explains, “The Milwaukee employees of Master Lock who shopped at Wal-Mart to save money helped the hand shove their own jobs right to Nogales.” Additionally, Stephen Dobbins in the same articles adds “…you can’t buy anything if you’re not employed. We are shopping ourselves out of jobs.”

Wal-Mart will increase the tax base, some will argue. As Good Jobs First discovered, Wal-Mart, in 30-40 percent of its facilities, contests it's property valuations to diminish their property tax bill. The Super Centers and Discount Stores win about 45 percent of these appeals. The Distribution Centers win about 65 percent of the time. This means less money for local services, schools, projects and programs. So, to keep up the services we all enjoy in our communities, thanks to the likes of Wal-Mart not paying their fair share, you and I pay more (and this is on top of the publicly financed subsidy you're paying for that your city already gave them).

Rather than continuing this beggar-thy-neighbor, war-among-the-states policies, Common Councils and Planning Commissions should be developing regional, state and federal proposals – alliances among public entities, rather than against one another. This encourages old economic staples like comparative advantage and clustering, and takes into consideration the local history of a place. These policy options are much better for all of us, rather than the false promises of job creation and the environmental irresponsibility of big box development.


“With more than $100 billion in personal assets among them, the five Waltons occupy positions six through ten in the Forbes billionaires rankings, twice as rich as Microsoft’s Bill Gates, the guy on top…It [Wal-Mart] uses its economic and political power to extend the scope of the low-wage economy and threatens to extend its business model into other sections of the economy, undermining wages and still more workers,” affirm Glen Ford and Peter Gamble.

For Further Reading:

Big Box Economic Impact
Big Box Swindle
Great American Jobs Scam
Rolling Back Property Tax Payments
Shopping for Subsidies
Wal-Marts Great Tax Dodge