Reply #4: Shopping for Subsidies: How Wal-Mart Uses Taxpayer Money

[Keirsey]

65-page report

Shopping for Subsidies: How Wal-Mart Uses Taxpayer Money to Finance Its Never-Ending Growth

Big-box retailing does not boost economic growth. A key justification for using taxpayer dollars for corporate subsidies is the idea that a large project will expand overall business activity in an area. Many analysts argue, however, that new retail stores do little more than take revenues away from existing merchants and may put them out of business and leave their workers unemployed. It’s quite possible that a new Wal-Mart store will destroy as many (or more) jobs than it creates—and the Wal-Mart jobs may pay less, meaning that they do less to stimulate the local economy.

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Executive Summary

Over the past few decades, Wal-Mart Stores Inc. has grown from a regional discount store operator into the world’s largest retailer. In fact, with annual revenues of $256 billion, it is the world’s largest corporation. It has more than 3,500 stores throughout the United States and another 1,600 abroad. Its profits last year were nearly $9 billion.

What is not widely known is that this wealthy company’s aggressive U.S. expansion has frequently been financed in part by taxpayers through economic development subsidies. This report, the first national study of the subject, documents more than $1 billion in such subsidies from state and local governments to Wal-Mart; the actual total is certainly far higher, but the records are scattered in thousands of places and many subsidies are undisclosed.

The subsidies go not only to Wal-Mart’s stores, but also to the network of nearly 100 distribution centers it has created to facilitate its rapid retail expansion. We found that more than 90 percent of the company’s distribution centers have been subsidized.

Given the absence of any centralized information source on development subsidies, we began with the electronic archives of local newspapers to find cases of Wal-Mart stores that had received such assistance. We then contacted economic development officials in each area to confirm the facts and obtain additional details.

This method, which does not catch subsidy deals that failed to gain press coverage or those reported in papers whose archives are not available, brought to light 91 stores that have received public assistance. In total, these subsidies were worth about $245 million to Wal-Mart and the developers of shopping centers in which a Wal-Mart store served as an anchor. Individual subsidy deals in those 91 stores ranged from less than $1 million to about $12 million, with an average of about $2.8 million.

http://www.goodjobsfirst.org/pdf/wmtstudy.pdf