OC Weekly: Welfare-Mart

[question everything]

November 11 - 17, 2005

Welfare-Mart

How your tax dollars subsidize the world's largest corporation

by GREG LEROY

Wal-Mart, the Alpha Dog of discount stores, has also become the Alpha Hog at the public trough.

The phenomenal growth of the world's largest corporation has been supported by taxpayers in many states through economic development subsidies. 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 economic impact of these subsidies on small businesses is given a human face in one powerful segment of Robert Greenwald's new documentary, Wal-Mart: The High Cost of Low Price. The sweetheart deals given to two Wal-Mart Supercenters in Hamilton, Missouri, undermined Red Esry's four family-owned grocery stores. Esry watched his sales plunge as soon as the Supercenters opened -- he couldn't compete with Wal-Mart's prices and lost almost half of his business virtually overnight.

In the film, Esry's wife ruefully recounts how her husband went to City Hall to ask for a property tax abatement to match Wal-Mart's subsidy, but was turned down. Esry cut costs, but refused to stop paying his employees a good wage and continued to provide them with full health-care benefits and a pension package. Red Esry's story is being played out in thousands of communities across America.

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It's ironic that a company which promotes itself as a free enterprise success story is so highly dependent on taxpayers. This fact was conveniently forgotten during the aftermath of Hurricane Katrina, when Wal-Mart garnered widespread accolades for its role in providing emergency supplies to victims of the storm. Those truckloads of supplies should be seen not as corporate charity, but as small bit of payback for the huge sums the company has previously drained from taxpayers of America.

http://www.ocweekly.com/ink/06/09/web-leroy.php

Greg LeRoy is the author of The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation and executive director of Good Jobs First.