Wal-Mart Welfare

A new report released from Good Jobs First today shows that Wal-Mart, the world's largest retailer, has received more than $1 billion in economic development subsidies from states for its stores and distribution centers. The subsidies have come as many states are forced by White House tax cuts and reductions in federal grants to make tough budget decisions. A report by the Center on Budget and Policy Priorities shows states are cutting subsidies for publicly funded health insurance, child care, federal employment, both higher and lower education, and programs aimed at public safety and people with disabilities -- all this while ponying up taxpayer dollars to subsidize a retailer that took in more than $200 billion revenue and netted nearly $9 billion in profits last year,  even as it paid workers near-poverty wages, drove out local businesses and violated environmental regulations.

REPORT: WAL-MART DEPLETES TAX BASE: A key justification for corporate subsidies is the idea that a large project will expand overall business in an area; Wal-Mart executives tout their stores as a positive economic force in the community. But the Good Jobs First report argues that, unlike factories which add jobs and export products outside the region, big chain retailers like Wal-Mart "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 will destroy as many (or more) jobs than it creates." And "since many Wal-Mart [jobs] are lower-paying and part-time, they will do less to stimulate the economy." Philip Mattera, research director of Good Jobs First, says Wal-Mart's "negative effect on small businesses in the communities where it locates and its contribution to urban sprawl and traffic raise serious questions about the value of giving it sizable financial incentives to expand."