walmart: subsidized growth
certainly an interesting read [pdf], the organization good jobs first has released a report on taxpayer subisidies for walmart - because, well, walmart needs the breaks.
the report claims that it documents more than $1 billion in subidies from local and state governments. it’s been picked up by the new york times.
Let’s see. A study funded by an organized labor organization that is openly hostile toward Walmart, that “reveals” 160 instances of government subsidies granted Walmart (oh, no, wait…many of those subsidies were actually granted to someone other than Walmart, included only because those people did business with Walmart), and without providing any information on whether these subsidies were unique to Walmart or are consistent with government’s treatment of large businesses that provide an economic base and growth to a community.
Yeah, right.
Frankly, I’m a little sick and tired of hearing about how Walmart is destroying America. I have no particular love for Walmart — I’ve been in their stores maybe a half dozen times in my entire life — but this is the way our society works. A business needs to offer something of value to the customer, and the customer decides whether they think it’s worth the rate being asked. “Mom and pop” stores survive on the basis of their added value, and if consumers decide that added value doesn’t warrant the higher pricers, they go elsewhere.
There is plenty of evidence that “boutique” type stores work just fine, when managed properly. There is ample room in the marketplace for “big-box retailers” (as this report describes Walmart) along with stores that provide personalized service, as many successful “mom and pop” or “boutique” type stores prove on a regular basis. Those that fail and blame Walmart are either just not in a community where their type of business can be supported or (more likely) they simply have failed to adapt to the change in the marketplace. Walmart can hardly be blamed for that.
A proper report would not just focus on money given to Walmart. It would look at all subsidies given to all businesses, and document not only the cost of the subsidy, but the benefit as well. Subsidies aren’t handed out just for fun; there is an expectation that the net benefit to the community will be positive. In most cases, this turns out to be true.
But then, a report like that would have to be done by someone else. It just wouldn’t fit UFCW’s agenda to publish actual facts. Much easier for them to use the popular hatred of Walmart to push their own agenda.
Comment by pete — May 24, 2004 @ 2:50 pm
my read on the story was that walmart is sucking up government subsidies at this rate simply because it’s that big an operation… so, yes… i’d love to see a report on government subsidies to all businesses (and then we get into the sticky issue of what constitutes a “subsidy”
)
anyway, i have issues with walmart for other reasons ( http://www.rojisan.com/blog/2003/11/the_evil_empires_spotlight_on_walmart.html ), and that’s been on the record long enough that i get interesting things about walmart tossed my way.
Comment by roj — May 28, 2004 @ 10:49 pm
“whether these subsidies were unique to Walmart or are consistent with government’s treatment of large businesses that provide an economic base and growth to a community”
Maybe other corporations get the same treatment as Walmart. How does this make things better? The mistake you make is to assume that the benefits handed out to Walmart and other corporations “provide a basis for growth”. That’s rubbish. Walmart stores destroy more jobs than they create. So-called free-market economists justify this by saying that Walmart is more efficient and the laws of economy are just like that. Complaining about job loss due to efficiency is like complaining about the tides, they claim. However, this picture changes completely if is true that a large part of Walmart’s success is not efficiency but public subsidy. The free-market fairy tale is turned on its head. Walmart is able to down-compete the established local stores because it is favored by policy (in part unintentionally) and subsidized by tax-money. Tax-payers pay for Walmart to destroy jobs.
“Subsidies aren’t handed out just for fun; there is an expectation that the net benefit to the community will be positive. In most cases, this turns out to be true.” You’d have to offer some evidence for that claim and you have to look at the net effect. If community A “benefits” at the expense of another community B because its subsidies attract a Walmart super store that will bankrupt all existing retail stores in neighbouring B, how is that a good deal? And if medical care for Walmart employees in A has to be provided by social programs paid for by the federal taxpayer, how is that a good deal? Sadly, this is how things are working. Walmart is only one example of this phenomenon.
Comment by piglet — May 11, 2006 @ 12:04 pm