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Just in case
you missed these items in the news recently, the continuing rise in oil/gas
prices is affecting transportation costs, in addition to manufacturing costs in
farming and industry. One of the economic hiccups comes from reports that Wal
Mart, the Godzilla of global retail, had lower profits this quarter, attributed
to higher energy costs. Wal Mart is
such an oversized player in the US economy and such a large part of the US
trade with China that economists worry what would happen if it developed
terminal symptoms. Our globalized economy is so integrated that natural
disasters in SE Asia, shipping disruptions at the Pt. Of Long Beach or via the
railroads, tumbling currency rates and surging energy costs are legitimate concerns. Wal Mart says oil prices held down profits
for quarter http://www.nytimes.com/2005/08/16/business/16cnd-walmart.html Wal Mart’s worrying outlook slams stocks http://www.msnbc.msn.com/id/3683270/ Economy shows signs of strain from energy
prices http://www.nytimes.com/2005/08/17/business/17oil.html?hp&ex=1124337600&en=1e12652021c8134c&ei=5094&partner=homepage Goldman Sachs revises oil forecasts to $68,
sees $60 for years to come http://quote.bloomberg.com/apps/news?pid=10000103&sid=aB5bwfjqFwEo&refer=news_index Venezuela ready to
cut oil exports to US if Bush
administration continues to threaten its sovereignty http://www.plenglish.com/article.asp?ID=%7B62FF49B6-ABE3-45A5-9B73-ADBD79676C0D%7D&language=EN American investors
move away from US assets According to the Treasury, US investors bought $9.64bn of
foreign equities, up from $4.7bn in May and taking the 12-month total to
$96.2bn. "It is partly because of the dollar, partly corporate scandals.
Both have been a wake-up call to investors with too much exposure to US
equities," said Brian Garvey, strategist at State Street bank. State
Street's indicators have shown weak demand for US equities over recent weeks
from both domestic and foreign buyers, even when good news has lifted stocks.
"This is one of the reasons we're still negative on the dollar,"
added Mr Garvey. American investors diversified away from the US at the
fastest rate in 10 years, even as foreign buyers stepped up their purchases of
US assets, data released on Monday suggested. http://www.nytimes.com/financialtimes/business/FT20050815_21670_180299.html So here’s some
data all in one place that suggests diversification is key to stabilizing local
economies, not further consolidation. And in the event of a global pandemic, economic
collapse, natural or terrorist disasters that threaten food security, shouldn’t
American consumers be thinking about alternative, closer to home, growers and
suppliers of food? Think global,
eat local. Something to think
about, I hope. KwC Fact
Sheet on Wal-Mart: The Death Star of American Commerce Wal-Mart's
True Cost to Taxpayers "Because Wal-Mart
fails to pay sufficient wages, U.S. taxpayers are forced to pick up the tab. In
this sense, Wal-Mart's profits are not only made only on the backs of its
employees-but on the [back] of every U.S. taxpayer." Representative George
Miller (CA) The
cost of a single Wal-Mart
" $36,000 a year
for free and reduced lunches for just 50 qualifying Wal-Mart families " $42,000 a year
for Section 8 housing assistance, assuming 3 percent of the store employees
qualify for such assistance, at 6,700 per family " 125,000 a year
for federal tax credits and deductions for low-income families, assuming 50
employees are heads of household with a child and 50 are married with two
children " 100,000 a year
for additional Title I expenses, assuming fifty Wal-Mart families qualify with
an average of two children " $108,000 a year
for the additional federal health care costs of moving into state children's
health insurance…assuming 30 employees with an average of two children
qualifying " 9,750 a year
for the additional costs for low income energy assistance (1) Everyday Low
Wages: The Hidden Price We All Pay for Wal-Mart," a report by the
Democratic staff of the Committee on Education and the Workforce, U.S. House of
Representatives, February 16, 2004, http://edworkforce.house.gov/democrats/WALMARTREPORT.pdf What
Wal-Mart gets from your local, state, and federal tax dollars " Free or
reduced-price land Good Jobs First, Wal-Mart’s'
U.S. Expansion has Benefited from More Than $1 Billion in Economic Development
Subsidies http://www.goodjobsfirst.org/pdf/wmtstudy.pdf Wal-Mart
and food " Wal-Mart
started selling groceries in 1988 and 15 years later it is now the largest
distributor of food in the world. " Wal-Mart gets
68 cents of every food dollar spent in the United States, with 30 cents going
to marketing, transportation and packaging. Farmers get 2 cents of every food
dollar. " For every one
Supercenter that will open, two supermarkets will close. Since 1992, the supermarket industry
has experienced a net loss of 13,500 stores. Fickes, Michael.
"Big Boxers have big expansion plans." Retail Traffic. 1 December
2002. Wal-Mart
and labor abuses " Wal-Mart has
racked up huge fines for child labor law violations. The rich company
reportedly makes children younger than 18 work through their meal breaks, work
very late and even work during school hours. Several states have found Wal-Mart
workers younger than 18 operating dangerous equipment like chainsaws, and
working in such dangerous areas as around trash compactors. (The New York
Times, 1/13/04; The Associated Press, 2/18/05; The Hartford Courant, 6/18/05) " By demanding
impossibly low prices, Wal-Mart forces its suppliers to produce goods in
low-wage countries that don't protect workers. A worker in a Honduran clothing
factory whose main customer is Wal-Mart, for example, sews sleeves onto 1,200
shirts a day for only $35 a week. (Los Angeles Times, 11/24/03) " Wal-Mart has a
shameful record of paying women less than men. Wal-Mart pays women workers
nearly $5,000 less yearly than men. Some 1.6 million women are eligible to join
a class-action lawsuit charging Wal-Mart with discrimination. (Richard Drogin,
Ph.D., 2/03; Los Angeles Times, 12/30/04) Wal-Mart
and the environment " In October
2004, the United States sued Wal-mart for violating the Clean Water Act in 9
states, calling for penalties of over $3 million and changes to W-M building
codes. [U.S. v. Wal-Mart Stores Inc., 2004 WL 2370700] " The United
States Environmental Protection agency fined Wal-Mart $1 million, settling
allegations that Wal-Mart violated the Clean Water Act with dirt discharges
while building stores in Massachusetts, New Mexico, Okalahoma, and Texas.
[Wal-MartLitigation.com] " Wal-Mart was
fined $765,000 for violating Florida's petroleum storage tank laws at its
automobile service centers. Wal-Mart failed to register its fuel tanks, failed
to install devices that prevent overflow, did not perform monthly monitoring,
lacked current technologies, and blocked state inspectors. [Associated Press,
11/18/04] " The average
supercenter attracts 3,315 car trips a day (Terrain magazine) " A
250,000-square-foot supercenter with a 16-acre parking lot will produce 413,000
gallons of storm runoff for every inch of rain. Each year, such a lot would
dump 240 pounds of nitrogen, 32 pounds of phosphorus, and 5 pounds of zinc into
local watersheds while creating heat islands. (Terrain magazine) Wal-Mart
general facts " Of the 100 most
powerful economies in the world, Wal-Mart ranks #19 " In 2003, sales
associates, the most common job in Wal-Mart, earned on average $8.23 an hour
for annual wages of $13,861.The 2003 poverty line for a family of three was
$15,260. ["Is Wal-Mart Too Powerful?", Business Week, 10/6/03] " Wal-Mart
employs 1.2 million Americans. It is the largest (civilian) employer in the United States. This fact sheet was
put together by the Organic Consumers Association http://www.organicconsumers.org/BTC/deathstar081805.cfm Also FYF Forbes: Wal Mart’s Next Victims
http://www.msnbc.msn.com/id/6451543/ (Note: since this was written in 2004, WM is beginning to sell liquor
in some locations, as well as applying for bank licenses in some states) Sirota: Will we follow Bush to Wal Mart America? “According to a study by the U.S. Conference of Mayors, new
jobs created during the 2004-05 period are forecast to pay an average of
$35,855 -- far lower than the $43,629 average pay of those jobs lost between
2001-03. Increasingly, companies are shipping well-paying manufacturing and
white-collar jobs overseas. At the same time, the productivity gains we gloat
about are just code for the fact that companies are squeezing more and more
work out of fewer and fewer workers. That means the jobs that are exported are
either not replaced, or replaced with other ones in lower-paying sectors of the
economy. The result is what Business Week calls the "Wal-Martization of America": an economy dependent on
"hiring temps and part-timers [with no benefits], dismantling internal
career ladders, and outsourcing to lower-paying contractors at home and
abroad." All told, "More than a quarter of the labor force, about 34
million workers, are trapped in low-wage, often dead-end jobs." The President has tried to say that the economic downturn
was inevitable because of the attacks on 9/11 and the invasion of Iraq. But the
argument holds no water, and even invoking such a specious rationale dishonors
the citizens who died that day and the soldiers who are serving overseas. The
fact is, the President had two economic paths to choose from. He could have
chosen policies that put more money into the hands of working families, helping
folks through the tough time while stimulating the economy. An expansion of tax
credits for education and health care, extension of unemployment benefits, an
increase in the minimum wage -- any such policy could have helped. Instead, he went to bat for his wealthiest contributors --
the corporate executives, old money fat cats, slick lobbyists, and country
clubbers he has been surrounded with since his umbilical cord was cut. He chose
tax cuts for the highest-income Americans. He chose new laws that allow
companies to avoid having to pay workers overtime. He chose to terminate
unemployment benefits, and loosen laws that protect worker pensions. He chose a
"free" trade policy that encourages corporations to troll the world's
most repressive countries for the cheapest labor. He chose his path carefully. The question is -- will America
now follow? David J. Sirota is the Director of
Strategic Communications for the Center for American Progress and co-chair of
the new Progressive Legislative Action Network (PLAN). December
2003 http://www.alternet.org/story.html?StoryID=17467 |
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