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Community Forum on Job Shadowing in
St. Paul High Schools May 17 - 28
http://www.stpauljobshadow.org
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Given the recent discussion about the new Wal-Mart store in St. Paul, as well as the
protest last week at their grand opening, I thought this press release from Good Jobs
First would be of interest to folks (including me) concerned about this corporate
behemoth now within our midsts.
Tom Goldstein
Mac-Groveland
----- Forwarded message from Philip Mattera <[EMAIL PROTECTED]> -----
STUDY: WAL-MART'S U.S. EXPANSION HAS BENEFITED FROM
MORE THAN $1 BILLION IN ECONOMIC DEVELOPMENT SUBSIDIES
Washington, DC, May 24, 2004--Wal-Mart Stores Inc., the world's largest retailer, has
benefited from more than $1 billion in economic development subsidies from state and
local governments across the United States, according to a new study by Good Jobs
First, a Washington, DC-based research group (the study, SHOPPING FOR SUBSIDIES, is
available online at www.goodjobsfirst.org). "Wal-Mart presents itself as an
entrepreneurial success story, yet it has made extensive use of tax breaks, free land,
cash grants and other forms of public assistance," said Philip Mattera, research
director of Good Jobs First and principal author of the study.
The study, the first comprehensive national examination of subsidies received by the
giant retailer, found more than 240 cases in which the construction of new Wal-Mart
facilities was assisted by public resources. In addition to 160 retail outlets, the
study found subsidies at 84 of Wal-Mart's distribution centers, representing more than
90 percent of the network of huge warehouses the company has built to facilitate its
rapid expansion.
The publicly evident value of subsidy deals for individual distribution centers ranged
as high as $48 million (with an average of $7.4 million), while for retail outlets the
largest was $12 million (with an average of $2.8 million). Wal-Mart subsidy deals were
found in 35 states, with the largest number in California, Illinois, Missouri, Texas
and Mississippi. In total dollar terms, Louisiana, Florida and New York also ranked
high. Although comparative data are not available, the study says it is likely
that Wal-Mart, given the extent of its operations, receives state and local subsidies
from more jurisdictions than any other corporation in the United States.
"That a company with $9 billion in profits can wrest job subsidies from state and
local governments shows that the candy store game has gotten out of control," said
Greg LeRoy, executive director of Good Jobs First. The subsidies to Wal-Mart are
particularly troubling, given that the company uses taxpayer dollars to create jobs
that tend to be poverty-wage, part-time and lacking in adequate healthcare benefits.
Mattera stressed that the $1 billion figure is an understatement, since disclosure of
economic development subsidies is poor in most states. "We had to track down subsidy
deals using sources such as archives of local newspapers," Mattera said. "Then we had
to interview hundreds of public officials to confirm the facts and seek additional
details, which sometimes were not available." Mattera continued: "While it was not
practical to contact officials in all of the more than 3,000 U.S. communities in which
Wal-Mart has stores, we did contact officials in every one of the 91 places
in which the company has its distribution centers. The fact that we found subsidies in
more than 90 percent of the distribution centers suggests that the true extent of
subsidies for stores is much higher than the rate we could find with our indirect
methods.
The types of subsidies given to Wal-Mart projects included the following:
*Free or reduced-price land;
*Infrastructure assistance, including access roads and water/sewer lines;
*Tax increment financing, a diversion of property (and/or sales) tax generated by a
new development;
*Property tax abatements;
*State corporate income tax credits;
*Sales tax rebates or exemptions;
*Enterprise zone status, which typically provides for a menu of subsidies such as
property tax abatements, state tax credits, sales tax exemptions and reduced utility
rates;
*Job training and worker recruitment funds;
*Tax-exempt bond financing; and
*General grants, including outright cash payments to the company.
While all of the distribution center subsidies went directly to Wal-Mart, some of the
public assistance for retail projects was given through the developers of shopping
centers in which Wal-Mart stores serve as anchors. The study regards these as, in
effect, subsidies to Wal-Mart, since they helped make possible the company's
expansion. Moreover, by reducing land acquisition and site preparation costs for
developers, the subsidies presumably led to lower rents for Wal-Mart.
In addition to documenting subsidies actually awarded to Wal-Mart projects, the study
describes those situations in which local citizen groups successfully opposed plans
for public assistance to the company. "The fact that Wal-Mart often proceeded with
such projects without subsidies suggests that the company did not seek the assistance
out of financial need," Mattera said.
The study concludes by addressing public policy issues. "Given the poor quality of the
jobs that tend to be created and the role that big-box stores play in contributing to
sprawl, we suggest that states prohibit subsidies to retailers such as Wal-Mart unless
strict conditions are met,"LeRoy said. "First, the subsidies should be available only
in economically distressed areas that are demonstrably underserved by retail outlets
for necessities such as food. Second, any retailer receiving subsidies should be
required to pay its employees a living wage."
The study was funded in part by the United Food & Commercial Workers International
Union, but the UFCW played no role in the research or analysis. Good Jobs First is a
non-profit research center promoting corporate and government accountability in
economic development.
------------------------------------
Philip Mattera
Research Director & Director of the Corporate Research Project
Good Jobs First
1311 L Street NW
Washington, DC 20005
(202) 626-3780 ext. 32 fax (202) 638-3486
[EMAIL PROTECTED]
www.corp-research.org
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