Readers of this Newflash are familiar with our often-repeated stories about corporate welfare given to large retailers. A new report from Good Jobs First says that Wal-Mart has benefited “from more than $1 billion in economic development subsidies from state and local governments across the United States.” The Washington, D.C. based research group released a 65 page report, “Shopping for Subsidies”, today. Researchers found more than 240 cases in which the building of a Wal-Mart store was helped by corporate welfare. Of that total, 84 cases were from distribution centers. These large warehouse facilities received tax subsidies worth an average of $7.4 million, while retail store subsidies averaged $2.8 million each. “Wal-Mart presents itself as an entrepreneurial success story,” the report says, “yet it has made extensive use of tax breaks, free land, cash grants, and other forms of public assistance.” Good Jobs First added, “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. 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.” Wal-Mart receives all of the following forms of welfare: free or reduced-priced land; infrastructure assistance; tax increment financing; property tax abatements; state corporate income tax credits; sales tax rebates; enterprise zone status; job training and worker recruitment funds; tax-exempt bond financing; and general grants, including cash payments. The study recommends that “states prohibit subsidies to retailers such as Wal-Mart unless strict conditions are met.” Such restrictions include using subsidies only in economically distressed areas which are underserved by retail outlets, and only when retailers are required to pay their workers a living wage. The study was funded by the United Food And Commercial Workers.
This Sprawl-Buster’s Newsflash database was one of the sources used by Good Jobs First to locate examples of corporate welfare. We have told this story for several years now. Many small businesses who paid their taxes, watched such taxes go into Wal-Mart’s savings account. Competitors were thus forced to watch their tax payments get used to put them out of business. For more details on these stories, get the book “The Case Against Wal-Mart,” which has a chapter on corporate welfare. For earier stories in Newsflash on this subject, search by “corporate welfare.”