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Wal-Mart Sucks Up Taxpayer Subsidies & Pays Poverty Level Wages

>From <

November 28, 2004

Wal-Mart Ways

by Ralph Nader

Law-breaker, union-buster, tax-escapee and shifter of costs to others, the
world's largest retailer, Wal-Mart, announced last week that it would
respect the wishes of its Chinese workers to form a union. As is usual with
Wal-Mart announcements, a substantial overstatement is working here.

In China, unions are not independent; they are government-controlled with
the Chinese communist party turning them into what would be called "company
unions" in the U.S. With 40 stores in China already, Wal-Mart understands
that these essentially Communist Party-controlled unions serve as a
controlling mechanism over workers ­ a one-stop system which often have an
in-company manager in charge.

China is seen by Wal-Mart as the future. With the U.S. market approaching
saturation (Wal-Mart has 3,600 big and bigger stores here), the company with
the biggest gross revenues in the world -- $258.7 billion last year ­ is
importing more from Chinese factories then is the entire country of Germany.

Its message to U.S. suppliers is that if they cannot meet the "China
price," they should close down in America and open up in the world¹s largest
communist dictatorship. Astonishing, isn't it, that this giant capitalist
corporation is using this Communist regime as its labor enforcement arm to
drive down wages and benefits in the U.S.

In Western Europe, Wal-Mart has to treat its workers better than it treats
its American workers. European labor laws are much tougher than those in the
U.S. Wal-Mart has to give its workers paid vacations (from four to eight
weeks depending on the country), better benefits and working conditions.
There is no "off the clock" work or wages not fully paid for long periods of
time. Wal-Mart has even agreed to collectively bargain with a large German

In the country of its birth, Wal-Mart is wrecking havoc with worker
standards of living. It forces other large grocery chains to demand from
their unionized employees lower wages and benefits to be able to compete
with Wall-Mart's race to the bottom. This direction is a historically tragic
reverse for the U.S. economy that before World War II featured rising wages
that increased consumer demand and improved livelihoods.

Increasingly, Wal-Mart's immense arc of influence here is pushing wages and
benefits downward. With hundreds of thousands of its nearly 1.4 million
workers making under $7.50 an hour, before payroll deductions, (the average
wage is between $7.50 and $8.50 an hour), the average-on-the-clock workweek
is only 32 hours. Since Wal-Mart defines anyone working fewer than 34 hours
per week as part-time, they have to wait for two years before qualifying for
health insurance whose co-payment takes one-fifth of the average paycheck.
Get the idea of what is meant by the Wal-Mart way.

Waiting periods are key to Wal-Mart's phony health insurance boasting in
their television ads. Impoverished employees don¹t stay, with turnover rates
for these hourly employees at 50 percent to 100 percent at many stores.

Wal-Mart is devilishly ingenious in thinking up ways to have taxpayers fill
in its wage gap. Put them on partial welfare, says the very well paid
company bosses who make millions of dollars each per year. These workers are
given advice on how to apply so that taxpayers subsidize Wal-Mart¹s profits.

For example, in Georgia, over 10, 261 children of Wal-Mart employees are
enrolled in the state¹s Peachcare program for health insurance in families
meeting federal poverty criteria.

According to the report, Everyday Low Wages, one 200-person Wal-Mart store
could cost federal taxpayers over $420,000 per year. These costs include
subsidized lunches, health insurance and housing assistance, federal tax
credits and deductions for low-income families, among other examples of
Wal-Mart's freeloading.

Enough is never enough for this corporation. It often demands substantial
local tax breaks from municipalities as a condition for locating there.
Although successful local opposition is blocking dozens of Wal-Mart location
plans, this corporate welfare King still manages to escape its fair share of
taxes, while local home owner and small businesses ante up for local public
services and assume Wal-Mart's share. That is, small businesses that manages
to remain in the hollowed out Main Streets that are the aftermath of a
Wal-Mart opening. Minimal thinking by consumers say Wal-Mart is a bargain;
maximum thinking starts adding up the local, national and global costs of
this Goliath depressor of purchasing power by workers.

For more information on these cost burdens, see the website which also shows how communities have stopped the Wal-Mart