by David Nassar
Posted April 30, 2008 | 09:20 PM (EST)

Source: David Nassar: Why Wal-Mart Does Not Strengthen Our Economy - Business on The Huffington Post

--------------------------------------------------------------------------------



It's tax rebate time, and no one is hungrier for the tax rebate checks arriving in mailboxes today than Wal-Mart. The retailer is advertising tax-rebate sales and has offered to cash the checks for free -- all in hopes that consumers will spend their newfound money at Wal-Mart stores. But spending your tax rebate at Wal-Mart won't stimulate the economy -- and here's why:

Despite bringing in over $378 billion last year, Wal-Mart repeatedly underpays its American workforce. More than 80 wage & hour lawsuits, including a recently certified class action lawsuit in California, are currently pending against the company. Plus, it faces more than 200 discrimination lawsuits for unfair promotion practices, pay discrepancies and other issues, including the nation's largest workplace gender discrimination lawsuit. By failing to fairly compensate its employees, Wal-Mart cheats states out of income tax revenues.

Wal-Mart also pays poorly. While the company seeks to benefit from the government's rebate payout, Wal-Mart's low wages means store employees have little or no disposable income to spend to stimulate the economy. Think about what even a small raise for Wal-Mart's 1 million+ workers would mean nationally, or what it would mean to your city or town if everyone at your local Wal-Mart got a raise.


Wal-Mart sources the vast majority of its products from countries overseas, meaning most of the cost of a given Wal-Mart product doesn't go into the U.S. economy. Rather than boosting the U.S. economy, Wal-Mart has played a major role in exporting U.S. manufacturing jobs to countries with low labor and environmental standards. Meanwhile, the company has embraced unions in its Chinese stores and has negotiated with them to raise Chinese salaries. Apparently, what is good enough for China is not good enough here at home.


Wal-Mart underfunds its health care plan and cuts corners whenever possible, forcing many of its employees to postpone care, thus decreasing their productivity and increasing the eventual cost of their treatment. In desperation, many of them rely on state-sponsored care and drain yet more funds from American communities. That means when Wal-Mart employees end up in emergency rooms, it's U.S. taxpayers who end up footing the bill. If Wal-Mart were truly interested in stimulating the economy, it would begin to adequately fund its health care plan and take care of its own Associates.


Wal-Mart routinely dodges state and local taxes, meaning money spent at a Wal-Mart store won't end up in your community. Wal-Mart actively works to challenge property tax assessments and creates complex real estate arrangements to obscure how much taxes the company owes. When Wal-Mart dodges its tax burden, it takes precious revenues away from cities and states to pay for roads, schools and other services. In turn, individual taxpayers are forced to pay more to make up the difference (which takes more money out of their pockets) or get by with less.


With its low price focus, Wal-Mart may appear to help the U.S. economy. But, the reality is that with its poor wages and benefits, massive China sourcing and tax avoidance, Wal-Mart makes its workers and the communities where it operates poorer.

As our nation's largest employer and most financially-successful company, Wal-Mart is a singular American institution. It occupies a unique position in our world by virtue of its size, reach and responsibility for the livelihoods of millions of workers and the needs of billions of consumers. And with such overwhelming influence comes certain moral responsibilities. It is the acceptance or rejection of those responsibilities that determines greatness.

For the time being, Wal-Mart has rejected those responsibilities and because of that choice, the money spent there does nothing of what it could to strengthen our economy. Higher salaries, quality affordable healthcare and paying what they owe like any good American, are just three things Wal-Mart can do tomorrow that will make them a company worthy of our money.

__________________

he's obviously biased against walmart..but many of the same principals apply to many multi-national organizations, however without quite the same effect as walmart.

Spending your money at a local buisness rather than a national one increases the Velocity of money - Wikipedia, the free encyclopedia in the local economy. Usually when you spend your money in a national chain the money is immediately sucked out of the local economy and deposited in the national chain's account. However, spending locally it is averaged that each dollar you spend will be respent an average of 7 times in your community.

Which is why I always try to buy local when I can. Farmer's markets, mom & pop restaurants, family owned garden center, local pest-control and non-chain daycare service.

However, I still love Target, amazon.com, old navy and Food Lion haha.

__________________

Ok I'm not shopping at Walmart (I call it Hellmart) anymore.

__________________
ProAzn.com on Youtube:
http://www.youtube.com/ProAznCommunity

Wiki-ABOUT US
http://www.aboutus.org/Proazn.com

unfortunatly , being in a small town, walmart and kroger are our only two shopping options.

Why am I not surprised by this. My niece's father calls it WallyWorld (he hates it so much). My niece when in the car ask can we go to Wal-Mart, like ti is an amusement park.

I also hear on the radio now, that car dealerships are "allowing" people to come in with their rebate check and leave with a car. A rebate check that will help them get the car but when it is gone, new owner will have to find other ways to pay for the car.

__________________

I just can't help myself. Risk it all with me.

Here's the deal, Walmart is a public company traded on the world's largest stock exchanges. Profit drives revenue and anyone with a basic knowledge of the dividend cash flow model knows revenue drives up stock prices. Walmart is there for Sam Walton and the Wall street cronies. Anyone can see that. Any drive up in cost (which the article implies) to better the workers is a hit against revenue and therefore lowering stock prices. Walmart is not the first nor last company to employ such tactics. Unfortunately for them size and publicity is not necessarily a good thing, quoting the other financial "genius" Martha Stewart. Walmart's strategy is just another way to obtain 3rd world labor practices and to legitimize a 3rd world labor market in the west under the guise of red tape fiascos. Typical, nothing new and many a profitable company has done it. For what you ask?? For being number one, being the largest, for being in the public eye on the front covers of every major business magazine in the world. In a sense what does this boil down to? Greed, and greed is the american way to achieve the top without acknowledging the social implications some of which is implied in the article. So what is the cost benefit analysis here?? Drive profit up purely for sake of increased social/financial cost at a later date cause Walmart can say "not my problem"; we're a profit driven entity not a social welfare entity - that's the state's problem.

In economics the true benefit is where cost/benefit analysis is greater than or equal to zero. That means the total benefit less costs (financial and social) must be greater than zero in order to add true value to a country. Economic equilibrium so to speak. The implication being that equation holds false for Walmart, that the financial and social cost outstrips the $378 billion profit. If so and is proven correct, Walmart needs to hit the books beginning with economics 101. Unfortunately, that learning process will including hitting them with real costs, lowering revenue to justify the reduced social cost implications. Will Sam Walton be happy with that?? Only if his wall street cronies can stop viewing people as numbers on the big ticker and as human beings... And only if the public and labor force will accept a reverse riveting effect on the economy. Higher costs will mean higher prices which will result in less sales and therefore less staff and less stores and more layoff's and a bigger shock to the state social programs in the long run. So which do you want, plan A or Plan B? A bit difficult isn't it...

But isn't that the american way, the so-called american dream?? Hmm.

walmart sucks with long lines and it aint that cheap. i noticed dollar stores have better quality these days... for el cheapo stuff anyways.