Revitalization, retailers and jobs are desperately needed on the south side of Fort Wayne, but is Wal-Mart the answer?
While Wal-Mart claims that it will bring 350 jobs, most of these will be part-time, low-wage jobs that include little or no benefits. The 350 part-time jobs translate into 200 full-time jobs at the typical Wal-Mart supercenter. The average Wal-Mart worker makes $8.23 an hour and typically works less than 24 hours a week. The average Wal-Mart employee working 40 hours a week would earn only $17,118 a year, but a more realistic annual wage for a Wal-Mart worker is about $10,000. This is well below the poverty level for a family of two. Most Wal-Mart workers qualify for federal, state and local social services, i.e., welfare.
According to a report by Rep. George Miller of California, when a Wal-Mart supercenter that employs 200 workers comes to town, the cost to federal taxpayers is $420,750 a year, or $2,103 per employee. Miller’s breakdown: $36,000 a year in free and reduced school lunches; $42,000 a year for Section 8 housing; $125,000 a year for federal tax credits and deductions for low-income families; $100,000 a year for Title I expenses; $108,000 a year for federal health care costs; and $9,750 a year for low-income energy assistance. By these estimates, Fort Wayne is doling out $1.2 million for its three existing Wal-Marts, and that will increase to almost $1.7 million if the new store opens.
The new Fort Wayne Wal-Mart’s 350 employees will exacerbate the costs to taxpayers. At some Wal-Marts, the company has supplied new employees with information on available social services. California estimated it paid $86 million annually in public assistance to Wal-Mart workers. Connecticut estimates Wal-Mart workers cost its low-income state health care program $5.4 million annually. More than 70 percent of Wal-Mart workers are women. Seventy-five percent of Wal-Mart workers earn under $10 an hour. Are these the kind of jobs Fort Wayne needs?
Wal-Mart claims that it provides health benefits to its workers. A part-time worker must work at Wal-Mart for a minimum of two years to be eligible for health benefits. When eligible, most Wal-Mart workers cannot afford health benefits that cost more than 20 percent of the average worker’s salary. Wal-Mart workers have no choice but to rely on publicly assisted health care. Even upper-management cannot afford the health benefits Wal-Mart “provides.”
Taxpayers in other communities around the country subsidize Wal-Mart under the guise of “economic development.” According to a recent report by the non-profit organization Good Jobs First, local communities have given Wal-Mart over $1 billion in subsidies in the form of free or reduced-priced land, infrastructure assistance, property tax abatements, state income tax rebates or exemptions, enterprise zone status, job training and worker recruitment funds, tax-exempt bond financing and outright cash handouts. How much money is the Fort Wayne/Allen County Economic Development Alliance doling out to Wal-Mart?
Wal-Mart requires its suppliers to continually seek cheaper alternatives, such as production in China. More than 70 percent of the goods on Wal-Mart shelves are produced in China. The U.S.-China Economic and Security Review Commission estimated that 33 percent of U.S. job losses in the past three years have gone to China.
When a Wal-Mart comes to town, local businesses disappear. Small entrepreneurs do not have Wal-Mart’s economic clout with suppliers and cannot compete with Wal-Mart’s prices. Small enterprises cannot offer the variety of goods that Wal-Mart has, nor can they provide “one-stop” shopping. The average supermarket worker earned over $10.35 an hour in 2001. Local firms simply cannot compete with Wal-Mart and will be forced to close. Wal-Mart will only redistribute where purchasing occurs, not increase overall purchasing.
The evidence of Wal-Mart’s dubious corporate ethics is astounding. Wal-Mart recently agreed to pay an $11 million fine for using undocumented janitors in Pennsylvania, Ohio, Missouri and New York, and was found guilty in Oregon for forcing its workers to work overtime for no pay, behind locked doors. Furthermore, Wal-Mart agreed to pay a fine of $135,540 for violating child labor laws in Connecticut, New Hampshire and Arkansas. Wal-Mart has initiated a multi-million-dollar media blitz to improve its image, yet it has done nothing to change its policies or behavior.
Wal-Mart shoppers appear to pay less for many products than elsewhere. With real wages decreasing, as good jobs vanish, consumers have no choice but to seek the lowest prices for their purchases. Wal-Mart appears to provide cheaper goods, but if we add the costs to taxpayers, how much are we really paying for Wal-Mart products?
Last year, Wal-Mart posted revenues of $256 billion; with profits of more than $9 billion (Wal-Mart’s profit increased 13 percent in just the third quarter of 2004). Wal-Mart’s CEO H. Lee Scott’s 2004 salary and bonuses have been estimated from $16.2 million to as high as $23 million.
With this kind of income, we should compel Wal-Mart to act in a legal, ethical, socially responsible manner and pay its workers a living wage with health benefits, rather than Fort Wayne citizens subsidizing their private profits.
Recently, the Maryland legislature enacted a law that demands payment to its public health care system from employers with more than 10,000 workers who don’t pay at least 8 percent of their total payroll in health-care benefits. The only employer with more than 10,000 workers in Maryland is Wal-Mart. Maryland said enough is enough.
When will Fort Wayne say enough?
