I subscribe to an excellent newsletter surveying national events that affect rural America from the Center for Rural Affairs , which focuses on the differing social dynamics in rural communities, problems of large corporate farming and how to improve the success of beginning farmers. But the latest edition also had an interesting piece about taxpayer subsidies given to Wal-Mart employees.
The story quotes a study released by U.S. Rep. George Miller (D) of California, which estimates that Wal-Mart stores cost federal taxpayers $2,000 per employee to subsidize the low wages Wal-Mart pays them. For a store of 200 employees, the report estimates that each year taxpayers pay $36,000 for free and reduced school lunches, $42,000 for housing assistance, $125,000 for low-income tax credits and deductions, $100,000 for services to at-risk students, $108,000 for health care subsidies, $9,750 for low-income energy assistance – all of these expenses incurred because the wages are so low that employees qualify for these benefits and have no other way to make ends meet. To quote the article, “The significance of these findings is underscored by estimates that Wal-Mart will control over one-third of all food and drug sales in the United States by 2007. This report reflects one of the world’s most profitable and rapidly growing corporations in the emerging world economy.”
Wal-Mart Welfare
By David Sirota, Christy Harvey and Judd Legum, The Progress Report
May 28, 2004
A new report released from Good Jobs First this week shows that Wal-Mart, the world’s largest retailer, has received more than $1 billion in economic development subsidies from states for its stores and distribution centers. The subsidies have come as many states are forced by White House tax cuts and reductions in federal grants to make tough budget decisions. A report by the Center on Budget and Policy Priorities shows states are cutting subsidies for publicly funded health insurance, child care, federal employment, both higher and lower education, and programs aimed at public safety and people with disabilities – all this while ponying up taxpayer dollars to subsidize a retailer that took in more than $200 billion in revenue and netted nearly $9 billion in profits last year, even as it paid workers near-poverty wages, drove out local businesses and violated environmental regulations.
Major companies like Wal-Mart maintain a competitive edge and reap greater profits by keeping worker wages as low as they possibly can be. This hurts the rest of us, not only because the company forces these workers to seek public assistance to survive, but because suppressed wages hurts small business owners and retailers when customers have less money to spend and it becomes impossible for independent businesses to compete and survive against this unfair practice. This is not “letting the free market decide.” I can hear some Republicans now, saying, “No one is forcing them to take these jobs” but they do not face the difficult reality of a languishing economy with few skills. Yesterday’s blue collar jobs paid enough to support a family, but today, the full-time forklift operator at Wal-Mart qualifies for many types of public assistance, and almost any person that want, can become a forklift operator thanks to an individual forktruck certify which you can even get online.
Small farmers suffer the same fate going up against corporate agriculture, where the mantra is “bigger is better” and financial assistance is not available to foster sustainable farming practices to the extent that it is available for building large barns for leased animals where the corporation controls everything from the animals selected to the food they eat.. All communities suffer as they lose their middle class and profits are drained out of the community, but rural communities suffer most because there are so few options. Big box stores and agribusiness corporations are winning not because their products and services are better but because their size gives them tremendous economic power, from more benign advantages such as ability to reuse store plans for cookie-cutter development to the coercive tactics of market manipulation through vertical integration. Their power in communities as a large employer is magnified by their refusal to pay their workers what they are worth – a living wage. This demands a policy change. We must insist that the Wal-Marts of this world pay a living wage to their workers, and we must enforce anti-trust laws that protect small businesses from the unfair pricing and marketing practices that corporations use to defeat the competition.
While thinking about other ways to even the playing field, how to prod our economic system towards morally and ecologically defensible and sustainable means, I visited the literal “Open House” held by Northfield’s Just Food Coop, which hopes to open up next October, when it calculates it will have enough memberships and contributions to begin extensive remodeling work on their building at 516 Water Street. The open house was hosted by Kaaren Williamsen, of the “Founding Team,” and they’ve hired Stuart Reed, from the Seward Coop, to shape its growth. I am a coop member, it’s not something new to me, because decades ago, the Northfield coop’s cheese was stored in a refrigerator in my garage, and despite all the years and changes since, I strongly believe in the principles behind this organization and I encourage each of you to join. This will be a boon for local growers with produce, meat and dairy to sell and is a way for Northfield buyers to both get the food they want and contribute to making whole and natural foods available in Northfield through their purchasing power.
I also attended the Living Green Symposium last month at the St. Paul Fairgrounds with many exhibits and booths offering information and examples of earth friendly products and services. I’ve needed to replace my furnace for some time, and I found information about geothermal furnaces, which would cut my heat bills dramatically – it runs air through large horizontal tubes (or vertical in a small yard, but more expensive) to warm it in the winter and cool it in the summer. Like many of these great inventions, the up-front costs are higher than conventional furnaces, which in my case means I’d have to stretch to be able to get it. The area was packed, and it’s encouraging to see so many people concerned about how to make life better on the planet we so often take for granted and going the next step that makes it happen.
After a recent meeting in Belle Plaine, I stopped for the open house at Cedar Summit Farm in rural New Prague, where Florence and Dave Minar are busy reviving a rural tradition, i.e. “Staying local, staying small, supporting community” as their flyer says. We visited the creamery, saw new calves, some just a few days old, and the happiest milk fed piglets I’ve ever seen. Minar’s have a mix of cows in their herd, Holstein’s with a few Jersey and mixes, which they milk in their self-designed and constructed 16 cow milking parlor. We got to see the entire operation close up during the tour, with knowledgeable commentary provided by Ralph Lenz, a sustainable agriculture expert and advocate from rural Lake City (also an expert in nuclear waste from his membership on the Goodhue County Citizen’s Task Force). The Cedar Summit Farm is an excellent example of how a family-based operation can is feasible in our economy “where custumers who support them know they are supporting practices which are good for the animals, the environment, and their community.” Small farms using sustainable farming practices can be as profitable, if not more so, than large farms, because large farms are so capital intensive. This is the type of operation we need to support – they sell meat, ice cream, milk, cheese — I’ve started looking for Cedar Summit Farm Products where I shop, and I hope you will too. For other similar farms and products, check the Minnesota Grown Directory.