The Devil Wears Wal-Mart

The Devil’s envoy arrived in Cleveland last week swaddled in magnanimity. He shared a podium with Mayor Frank Jackson to announce that his company, Wal-Mart, would be forgoing $10 million in tax abatements at its new Steelyard Commons store.

Leaders cooed, headlines gushed, and other Steelyard companies jumped on for the ride. Finally, it seemed, a large corporation in Cleveland was willing to stand on its own two feet, willfully disposing of its right to sponge.

It was a remarkable moment. For years Wal-Mart was content to ply the countryside, working that Homespun Hillbillies From Arkansas routine on its way to becoming America’s largest private employer — 1.3 million workers and $11 billion in profits last year. But as it ran out of turf, it was forced to hunt untapped purses in suburbs and cities. That’s when things went bad.

People of the metropolis tend to have more finely tuned bullshit detectors. While our country cousins saw lovable hillbillies, we saw prehistoric goobers who went sphincter on paychecks and health plans, and violated pretty much every civil rights and labor law they could find.

It is good to punch such people. So we did.

Now two-thirds of all new stores face community protests. Cities are manufacturing laws to force the company to provide health care. And since 2000, Wal-Mart’s stock has fallen 22 percent.

Still, executives ignored it all. It’s what the large and mighty do. But animosity continued to elevate.

So in recent months Wal-Mart has launched a grand PR thrust, hoping to convince you that it isn’t a subsidiary of Mephistopheles Inc. That’s where last week’s Cleveland announcement came in. A company willing to forgo $10 million can’t really be the Prince of Darkness, can it?

Some bought it. Robert Heinrich of Strongsville wrote The Plain Dealer to congratulate Wal-Mart for standing up: “It illustrates for other multimillion dollar firms that a well-managed business doesn’t need to beg or blackmail local taxpayers to succeed.”

Alas, Robert, we regret to inform you that you’ve been had. As the revered economist Tom Waits once remarked, “The large print giveth, and the small print taketh away.”

Mayor Jackson, not the brightest bulb in the fixture, would stand at a podium with Josef Mengele to announce a new clinic coming to town. But elsewhere, governments actually research their business partners. And if you buy the numbers, Wal-Mart’s $10 million gift will soon boomerang back to its own pocket — with a whole lot more flowing straight out of yours, whether you shop there or not.

Let’s look at the numbers, shall we?

Depending upon whom you ask, the average Wal-Mart employee makes between $11,000 and $17,000 a year. Even at the higher figure, that’s still 10 grand below the poverty level for a family of two. Which means someone else picks up the difference in health care, school lunches, subsidized housing, and everything in between.

Who might that be? You’re looking at him in the mirror.

Former managers confess that providing welfare information is part of the company’s unofficial hiring process. Perhaps that’s why Georgia found over 10,000 children of employees on its state-funded health-care rolls. California estimates spending $89 million annually on Wal-Mart employee welfare. And one congressional study says the federal cost per store is $420,000 a year.

Totaled out, the best estimate suggests Wal-Mart gobbles up $1.5 billion in welfare a year.

Former Mayor Jane Campbell apparently knew none of this when she invited the Devil to Cleveland. (You want me to have fabulous hair and do research?) But a five-minute internet scan would have disclosed that Wal-Mart actually suppresses a city’s economy.

Due to its size and buying power — and subsequent ability to offer lower prices — the company crushes better paying competitors. In California, researchers found that after Wal-Mart opens a store, total payroll in the host county declines by 3-5 percent in the following years.

The good news is that in exchange for higher welfare and lower wages, at least we’ve invited some really despicable people to town. This is a company that gives everyone something to hate.

For women, there’s the largest civil rights suit in U.S. history, in which Wal-Mart is charged with discriminating in pay and promotion. Though 70 percent of its employees are female, only 14 percent are managers. Some report being paid as much as $10,000 less than male colleagues in the same job.

For blacks, there are scores of racial bias suits, the most recent involving an Idaho worker who faced two years of racial slurs and graffiti, then was fired when he complained. Though he picked up a $125,000 settlement, the same thing happened to a worker in Elyria who walked away with nothing [“Nigger Dave,” October 15, 2003].

If it’s workplace rights you’re into, we have highlights: A $78 million judgment in Pennsylvania for forcing employees to work off the clock. A $33 million fine for screwing people on overtime. Another $172 million judgment in California for failing to provide lunch and supper breaks.

There’s even something for you patriots in the crowd. Though Wal-Mart used to boast of its “Buy America” policy, some 70 percent of its products are at least partially made in China. In fact, Wal-Mart is China’s eighth-largest trading partner, ahead of both Russia and Germany.

And finally, if it’s conservatism you want, you won’t get it here. Roughly 80 percent of Wal-Mart’s campaign contributions go to Republicans. Yet conservatism’s fundamental principle is self-reliance. We’re just guessing, but when one company is sponging $1.5 billion in welfare annually, Horatio Alger won’t be writing your official biography.

We could go on and on with this catalog of sins. But you, dear reader, know the Devil when you see him.

So spend the $10 million while you’ve got it, because Satan rarely tips.

This article appears in Feb 28 – Mar 6, 2007.