Pushed Over the Fiscal Cliff by Wal-Mart
by Al Norman
November 19, 2012 Huffington Post Business
Was it Bill Clinton who inserted Wal-Mart on President
Obama's short list for Fiscal Cliff discussions at the
White House recently?
Clinton promotes Wal-Mart CEO Mike Duke like the late
Sam Walton used to push Moon Pies. But it's hard to
imagine Barack Obama suffering through a meeting with
Duke, who personifies the 1% corporate power-broker,
and whose store managers warned Wal-Mart "associates"
in 2008 that a Senator Obama in the White House would
favor the unions. Ironically, now its Duke who is in
the White House.
After meeting with the President, Wal-Mart's CEO issued
a 216- word statement that was equal parts arrogance
and ignorance. The Walmart Statement on Fiscal Cliff
Meeting with President Obama included the following
"In many ways, Wal-Mart's customers are at the center
of this debate." Why? Because there are 19 million of
them every day? Discount shoppers represent no social
movement or coherent vision of America---but because
they are the only people who can move Wal-Mart's stock
price--they are the focus of everything Wal-Mart says.
"Walmart Moms tell us their confidence in the economy
is shaped by whether they believe Washington is working
for them." Wal-Mart loves it that political pollsters
have created this demographic that bears the retailer's
name. But every demographic group in the country thinks
that more Congressional gridlock is intolerable, and
that the government is not "working for them." But ask
these same people if the Walton Family is working for
Wal-Mart Moms might not be pleased to learn that
according to the Economic Policy Institute, the U.S.
trade deficit with China, between 2001 and 2006,
eliminated 1.8 million U.S. jobs---and Wal-Mart's trade
deficit with China alone eliminated nearly 200,000 U.S.
jobs. Wal-Mart was responsible for 11% of the growth in
the U.S. trade deficit during this period.
"Our customers are working hard to adapt to the 'new
normal,' but their confidence is still very fragile.
They are shopping for Christmas now and they don't need
uncertainty over a tax increase." In other words, don't
ruin the holiday spirit for our shoppers with all this
talk about falling off a Cliff. Sure, customers are
"fragile," because many have had to trade down a
decent-paying job for a Walton Job. A recent study by
the Investigative Reporting Workshop notes that U.S.
factory jobs dropped by 44% from 21 million jobs in
1979, to 11.7 million manufacturing jobs in 2011.
Walton Jobs lock hundreds of thousands of workers at
the poverty level. Wal-Mart needs an underclass of
workers who are financially desperate enough to work
part-time for $8.90 an hour. These people aren't
worried about the Fiscal Cliff--- they have already
gone over it by working at Wal-Mart.
A 2011 research brief by the Center for Labor Research
and Education at UC Berkeley concluded that "jobs
created by Wal- Mart in metropolitan areas pay less and
are less likely to offer benefits than those they
replace...Wal-Mart workers earn an estimated 12.4% less
than retail workers as a whole, and 14.5% less than
workers in large retail."
The same report concluded that if Wal-Mart paid its
workers $12 per hour and passed on the entire cost of
that wage increase to customers, the average Wal-Mart
shopper would pay 46 cents more per shopping trip. The
workers would receive as much as $6,500 in an average
annual pay increase--which they would no doubt spend in
their local economy to pay their rent, food and utility
Part of the 'new normal' in a Wal-Mart economy is that
fewer people are working, and they are working for
less. The National Bureau of Economic Research found
that a Wal-Mart store opening reduces county-level
retail employment by about 150 workers, and each
Wal-Mart worker replaces approximately 1.4 retail
workers at other merchants.
"We encourage the White House and Congress to work
together on an approach that includes additional
revenue, comprehensive tax reform, and spending cuts,
including entitlement reforms, to get our fiscal house
in order while creating economic growth." Keep in mind
that the man writing this was paid $18.1 million by
Wal-Mart in 2011, not counting the use of a company
plane---a perk valued at around a $100,000.
What kind of "entitlement reforms" would Wal-Mart want?
They certainly don't want to shrink Medicaid, because
in states that have published data on corporate use of
Medicaid, Wal- Mart consistently places at the very top
of private companies with the most employees and
dependents who rely on taxpayer- supported Medicaid
health care. Similarly, cutting Medicare and forcing
elders to pay more out-of-pocket for health care is
going to reduce their discretionary spending at
Social Security should not be on Wal-Mart's entitlement
reform list, because it's a Trust Fund. That
distinction is likely to be lost on Mike Duke, who,
because of the cap on Social Security wages subject to
the payroll tax, contributes based on only 2.6% of his
$4.18 million in base salary and cash performance
bonus. His $13.1 million in stock awards is not subject
at all to the payroll tax. Duke pays the same FICA tax
as someone earning $110,100. In the first 10 days of
the year, Mike Duke hits the cap on Social Security
taxable income---the rest of his work year is tax free.
So any "reforms" on Social Security should start with
people like Mr. Duke (and the much richer Waltons,
whose unearned income is not taxed by Social Security)
paying their fair share to help today's retired
"Washington needs to find an agreement to avoid the
fiscal cliff." Wal-Mart could help that agreement by
changing its business model from one of rampant
exploitation of its workers and vendors, to one that
keeps product sourcing and jobs in America, offers a
liveable wage to its workers, and calls upon families
like the Waltons to pay their fair share in taxes.
If America goes over the Fiscal Cliff, we will find
Wal-Mart waiting or us at the bottom with a check-out
[Al Norman has been helping communities fight big box
sprawl for 19 years. He is the founder of
Sprawl-Busters. His most recent book is Occupy Walmart.
,. You can follow him on Twitter @SprawlBusters.]
[Many thanks to the author for sending this to
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