World's Biggest Corporation is a Welfare Queen

World's Biggest Corporation is a Welfare Queen

Wal-Mart Has Received More Than $1 Billion in Economic Development Subsidies

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Wal-Mart, the world's largest retailer, has benefited from more than $1 billion in economic development subsidies from state and local governments across the United States, according to a new study by Good Jobs First, a Washington, DC-based research center.

The study is freely available at www.goodjobsfirst.org. For the executive summary, click here (PDF format).

"Wal-Mart presents itself as an entrepreneurial success story, yet it has made extensive use of tax breaks, free land, cash grants and other forms of public assistance," said Philip Mattera, research director of Good Jobs First and principal author of the study.

The study found more than 240 cases in which the construction of a new Wal-Mart facility was assisted by taxpayers. Apart from 160 retail outlets, the study found subsidies at 84 distribution centers, representing more than 90% of the network of huge warehouses Wal-Mart has built to facilitate its expansion. Mattera stressed that the $1 billion figure is necessarily an understatement, given that public disclosure of subsidies is severely limited.

The value of subsidies for individual distribution centers ranged as high as $48 million (with an average of $7.4 million), while for retail outlets the largest was $12 million (average: $2.8 million). Subsidy deals were found in 35 states, with the most in California, Illinois, Missouri, Texas and Mississippi. In dollar terms, Louisiana, Florida and New York also ranked high.

"That a company with $9 billion in profits can wrest subsidies from state and local governments shows that the candy store game is out of control," said Greg LeRoy, executive director of Good Jobs First. "The subsidies to Wal-Mart are particularly troubling, given that it uses taxpayer dollars to create jobs that tend to be poverty-wage, part-time and lacking in adequate healthcare benefits."

The study recommends that states prohibit subsidies to retailers except in distressed areas that lack adequate retail outlets for necessities such as food. It also recommends that any retailer -- like any corporation -- receiving subsidies should be required to pay a living wage.

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Good Jobs First is a non-profit research center promoting corporate and government accountability in economic development.