EDITOR’S VIEWPOINT/Don’t get scrooged
We have become a nation of Scrooges, and, like the parsimonious Dickens character, we are oblivious to the consequences of our behavior — especially some local governments who have become unwitting pawns in a deceptive retail game.
The Scroogification of America began with its retailers, who, decades ago, found the secret path to our pocketbooks and unleashed K-Mart, with its blue light siren signaling a deal.
The emergence of K-Mart meant the end of thousands of smaller retailers, but, by that time, we had been inoculated with the free market serum, which protects us from excessive sympathy for such things as merchants who have not changed with the times.
Subscribing to the maxim that business is good for America and that big business must be even better, local governments welcomed large discount retailers, like K-Mart, into their communities. And, why not? They produced jobs, taxes and the uniquely American prestige of being a place of sufficient size and importance to build there.
K-Mart, however, finally met its match, with a once little-known Arkansas chain, Wal-Mart. Initially, local governments approved of the new discount giant for the same reasons they welcomed K-Marts. Unfortunately, in some communities, Wal-Mart appears to be taking advantage of its hosts.
Wal-Marts have become widely successful the same way K-Mart did: appealing to the inner Scrooge. The company, whose slogan is “Always Low Prices,” has become America’s largest retailer, employer and grocer. The problem is not that the company is large — it is how it keeps prices so low.
For example, only about half of Wal-Mart’s employees receive benefits. Worse, Wal-Mart’s “culture encourages employees to turn to taxpayer-funded assistance,” according to a recent episode of the television program, “Bill Moyers Now.” One former Wal-Mart manager who was interviewed by Moyers said that the company expects its managers to direct employees to seek public assistance. He said the company taught its managers how to “take full advantage of the ministries, the civic organizations, tax-based organizations, and subsidy organizations” for food or health care.
The Moyers report also featured a chilling story of how Wal-Mart closed its Cathedral City, Calif., store and reopened in another community close by — only after the city completed its end of an agreement to pay the retailer $1.8 million for the building and other expenses. Now, instead of receiving an anticipated $1 million annually in sales tax revenues, the city expects only to see about $500,000 total.
Armed with stories like those, government leaders should be careful when negotiating with large retailers, like Wal-Mart. There is nothing wrong with expecting a return on the investment needed to bring in new businesses, but, as some of your colleagues have shown, you have to protect yourself, least you get scrooged.