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News > Fortune 500

Wal-Mart shopping for subsidies?
Watchdog group's report says $1B in government subsidies have aided the retailer's expansion.
May 24, 2004: 4:03 PM EDT

NEW YORK (CNN/Money) - Over $1 billion in government subsidies have gone into transforming discounter Wal-Mart Stores from a regional discount store operator into the world's largest retailer, according to a report Monday from Good Jobs First, a Washington-based subsidy watchdog group.

"Wal-Mart presents itself as an entrepreneurial success story, yet over a few decades it has made extensive use of tax breaks, free land, cash grants and other forms of public assistance," Philip Mattera, research director of Good Jobs First said in a statement.

The study, which is funded in part by the United Food and Commercial Workers International Union, found that 91 Wal-Mart stores have received individual subsidies ranging from $1 million to about $12 million, in the form of free or reduced-priced land, job training funds, sales tax rebates, tax credits and infrastructure assistance, including investment in roads.

In total, these subsidies amounted to $245 million, the report said.

Separately, the report found that 84 of Wal-Mart's distribution centers received an average of $7.4 million in subsidies, totaling about $624 million. Additionally, a database search for tax-exempt bonds issued by state and local authorities indicated that another 69 Wal-Mart stores received other low-cost financing of about $138 million

Wal-Mart spokeswoman Mona Williams said the group was "shooting itself in the foot" with the report.

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"We think the report in fact shows that the subsidies are a great thing for us. Do the math and you will see that every dollar invested with Wal-Mart has returned more than $30 for the community. We expect to see lots of other local governments will be asking for that $30 deal," Williams said.

Bentonville, Ark.-based Wal-Mart operates more than 2,485 stores of its Wal-Mart discount store and 456 Sam's Club warehouse stores in the United States.

Greg LeRoy, executive director of Good Jobs First, said in a statement that the subsidies to Wal-Mart are particularly troubling given that the company "uses taxpayer dollars to create jobs that tend to be poverty-wage, part-time and lacking in adequate healthcare benefits."

"That a company with $9 billion in profits can wrest job subsidies from state and local governments shows that the candy store game has gotten out of control," he said.

Williams disagreed.

"Mr LeRoy is repeating tired old allegations that simply aren't true. We pay annual wages that are higher than those offered by other non-union retailers and equal to those paid by union retailers. More than 75 percent of our jobs are fulltime and we offer solid healthcare benefits starting at less than $35 a month for individuals."  Top of page

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