New Study Shows Wal-Mart Doesn’t Pay Its Fair Share

Posted by Alex Goldschmidt

Study Says Wal-Mart Often Fights Local Taxes [New York Times]

Wal-Mart doesn’t believe just in lower prices — it believes in lower property taxes, too. The big discount chain has sought to reduce the property taxes it pays on 35 percent of its stores and 40 percent of its distribution centers, according to a report to be released today by Good Jobs First, a group that is critical of Wal-Mart.

Over all, the company wins lower taxes in half the challenges it brings, the group found. Because it had not seen the report, Wal-Mart did not wish to comment in detail, said a spokesman, John Simley.

Mr. Simley added that the study should be viewed with caution because “they are a union-funded group.” Wal-Mart has had tense relations with unions, which have criticized pay and working conditions there.

Good Jobs First said that less than 3 percent of its financing came from unions, with the bulk from foundations, including the Rockefeller and Ford foundations. The group said a donor, whom it declined to identify, paid for the tax study; the donor has no union affiliation, it said.

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Wal-Mart Re-Uses Flawed Reporting Methods

Posted by Alex Goldschmidt

In a report released today (PDF), Wal-Mart claimed that it saves families $2,500 a year. Citing generic drugs and in-store banking centers, the new report sings the “low prices” gospel, but it fails to take into account the hidden costs of having a Wal-Mart in town: higher taxes, lower average wages, and fewer local businesses.

In June of 2006, the Economic Policy Institute issued a report attacking the flawed methodology Global Insight used to calculate customers’ supposed savings. It is the very same methodology Global Insight used again in this year’s study. The “research” glosses over a whole host of problems the company creates, not to mention the fact that Global Insight - far from independent - was comissioned by Wal-Mart to conduct this study. Legitimate, independent reports not commissioned by Wal-Mart show that when the company comes to town, poverty levels go up, wages go down and small businesses go away.

From the report:

  • A widely quoted figure from a study by the consulting firm Global Insight (GI) indicates that Wal-Mart’s expansion has resulted in $263 billion in savings to U.S. consumers. We find this to be implausible. The statistical analysis generating this highly influential result fails the most rudimentary sensitivity checks.

  • A robust set of research findings shows that Wal-Mart’s entry into local labor markets reduces the pay of workers in competing stores. This effect is greatest in the South, where Wal-Mart expansion has been greatest.

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Wal-Mart Eavesdrops on New York Times Reporter

Posted by Russ Fagaly

From the New York Times:

Wal-Mart Stores, the nation’s largest retailer, said today that a computer systems technician at its headquarters in Bentonville, Ark., had secretly taped conversations between a reporter for The New York Times and members of Wal-Mart’s media-relations department from September of last year until mid-January.

The clandestine recordings were discovered in mid-January, and the company started an internal investigation, said Mona Williams, a spokeswoman for the retailer. Wal-Mart said it had also notified and begun cooperating with the United States attorney for the western district of Arkansas.

From Bloomberg News:

The retailer, based in Bentonville, Arkansas, learned of the recordings on Jan. 11 when a worker reported them, Wal-Mart said today in a statement. The unnamed technician was fired along with his supervisor, and another manager was disciplined.

The recordings took place over four months through January and didn’t break state and federal laws, Wal-Mart said. Last year Hewlett-Packard Co. Chairman Patricia Dunn and other officials resigned after company representatives improperly obtained phone records of reporters and board members.

“We’re looking at this to determine if there is a violation of federal law within our jurisdiction,” said Deborah Groom, the first assistant U.S. attorney in the Western District of Arkansas. The Federal Bureau is also investigating, said Wal-Mart, which first notified the U.S. attorney’s office Jan. 13.

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Poll: The Politics Of Health Care

Posted by Russ Fagaly

From CBS News:

Americans think the U.S. health care system is in need of major repairs, according to a CBS News/New York Times poll.

Nine out of 10 say the system needs at least fundamental changes, including 36 percent who favor a complete overhaul.

Although most Americans say they are generally satisfied with the quality of their own health care, including 41 percent who say they are very satisfied, it’s a different story when it comes to the cost of care.

Just one in five are very satisfied with what they pay for health care, while a majority (52 percent) are dissatisfied, including a third who are very dissatisfied.

  • Click here to read more about the CBS News/New York Times poll.
  • Click here to read about the high cost of Wal-Mart’s health care.

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A New Coat Of Paint

Posted by David Nassar, Executive Director

The article in the Washington Post today about Wal-Mart’s new ad firm, The Martin Agency, implies that the same ad agency that gave us the Geico gecko and “What can brown do for you?” may be able to breathe more “joy” into Wal-Mart’s ad campaign. But joy in the ads won’t be enough if there is no joy in the faces of Wal-Mart’s workers when shoppers go into the stores.

Sam Walton once said “If you want people in the stores to take care of the customers, you have to make sure you are taking care of the people in the stores.” By hiring the Martin Agency, Wal-Mart thinks it can slap a new coat of whitewash on its stores faster than the army tried to fix up Walter Reed last week.

The trouble with this is that Wal-Mart’s problems are not about their marketing, their problems are about their values. Of course, none of this is The Martin Agency’s fault.

Wal-Mart is the one that looked for a marketing solution to the corporation’s cultural and structural problems. Unfortunately for Martin though, they may soon find that what appears to be a goldmine is a quagmire. Once stuck, they may find their firms future being sucked to the bottom.

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Edelman Paid Critic Hates Whole Foods Corn

Posted by Media Team

Remember Marshall Manson, the PR genius who brought you the “Wal-Marting Across America” flog disaster (PDF)? Here’s his latest attempt at blogger outreach:

-----Original Message-----
From: “Manson, Marshall”
To: REDACTED
Sent: 2/20/2007
Subject: All Politics, er, Produce is Local

REDACTED,

Ever walked into a Whole Foods or another high priced grocery store in August looking for some fresh corn and discovered that the corn is from someplace far off?

It happens to me every August. I live near Washington, DC, and when summer comes, there’s nothing better than our local corn. Trouble is, you can’t find it in the grocery stores anymore. Check the labels:

They’re all trucking or floating the stuff in from a million miles away.

Wal-Mart gets it.

Last fall, Wal-Mart announced a plan to try and purchase more of produce from local farmers. Since then, they’ve been spotlighting a local farm each month.

This month, it’s North Dakota’s Tri-Campbell Farms.

The program is also another great example of Wal-Mart’s commitment to the communities where it operates. By purchasing locally, Wal-Mart helps local economies.

More details here:

http://walmartfacts.com/articles/4820.aspx

And here’s the original announcement from last fall:

http://walmartfacts.com/articles/4522.aspx

Hope you’re having a good week.

Best,

M

Marshall Manson
Vice President
Online Advocacy
Edelman
ph 202-326-1784
cell 703-850-3014

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Ad Age: Floggers Beware

Posted by Media Team

Floggers Beware: Europe Will Prosecute

By Brooke Capps
Published: February 12, 2007

Richard Edelman and Wal-Mart, Zipatoni and Sony be warned: If you were in Europe, the hand of the law would be upon you. As of the end of this year, businesses who create fake blogs or pretend to be consumers writing rave reviews will be vulnerable to criminal prosecution.

Per The Times: “The change is part of a Europe-wide overhaul of the consumer protection laws. It will oblige businesses not to mislead consumers and also will outlaw aggressive commercial practices such as aggressive doorstep selling, bogus ‘closing down’ sales and pressurising parents through their children to buy products.”

Even authors who review their own books on Amazon.com could be at risk, unless of course, they identify themselves properly.

Funny how ethics and self-regulation just never seem to be enough.

3 comments

Wal-Mart Watch In Depth

Posted by Alex Goldschmidt

The inaugural issue of Wal-Mart Watch’s issue brief, In Depth, focuses on gender discrimination at Wal-Mart and the massive class action lawsuit female employees are waging against the company.

From the cover story:

On February 6, 2007, The Ninth Circuit Court of Appeals, ruled that Wal-Mart must face a class action lawsuit of 1.6 million female workers who are alleging that they were discriminated against in pay and promotions.

An overview of gender discrimination at Wal-Mart, an interview with one of the lead plaintiffs in the landmark case Dukes v. Wal-Mart, news reports and facts about discrimination at Wal-Mart are just some of the items included in this first issue.

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