New document assesses true cost of Wal-Mart

Laura McPhee

The controversial new film Wal-Mart: The High Cost of Low Prices is debuting now in Indianapolis area homes, schools and theaters as part of Wal-Mart Premiere Week, an unprecedented grass-roots effort that will see over 3,000 screenings across the nation from Nov. 13-19, 2005.

Wal-Mart: The High Cost of Low Prices is a feature length documentary that uncovers a retail giant's assault on families and American values. The film dives into the deeply personal stories and everyday lives of families and communities struggling to fight a Goliath.

A working mother is forced to turn to public assistance to provide health care for her two small children. A Missouri family loses its business after Wal-Mart is given over $2 million to open its doors down the road. A mayor struggles to equip his first responders after Wal-Mart pulls out and relocates just outside the city limits.

Producer/director Robert Greenwald and Brave New Films hope their film will change the way Americans think, feel and shop.

"When you make films concerned with working for social change, it is critical to reach all kinds of people. If your film is in theaters, that is terrific. But, that is only a small part of reaching people," Greenwald says.

While Greenwald hopes his film will provoke change, he acknowledges that it won't solve the real problem.

"The film shines a light on the problem, connects the dots, makes what is abstract personal and tells a story," he says, "[but] the film is not the solution; that comes from the good people around the country who use the power of democracy to exercise their opinions, views and activism in numerous ways."

But Greenwald believes that his film can be an agent for change.

"Wal-Mart is a big corporate problem, it will not be fixed by one film or one action, but the film will be a step towards the vital debate, discussion and actions we need to begin to get the problem front and center."

The high cost of low prices

Impact on local business

A study of small and rural towns in Iowa showed lost sales for local businesses ranging from -17.2 percent in small towns to -61.4 percent in rural areas, amounting to a total dollar loss of $2.46 billion over a 13-year period.

In Mississippi, local food stores in counties hosting a Wal-Mart Supercenter lost sales of up to 17 percent over five years.

In Maine, Wal-Mart captured an average $7.8 million from local/family businesses in their host towns during the first year of operation.

Retail Forward, an industry consulting firm, estimates that for every Wal-Mart Supercenter that opens in the next five years, two supermarkets will close.

Impact on retail wages

A recent study by researchers at the UC Berkeley's Labor Center found that Wal-Mart drives down wages in urban areas, with an annual loss of at least $3 billion dollars in earnings for retail workers.

Impact on taxpayers

The Democratic Staff of the Committee on Education and the Workforce estimates that one 200-person Wal-Mart store may result in a cost to federal taxpayers of $420,750 per year - about $2,103 per employee.

Specifically, the low wages result in the following additional public costs being passed along to taxpayers for each store:

* $36,000 a year for free and reduced lunches for just 50 qualifying Wal-Mart families.

* $42,000 a year for Section 8 housing assistance, assuming 3 percent of the store employees qualify for such assistance, at $6,700 per family.

* $125,000 a year for federal tax credits and deductions for low-income families, assuming 50 employees are heads of household with a child and 50 are married with two children.

* $100,000 a year for the additional Title I expenses, assuming 50 Wal-Mart families qualify with an average of two children.

* $108,000 a year for the additional federal health care costs of moving into state children's health insurance programs (S-CHIP), assuming 30 employees with an average of two children qualify.

* $9,750 a year for the additional costs for low income energy assistance.

Impact on real estate

As of March 5, 2005, Wal-Mart Realty has a total of 356 buildings for sale or lease, a total of 26,699,678 million square feet of empty stores. That's enough empty space to fill up 534 football fields. No other retailer has this many dead stores in its inventory.

Impact on the environment

1999: All new Wal-Mart construction halted in state of Pennsylvania due to Environmental Violations.

2001: EPA orders Wal-Mart to pay $1 million fine for Clean Water Violations in Texas, Oklahoma and Massachusetts.

2004: Wal-Mart fined $3.1 million by EPA, the largest ever for a retailer, for Clean Water Act violations in Texas, Colorado, California, Delaware, Michigan, South Dakota, New Jersey, Tennessee and Utah.

2005: Connecticut EPA orders Wal-Mart to pay $1.15 million for Clean Water Act violations in 22 stores related to storm water and other water management issues. - LM


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