The Walmart Tax

I have written before about the “Walmart tax.”

Walmart generates nearly $500 billion in revenue annually; over the past five years, its yearly profits have averaged $15.5 billion dollars, and the family that owns it has a net worth of $129 billion dollars.

Despite its obvious ability to do so, the company declines to pay its employees a living wage, instead relying upon government programs–taxpayer dollars– to make up the difference between its workers’ paychecks and what they need to make ends meet. In essence, when a Walmart employee must rely on food stamps or other safety-net benefits, taxpayers are paying a portion of that employee’s wages.

Walmart (including its Sam’s Club operation) is currently the largest private employer in the country–and one of the largest recipients of corporate welfare. Walmart employees receive an estimated $6.2 billion dollars in taxpayer-funded subsidies each year. Money not paid out in salary goes directly to the shareholders’ bottom line.

Not only is this greedy and despicable, it is bad business. For one thing, as awareness of this subsidy grows, the numbers of people shopping at Walmart declines. But there are other costs incurred.

One of my graduate students wrote his research paper on corporate philanthropy, and the growth of business practices that recognize a duty to stakeholders other than shareholders: employees, vendors and the general community. As he explained,

The Triple Bottom Line (TBL) is an accounting framework that incorporates three dimensions of performance: social, environmental and financial. This differs from traditional reporting frameworks as it includes ecological (or environmental) and social measures that can be difficult to assign appropriate means of measurement. The TBL dimensions may also be referred to as the three P’s: people, planet and profits (Hall, 2011). The TBL further supports the integration of Corporate Responsibility into the fiber of companies as the bottom line is expanded, to include these additional levels of measurement, suggesting “purpose” shares importance with profit.

One company that has seen the benefits of good corporate responsibility through TBL is Costco, specifically the “people” component. Second to the multi-national titan Walmart, Costco is the largest American membership-only warehouse club. Costco’s average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam’s Club (Greenhouse, 2005). Costco’s practices are clearly more expensive, but they have an offsetting cost-containment effect: Turnover is unusually low, at 17% overall and just 6% after one year’s employment. In contrast, turnover at Wal-Mart is 44% a year, close to the industry average (Cascio, 2006).

In the case of Costco, their corporate responsibility and voluntary decision to invest in their people have been a direct contributor to their profits. In return for its generous wages and benefits, Costco gets one of the most loyal and productive workforces in retail, and, not coincidentally, the lowest shrinkage (employee theft) figures in the industry. As a result, Costco generated $21,805 in U.S. operating profit per hourly employee, compared with $11,615 at Sam’s Club. Costco’s stable, productive workforce more than offsets its higher costs (Cascio, 2006).

It appears that “doing well by doing good” is more than a slogan.

I shop at Costco, and avoid Walmart. So do most of my friends. In virtually all cases, the choice is intentional: we want to demonstrate support for businesses that value and properly compensate their employees (and aren’t sucking at the public tit, if you’ll excuse the vulgarity).

Walmart may get my tax dollars, but I’m damned if they’ll get my discretionary dollars too.

 

And Now A Word From the Fantasy-Based Community

I read Dispatches from the Culture Wars regularly. Ed Brayton is a witty and perceptive commentator with an excellent grasp of America’s constitutional foundations–but his greatest appeal (for me) comes from the fact that he monitors behaviors that I wouldn’t have the stomach to follow. He keeps tabs on the kooks of the far, far right (and sometimes the far, far left)–the “celebrities” of the wacko fringes.

Most of the time, when reading about the pronouncements and delusions of these characters, I take comfort in reminding myself of the limited appeal of whatever brand of crazy a particular figure is peddling.

But this was truly appalling.

Earlier this month, the city of San Antonio (Texas) held a mayoral forum in which candidates talked about the impact of and challenges for non-profit groups in the community.

At one point, current Mayor Ivy Taylor was asked about the “deepest systemic cause of generational poverty.” There’s no simple answer to that, of course, but Taylor’s response wasn’t even close.

“Not even close” is an understatement. Here’s the Mayor’s response.

To me, it’s broken people. People not being in a relationship with their Creator, and therefore, not being in good relationship with their families and their communities, and not being productive members of society. I think that’s the ultimate answer.

As Ed points out, that not only isn’t the “ultimate answer,” it’s an answer that betrays vast ignorance of American economic realities and that displays the sort of breathtakingly smug religious arrogance that you encounter from time to time from people who give religion a very bad name. As Brayton puts it,

Poor people aren’t all poor because they’re “broken” or atheists or in need of a better relationship with their families. (While we’re at it, they’re also not poor because they’re lazy and addicted to welfare checks.)

People are poor, in many cases, because they don’t have opportunities to put their skills to work, they never had access to a quality education, and they live in areas where upward mobility is hard to come by. In some cases, they can work multiple jobs with little sleep and still have a hard time getting out of whatever debt they’re already in. Poverty is tough to overcome. Generational poverty, even tougher.

The vast majority of poor Americans work 40 or more hours a week at jobs that don’t pay a living wage. (Not that it is relevant, but a sizable majority of them identify as Christian, and profess a “relationship” with a “Creator.” Atheists in the U.S. actually tend to be well-educated and financially comfortable–when you aren’t constantly struggling to put food on the table, you have the time and resources to ponder theological questions and consider counter-majoritarian conclusions…But I digress.)

I’ve written before about the United Way of Indiana’s description of ALICE families (Asset Limited, Income Constrained, Employed) and the huge gap between what those families need simply in order to survive and the pitifully inadequate public and private resources available to them.

There are a lot of things policymakers could do to decrease poverty: raise the minimum wage, reinstitute Reagan-era tax brackets, strengthen unions, eliminate the ACA in favor of “Medicare for All”…and jettison a self-satisfied ideology that blames poverty on a lack of productivity and an inadequate “relationship with the Creator.”

The fact that Americans elect people who mouth such inanities (beginning with Donald Trump and definitely including Mayor Ivy Taylor) is evidence of a different kind of poverty.

 

 

 

Transferable–and Not-So-Transferable–Skills

A recent article in the New York Times reflected upon Trump’s relationship with Steve Bannon (which appears to be unraveling). That article was one of many focusing on the disarray in the White House and the tensions between Bannon and the various others who have the President’s ear, and wouldn’t ordinarily prompt me to post.

But this paragraph caught my eye:

In a way, to believe in Mr. Bannon’s genius is to adopt the president’s belief in a sort of vulgar technocracy — the belief that the “best people” can solve any problem put in front of them, whether they have expertise in that field or not. A newspaper publisher can broker peace in the Middle East and revolutionize the government. A neurosurgeon can run the Department of Housing and Urban Development. A life as a real estate mogul and celebrity businessman is adequate preparation for the presidency. But the ability to grab power does not grant the wisdom to wield it, and ungrounded grandiosity is just pretension.

During the campaign, I was constantly amazed by the number of people who appear to hold the belief that no special knowledge or experience is necessary to run a government agency-or for that matter, to run the government. They clearly believe that any reasonably savvy person (or in Trump’s case, anyone who can fog a mirror) can be President.

I watch television during my morning treadmill routine, and the other day I was struck by an ad for a window installer. He emphasized the length of time he’d been installing the product, and how important his knowledge and experience were.

May I point out that governing the United States is more complicated than installing double-paned windows?

Indianapolis once had a Mayor named Goldsmith who shared Mr. Trump’s evident belief that smart people can do any job, no matter how unrelated their prior education or experience. I still recall the woman with a distinguished scientific background who thought she’d been hired to oversee environmental assessments, and was astonished to discover she’d been hired to manage planning and zoning. (Because she was a smart person, she left.)

It’s bad enough that we have a President who substitutes arrogance for competence, but the problem is compounded by the fact that most of his personnel choices–in addition to lacking any relevant expertise–don’t appear to be all that smart, either. (Trump apparently confuses a willingness to flatter his already outsized ego with intelligence.)

We have a cabinet composed of people who have no idea how government works. The Secretary of State appears oblivious to the web of international agreements and protocols within which the United States is expected to operate. The Secretary of Education has never set foot in a public school; during her confirmation testimony, she displayed appalling ignorance of the most significant policy issues facing that department. But there is no humility accompanying her ignorance; instead, she comes armed with self-righteous hostility to the entire enterprise of public education.

There is the new head of the EPA, whose disdain for science and evidence (not to mention the agency he manages) is matched only by his regard for the bottom lines of fossil fuel companies. And the Secretary of Housing and Urban Development who barely seems to understand what day it is, let alone the importance of HUD’s mission to neighborhoods in America’s cities.

Jeff Sessions does know how government works, of course; what recommended him to Trump appears to be his determination to reverse the progress made on civil rights–to further eviscerate the Voting Rights Act, encourage overreach by the police, and re-invigorate the drug war.

Most of the others are just as bad.

It’s not just that we have a self-aggrandizing buffoon in the Oval Office. We now have a government populated with–and being run by–dangerous ideologues with second and third-rate intellects who lack both relevant experience and any obvious willingness to learn, or to devote themselves to the tasks they’ve been assigned.

Our best hope actually lies in their incompetence. As Trump would say, SAD.

 

 

Environmentalism is About More than Climate Change

If  Saturday’s March for Science did just one thing, I hope it underlined the message that protecting the environment is about much more than climate change, critical as that issue is.

Do the climate change deniers at least believe that children in Flint, Michigan,  and East Chicago, Indiana should have lead-free water to drink? What about the rest of us? Should Americans continue to have routine access to safe, potable water? Breathable air? Toxin-free fruits and vegetables?

How do Republicans justify Trump’s reversal of an Obama-era regulation to protect U.S. waterways from coal mining operations? (I don’t know about you, but to me, “Let them drink coal ash” sounds even worse than “let them eat cake.”) What about the elimination of information on methane emissions, removal of the word “science” from the EPA’s Office of Science and Technology mission statement, and the promised roll back of auto pollution standards?

Huffington Post has published a list of Trump’s anti-environment measures in just the first 90 days of his administration.

I’d be interested in hearing Todd (don’t confuse me with the facts) Rokita’s justification for the administration’s refusal to ban an insecticide that, as extensive research has demonstrated, harms the developing brains of fetuses and children who eat food from plants treated with the compound.

Much of the EPA’s own research outlines chlorpyrifos’s adverse health effects. In 2016 the EPA reported“sufficient evidence” that low levels affect brain development and concluded that some American 1- to 2-year-old children are receiving up to 140 times what are considered safe levels in their food. The EPA has also reported elevated levels in water supplies and established that the compound adversely affects 1,778 out of 1,835 studied species of wild animals.

I’ve noticed that all those pious “pro life” Republicans lose their zealous commitment to the well-being of the fetus when the threat to the unborn must be balanced against the health of corporate bottom lines, rather than the health of the mother.

Trump has issued Executive Orders that would undo both the Clean Power Act and the Clean Water Act.  According to those much-maligned scientists, reducing the scope of the Clean Water Act as called for in the Executive Order risks seriously degrading waters used for swimming, fishing or drinking.

Speaking of Republicans, incomprehensible as it may seem today, it was a Republican President–Richard Nixon– who established the EPA that is under such relentless attack from today’s GOP.  As Nixon stated in his 1970 State of the Union address to Congress,

“Restoring nature to its natural state is a cause beyond party and beyond factions. … Clean air, clean water, open spaces – these should once again be the birthright of every American.”

Well, times (and the GOP) have certainly changed. As U.S. News recently reported,

Currently, there is a systematic attempt to undermine this legacy. President Donald Trump proposes to slash the EPA’s budget by 31 percent and reduce its workforce by 3,200 employees – the harshest cuts in the agency’s history. But the environmental problems for which the agency is responsible have not shrunk or even stayed constant; instead they’ve grown significantly since the 1970s. The U.S. population has grown by over 100 million, economic activity has quadrupled, electricity use has tripled and the inventory of toxic substances has grown to over 85,000 compounds.

Every elected official who supports this assault on the EPA is supporting the presence of particulates, smog and greenhouse gases in the air we breathe, lead and coal ash in the water we drink, and toxic pesticides in the food we eat.

We need to challenge them to deny that.

What Keeps Me Up At Night…

Why have a blog if you can’t share your nightmares?

As I see it, we live in a time of paradigm shift, characterized by a rapidly morphing information environment, a reversion to tribalism, deepening economic insecurities, widespread civic illiteracy, and growing recognition of the inadequacies of current legal and political structures.

All of these elements of our contemporary reality challenge our existing worldviews.

Humanity has gone through similar “shifts” before, but with the possible exception of the nuclear arms race, we have not previously faced the very real possibility that our behavior will cause large portions of the planet to become uninhabitable, or that social order will collapse—with consequences we can only imagine.

The 2016 election exposed significant fault-lines in American society and forced us to confront the erosion of our democratic institutions. The problems have been there, and been accelerating, for some time.

A splintered and constantly morphing media has dramatically exacerbated the problems inherent in democratic decision-making. The current media environment enables/encourages confirmation bias, is rife with spin, “fake news” and propaganda, and  is widely distrusted. The widening gap between the rich and the rest feeds suspicion of government decision-making, and Citizens United and its progeny increased recognition of—and cynicism about– the power wielded by corporate America through lobbying, political contributions and influence-peddling.

In order for democracy to function, there must be widespread trust in the integrity of electoral contests. The fundamental idea is a fair fight, a contest of competing ideas, with the winner legitimized and authorized to carry out his/her agenda. Increasingly, democratic norms have been replaced by bare-knuckled power plays and widening public recognition of the ways in which partisans game the system.

As a result, citizens’ trust in government and other social institutions has dangerously eroded. Without that trust—without belief in an American “we,” an overarching polity to which all citizens belong and in which all citizens are valued—tribalism thrives. Especially in times of rapid social change, racial resentments grow. The divide between urban and rural Americans widens, as does the gap between various “elites” and others. Economic insecurity and social dysfunction are exacerbated by the absence of an adequate social safety net, adding to resentment of both government and “the Other.

Making matters worse, in the midst of these wrenching changes, Americans elected someone incapable of recognizing or dealing with them.

Citizens in21st Century America are facing a globalized, technocratic, increasingly complex world that poses previously unprecedented challenges to the goal of e pluribus unum (not to mention human understanding and survival). The existential question we face: Can we create a genuine “us” out of so many different/diverse “I’s” and “we’s”? Can we use the law and legal system to create a supportive, nourishing culture that remains true to the Enlightenment’s essential insights, while modifying those we no longer consider so essential? If so, how?

How do we overcome the multiple challenges to the rule of law and a functioning democratic system? Those challenges tend to fall into three (interrelated and sometimes overlapping) categories: Ignorance (defined as lack of essential information, not stupidity); Inequality (poverty, consumer culture, civic inequality, globalization, power and informational asymmetries among others) and Tribalism (“us versus them”—racism, sexism, religion, urban/rural divide, etc.)

As an old lawyer once told me, there’s only one question, and that’s “what do we do?”

In the wake of the election, there’s been a lot of understandable hand-wringing. Comments on this blog, on Facebook and elsewhere have emphasized the need to act. Most of us don’t need that reminder; what we need is specifics: what do we do? How do we do it? 

The most obvious answer and most immediate imperative is political: we need to change Congress in 2018. But we also need to fashion concrete answers to the questions raised by social change and  threatening political realities. If we can’t find those answers and then act on them, humanity’s prospects don’t look so good.

And I don’t sleep so well.