Grace Ross: Beating Corporate Moochers

Wednesday, June 27, 2012

Grace Ross, GoLocalWorcester MINDSETTER™

One thing that’s clearly wrong with our government is that people need much more accurate information about where their tax dollars actually go. For a long time, the only information that folks have been pointed to look at was specific expenses – these usually were government costs to help people survive. Our attention was diverted from much bigger chunks of tax dollars like huge tax loop holes for very wealthy and big corporations that the taxes of regular people end up being more heavily burdened to make up for or big subsidies to huge private sectors. These all added up to what for a long time was being referred to as corporate welfare – much more expensive than any welfare for human beings. And more reprehensible when its cash to mega-companies like GE and Bank of America with bloated CEO salaries and more money than they know what to do with.

One of the big corporate moochers in Massachusetts for many years was Wal-Mart. They still get a big tax break, but for many years they were actually getting subsidized directly by the people of Massachusetts for their operations in our state.

They basically figured out two things. One was that if they could claim that the buildings that they built for their stores were actually owned by a dummy corporation in a tax free zone (in their case, Delaware), then they could claim that the money that they spent to “rent” that space in Massachusetts as a business expense; they got to decide how much rent they claimed they paid; they wrote it off their taxes, and basically ended up paying Massachusetts almost nothing in taxes for all the corporate business profits they were making in Massachusetts.

When they added to that the fact that they refused to provide health coverage for their workers and paid their workers such little money that they were eligible for Mass Health, our Medicaid financed healthcare program in Massachusetts, they basically figured out how we, the tax payers of Massachusetts, could pay for the benefits for their workers.

They got to pay for the privilege of their making of millions and millions of dollars in our state.

The first set of loopholes were closed thanks to initiatives under Romney that reached fruition under Deval Patrick. However, Wal-Mart has continued to be a way of undermining decent wages, decent jobs, and the local economy of any area where they plunk themselves down.

A number of years ago the folks in Worcester were struggling with wanting something built near the Blackstone River where there had been quite a lot of pollution from brown fields. After trying to get lots of different businesses to settle there, they ended up compromising with letting Wal-Mart come in. There were community efforts to keep Wal-Mart out, but Wal-Mart did something unique because of the pressure from unions in Worcester; they build the store with union labor and to build it, at the time, as their premiere “green” building Wal-Mart in the country.

This weekend we found out that if the community and labor flexes their muscle together that even bigger wins can happen. A couple years ago Wal-Mart announced that they were going to do a massive expansion in big stores in inner city areas of the biggest cities across the U.S.

While I hear folks all the time complaining about how undocumented workers are used by businesses to drive down wages; that is, businesses with workers who are scared of getting reported to immigration, are sitting ducks for businesses to not pay them a fair wage, not meet basic health and safety standards, and not pay any of the benefits required by law.

But there are corporations that come into our state and do basically the same thing, like Wal-Mart. There is no such similar outcry even though Wal-Mart obviously has control over this situation! It mints money by taking advantage of local workers who are desperate for jobs with lower wages, not meeting basic health coverage, often violating wage and hour laws. In the above situation, immigrants mostly just get abused, but somehow folks have not made the connection when it is corporations raking in profits for far-away coffers.

So we get a big corporate moocher like Wal-Mart moving into a neighborhood; we tend to lose our local hardware stores and clothing stores because everybody rushes to Wal-Mart to buy cheaper goods. Cheaper because Wal-Mart workers are getting paid less and these goods are already subsidized by our tax dollars.

The whole situation is wrong.

Yet over the last year and a half, when the community groups and unions came together in the greater Boston area, they had a major win: Wal-Mart announced as of Sunday that they are not attempting to expand into the greater Boston area anymore.

This coalition of community and labor working together educated their neighbors and co-workers and together pressured elected official to put some basic requirements on the table.

And just requiring of one of these corporate moochers that they meet the same standards as everybody else in terms of pay rates, treatment of their workers, environmental standards, it’s enough to make them throw their hands up in the air and go somewhere else.

We don’t need bad corporate players and bad corporate neighbors in our cities and towns.
It turns out that if we remember that coming together as community and workers we have the power to choose who does business in our communities, that coming together is going to make all the difference.

Perhaps in our next chapter, as I keep suggesting, people and their organizations should take their money out of these huge banks that keep destroying us and using our tax dollars to hire more lobbyists to get more tax dollars. We’ve just got to get our feet on the ground and move together in the same direction do it.