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As Special Session Looms, More Public Statements Against Corporate Greed

by | Jun 25, 2015 4:30am () Comments | Commenting has expired | Share
Posted to: Business, Corporate Watch, Jobs, Labor, Poverty, Hartford

Elizabeth Regan A group of approximately 25 people delivered a message, complete with an invoice for $2.2 billion, to a Hartford Wal-Mart manager Wednesday morning to protest the effect of untaxed corporate assets on the Connecticut economy.

Protest organizer Ann Pratt, of the Connecticut Citizen Action Group, said the corporation owes its workers higher wages and it owes the state more taxes. She cited statistics from a report released last week by the progressive group Americans for Tax Fairness that said Wal-Mart is hiding $76 billion in assets overseas.

The protesters walked in a circle on the sidewalk in front of the building to chants of “low pay is not okay,” “beat back the Wal-Mart attack,” and “pay your taxes” before several community activists took a turn at the bullhorn.

Hartford City Councilor Larry Deutsch referenced several Hartford police officers who were monitoring the scene when he told protesters about the effect corporate tax avoidance has on Hartford.

“I say to those who are employees of the city, including the police officers here, the city will not have enough money to fund the pensions, to fund additional officers, to fund salaries if we do not get our money from the state if the state doesn’t get it from a company like Walmart,” Deutsch said.

The protest came as lawmakers prepare for a special session next week to tie up the loose ends of a two-year, $40.3 billion budget they approved June 3. After the budget was panned by the business community, Gov. Dannel P. Malloy told legislators he wants to roll back about $223.5 million in tax increases and wants them made up through spending cuts.

Pratt and former Hartford City Councilor Jo Winch tried to give a Wal-Mart manager a symbolic invoice for the total, hypothetical amount small businesses in the state would have to pay to make up for all the revenue lost to corporations exploiting tax havens.

But the $2.2 billion figure, culled from a report by public advocacy group U.S. PIRG, represents allegedly untaxed assets from many other corporations besides Wal-Mart.

The manager, who would not give her full name, declined to accept the “invoice.”

“Even this young lady probably doesn’t even make $15 an hour herself, and she’s a manager at a big corporation like Walmart in the city of Hartford,” Winch said.

But that didn’t stop protesters from screaming “take the invoice” at the retreating woman and chanting an aggressive round of “pay your bills.”

Elizabeth Regan Wal-Mart Spokesman Randy Hargrove characterized Americans for Tax Fairness as a union-supported organization that regularly issues flawed reports in support of its own agenda. He said the study is based on “incomplete, erroneous information designed to mislead readers.”

Hargrove said Wal-Mart paid $33.9 million in taxes to the state last year. The corporation operates 39 retail stores in Connecticut with 8,830 employees, according to Hargrove.

Those employees make an average of $13.85 per hour, he said.

Winch told protesters it’s unjust that employees at Wal-Mart don’t make a living wage of $15 per hour. She said it’s not that the company can’t afford to pay its workers more; it’s that they simply don’t want to.

“It’s not fair that parents cannot put their children in childcare because places like Wal-Mart refuse to pay them a living wage,” Winch, a childcare provider, said.

Hargrove said the company made a $1 billion commitment to higher wages through multiple increases over the past year. As of April, all employees across the country are paid at least $9 an hour. The rate will rise to $10 per hour in February 2016. Managers in certain departments will receive at least $15 an hour when additional changes go into effect in February, according to Hargrove.

But Hargrove said the answer to better pay doesn’t rest on a minimum wage; instead, it comes through promoting a culture where employees make more money by rising through the ranks.

“It’s not where you start, it’s the opportunity you have. And we offer an opportunity for a career,” he said.

Hartford Wal-Mart cashier Jonathan Rodriguez said he makes $9.15 an hour — though $15 sounds a lot better to him. He’s been with the company for two months.

“Wal-Mart makes enough money to pay their employees,” he said. “Plus, $9.15 is hard to live with in Connecticut.”

A bill to penalize the state’s biggest corporations that don’t pay workers at least $15 an hour failed to come to a vote in the legislature after making it out of the Human Services and Labor and Public Employees Committees.

The effort came on the heels of a law last year to raise the minimum wage to $10.10 an hour by 2017.

This year’s failed legislation would have fined corporations like Wal-Mart $1 per hour for each employee paid $15 per hour or less. The fiscal note estimates that about 146,710 of the 743,328 employees who work for companies with at least 500 employees would be covered under the bill. The measure would result in a revenue gain to the state of up to $152.6 million in 2016 and $305.1 million in future years.

Proponents of the legislation say that because these 146,710 employees are underpaid, they are forced to rely on state programs and subsidies for health insurance and childcare. Since funding for some of those human and social services may still be on the chopping block in the budget that has yet to be finalized, proponents had hoped new revenue from the legislation could help fill the gap.

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(11) Archived Comments

posted by: LE 2015 | June 25, 2015  12:02pm

People need to get an education and get the skills so they will get better pay. If companies have to pay more they will either raise prices or layoff workers.

posted by: Politijoe | June 25, 2015  1:53pm

Politijoe

Almost a quarter of all jobs in America now pay wages below the poverty line for a family of four and a significant majority of Wal-Mart and McDonalds employees are not high school kids but are in fact an average of 34 years old, with families and working poor-which means they work 34-40 hours or more but still cant meet their basic needs of food, shelter and healthcare.

The average Wal-Mart employee earns $8.81 an hour.  (Better than the national average minimum wage but still an unsustainable low wage) A third of Wal-Mart’s employees work less than 28 hours per week and don’t qualify for healthcare benefits, another 50% work 34 hours or less and they also don’t qualify for healthcare. The remaining 20% who are offered healthcare simply can’t afford the high cost plans. Half of the workforce (Over one million employees) qualify and receive government assistance, which is provided by the American taxpayer at a cost of $900 million dollars per year.

The issue of providing a living wage is not mutually exclusive; it remains part of a broader perspective that includes equitable taxation policies, healthcare, concentration of wealth, unionization, corporate welfare and the middleclass. The reason Wal-Mart is the subject of discussion (some would say the target) is because they have the largest profits, largest workforce and therefore the American taxpayer provides the largest subsidies, which contribute to Wal-Marts multi-national profit margin and status as a corporate welfare recipient.

Here’s the general math:

•  Wal-Mart earns $400 billion dollars annually in retail sales.

•  The profit is $16 billion annually. That’s about a 4% margin. 

•  A wage increase of $3.19 per hour ($5400 per year per employee) would bring their workforce up to $12 per hour-still low but somewhat sustainable wage.

•  The increased labor costs would equal about $11 billion dollars or 2.5% of Wal-Mart annual sales revenue – or about $225 million dollars per week.

•  The number of Wal-Mart customers is 11.7 billion customers annually- or about 255 million customers per week.

•  Therefore, the increased costs to consumers who shop at Wal-Mart would equate to about .75 cents per shopping visit.  And this is if Wal-Mart passed on the entire labor increase to their customers.

Wal-Mart, like Amazon , McDonalds, Taco Bell, etc… have fought against labor unions in an effort to keep its labor cost below a living wage. In the case of McDonalds, simply raising the cost of a big Mac twenty cents and an entire meal an additional sixty cents would provide a low but at least living wage to its employees. This is not about who is deserving but about equality, fairness and economic sustainability.

posted by: LE 2015 | June 25, 2015  10:41pm

11 billion is 68% of walmarts profit. If you go to $15 per hour it would cost an additional 11 billion. At that point Walmart would be losing money. It is easy to give away a companies profit until they lay off and then the people will complain about that.

posted by: Politijoe | June 26, 2015  5:31am

Politijoe

@LE:  Walmart themselves have reported their annual revenue at $400 billion dollars. Although these are rounded numbers, the sales revenue and margins remain consistent within the industry. Your math suggest either Walmarts profits are not as high as $400 billion or their margins are much smaller than 4%. I would certainly welcome some additional info on your calculations to reassess this. In the meantime, lets look at this from another angle….

lets compare Walmart with Costco, same industry, therefore similar margins.

the avg hourly wage of a Costco employee is about $15.00 compared with Walmart at $9.00

Costco annual healthcare cost per employee is $5,700, Walmart is $3,500

Costco employees covered by healthcare is 82%, Walmart 47%

Costco annual retirement costs per worker is $1,330, Walmart $747.00

Costco employees covered by retirement plans is 91%, Walmart 64%

Here’s what is interesting when you take a closer look.

Costco employee turnover is 6% annually, Walmart 22%

Costco labor/overhead 9.8% of sales, Walmart is 17% of sales.

Costco sales pr SF is $800, Walmart is $515

Costco profits per employee $14,000, Walmart is $11,000

Therefore, Costco pays a living wage and yet still manages to maintain costs and profits.

The same can be applied to McDonalds and other giant retailers and fast food, modest increases in a Big Mac or meal would maintain costs and profits. This is not a question of ability, its a matter of willingness.

posted by: LE 2015 | June 26, 2015  6:45am

Joe.  Walmart makes 4 cents on each dollar of revenue per your numbers. In order to get 11 billion to cover the additional expense they would need 275 billion in additional revenue.

posted by: Hebee | June 26, 2015  7:11am

Corporations are required to make a profit. If they don’t we sell the stock (at least the fund manager does). Everyone with a 401k is a shareholder. If wages and expenses go up, prices go up in the store. Why don’t unions care that the companies where their workers are employed need to remain healthy, local and open in order for their members to remain employed. If they raise prices to compensate for increased wages, they will be called “greedy”. If they don’t pay $15.00 per hour they are called greedy. Be careful what you ask for. The Dunkin coffee you get on the way to work is going to cost $7.00. Those greedy pigs.

posted by: DrHunterSThompson | June 26, 2015  10:13am

There is such a huge misunderstanding regarding corporate economics it is impossible to have an intelligent discussion. Force them to pay more, they will leave and take high paying jobs with them. Raise the income tax on high earners and leave their corporations alone. Do that and they will stay.

HST

posted by: Politijoe | June 26, 2015  2:52pm

Politijoe

@LE: Youre correct if Walmart was to cover the entire cost it would require $275 billion in additional sales to maintain a 4% margin on the 11b increase in labor costs.
However, the number of Wal-Mart customers is 11.7 billion customers annually- or about 255 million customers per week. Therefore, the increased costs to consumers who shop at Wal-Mart would equate to about .75 cents per shopping visit.  And this is if Wal-Mart passed on the entire labor increase to their customers. Of course they could absorb some of this increase or they could partially increase sales to off-set the costs or they could simply pass the cost of .75 per visit onto their customers. The long-term gain is the $900 million dollars annually the American taxpayer currently doles out as corporate welfare to subsidize Walmart for their employees healthcare, food and shelter would be significantly reduced as a result of these workers now earning a living wage

posted by: LE 2015 | June 26, 2015  3:48pm

Joe you are mixing up revenue and profit.  You stated that Walmart made 16 billion in profit on 400 billion in revenue. If you pay workers 11 billion more then the profit goes down to 5 billion. Revenue will not increase just because you pay your workers more. If you pay $15 per hour that is another 11 billion in expense with no increase in revenue now they will now be in a loss position.

posted by: Politijoe | June 27, 2015  7:23am

Politijoe

@LE: With all due respect, I dont believe Im mixing up profit and revenue, as I stated earlier the number of Wal-Mart customers is 11.7 billion customers annually Therefore, if Walmart passed all the increased labor costs onto their customers it would equate to about .75 cents per shopping visit. Of course walmart could absorb some of this increase or they could partially increase sales to off-set the costs.

The bottom line is that increasing hourly salaries to provide a living wage is not nearly as unattainable as some corporations would have us believe. I would gladly pay .75 cents more per shopping visit at Walmart, or .60 more per McDonalds meal to ensure a living wage for those employees.

Equally as important, providing a living wage significantly reduces the $900 million dollars taxpayers dole out annually to subsidize JUST Walmart for their lack of providing a living wage to their employees. Why should this remain a taxpayer issue?

posted by: dano860 | June 29, 2015  7:43am

Lets make it a nation wide minimum of $25 per hour. Will the issue then go away? I doubt it but at least they become tax payers and not eligible for the gratuitous ‘unearned income’ payment.
Will we become another Greece, doubt it!
We will get better qualified and more educated people to take those jobs that need a little polishing up.

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