Dear Editor:
Perpetua Carillo’s letter, published Friday, June 13 favoring a
new Wal-Mart superstore reeked with ignorance, as she buried her
head in the sand.
Dear Editor:
Perpetua Carillo’s letter, published Friday, June 13 favoring a new Wal-Mart superstore reeked with ignorance, as she buried her head in the sand. Her reasons were nothing but half-truths, as she forgot to tell the whole story.
Half-Truth: “A superstore will definitely create more jobs and opportunities for Gilroy residents.”
Fact: Jobs promised are not supported by the research. In fact a “Lake Placid Study stated that for every two jobs created by Wal-Mart three jobs were eliminated in the small business sector (Wharton Study). Superstores would eliminate preexisting jobs and hours worked. The effect on the community would lessen consumer purchasing, employment and decrease taxes collected.
Half-Truth: “It follows that, the more business and employment we have the more taxes for Gilroy.”
Fact: Revenues – Superstores promise additional sales tax revenues, however, development studies never question the impact on existing economics. These additional revenues impact both large and small companies. Target Corporation stated its sales receipts diminish substantially (30 percent) if a superstore moves within 5 miles of their location. According to Orange County Business Council Report increase in sales tax to local municipalities is largely a myth.
The study stated that over the first two years sales increase, however fall below the original bench mark there after . This figure is compounded if any financial incentives are applied (i.e., sales tax rebates, incremental financing, impact fees).
Increase sales tax is siphoned off due to selling the same or similar items and therefore has no positive economic impact. While mega stores receive tens of millions in handouts, school’s shortfall may exceed $1 billion dollars. While Wal-Mart feeds at public trough with little compunction – millions are taken from schools while Wal-Mart uses redevelopment agencies to build stores with taxpayer money. Low wage and substandard health benefits simply produce unfunded mandates.
Over the long haul taxpayers, county and state government pick up the costs. Increases in pharmaceuticals, state sales tax and property taxes are just a small example of how the taxpayer subsidizes Wal-Mart’s bottom line. Costshifting is an economic reality. County government in California is mandated to provide health care cost if individuals cannot afford it.
Low wages and poor health care programs add substantially to the mix. Boarnet in the Orange Business Council Study demonstrates throughstatistical analysis the impact on southern California counties. Wal-Mart has created sub standard wages, high turnover rates and little medical incentives for its employees. Using the economic multiplier principal Boarnet and Crane foresee a $2.8 billion impact to the southern California economy due to cost shifting.
Half-Truth: “Wal-Mart is known for its low and reasonable prices that helps most – especially the middle and low-income residents and even the affluent who wants to save more.”
FACT: Chairman of the House Small Business Committee – Super store development was coming at the expense of smaller merchants. Thomas Muller stated Wal-Mart charged higher prices where competition was eliminated. Muller said Wal-Mart simply steals preexisting retail sales.
Half-Truth: “Business competition is what we need to keep prices of our basic needs at minimal and affordable (levels).”
FACT: Wal-Mart will eliminate many small businesses and large businesses. Wal-Mart managers will secretly shop at their competitor’s businesses and then undercut their prices for similar items, even if it is at a loss for Wal-Mart. This will continue until competitive businesses are shut down. Once the competition is eliminated, then Wal-Mart will raise their prices to levels that are higher then before. This predatory pricing is against the law!
The goal of Wal-Mart is to penetrate 30 percent market share in every business they are in. (Warburg Equity study, Time Magazine January 13, 2003) If the Time article is right, what price will small business pay in local communities?
John Reese, Morgan Hill
Submitted Sunday, June 15 to ed****@************ch.com
