Attention South Carolina taxpayers – with Wal-Mart planning to build, expand or relocate “dozens” of stores in the Palmetto State, here’s something to keep in mind:
The capacity for Wal-Mart to offer the company’s famously “always low prices” is enhanced, directly or indirectly, by public subsidies that benefit the world’s biggest retailer.
Wal-Mart’s growth plans in South Carolina apparently do not involve any state incentives. But it is unclear whether the same is true when it comes to local subsidies.
Indeed, one of the company’s new projects in the state already has received local taxpayer-funded infrastructure support.
And that, in fact, follows a years-long pattern with Wal-Mart in these parts.
In a project dubbed “Wal-Mart Subsidy Watch,” a nonprofit policy group named Good Jobs First reports that at least three other Wal-Mart projects in South Carolina received millions of dollars in subsidies combined.
The publicly funded support was either indirect, in the form of infrastructure upgrades, or direct in such forms as free land, according to Good Jobs First.
Then there is the matter of health care.
It is not a direct subsidy for Wal-Mart like a land grant. But because many Wal-Mart employees lack health insurance, some of them turn to government programs that cost taxpayers.
In South Carolina, Wal-Mart ranks first among employers with workers enrolled in Medicaid, a federally and state-funded health care program for the needy, according to data compiled by the S.C. Department of Health and Human Services.
Efforts on Friday and Monday to reach a Wal-Mart spokesman at the company’s headquarters in Arkansas were unsuccessful.
In a news conference in early May, Gov. Nikki Haley and state Agriculture Commissioner Hugh Weathers stood beside Wal-Mart U.S. President and CEO Bill Simon at the new South Carolina Farmers Market in Lexington County as Simon announced Wal-Mart’s big plans for the Palmetto State.
The company, he said, will create a total of 4,000 jobs plus another 300 salaried management positions in “dozens” of locations over the next five years. “That’s a commitment of about $400 million in capital investment in the state,” Simon added.
He then spoke of Wal-Mart employees in South Carolina.
“We’re very, very proud of the associates we have here in the state and the wages that we pay,” Simon said. “The average wage that we pay in South Carolina is $12.80 an hour.”
Based on a 40-hour work week, that equates to $26,624 gross per year, which is about $6,500 less than the state’s per capita income in 2010 – $33,163 – as reported by the U.S. Bureau of Economic Analysis.
Of course, many Wal-Mart employees work part time and do not receive benefits.
At the end of the news conference, Haley answered questions from reporters. After she responded to two, someone called out, “Last question!” Haley then answered a third and final question before ending the event with, “All right, thank you very much. It’s a great day in South Carolina.”
The announcement played well for the cameras as media outlets across the state hyped the news.
The S.C. Department of Commerce handled it differently, though.
Normally, the agency proudly declares large economic development projects and posts a news release about them on its website. But no such declaration regarding Wal-Mart can be found.
Under the S.C. Freedom of Information Act, The Nerve asked the Department of Commerce for records related to any state incentives agreements for Wal-Mart.
The agency does not possess any, Commerce general counsel Karen Manning said in a written response.
It’s a different story at the local level.
Simon did not announce any locations of the planned Wal-Mart projects in South Carolina, although media reports identified six: relocated or expanded stores in Easley, James Island, Hilton Head Island and Lake City; and new stores in Fort Mill and Bennettsville.
Of those six, at least one is receiving help from local taxpayers.
Easley, a small Pickens County town in the Upstate, floated $1.7 million in bonds to provide roads and other infrastructure for a new Wal-Mart supercenter, according to Easley Mayor Larry Bagwell. “It’s definitely a big boost for our community,” he says of the store.
Bagwell says the project developer has agreed to cover the bonds if the supercenter does not generate enough tax revenue to do so.
Replacing an existing Wal-Mart in Easley, the new store is part of a larger development that received $13 million in state and city infrastructure funding, Bagwell says.
The $1.7 million in bonds is small potatoes compared to public support for other Wal-Mart operations in South Carolina.
In its “Wal-Mart Subsidy Watch” project, Good Jobs First says:
- The city of North Charleston agreed to reimburse the developer of a Wal-Mart supercenter and a Sam’s Club up to $10 million through tax increment financing for infrastructure to support the outlets, which opened in 2005.
- A Wal-Mart distribution center opened in Chesterfield County in 1997 received $28.2 million in subsidies, mostly from the state. The incentives included an estimated $19.2 million in job tax credits and a development tax credit worth a projected $7.1 million, as well as a $1 million grant and free land valued then at $350,000.
- A $250,000 state grant paid for infrastructure upgrades, including a water tank, for a Wal-Mart distribution center that began operating in Laurens County in 1988.
Good Jobs First also documented two successful property tax appeals by Wal-Mart in South Carolina, for a combined savings of more than $43,800.
Based in Washington, D.C., Good Jobs First says it is dedicated to promoting corporate and government accountability in economic development.
In terms of health care costs, the data from the state Health and Human Services agency show that children, the elderly and the disabled make up the vast majority of South Carolina’s Medicaid population. It totaled more than 824,000 in July.
Adults, including pregnant women, accounted for roughly 19 percent of the state’s Medicaid enrollees.
That’s nearly 156,600 people. Of those, about 50 percent were working. And of the Medicaid recipients with jobs, more were employed by Wal-Mart – 2,442 – than any other company.
That might not be surprising given the nature of most Wal-Mart jobs and the fact that the company is the nation’s and the state’s largest employer.
But just remember: There’s more to Wal-Mart’s “always low prices” than cheap labor and economies of scale.
Reach Ward at (803) 254-4411 or eric@thenerve.org.