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Losing this prospect is no great loss

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The recent failure to land a big-time retailer in the northeast part of the city was discouraging — but because the prospect was Wal-Mart Stores Inc., it’s hard to feel too bad about saying goodbye.

The story of the world’s largest retailer is turning into a classic American tale: success leads to arrogance, and arrogance leads to all kinds of problems.

Because the company pays low wages to so many American workers (the average sales clerk receives $14,000 per year, according to the reviewer of several books about Wal-Mart), taxpayers are forced to pick up various costs.

Simon Head, writing in The New York Review of Books, refers to a February 2004 report by the Democratic staff of the U.S. House Education and Workforce Committee: “For a 200-employee Wal-Mart store, the government is spending $108,000 a year for children’s health care; $125,000 a year in tax credits and deductions for low-income families; and $42,000 a year in housing assistance. The report estimates that a 200-employee Wal-Mart store costs federal taxpayers $420,000 a year, or about $2,103 per Wal-Mart employee. That translates into a total annual welfare bill of $2.5 billion for Wal-Mart’s 1.2 million U.S. employees.”

Wal-Mart also is acquiring a reputation for flouting local government regulations. For example:

In Maryland, Calvert County officials passed a rule that limited the size of new big-box stores to 75,000 square feet. Fine, said Wal-Mart; we’ll build a 74,998-square-foot store in the town of Dunkirk – with a 22,689-square-foot garden center right next door.

Iowa State University’s retired retail expert, Ken Stone, was quoted in a news story about that controversy: “It almost points out the futility of municipalities developing ordinances and laws that restrict the size of stores. There’s always a way around them, and an outfit as big and smart as Wal-Mart will think of a way.”

And now it’s starting to look as if Wal-Mart has grown so large that it’s virtually a branch of the federal government.

The U.S. Department of Labor has made a deal with Wal-Mart in which it agrees to give the company 15 days of advance notice before investigating any alleged violation of laws pertaining to wages or hours. Then comes the investigation and report – and then Wal-Mart has another 10 days to correct any problems that were found.

Other large retailers are expected to bring their labor practices into compliance immediately.

The developers of Des Moines’ economy can certainlly find more desirable corporate citizens than Wal-Mart.