June 23, 2014

Wal-Mart Blog Posts Spirited, Devastating ‘Fact Check’ Response to Timothy Egan’s NYT Op-ed

In a Thursday New York Times op-ed, columnist Timothy Egan, who previously “worked for 18 years as a writer” at the Times, went after Wal-Mart as “net drain on taxpayers, forcing employees into public assistance with its poverty-wage structure.” In his view, working at Wal-Mart and receiving its “humiliating wages … certainly keeps you poor.”

At the company’s blog, David Tovar, Walmart’s vice president for corporate communications, armed with a photocopy of Egan’s op-ed and a red pen, ripped Egan’s contentions to shreds (portion presented was reformatted to fit the available space; HT Instapundit):


(1) — Supplementing Tovar’s response, Wal-Mart’s provision for U.S. income taxes during its latest fiscal year was $6.377 billion (that may differ from taxes actually paid in any given year, but retailers’ ability to defer taxes on a long-term basis is fairly limited). That’s roughly 2.5 percent of all of Uncle Sam’s corporate income tax receipts — from one company. Its effective income tax rate is 32.9 percent. A couple of years ago, I seem to recall that a company, General Electric, run by a fan of Barack Obama, Jeff Inmelt, paid no U.S. income tax. Why yes, that’s correct — and that was on $14 billion in reported profits.

Additionally, large manufacturers like GE constantly beg states and localities for property tax breaks, a practice in which Wal-Mart rarely indulges (to be clear, the company probably would do so if it could, but its negative perception in many politicians’ minds likely makes it a non-starter). Just last fall, the company’s Evendale, Ohio plant north of Cincinnati received an 11-year, 50 percent tax credit surely worth millions of dollars just to keep thousands of jobs in Ohio. This means that everyone else in the area — except others receiving similar breaks — has to pitch in more to fund local schools and public services.

The point is that if Tim Egan wants to get upset about corporate conduct, why isn’t he railing against the way large companies play the state and local tax blackmail game and manage to avoid paying federal income taxes altogether?

(2) — The linked video about one particular employee notes that “73 percent of Wal-Mart’s store management team started out as hourly associates.”

(3) — As James Taranto pointed out at tdoay’s Best of the Web at the Wall Street Journal, Egan’s petulant and clearly bitter assertion that “corporations are citizens” is “an embarrassing error Tovar doesn’t correct.” Egan apparently has come to this erroneous belief because of the Supreme Court’s Citizens United decision. But the correct term for corporations is that they are considered “persons” in a legal sense, a designation that goes back roughly 150 years to the late 19th century.

Then, the courts determined that “the Fourteenth Amendment’s equal protection clause guarantees constitutional protections to corporations in addition to natural persons.” That ship sailed a long time ago, Tim, and you missed the boat.

Corporations certainly aren’t “citizens.” Citizens get to vote. Corporations don’t.

Just a few of the other points Tovar refuted follow.

Egan used the fact that one Wal-Mart store in Ohio advertised for donations for families of employees down on their luck at Thanksgiving as evidence of comprehensive employee mistreatment. Tovar pointed out that the situations involved “fires, divorce, loss of life, etc.” — “noble causes, no doubt.”

Egan claimed that a highly quoted average pay figure of $12 and hour for Wal-Mart employees is skewed by salaries paid to top management. Tovar asserted the number is $12.91, and that only hourly employees are included in the figure. Egan tried to claim that the hourly-only average is $8.81. Tovar said that’s false, and that the figure is three years old. I should add that starting part-time employees at unionized Kroger stores in Greater Cincinnati get $7.85 per hour and are required to kick in union dues out of what they get paid. What do you say to that, Tim?

Egan cited a poll result indicated 28 percent of the public has an unfavorable view of Wal-Mart as evidence that there is “growing public disdain” towards the company. Tovar noted that “any corporation, politician (and) even media outlet would love to have a 72% approval rating.” Indeed. Gallup recently indicated that 40% of the public has no confidence or very little confidence in large businesses on the whole. The company is beating the averages. While we’re on the topic, 33% of Americans have little or no confidence in newspapers.

Tovar also noted that the company’s founders formed “the largest corporate foundation in America,” which “gives over $1 billion in cash and in-kind donations every year.” How do the Sulzbergers’ charitable efforts at the Times stack up to that, Tim?

Other companies should look at Tovar’s response strategy for lessons in how to combat ignorant garbage such as that promulgated by Timothy Egan.

Cross-posted at NewsBusters.org.


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