January 17, 2003

Who stands to benefit most from President Bush’s proposed economic-stimulus package? The unemployed? Working families? Minimum-wage workers? Single working mothers?

Guess again, says USA Today reporter Del Jones. The biggest beneficiaries of the Bush plan are the multimillionaire heirs of Sam Walton, legendary founder of the Wal-Mart discount-store chain. Together, the five Walton offspring collected more than $500 million in dividends on their Wal-Mart stock last year.

And if the Bush stimulus plan is passed, they’ll collect even more. That’s because a critical part of the Bush proposal is the elimination of the income tax on corporate stock dividends. While working people will continue to pay income taxes on the wages and salaries they earn, non-working people no longer will pay taxes on the stock dividends they collect for not working.

And based on data collected from the Securities and Exchange Commission (SEC), few will collect more than the Waltons.

“According to Wal-Mart’s SEC filing, Alice, Helen, Jim, John and Robson Walton together own about 1.7 billion shares of Wal-Mart stock that pays a quarterly dividend of 7.5 cents a share,” Jones wrote in USA Today’s January 9 edition. “Each Walton’s dividends come to $102 million a year, which means they would each save $38.5 million [in taxes] at the 38.6% bracket.”

Even more unnerving than the idea of people not paying taxes on hundreds of millions of dollars of unearned income is the idea of where some of those profits appear to have come from–brutal and inhumane sweatshops of a type unknown in America since the 1930s, when they were outlawed by the New Deal’s labor-reform legislation. But such sweatshops are booming today in China, and nobody buys more Chinese-made toys–especially children’s toys–than Wal-Mart.

“Seventy-one percent of the toys we buy are made in China,” writes Texas social critic Jim Hightower in in his December 31 “Common Sense Commentary” column. “Wal-Mart alone uses several thousand Chinese toy factories, but it refuses to release the name and address of even a single one of them, because it wants no independent observers poking into them and reporting on the fact that these places are hell holes.”

Unfortunately for Wal-Mart, the National Labor Committee, a respected monitor of global working conditions, identified some of these factories on its own and published its findings in a report titled “Toys of Misery.”

Some highlights: One of Hong Kong’s top toy manufacturers employs 20,000 workers, mostly young women and teenage girls. They work from 8 a.m. to 9 p.m.–and often to midnight–seven days a week, making toys that are shipped to Wal-Mart and other U.S. retailers.

Technically, China has a minimum wage of 31 cents an hour, which is below the level needed to meet basic human needs even in the Chinese economy. But the young women who make toys are paid only 13 cents an hour. They live jammed together in company dormitories, 12 or more to a room.

“They are literally sick of work,” Hightower writes, “thanks to the ‘paint dust’ that constantly hangs in the air, as well as the toxic glues, thinners, plastics and other solvents in which they’re immersed every day.”

Watch those Wal-Mart ads on TV and you’d think Wal-Mart is as American as apple pie. In fact, however, Wal-Mart’s success depends on driving its costs down by exploiting cheap foreign labor. And the reason foreign labor is so cheap is that Wal-Mart gets its products from countries that have no unions and no laws to control workplace safety, child labor, hours of service or environmental pollution.

Wal-Mart is “American,” all right, but the America it reflects is not the America of today.

It’s the America of 1865, when textile manufacturers lured young New England farm girls to the brutal mills and shabby dormitories of Lawrence, Mass., and hordes of impoverished Jewish immigrants from Eastern Europe into the sweatshops and tenements of New York’s Lower East Side garment district.

All War-Mart has done is move the misery offshore. Please think of that the next time you stop to pick up a toy for your child–or when you pay your income taxes.