If Walmart Paid its 1.4 Million U.S. Workers a Living Wage, it Would Result in Almost No Pain for the Average Customer
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What US companies actually pay in taxes is among the lowest figures in the developed world. As the non-partisan Center for Budget and Policy Priorities (CBPP) explained, the 35 percent rate the corporate mouthpieces on CNBC are always whining about “does not take into account the generous depreciation rules, exemptions, deductions, and credits (some of which are sometimes termed 'loopholes') that corporations may be eligible for.”
Looking at the big picture, the U.S. ranked 28th out of 30 countries in the Organization for Economic Cooperation and Development (OECD) (which includes most of the world’s leading economies) in terms of the share of our economic activity that corporations pay in income taxes. At 1.8 percent, our government actually collects around half of the OECD average of 3.4 percent ( PDF).
Or consider what Republicans refer to as “job-killing regulations.” The costs of protecting human health, workers' safety and the environment is supposedly too onerous to the private sector, but the Office of Management and Budget (OMB) studied the economic impact of 106 major regulations between 2001 and 2010 and found that they cost the economy between $44 and $62 billion (in 2001 dollars), but yielded far more in economic benefits , adding $136 billion to $651 billion to the U.S. economy ( PDF).
Now consider this: during the 2000s, under President Bush, we had a model of the low-wage, low-tax, lightly regulated economy that conservatives insist businesses require in order to employ people. Bush slashed taxes for corporations and high earners, cut rates on investment income, threatened to veto (or did veto) nine minimum wage increases and had a dismal record of regulating corporate activities.
That climate did lead to robust job growth by big U.S.-based multinationals, but not in this country. According to Commerce Department data cited by the Wall Street Journal , big “companies cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million.” How did that performance stack up against the Clinton years, with slightly higher taxes on wealth and modestly stronger corporate regulation? The Journal notes that the last decade saw “a big switch from the 1990s, when [big business] added jobs everywhere: 4.4 million in the U.S. and 2.7 million abroad.”
It's not that companies don't seek more “business-friendly” climes where there is less regulation and wages are lower. It's that the process has been facilitated by trade agreements allowing multinationals to offshore production for our domestic market without any barriers whatsoever. As economist Dean Baker put it, “we carefully structured these trade agreements -- we put great effort into it -- to put our manufacturing workers into competition with manufacturing workers in developing nations.”
That meant going to these places and asking: What kind of problems does General Motors face if they want to set up a manufacturing plant in Mexico or Malaysia or China? What can we do to make it as easy as possible? That means that they know they can set up their factory and not have it nationalized, not have restrictions on repatriating profits, etc. Then they need to be able to import the goods back into the United States, and that means not only making sure there are no tariffs or quotas, but also that there's no safety or environmental restrictions that might keep the goods out.
And big, multinational companies are increasingly investing in overseas operations because the middle class in this country is being squeezed so hard – and consumer demand is so deep in the trough – that foreign shores are where the customers are. They've come a long way from Henry Ford's novel idea of paying his workers enough to afford to buy the products they were making.