New York City Ensures No Wal-Mart Good Deed Goes Unpunished

Source: courtesy of Wal-Mart Stores Inc. It’s a Kafka-esque world we live in when politicians excoriate employers wanting to bring jobs to areas where unemployment is rampant; offering to sell food at low prices when costs are at record levels; and giving money to charity when vast numbers of people are in need.

The mental gymnastics needed to arrive at such a position are mind-boggling, but New York’s city council contorted itself into just such a pretzel when it fired off a letter to Wal-Mart (NYSE: WMT) demanding it stop donating millions of dollars to charity.

Wait, what?!

It’s long been known the deep discount retailer would like to establish a presence in New York, but the political animus against Wal-Mart has prevented it from ever opening a store there, as if jobs and low prices aren’t needed in a city where, according to the state’s Labor Department, unemployment stands at 7.9% — more than 25% above the national average of 6.3% and over 36% higher than elsewhere in the state — and where it has one of the highest cost of living indexes in the country, behind only the District of Columbia and Hawaii.

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And according to Mayor Bill DeBlasio’s Annual Poverty Report, New York City’s poverty rate rose to 21.4% in 2012 (the latest statistics available), and since 2008 and the onset of the Great Recession, 45.6% of the city’s population still live near the poverty line.

Last year Wal-Mart donated $3 million to New York City charities, including $1 million to the New York Women’s Foundation, which offers job training, and $30,000 to Bailey House, which distributes groceries to low-income residents. It’s donated some $22.5 million all across New York state. In 2011, it donated $4 million to a city program that offers summer jobs to young people and since 2004 it has donated $16 million to the city’s charter schools.

In 2013, the Walton Family Foundation invested more than $325 million in initiatives for expanding opportunities for individuals and communities here at home in the U.S. and around the world.

Yet for more than half of New York City’s governing city council, such donations are considered “toxic money.” In a letter to Wal-Mart the other day, 26 of the 51 city council members said they know what the retailer’s up to, and no amount of softening up the opposition with charitable donations is going to their minds that Wal-Mart is persona non grata within the City’s limits. The council speaker said the donations were an underhanded way of ingratiating itself with the public and was a “cynical public-relations campaign that disguises Walmart’s backwards anti-job agenda.”

No doubt Wal-Mart hopes that by showing it’s a good corporate citizen those who are not simply irrationally opposed to the retailer opening a store would consider the good that would come from allowing it to do so. For example, one study looked at the effect opening a Wal-Mart had throughout Alabama over a 10-year period and determined its impact on unemployment rates suggested local residents obtained jobs they wouldn’t otherwise obtain while developing important job skills. And while a new store opening is a one-time event, “those receiving jobs are permanently better off because of these increased skills.”

But because New York’s city council admits the charitable donations would “undermine the progressive agenda we support,” it wants Wal-Mart to stop giving money to organizations. “Stop spending your dangerous dollars in our city. That’s right: this is a cease-and-desist letter.”

One can only marvel at the logic used to craft such a broadside, but it shows that Wal-Mart brings out the bitterest of passions in some people and ensures that no good deed will go unpunished.

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