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Target's Tax Subsidies Under Fire After Chicago Living Wage Fight



Monday, August 14, 2006

Rewarding Work

Target's Tax Subsidies Under Scrutiny After Chicago Living Wage Fight

Target management apparently didn't get the memo. Faced with stagnating wages and increasing inequality, American workers and taxpayers are waking up to the big box gambit where irresponsible employers subsidize their low wages through favorable tax packages. When Target threatened to stop opening new stores in Chicago if the Windy City gave final approval to its ordinance requiring a living wage for retail workers (see this Dispatch for more details), it opened up a new debate over why cities are offering low-wage retail stores tax subsidies in the first place. As a new report produced by the Neighborhood Capital Budget Group documents, Target received $9.9 million in tax-increment financing (TIF) to subsidize its existing stores in Chicago.

The fight has spilled over to Target's home state, Minnesota, as Good Jobs First details:

Labor and community organizations are putting together a coalition to lobby the state legislature to end tax-increment financing (TIF) for retail projects in Minnesota. Angered by the position of Target Corp. in Chicago, United Food and Commercial Workers Local 789 President Don Seaquist said: "Taxpayers can no longer allow TIF to be used by retailers that don't pay a living wage, don't provide health care and aggressively deny their workers a voice at work."

Labor is working with ACORN and TakeAction Minnesota, the latter an organization with a long history of working to pass path-breaking economic subsidy disclosure reforms in Minnesota. If Target is going to resist paying decent wages, activists in Minnesota want reforms to end subsidies for Target or any company that doesn't use public money to promote decent jobs.

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Increasing Democracy

Prescription Drug Data for Sale

Here's a shocking fact. When doctors prescribe prescription drugs, the big drug companies get access to data on which doctors are prescribing which drugs to patients. Pharmaceutical companies then load the data up on sales reps' laptop computers to help figure out which doctors are the best targets for their next sales pitch.

As detailed in the San Francisco Chronicle, when Dr. Brad Drexler, a California obstetrician, was told about this "data mining" by the drug companies, he convinced the California Medical Association (CMA) to pass a 2003 resolution demanding that the government cut off access by pharmaceutical companies' marketing divisions to these prescription records. California Assemblywoman Wilma Chan introduced AB 262 in 2003 to ban use of prescription drug data for marketing purposes, but the drug companies successfully fought to kill the bill.

Multiple studies have shown that drug company marketing, which often includes gifts and other payoffs to doctors,can lead to prescriptions that are not necessarily in patients' best interests. Add in "data mining" of doctor's prescription habits and it's a recipe for bad medicine. Jamie Reidy, a former Pfizer company representative wrote in a 2005 book that: "Prescription data was our greatest tool in planning our approach to manipulating doctors."

Part of the problem is that CMA's parent organization, the American Medical Association, is colluding with the prescription drug companies by supplying them with data on doctors that can be matched with drug sale information to create this trove of marketing data. The AMA makes millions of dollars selling doctor information to the drug companies, so has refused to support efforts to fix the system.

Some states are saying enough is enough. Led by state Rep. Cindy Rosenwald (D-Nashua), New Hampshire enacted a law, HB 1346, this past June which bans the release of any prescription drug data for commercial use.

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Increasing Democracy

Waste and Abuse in Homeland Security Contracts

A followup to Monday's Dispatch on waste and corruption in privatization of government services: it turns out that Accenture, the company that screwed up in taking over Texas's human services computer systems, is also a star player in a new Congressional report, Waste, Abuse, and Mismanagement of Homeland Security Contracts.

In June 2004, Accenture was awarded a ten-year, $10 billion contract to implement US-VISIT, a program to collect and store personal information, fingerprints and photographs on all visitors to the United States. According to the Congressional investigation, Accenture used "out-of-date and ineffective technologies" that failed to integrate US-VISIT data effectively with other computer systems, such as FBI crime data, even as "the system’s security has multiple weaknesses that leave it vulnerable to unauthorized access."

So Accenture designed a system that is both ineffective AND undermines the nation's security.

And this is the company that Texas is trusting with personal data about the health care of its states' citizens? As Mike Gross, vice-president of the Texas State Employees Union, notes, "Using a company that relies on 'out-of-date and ineffective technologies' doesn't seem like a smart way to modernize Texas' health and human services delivery system."

Read the whole Congressional report. It details how private contracting by the Department of Homeland Security nearly tripled in the last few years-- and the result has been a story of wasted taxpayer dollars and failed services for the public. It's a cautionary tale for states thinking about privatizing local services.

More Resources

Research Roundup

Family Friendly Workplaces, Land Use, Workplace Health Insurance, Dropouts, Term Limits, Voting Problems in Ohio, and Medical Malpractice

The Center on Law And Social Policy (CLASP) has released Getting Punched: The Job and Family Clock, a policy brief detailing pressures on working families and how government can promote more family-friendly workplace policies by encouraging family leave and more flexible scheduling.

Looking at land use regulations in the nation's 50 largest metropolitan regions, the Brookings Institution has released a broad survey of the different zoning, comprehensive plans, building moratoriums and other rules that shape metropolitan growth and density-- and the opportunities for housing and decent transit in these different communities. In a companion piece, researchers found that cities with the legal ability to annex land from its surrounding county have higher bond ratings and stronger fiscal health than in states that deny cities that power.

According to data from the Economic Policy Institute, employees are now paying 22.1% of health insurance premiums, a major increase from the 14% of premium costs they were paying back in 1992. This is on top of increased deductibles and co-pays by employees as well.

Increasing the high school and graduation rates of male students by only 5% would lead to $8 billion in savings and increased revenues to the economy, estimates a new report by the Alliance for Excellent Education. Much of the savings would come from reduced crime-related costs.

Instead of increasing the power of citizen legislators as originally promised, term limits, according to a new study by The Joint Project on Term Limits, has led to a shift in power away from state legislatures towards greater executive discretion, especially in budget decisions. The report also details efforts by states with term limits to increase training of new legislators to try to counteract this loss of experience.

A new report commissioned by Cuyahoga County in Ohio has found problems to be so widespread with voting technology and election training that there are fears that the problems will not be solved 2008, much less by this November's election.

A study comparing attitudes of doctors in the U.S. and Canada has found that malpractice concerns do not drive lack of disclosure of medical error among doctors -- more evidence that tort reform is far from the panacea claimed by the far right.

Target's Tax Subsidies Under Scrutiny After Chicago Living Wage Fight

Neighborhood Capital Budget Group, Analysis of TIF Subsidies for Target Stores
Good Jobs First, Subsidies in the News
State of Minnesota, Statute Regulating local and states business subsidies

Prescription Drug Data for Sale

HB 1346 -- New Hampshire law banning use of prescription drug data for marketing purposes
Angell, Marcia, The Truth About Drug Companies: How They Deceive Us and What to Do About It (2004)
No Free Lunch -- organization challenging drug company marketing efforts

Waste and Abuse in Homeland Security Contracts

US House Committee on Government Reform, Waste, Abuse, and Mismanagement of Homeland Security Contracts

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Eye on the Right

In response to a number of prominent politicians publicly questioning their business methods, Wal-Mart -- a for-profit corporation -- has declared its intention to start biased "voter education" programs in early Presidential primary and caucus states like Iowa, New Hampshire, South Carolina, and Nevada. Under federal law, it is illegal for corporate money to be spent to promote the election or defeat of candidates, but it looks like Wal-Mart is looking to make as big of an impact as it can by using its massive corporate coffers to threaten any political leaders who dare to question their destructive business practices.

Upcoming Events

Partner Events at NCSL

Thursday, August 17

  • 4:00 PM-5:30 PM
    State Issues Forum on Health, Morality, and Reproductive Rights
    Jackson E/F
  • 4:00 PM-5:30 PM
    State Issues Forum Workshop on Building Relationships Between Legislators and Advocates
    Lincoln D/E
  • Upcoming Partner Events Around the Country

    Tuesday, August 22 -- Americans for Health Care, a project of the Service Employees International Union, is organizing Chalk It Up, a National Day of Health Care Action. Using chalk as a creative unifying theme, Americans for Health Care is hosting rallies, house parties, and public events across the nation. To find a local event, or create your own, go to www.ImAHealthCareVoter.org.
    -- Manchester, New Hampshire ”“ The Center for American Progress Action Fund is hosting a candidate forum on health care reform for United States House of Representative candidates in the New Hampshire 1st Congressional District. 6:00 PM | Location TBA Check New Hampshire for Health Care for more info.

    Thursday, August 31 -- If It's Broke, Fix It: Health Care Providers and Health Reform -- This event hosted by the Center for American Progress Action Fund will explore the challenges the current health care system poses for health professionals, patients and policymakers, and how doctors, nurses, and other health care professionals can use their unique insight and real-life experiences to steer the nation towards a solution. Featured Speaker: Senator Tom Daschle, Distinguished Senior Fellow, Center for American Progress. 5:00 PM-6:00 PM | HealthSpace Cleveland | 8911 Euclid Avenue | Cleveland, OH 44106

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    Matt Singer
    Editor, Stateside Dispatch

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