The Euro in the United States — A Giant Step Forward

How can the euro help bridge the U.S. income gap?

January 2, 2001

How can the euro help bridge the U.S. income gap?

As the euro was finally launched on January 1, 2002, the supermarket chain Giant — which has over 100 stores in Washington DC., Virginia, Maryland, Delaware and New Jersey — has issued a special invitation to its customers in the nation’s capital. Giant is sponsoring the euro campaign in conjunction with the Washington Post and Chevy Chase Bank.

They are encouraged to drop all of their left-over coins or paper currency from past European vacations — liras, francs, deutschmarks, etc. — at local Giant stores before December 31st, 2001. The monies collected would then presumably have to be converted to euros — and later back into dollars to achieve their noble and charitable purpose.

Indeed, Giant promises to directly donate 100% of the funds it collects to the Capital Area Food Bank — the largest public, non-profit food and nutrition education program in the Washington area. The Foodbank regroups 750 member programs and distributes millions of pounds of food to area residents a year. The Giant sponsored euro campaign will allow the organization to buy food for the city’s neediest residents.

Of course, the poor in Washington must be completely mystified about their new source of financial support. Indeed, few ordinary Americans know anything about the euro — or about the fact that the currencies of 12 European countries no longer really exist.

Only the globe-trotting American upper classes — those who tour Europe on business, ski in the Alps and vacation and shop in Italy or France — have enough assorted loose change left over to worry about what to do with it.

And even among those jet-setters, many must be puzzled as to why Giant — a true blue icon of the U.S. food sales’ firmament — all of a sudden engages in the euro game, far away from Europe’s shores.

Truth be told, the Giant chain has a very direct corporate connection to Europe’s economic fortunes. It is actually owned by a true giant — the Dutch food conglomerate, Ahold, which has global sales of around $60 billion per year.

And the Dutch being Dutch may have a lot to do with this charity initiative. You see, the Dutch have one of the more equitable income distributions in the world. They also have pretty high tax levels — and do tend to soak the rich. Their top income tax bracket stands at 60%. And that tax rate starts to bite at a modest income level of around $35,000.

This compares to the top tax rate of 35% in the United States. And that rate applies to incomes of over $271,000 — in other words, the truly upper middle class, if not the rich.

Little wonder then that incomes in Holland are really average — and do not range from dismal poverty to obscene wealth, as they do in the United States.

To be sure, taxes and income redistribution are not exactly popular topics in the U.S. political debate. On the contrary, the rich got a massive tax break from the Bush administration in early 2001 — and are slated to get even more.

So, we are left wondering: Could it be that Ahold, through its Giant subsidiary, is insidiously using the euro to introduce the Dutch idea of income leveling into the United States? If so, it will need to do a lot more than to collect a handful of foreign coins lying around rich Americans’ desk drawers.

Either way, so far the Giant ad campaign has been the most imaginative way to make the euro a true household name across the United States of America.