The Hidden Cost of Wal-Mart Jobs

A report from the UC Berkeley Labor Center on the toll Wal-Mart takes on local tax infrastructures. From the introduction: 

"When workers do not earn enough to support themselves and their families through their own jobs, they rely on public safety net programs to makes ends meet. In fact, more than half of the public assistance in California now goes to the working poor.

This report estimates the public assistance expenditures for California workers employed by Wal-Mart. The report quantifies the cost of public assistance in California resulting from Wal-Mart’s pay and benefit package, using data compiled on the tenlargest public assistance programs in the state. Wal-Mart is the largest employer in the United States, with more than one million workers. As of 2001,Wal-Mart had 143 stores and employed about 44,000 workers in California. It is expanding rapidly. Wal-Mart’s wages and benefits are significantly below retail industry standards. Since Wal-Mart’s future growth trajectory may have a significant impact on industry standards, the study also assesses the potential costs that taxpayers would incur if other large retailers in the state were to follow the Wal-Mart model due to real or perceived competitive pressure.

Several recent reports have explored the issue of public supports to Wal-Mart workers. The best documented example comes from Georgia and involves a single healthcare program. A state survey found that Wal-Mart employees rely disproportionately on the state’s Children’s Health Insurance Program, PeachCare, accounting for more than 10,000 of the 166,000 children enrolled in the program (see A. Miller 2004). A report by the Democratic Staff of the Committee on Education and the Workforce of the U.S. House of Representatives, prepared for Congressman George Miller (2004), looked at the issue of public support to Wal-Mart workers across a wider range of programs. Using employee eligibility for programs to estimate the public costs of Wal-Mart’s compensation policies, the report estimates that a typical 200-employee Wal-Mart store may cost federal taxpayers $420,750 a year—about $2,103 per employee. The research reported here goes a step further and models actual program utilization, as opposed to worker eligibility, across the same wide range of programs."

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