June 4, 2013
A Congressional report released Thursday confirms what many Americans have suspected all along: Taxpayers are subsidizing Wal-Mart’s workforce. The running-joke that says “for every dollar you save at Wal-Mart you spend two dollars more in taxes” isn’t far off the mark.
The report, prepared by Democrats in the House Committee on Education and the Workforce, focused on “Wal-Mart’s low wages and their effect on taxpayers and economic growth” and found that Wal-Mart pays its employees such low wages they can’t even afford the necessities of life, and taxpayers are forced to pick up the tab.
“Taxpayer-funded public benefit programs make up the difference between Wal-Mart’s low wages and the costs of subsistence.”
The report analyzed data released by Wisconsin’s Medicaid program, because Wisconsin had the most recent information, and their findings were appalling.
They estimate that a single 300-person Wal-Mart Supercenter store in Wisconsin likely costs taxpayers at least $904,542 per year. And if you add in the fact that many Wal-Mart employees who receive Medicaid benefits also benefit from other taxpayer-funded programs such as food stamps, WIC, and other federal aid, the total cost to taxpayers is more like $1,744,590 per year – about $5,815 per Walmart employee – and that’s just for one store.
According to the report, Walmart employs approximately 1.4 million American workers. Multiply that by $5,815 per worker and the total is almost $82 billion annually that Americans pay to keep Wal-Mart workers from starving to death.
Meanwhile, back in Bentonville, the Walton family now has a combined wealth of more than $89.5 billion and the company grossed $17 billion in profits in 2012.
The report comes just as Senators Tom Harkin (D-Iowa) and George Miller (D-Calif.) have introduced legislation to raise the federal minimum was limit to $10.10 per hour. But, it’s not Wal-Mart’s low wages alone that keep their employees living below the poverty level. The company also limits access to full-time employment.
Limiting a large percentage of their employees to less than 30 hours per week means Wal-Mart can avoid paying for comprehensive health insurance plans for most of their associates. While Wal-Mart claims that fewer than half its hourly workforce is part-time, according to the report, “Data Wal-Mart reported to the Partnership for a healthy America revealed that it recently hired 6,758 employees to work in ‘newly built or existing expanded/remodeled stores’” and “a majority (3,537) were hired on a part-time basis.”
For those employees who are scheduled more than 30 hours per week, Wal-Mart’s healthcare plan is still out of reach because wages are so low. Consequently, even full-time employees often have to rely on federal programs just to survive.
The report makes several recommendations, such as raising the minimum wage, hiring more full-time employees, better training, less gender discrimination, and so on, but we all know nothing’s going to come of this report. After all, the Walton’s have their very own Congressional representative, Republican Steve Womack of Bentonville, Ark.
The idea that Wal-Mart employees can just up and quit and go somewhere else if they aren’t making enough money doesn’t work. In suburban and rural areas, Wal-Mart is often the largest employer around and they set the status quo for wages. In larger metropolitan areas, unemployment is already so high, where else would they all go?
But American consumers have grown comfortable shopping at Wal-Mart. They can find everything they need (but not necessarily everything they want, and there’s certainly not much of a selection) and they believe they’re getting it at the best price in town. Too bad more consumers don’t understand that for every dollar they save at Wal-Mart they’re sending $2 more to Uncle Sam.