Wal-Mart is Using Taxpayers to Subsidize Low Wages
It isn’t breaking news that many Wal-Mart Stores (NYSE:WMT) employees are dissatisfied with their current wage levels, as it was only late last year that members of OUR Walmart, a union-backed worker group, chose Black Friday to walk off the job and campaign for their rights. Similarly, earlier in May, that same group announced its plans to meet in Bentonville, Arkansas, on the day of Wal-Mart’s annual shareholder meeting, and campaign for a greater number of full-time jobs with predictable schedules and wages that could help them provide for their families.
A new report, however, illuminates that Wal-Mart employees might not be the only ones paying the price for their low wages. Taxpayers, too, may have a reason to take a stand. According to The Huffington Post, Congressional Democrats released a study Thursday that demonstrated how Wal-Mart’s wages are so low that many of its workers must rely on food stands and other government aid programs, costing taxpayers as much as $900,0000 at just one Wal-Mart Supercenter in Wisconsin.
The report, “The Low-Wage Drag on Our Economy,” was produced by Democrats with the House Committee on Education and the Workforce. It explains that it chose Wisconsin as its state of study because of its data being the most recent, allowing the study to employ the state’s Medicaid data to discern the annual cost taxpayers pay in order to provide the food stamp and publicly subsidized health care programs to those Supercenter workers who require it. Wal-Mart has long been criticized for its pattern of offering wages that force its workers to take advantage of public-assistance programs. This recent study argues that the criticism is warranted. The company had more workers enrolled in the state’s public health care program in last year’s last quarter than any other employer.
So how did the report’s authors come up with the $900,000 figure? First, they took into account the number of Wal-Mart stores and employees across Wisconsin and the per-person costs of Badgercare, the state’s health care program, estimating that the cost of the publicly funded health care comes to $251, 706 per year for a Supercenter that employees 300 workers. Then, they considered the other public-assistance programs available to these families on Badgercare. Assuming that the families take advantage of all the additional programs offered, the final cost amounts to over $900,000. Though the study’s estimate is based on the assumption that those who qualify for the public assistance programs take advantage of all the opportunities offered to them, the number is a daunting figure nonetheless.
The chairman of the committee who produced the report, Rep. George Miller, has been working to sponsor legislation that would increase the federal minimum wage to $10.10, arguing that this boost could help pull Wal-Mart workers off these public-assistance programs, as well as others employees who suffer the same problems. The current federal minimum wage is $7.25 and applies to the 31 states that do not mandate a higher one.
Nevertheless, Wal-Mart stands by its current wage levels and the “opportunities it provides for its workers.” The Huffington Post
quotes Wal-Mart spokeswoman Brooke Buchanan contending, “Unfortunately there are some people who base their opinions on misconceptions rather than the facts…We provide a range of jobs — from people starting out stocking shelves to Ph.D’s in engineering and finance. We provide education assistance and skill training and, most of all, a chance to move up in the ranks.”
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