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I CLASSIFY IT AS the worst thing that ever happened to America and Retail.
A 2004 study by the University of California Berkeley Labor Center found that Wal-Mart in California costs that state $86 million each year in hidden costs.
“Wal-Mart workers’ reliance on public assistance due to substandard wages and benefits has become a form of indirect public subsidy to the company,” the study found.
According to the report, many of Wal-Mart's 44,000 California employees in 2001 relied on food stamps, school lunches, Medicare and subsidized housing to make ends meet. By 2004 Wal-Mart employed 60,500 California workers, resulting in even more employees subsidized by the state, researchers contend.
Researchers obtained data on Wal-Mart wages from a sex-discrimination lawsuit that revealed information for 2001. Researchers found that 54 percent of Wal-Mart workers earned less than $9 an hour in 2001, 21 percent made from $9 to $9.99, and 16 percent from $10 to $10.99.
Wal-Mart reacted to the study by releasing increased average pay rates for California employees in 2004.
“In terms of relative wages and public assistance take-up, the story is the same,” researchers responded. “If we compare Wal-Mart’s stated California wages in 2004 ($10.37) to large retailers in the state overall ($14.82), we find a Wal-Mart wage penalty of 30 percent, virtually identical to the 31 percent we found in 2001. This implies that the relatively greater utilization of public assistance by Wal-Mart workers has remained in place since our study period of 2001.”
A Wal-Mart official said that two-thirds of California Wal-Mart workers were either senior citizens, college students or second income providers likely to have health care coverage.
But this argument isn’t valid. Other retailers also employ students, retirees and second-income workers, right? While the average Wal-Mart employee obviously isn’t earning enough to support a family of four, a fulltime job should pay enough to at least support the individual worker, shouldn’t it?
The study found that “Wal-Mart workers in California earn on average 31 percent less than workers employed in large retail as a whole, receiving an average wage of $9.70 per hour compared to the $14.01 average hourly earnings for employees in large retail (firms with 1,000 or more employees).”
If Wal-Mart employees earn 31 percent less than other grocery and retail workers, it’s no surprise that they still receive public programs like food stamps and subsidized housing. According to the study, “the families of Wal-Mart employees in California utilize an estimated 40 percent more in taxpayer-funded health care than the average for families of all large retail employees.”
The study warned, that “If other large California retailers adopted Wal-Mart’s wage and benefits standards, it would cost taxpayers an additional $410 million a year in public assistance to employees.” |
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