Thursday, January 03, 2013

Speaking of low wage businesses

Walmart is a drag on our society - it's time to regulate it so that it pays fair wages and provides its own benefits. Let it charge it's customers for the cost of doing business and stop the practice of having the rest of us pay taxes to support them.


---------- (the following is not written by me, but unfortunately it has been a while since I copied this and I've lost the source. My apologies and thanks to the author.)

A study by researchers at UC Berkeley's Labor Center has quantified what happened to retail wages when Wal-Mart set up shop, drawing on 15 years of data on actual store openings. The study found that Wal-Mart drives down wages in urban areas, with an annual loss of at least $4.7 billion dollars in earnings for retail workers.

And in 2004, a study released the UC Berkeley Labor Center found that "reliance by Wal-Mart workers on public assistance programs in California comes at a cost to taxpayers of an estimated $86 million annually; this is comprised of $32 million in health related expenses and $54 million in other assistance. Source: Ken Jacobs and Arindrajit Dube, "Hidden Costs of Wal-Mart Jobs" [PDF file], UC Berkeley Labor Center.

Wal-Mart dismissed the findings of the UC Berkeley study, "Hidden Costs of Wal-Mart Jobs," as a "union hit piece." However, text from Wal-Mart's own internal memo substantially corroborates their findings.

An excerpt from the memo states:

"We also have a significant number of Associates and their children who receive health insurance through public-assistance programs. Five percent of our Associates are on Medicaid compared to an average for national employers of 4 percent. Twenty-seven percent of Associates' children are on such programs, compared to a national average of 22 percent. In total, 46 percent of Associates' children are either on Medicaid or are uninsured."

Source: Wal-Mart Internal Memo [PDF File], via New York Times

A few statistics on exactly how many children of Wal-Mart of employees receive state-funded health care, and the cost to those states:

- FLORIDA: 12,300 WAL-MART Workers and their Dependents on Medicaid

- GEORGIA: 10,261 Children of WAL-MART Employees are Enrolled in PeachCare for Kids

- WISCONSIN: 1,252 WAL-MART Employees and Dependents on BadgerCare

Why are states subsidizing health care for Wal-Mart employees when the Walton family are all in the top ten wealthiest people in the entire nation? I'm not complaining that these families are getting health care, everyone deserves health care, but the Walton's should be ashamed that they aren't providing it.

WAL-MART Costs Taxpayers $1,557,000,000,00 to Support its Employees

"The Democratic Staff of the Committee on Education and the Workforce estimates that one 200-person Wal-Mart store may result in a cost to federal taxpayers of $420,750 per year - about $2,103 per employee. Specifically, the low wages result in the following additional public costs being passed along to taxpayers:

- $36,000 a year for free and reduced lunches for just 50 qualifying Wal-Mart families.
- $42,000 a year for Section 8 housing assistance, assuming 3 percent of the store employees qualify for such assistance, at $6,700 per family.
- $125,000 a year for federal tax credits and deductions for low-income families, assuming 50 employees are heads of household with a child and 50 are married with two children.
- $100,000 a year for the additional Title I expenses, assuming 50 Wal-Mart families qualify with an average of 2 children.
- $108,000 a year for the additional federal health care costs of moving into state children's health insurance programs (S-CHIP), assuming 30 employees with an average of two children qualify.
$9,750 a year for the additional costs for low income energy assistance."

The total figure is based on the average $420,750 per-store figure, multiplied by 3700 (the approximate number of stores currently in the United States).

Source: Rep. George Miller / Democratic Staff of the Committee on Education and the Workforce, "Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart", February 16, 2004.

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