Wal-Mart Workers Receive $86 Million Annually From State Benefit Programs, Including Health Care Benefits, Report Finds
Wal-Mart's wage and benefits structure causes its workers to seek $86 million annually in state assistance, including $32 million in health-related expenses, according to a report released Monday, the Los Angeles Times reports. Arindrajit Dube and Ken Jacobs of the University of California-Berkeley's Institute for Industrial Relations examined statewide data on wages that large retailers pay, the number of workers in the retail industry who receive state assistance and payroll information that they obtained from lawsuits concerning Wal-Mart's wages and benefits (Goldman, Los Angeles Times, 8/3). They found that Wal-Mart's wages on average were 31% lower than those of other retailers with at least 1,000 employees; Wal-Mart employees were paid an average of $9.70 per hour, compared with other large retailers' workers average wages of $14.01 per hour.
In the report, researchers assumed that given Wal-Mart's low wages, workers are forced to supplement their incomes with Medi-Cal, food stamps and other public assistance programs. Dube and Jacobs calculated that state taxpayers contribute about $1,952 annually per Wal-Mart employee for public services, 39% more than the average public assistance cost of $1,401 for workers at other large retailers (Liedtke, AP/Orange County Register, 8/3).
"In effect, Wal-Mart is shifting part of its labor costs onto the public," the report states, adding that the company's "long-term impact on compensation in the retail industry has the potential to place a significant strain on the state's already heavily burdened social safety net." If other retailers were to reduce their wages and benefits to comparable levels, the cost of the state's public assistance programs would increase by $410 million a year, according to the study (Los Angeles Times, 8/3).
During recent negotiations between grocery store chains and their unionized workers, "management [has been] using Wal-Mart's presence and proposed California expansion as a negotiating tactic, arguing they must lower labor costs to be competitive with the company and other low-cost grocers," according to the San Francisco Chronicle (Raine, San Francisco Chronicle, 8/3).
Wal-Mart spokesperson Cynthia Lin said the study uses outdated information from its payroll in 2001, when the company employed 44,000 workers in the state. Currently, Wal-Mart has about 60,500 employees in the state, and they are paid an average of $10.37 an hour, according to Lin. She added, "The (study's) conclusions are questionable because they are based on faulty assumptions."
Company officials said that 90% of Wal-Mart employees have health insurance through the company or through a spouse's or parent's employer (AP/Orange County Register, 8/3). Lin said that 50% of insured employees are covered by the company's health plan. She added that about 67% of workers are seniors, college students or second-income providers (San Francisco Chronicle, 8/3).
Wal-Mart said that it "pays competitive wages and relieves public assistance burdens" by employing "many people who otherwise would not be employed," the Times reports (Los Angeles Times, 8/3).