The High Cost Of Saving Money At Walmart
A UC Berkeley study says California taxpayers are forking over $86 million a year to subsidize Walmart's low-wage workers. Walmart, of course, disputes the findings:
The study indicates that Wal-Mart workers in California rely on the state for about $32 million annually in health-related services, and $54 million a year in other assistance such as subsidized school lunches, food stamps and subsidized housing."When workers do not earn enough to support themselves and their families through their own jobs, they rely on public safety net programs to make ends meet," said the report by Arindrajit Dube of UC Berkeley's Institute for Industrial Relations, and Ken Jacobs of the campus's Center for Labor Research and Education.
The researchers said they conservatively estimate that the approximately 44,000 workers at 143 Wal-Mart and its sister Sam's Club stores in California earn about 31 percent less than workers in large retail as a whole, and that 23 percent fewer Wal-Mart/Sam's Club workers generally are covered by employer-sponsored health insurance than workers in large retail.
There is an array of reasons for the low rates of coverage, said the researchers. They include higher employee turnover, eligibility issues, employee costs for health plans and plan quality.
In the end, Wal-Mart essentially "is shifting part of its labor costs onto the public," the report said.
A very expensive "bargain." How about you Walmart afficionados shop at worker-friendly Costco, like me -- so the $2 you save on a laundry basket doesn't end up costing me $12?
UPDATE: This remark from Lena, in the comments section below, deserves to be seen, so I'll post it here:
I just came across this quote today, from a 1937 Supreme Court decision, in Cass Sunstein's new book, The Second Bill of Rights: FDR'S Unifinished Revolution and Why We Need It More than Ever:"The exploitation of a class of workers who are in an unequal position with respect to bargaining power and are thus relatively defenseless against the denial of a living wage... casts a direct burden for their support upon the community. What these workers lose in wages, the taxpayers are called upon to pay... The community is not bound to provide what is in effect a subsidy for unconscionable employers."
Chief Justice Charles Evan Hughes
I thank Walmart for providing jobs to all those unskilled workers. Just think how much more the taxpayers would have to fork over if Walmart wasn't hiring those unskilled workers.
nash at August 10, 2004 1:07 PM
Walsh, Walmart is bad for America. Businesses close when they come to town...those unskilled workers wouldn't necessarily be unemployed. Feel free to pick up all their health care costs personally.
Amy Alkon at August 10, 2004 3:07 PM
I just came across this quote today in Cass Sunstein's new book, taken from a Supreme Court decision in 1937:
"The exploitation of a class of workers who are in an unequal position with respect to bargaining power and are thus relatively defenseless against the denial of a living wage... casts a direct burden for their support upon the community. What these workers lose in wages, the taxpayers are called upon to pay... The community is not bound to provide what is in effect a subsidy for unconscionable employers."
Chief Justice Charles Evan Hughes
Lena the Riveter at August 10, 2004 5:34 PM
Much as I don't like WalMart, WalMart employed people, at least in the early days in the South, that the local Mom 'n' Pop stores wouldn't hire--minorities. Comparing Wal-Mart's pay scale to say, Nordstrom's, is silly.
I don't like WalMart, so I don't shop there. But it's unlikely that the largest employer in the country is going to close down becasue of me.
Rachel at August 11, 2004 6:55 AM
In my small city in western NYS when we got our WalMart the "Ma & Pa" stores that were affected only paid their employees the absolute minimum wage with no benefits at all. At least WalMart gives regular raises, provides a way to get health insurance and offers a way to get shares of stock. What could possibly be wrong with that..
Rojak at August 12, 2004 4:54 PM
What about "it costs us money" do you not understand? I'll take a study with good data over anecdotal evidence every day. The poor lady at my hair salon is going to get her fillings yanked out thanks to anecdotal evidence.
Amy Alkon at August 12, 2004 5:19 PM
"I'll take a study with good data over anecdotal evidence every day."
my kind of gal!
Lena at August 12, 2004 9:06 PM
You just went to a Anthropology and Evolution Conference, right? Both those sciences demand all organisms must adapt or die from stagnation. What are part of these people is now better because of Wal-mart?
But with all the unclaimed scholorships, grants and low interest student loans out there, why do they end up at Wal-mart? Why not get some skill and get a better job?
Well, they have children out of high school or a drug habit or just aren't ambiteous enough. Should we raise the minimum wage and demand all employers give good medical benifits just so they "might" get off food stamps and medical?
See I think of them more like parisites. If you have a petrie dish full of little bodily fluid sucking single celled organisms and then you drop some eggs in there and stick them in a cozy-type warm place, do you think they'll multiply? If you take some slightly more complex organisms and give them money that they didn't actually earn by, say, going to college or breaking their back for, do you think they'll stop at 3 kids?
And sometimes the food lines must stop or like all communing lifeforms, the stupid will overbreed and the smart and the stupid will all starve togther.
Sandra at August 12, 2004 10:24 PM
And which cozy spot in that petrie dish do you call home, Sandra?
"You just went to a Anthropology and Evolution Conference, right? Both those sciences demand"
Last time I checked, Sandra, "evolution" was not a science, but a concept. You should try it sometime. Your posture will improve dramatically, and you won't have to shave your body nearly as often as you do now.
"do you think they'll stop at 3 kids?"
Actually, the Temporary Aid to Needy Families program does impose upper limits on family size. But I'm sure that the "little bodily fluid sucking single celled organisms" are reproducing at an alarming rate. Drilling a hole in your skull might help to relieve some of the pressure.
"And sometimes the food lines must stop or like all communing lifeforms, the stupid will overbreed"
I think that's already happened.
Lena the Welfare QUEEN at August 12, 2004 11:03 PM
Well, since this metaphor which just a bit over your head, I'll explain further.
This was not a metaphor for the world but for welfare programs. Since I'm not on welfare, medical or any of those, I don't live in a dish.
"do you think they'll stop at 3 kids?"
Well maybe that's the problem. Maybe if people had the number of children they could care for instead of the maximum amount welfare would pay for places like Wal-mart would be short on people and they would pay a bit more.
"And sometimes the food lines must stop or like all communing lifeforms, the stupid will overbreed"
Yes I think it has.
It shows.
Sandra, not on welfare at August 16, 2004 1:50 PM
While this view of Wal-Mart is based on a a real study with real data, I wonder what the meaning of "large retail" is. How many different companies and different segments of retail were included?
It's been well-documented lately that Costco pays and treats its employees well. If they'd treat me well enough not to charge $40 a year just for the privilege of buying things in quantities I'll never run out of and can't find room to store, then I'd shop there. I'd much rather see a comparison of Wal-Mart and its direct competitors: Kmart, Target, Walgreens, Sav-On and Rite-Aid. I bet Wal-Mart starts to look a whole lot better when the playing field is narrowed in that manner. I'm not saying that Wal-Mart is free of evil, only that the current journalistic view of the mega-retailer is, in effect, letting each and every one of its competitors off scot-free, and all those people who think they're doing a good thing and sticking it to the man by shopping at Target are really, in effect, not helping the situation at all and feeling a false sense of liberal pride.
Steven Rosenberg at August 16, 2004 2:45 PM
Sandra, Lena has a Ph.D. -- the kind you have to write a massive dissertation to get, and is published in some of the most prestigious peer-reviewed journals in the country. Suffice it to say, if you shoot out some hackneyed comparison, he gets it. Because somebody doesn't comment on your remark doesn't mean they're an idiot -- maybe just not really keen on your icky verbiage, hmmm?
Amy Alkon at August 16, 2004 3:10 PM
Well, I saw no dissertation. I saw insults.
If you'd like dissertation that doesn't require disinfectant, here you go:
I live in a small town. I remember when we didn't have a Walmart. We had 2 Woolworths which also paid no benefits and minimum wage. We also had a Brock's, Gottshaks, Sear's and Macy's. When Walmart came, we lost some ma-&-pa stores but the ones that stayed noticed Walmart sold the crap that breaks down after a few months. The other stores started importing things from Europe and Africa, reproducing antiques and selling antiques in general. Now we have fewer empty stores.
The same can be said for Petsmart, which also pays minimum wage and has no real benefits. However when customers get the pet they want cheaply, they then go to the 2 specialty tropical fish stores and the reptile store for accessories. When they get there they find healthier animals for mates and replacements. All three stores thank Petsmart for sparking the customers interest. Happy endings make everyone happy, right?
The solution is not to raise the minimum wage because that only makes prices go up. It's not even to get the government to sponsor a medicine plan. We have one called Medi-cal. The solution is offer more job training and education grants and reduce welfare programs to goad people to take advantage of them.
sandra at August 16, 2004 7:34 PM