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What we pay for Wal-Mart Employees' health care, from a New York Review Of Books analysis of books and documents by Simon Head:

One of the most telling of all the criticisms of Wal-Mart is to be found in a February 2004 report by the Democratic Staff of the House Education and Workforce Committee. In analyzing Wal-Mart's success in holding employee compensation at low levels, the report assesses the costs to US taxpayers of employees who are so badly paid that they qualify for government assistance even under the less than generous rules of the federal welfare system. For a two-hundred-employee Wal-Mart store, the government is spending $108,000 a year for children's health care; $125,000 a year in tax credits and deductions for low-income families; and $42,000 a year in housing assistance. The report estimates that a two-hundred-employee Wal-Mart store costs federal taxpayers $420,000 a year, or about $2,103 per Wal-Mart employee. That translates into a total annual welfare bill of $2.5 billion for Wal-Mart's 1.2 million US employees.

Wal-Mart is also a burden on state governments. According to a study by the Institute for Labor and Employment at the University of California, Berkeley, in 2003 California taxpayers subsidized $20.5 million worth of medical care for Wal-Mart employees. In Georgia ten thousand children of Wal-Mart employees were enrolled in the state's program for needy children in 2003, with one in four Wal-Mart employees having a child in the program.[9]

This isn't capitalism. This is the corporation as welfare mother.

Posted by aalkon at January 5, 2005 8:06 AM


Different cite, b
ut you already covered the Wal-Mart medical thing back on Nov 1.

Posted by: Ron at January 5, 2005 2:37 PM

It's worth another visit. Wal-Mart may not be a corruption of all we hold dear in capitalism (i.e., it's been said their data-interface requirements have done much more for the microcomputer revolution than Microsoft has). But let's not pretend that all that wealth was created anew. They simply figured how to get in front of it, which is not the same thing.

I hope this has legs.

Posted by: Cridland at January 5, 2005 3:01 PM

Considering the source, I'd say some skepticism is on order.

Posted by: Todd Fletcher at January 5, 2005 4:08 PM

I'm not trying to defend Wal-Mart's hiring or compensation practices, since I think they are in general reprehensible. However, what at least this clip fails to put into perspective is whether the taxpayers are paying more than they would if these people were completely unemployed.

Posted by: Alan at January 5, 2005 4:49 PM

Todd, it's data, not opinion. (The financial stuff.) I'm a capitalist, and as the English economist Pigou suggested, businesses should pay their way, not expect defacto welfare. Which this is.

Posted by: Amy Alkon at January 5, 2005 5:59 PM

More than anything, this could be remedied by a progressive tax system that discourages the concentration of mega wealth. The Walton family has over $100 billion at their immediate disposal. Soon, none of that wealth and concentrated political power will be diluted through the estate tax. Also, dividend wealth will be taxed at a lower rate than the paychecks of their $50k/year middle managers.

Jefferson and Madison recognized the threat of the formation of such dynasties.

Posted by: eric at January 5, 2005 8:00 PM

But why single out Walmart then? If the point is that you can be employed at so low a salary that you also qualify for welfare, then this is true for every other job that also pays that low. So what's significant about the Walmart angle? This is a great argument against what amounts to a taxpayer subsidy to business in general, but again I'm must be missing what's important about Walmart in all this. This subsidy would apply to small businass as well.

Posted by: Todd Fletcher at January 5, 2005 10:25 PM

Any business that does this is wrong, and should be boycotted.

Posted by: Amy Alkon at January 5, 2005 11:19 PM

Right on! It's amazing how companies like Wal Mart opposed mandatory health care for folks in California, yet don't seem to mind having Uncle Sugar pay their way. Corporations seem to have this compulsion to have handouts for gummint cash. What's up with that?

Posted by: Greg Dewar at January 6, 2005 6:52 PM