Monday, January 03, 2005

Wal Mart & Welfare

From Inside the Leviathan, an article in the Dec. 16 issue of the New York Review of Books:

With its deliberate understaffing, its obsession about time theft, its management spies, and its arbitrary punishments, Wal-Mart is a workplace where management's suspicion can affect the morale of even the best employees, creating a discrepancy between their objective record of high productivity and how they come to regard their performance on the job as a result of their day-to-day dealings with management. This discrepancy helps keep wages and benefits low at Wal-Mart.

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.


SugarDuck said...

You have to be careful about these figures. I read about the report that showed that a 200-employee Walmart costs taxpayers about $400,000 a year. So I looked it up and it turns out that the report is using estimates to get those figures, not past social service payouts as I had thought. They estimated that a certain percentage of the 200 employees would need certain services, and these services would typically cost such-and-such, and if you add it all up it would be $400,000.

Here's the actual report:

I'm sure that Walmarts' low salaries do get subsidized by taxpayers, which is one of the reasons I don't shop there, but I would prefer to see numbers based on actual payouts. The report does say in another section that California taxpayers have covered $25 million in health care costs for Walmart employees, although it doesn't say how long a period of time that covers.

Canowine said...

It's hard to catch a devil, isn't it.

SugarDuck said...

I guess, although California was able to track the excess health care costs that were due to Walmart so it's possible if you wanted to. It would be interesting to see the actual figures on this.

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