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Study: Wal-Mart Policies Cost Taxpayers

Study: Calif. Taxpayers Pay $86M Annually to Subsidize Wal-Mart Workers'

Public Assistance

 

The Associated Press

 

 

SAN FRANCISCO Aug. 2, 2004 — Wal-Mart Stores Inc.'s compensation policies

cost California taxpayers $86 million annually to provide health care and

other public assistance to the retailer's underpaid workers, according to

an analysis released Monday.

 

Wal-Mart disputed the study by the University of California Berkeley's

Institute for Industrial Relations, contending many of its key findings

are badly flawed.

 

The study estimated Wal-Mart employs roughly 44,000 California workers who

make an average of $9.70 per hour 31 percent below the $14.01-per-hour

average of other large retailers with at least 1,000 employees. The study

calculated Wal-Mart's wages using 2001 payroll figures disclosed in a sex

discrimination lawsuit against the retailer.

 

But Bentonville, Ark.-based Wal-Mart said the study's job and wage

estimates for California are outdated. The world's largest retailer

employs 60,500 California workers who are paid an average of $10.37 per

hour, said Wal-Mart spokeswoman Cynthia Lin. " The (study's) conclusions

are questionable because they are based on faulty assumptions. "

 

UC Berkeley's study is based on the premise that Wal-Mart's paltry pay

scale forces the retailer's workers to supplement their incomes with

Medicaid, food stamps and other taxpayer-backed assistance programs at an

unusually high rate.

 

California taxpayers contribute an average of $1,952 per Wal-Mart worker

39 percent more than the average public assistance cost of $1,401 per

worker at other large retailers with at least 1,000 employees, the study

concluded.

 

" People understand the benefits of Wal-Mart they have lower prices, " said

Arindrajit Dube, a research economist who co-authored the study. " What

might not be obvious is those low prices are fed by taxpayer-funded

compensation. "

 

Wal-Mart rejected that notion, maintaining its wages are similar to those

of its rivals. And the company said 90 percent of its workers have health

insurance either through the company or coverage provided by the employer

of a spouse or parent. Wal-Mart also employs many elderly workers eligible

for Medicare, the federal health insurance for senior citizens.

 

On The Net:

 

UC Berkeley study:

 

Wal-Mart Stores Inc.:

 

www.walmartstores.com

 

Copyright 2004 The Associated Press. All rights reserved. This material

may not be published, broadcast, rewritten, or redistributed.

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hoarded gold, it would be a merrier world.

~ J. R. R. Tolkien