One Walmart's Low Wages Could Cost Taxpayers $900,000 Per Year, House Dems Find

A Single Walmart's Shocking Cost To Taxpayers
Grocery items sit inside a cart at a Wal-Mart store in Alexandria, Virginia, U.S., on Wednesday, Nov. 14, 2012. Wal-Mart Stores Inc. is scheduled to release earnings data on Nov. 15. Photographer: Andrew Harrer/Bloomberg via Getty Images
Grocery items sit inside a cart at a Wal-Mart store in Alexandria, Virginia, U.S., on Wednesday, Nov. 14, 2012. Wal-Mart Stores Inc. is scheduled to release earnings data on Nov. 15. Photographer: Andrew Harrer/Bloomberg via Getty Images

Walmart wages are so low that many of its workers rely on food stamps and other government aid programs to fulfill their basic needs, a reality that could cost taxpayers as much as $900,000 at just one Walmart Supercenter in Wisconsin, according to a study released by Congressional Democrats on Thursday.

Though the study assumes that most workers who qualify for the public assistance programs do take advantage of them, it injects a potent data point into a national debate about the minimum wage at a time when many Walmart and fast food workers are mounting strikes in pursuit of higher wages.

The study uses Medicaid data released in Wisconsin to piece together the annual cost to taxpayers for providing a host of social safety net programs, including food stamps and publicly subsidized health care, to workers at one Supercenter in the state.

According to the report, Walmart had more workers enrolled in the state’s public health care program in the last quarter of last year than any other employer, with 3,216 people enrolled. When the dependents of those workers were factored in, the number of enrollees came to 9,207.

"When low wages leave Walmart workers unable to afford the necessities of life, taxpayers pick up the tab," the report says.

After accounting for the total number of Walmart stores and employees across the state and the per-person costs of BadgerCare, as the state’s health care program is known, the report's authors estimated that the cost of publicly funded health care comes to $251,706 per year for a 300-employee Supercenter.

The authors then added up the projected costs of other public-assistance programs available to families on BadgerCare, such as reduced-price school meals, Section 8 housing assistance, the earned income tax credit and energy assistance. Assuming all those workers avail themselves of those additional programs -- granted, an unlikely scenario -- the report extrapolates that the final tab would top $900,000.

In response to the report, Walmart spokeswoman Brooke Buchanan said the company was proud of the opportunities it provides for employees.

"Unfortunately there are some people who base their opinions on misconceptions rather than the facts, and that is why we recently launched a campaign to show people the unlimited opportunities that exist at Walmart," Buchanan said, noting that 75 percent of Walmart managers started as hourly employees. "Every month more than 60 percent of Americans shop at Walmart and we are proud to help them save money on what they want and need to build better lives for themselves and their families. We provide a range of jobs -- from people starting out stocking shelves to Ph.D.’s in engineering and finance. We provide education assistance and skill training and, most of all, a chance to move up in the ranks."

The report, entitled "The Low-Wage Drag on Our Economy," was produced by Democrats with the House Committee on Education and the Workforce, which is chaired by Rep. George Miller (D-Calif.). The committee says it chose Wisconsin because the state's data "appears to be the most recent and comprehensive." The paper is an updated version of an earlier report by the same committee in 2004, which at the time estimated that a 200-employee Walmart store could account for $400,000 in public assistance for workers.

"The labor policies of Walmart, and those of companies that emulate its low-road approach, end up leaving taxpayers holding the bag," Miller said in a statement.

Critics have long denounced Walmart for paying such low wages that many workers are forced to take advantage of public-assistance programs like food stamps or Medicaid. (Notably, many Democrats who lament this scenario are strong backers of such programs.)

In fact, many workers throughout the retail industry take advantage of these programs, though a 2004 study of Walmart workers in California estimated the chain's workers availed themselves of 38 percent more non-health, public-assistance money than workers at competing stores. (That report, by the University of California, Berkeley, had findings similar to the committee's 2004 study.)

The Congressional report's timing is no accident. Miller, along with Sen. Tom Harkin (D-Iowa), has sponsored legislation that would raise the federal minimum wage to $10.10, a boost that would presumably benefit many Walmart store employees. (The federal minimum wage, which prevails in the 31 states that do not mandate a higher one, is currently $7.25, where it's been since 2009.) Democrats have argued that boosting the minimum wage would help pull some workers off of these programs.

Following sparse but high-profile walkouts by Walmart employees late last year, the union-backed worker group OUR Walmart announced "prolonged strikes" by employees this week. As of Thursday, organizers said 80 workers had joined the walkouts -- a tiny fraction, for sure, of the estimated 1.4 million Walmart workers across the country, though labor activists are hopeful the strikes will inspire other workers.

Aubretia Edick, a Massachusetts woman who earns $11.70 an hour and receives public assistance, food stamps, Section 8 housing, and state-funded health care, said her reliance on the safety net is one reason she plans to join the strikes. “Walmart doesn't pay my salary,” she said. “You pay my salary.”

When she started working for Walmart, she said, she had expectations that have since proved unattainable. “I thought I could make it on my own,” she said. "That didn't happen.”

This post was updated with comment from Walmart.

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