The Hidden Cost of Wal-Mart Jobs in public safety net use by low-paid employees

Interesting study from California whose results probably also apply to Georgia, showing that Wal-Mart pays about a third less than other retail companies, so little that Wal-Mart employees tend to use food stamps and public medical assistance and housing to stay afloat, which thus "creates a hidden cost to the state’s taxpayers."

Arindrajit Dube and Ken Jacobs wrote for UC Berkeley Labor Center, August 2004, Hidden Cost of Wal-Mart Jobs: Use of Safety Net Programs by Wal-Mart Workers in California. According to the UC Berkeley Labor Center:

This widely publicized report finds Wal-Mart’s wage and health benefits packages for its California workers to be below average as compared to the overall retail sector in California. The authors also find a greater reliance upon public assistance programs among Wal-Mart workers as compared to other California retail workers. Finally, the authors estimate the additional costs to taxpayers of “Wal-Martization”—the adoption of Wal-Mart’s wage and health benefits standards by retailers throughout California.

Here is an extract from the study:

We estimate that Wal-Mart workers in California earn on average 31 percent less than workers employed in large retail as a whole, receiving an average wage of $9.70 per hour compared to the $14.01 average hourly earnings for employees in large retail (firms with 1,000 or more employees). In addition, 23 percent fewer Wal-Mart workers are covered by employer-sponsored health insurance than large retail workers as a whole. The differences are even greater when Wal-Mart workers are compared to unionized grocery workers. In the San Francisco Bay Area, non-managerial Wal-Mart employees earn on average $9.40 an hour, compared to $15.31 for unionized grocery workers—39 percent less—and are half as likely to have health benefits.

At these low-wages, many Wal-Mart workers rely on public safety net programs— such as food stamps, Medi-Cal, and subsidized housing—to make ends meet. The presence of Wal-Mart stores in California thus creates a hidden cost to the state’s taxpayers.

This could help explain why Wal-Mart workers are protesting.

-jsq