Democratic Congressional report: Wal-Mart may cost more than you think

Giuseppe Macri Tech Editor
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Wal-Mart’s famous slogan — “Always low prices” — may translate into higher taxpayer costs, according to a recent Congressional report stating Wal-Mart’s controversially low-wages are paid for by government subsidization.

Criticism over living wages by employees and labor groups of the nation’s biggest private employer is nothing new, but the fact that they can inadvertently cost taxpayers close to $6,000 per employee is.

In a report titled “The Low-Wage Drag on Our Economy: Wal-Mart’s low wages and their effect on taxpayers and economic growth,” Wisconsin Medicaid data placed Wal-Mart employees as the program’s largest subscribers at 3,216 enrolled. Dependents of those employees pushed that number to 9,207.

Data analysts calculated that employees receiving Medicaid likely required membership in additional government assistance programs like food, energy and housing to make up for the lack of a living wage. Taking all those taxpayer programs into account, one Wisconsin Wal-Mart Supercenter with an average of 300 employees would cost taxpayers between $904,542 – $1,744,590 per year, or $5,815 per employee.

Based on those figures, the state of Wisconsin, with its 77 Wal-Mart Supercenters listed on the company’s corporate website, would cost more than $134 million in tax-funded assistance programs on the high-end. Wal-Mart has paid $74.4 million in taxes and fees in Wisconsin, according to the same website.

The report comes just in time to rally striking Wal-Mart employees demonstrating before the company’s June 7 shareholders meeting outside its Bentonville, Ark. Headquarters, Bloomberg reported.

“When low wages leave Wal-Mart workers unable to afford the necessities of life, taxpayers pick up the tab. Taxpayer funded public benefit programs make up the difference between Wal-Mart’s low wages and the costs of subsistence. This public subsidization of the low-wage model of companies like Wal-Mart received significant attention in the early 2000s,” the House Committee on Education and the Workforce statement said. “With wage stagnation, income inequality, and federal budget deficits of increasing concern to public policy, this issue is due for a re-examination.”

Many members of the Democratic staff within the committee support federal safety net programs. The report’s May release may have been timed to coincide with renewed Congressional arguments to raise the federal minimum wage standard from $7.25 to $10.10.

Wal-Mart pushed back against the accusations that they place a burden on the public treasury.

“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 Wal-Mart,” company spokeswoman Brooke Buchanan said in response to the report, according to the Huffington Post.

“Every month more than 60 percent of Americans shop at Wal-Mart 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.”

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