Wal-Mart's low wages cost taxpayers plenty

A new report says the retail giant's workers often need public aid. Such payments could total $1.7 million for a single Superstore.

By Aimee Picchi Jun 3, 2013 1:14PM
Wal-Mart store in Secaucus, New Jersey / Jin Lee/Bloomberg via Getty Images

Wal-Mart (WMT) is a favorite of many consumers because of its low prices, but a new report claims those bargains have a dark side. 

Because of the chain's low wages, its workers are often pushed to accept public aid, including food stamps and subsidized housing, according to a report from congressional Democrats.

That means a single Wal-Mart Supercenter store in Wisconsin may require taxpayers to shell out as much as $1.7 million per year -- or nearly $6,000 per employee -- in aid, according to one estimate in the report. A second estimate pegged the cost to taxpayers at a lower $904,542 per Supercenter. The study examined Wal-Mart stores in Wisconsin because of the availability of Medicaid enrollment data for the fourth quarter of 2012.

"When low wages leave Wal-Mart workers unable to afford the necessities of life, taxpayers pick up the tab," the report notes. "Taxpayer-funded public benefit programs make up the difference between Wal-Mart's low wages and the costs of subsistence."

Wal-Mart defended its record by noting the company offers opportunities to its workers, spokeswoman Brooke Buchanan told The Huffington Post. She said 75% of Wal-Mart managers started as hourly employees. The company provides "a chance to move up in the ranks," she said.

It's not as if Wal-Mart doesn't have the resources to increase wages. The retailer, which employs about 1.4 million U.S. workers, earned $17 billion in profits last year. While the report notes it's not clear how much Wal-Mart pays its hourly workers, one research company pegs the average at $8.81. (That's above the federal minimum wage of $7.25 but below President Barack Obama's call for a $9 baseline wage.) 

At $8.81 per hour, the average Wal-Mart sales associate would gross about $18,300 per year, or well within the income range for a family of four to receive food stamps.

In Wisconsin, Wal-Mart was ranked as the employer with the most workers on the state's Medicaid program, the report notes. Even though 3,216 employees qualify for Medicaid, Wal-Mart is responsible for 9,207 enrollees because of children and adult dependents of those workers. 

Meanwhile, some Wal-Mart employees are participating in strikes around the country and leading a protest in caravans to the company's annual shareholder meeting on Friday, the Nation notes. 

One employee who plans to join the protest told The Huffington Post: "I’m not a screw-off employee by any means, and it's upsetting to me that I can't even support myself at 45 years old."

Follow Aimee Picchi on Twitter at @aimeepicchi

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Jun 3, 2013 2:53PM
Let me see if I have this concept right. Corporations are sitting on Records amount of Cash and Profits. They refuse to retrain workers and or pay them a living wage. Upper Management types get to sit on their collective buts with their only job being the Barking Dog. Their pay goes up while yours goes down. Yet all the blame go to workers that haven't seen Real Wages rise for over a Decade. Meanwhile workers productivity has Soared. So sure, call the Workers dumb, dumb for taking this crap for so so long. Guess what happens when they have finally had enough of it.
Jun 3, 2013 2:39PM
Once some folks get past 50, Wal-Mart might be the only company that will hire you. Folks need to wake up to what has happen to Jobs in America. It's so easy to talk about others, when you have never walked in their Shoes.
Jun 3, 2013 3:10PM
Wow. Some of the posts I'm reading on here are pretty disgusting. Sterilization and bags of cheap rice are what working Americans and their families deserve? Damn. I'm all for people paying their own way and working hard in life to support themselves, but in many cases either they can't (disabilities) or aren't able to despite working a full-time job (minimum wage is a joke). I also understand that minimum wage jobs should be stepping stones for most, but for some it is all they have to provide, for an average $60,000 college tuition just isn't feasible. I must be naive for thinking that Americans should care for the other less fortunate Americans. I do find it interesting that those who complain about us helping the poor and disabled in the form of aid have no problem with the ongoing corporate welfare that's taking place in this country. Tax breaks and loopholes for the richest and most fortunate Americans seems to be a non issue, although it is costing this country more than our attempt to keep those disabled and working off the streets. The most wealthy take huge tax breaks and loopholes and then ship the good paying jobs off overseas so they can pay slave wages. And then some complain that people should quit living off of the government, find better employment, and stop looking for a handout? Interesting...
Jun 3, 2013 2:44PM
where's sam when you need him, this is what happens when the kids inherit the business and have no appreciation for the ethics their father had. 17 billion in PROFITS, and they pay there help how much?  Take the money and run kiddies, karma will get you in the end...................
Jun 3, 2013 2:45PM
I'm from Wisconsin and remember reading how Walmart was the #1 employer in the state with employees on Badger-Care.  Washington state passed the "Walmart Law" (termed so because they are the only employer large enough to fall under it.  I'm pretty conservative on a lot of things, and I feel that Walmart is reducing competition in the marketplace.  It is getting as close to a monopoly as you can get.  It destroys small businesses in the area and drives down wages, while driving up government assistance.  The only thing I'll buy there is ammunition, and that's only because Walmart is the only place that regularly gets any in stock.  I'd rather do business at a Costco any day....if there was one within an hour of me.
Jun 3, 2013 1:45PM
Thanks Walmart for NOT doing your part as a responsible corporate citizen.
You're already subsidized enough with tax breaks now adding additional mega costs for  welfare support to the tab?
Trailerparkmart should be their new name.

Jun 3, 2013 2:33PM
Poster have no problem with a economy that has far too many min wage jobs and has outsourced the rest overseas so that they can pay folks there, slave labor wages. Then these same poster can't understand why the number of folks on food stamps have soared. Yet they talk about how dumb others are, seems they are the dumb ones.
Jun 3, 2013 3:16PM
It has been reported that when the net worth of all the Wal Mart heirs' are added together, the have more wealth than the bottom 40% of ALL Americans combined. 40%! And us taxpayers have to support their workers? It's time for Congress to get involved!
Jun 3, 2013 2:54PM
At least these folks are working and trying. I'm surrounded in my town with people who say there're not working for that amount and collect welfare for years.Walmart should pay more but in my area $18000 is better than zip.
Jun 3, 2013 4:30PM
I think many are overlooking a very key element. What were these areas like before the Walmarts, Taco Bells, Walgreens, Rite Aids, etc. etc. came along and started buidling stores every few miles? Were these areas suffering through extreme poverty and relying on assistance? Another important question is, how much more are we spending on entitlements than we were 10, 20, 30, ... years ago. I think it's quite obvious there is a correlation between increased spending on these programs since these kinds of stores started gaining traction. I know Walmart is unfairly singled out most of the time when there are a lot of other companies running similar business models, but sometimes it is easier to start with the largest culprit (and that is definitely Walmart). 

If you do some research, you will find that when a Walmart opens, communities see a net loss in employment and wages within several years. Why is this? It's because Walmart's entire philosophy is put as much merchandise in a store as possible with as few workers as possible (while not giving those workers enough hours to qualify as full time). What does this do? It forces the local grocery to close, the local hardware store to close, the local garden store to close, etc. etc in a chain reaction. Each of these stores had full time workers (and more of them) and each paid their employees more. These stores simply can't compete because people want the cheapest of the cheap and they can't provide it to them like big companies like Walmart (who have benefited from a global economy where they can exploit people in other countries to offer lower prices in a way these small shops can't along with exploiting their own workers).

Hopefully you are getting my point. There is a reason why more affluent communities fight back when a Walmart wants to open in a community. These people know it will affect the quality of life in the entire area in a negative way for everyone from wealthy to poor as well as overall product choice.
Jun 3, 2013 2:45PM
What is the definition of "necessities" in this day and age? 50" color TV, cell phone, cigaretes, beer, car and what else? When I was young it was food and a roof over your head. From what I see nowdays everyone wants to be in the middle class group they just don't want to do what it takes to get there.
Jun 3, 2013 2:41PM
I hate to see people barely make it. But I hate even more to see, and I know people that choose to be 'comfortably poor'. Willing to make by living entirely off the multitude of entitlement programs offered by both the federal and state governments. Their attitude is if I can make almost as much by doing nothing, why would I want to work 40 hours a week to gain nothing? So in reality I am subsidizing people willingly doing nothing. After all, if you give a mouse a cookie, its going to want a glass of milk.
Jun 3, 2013 2:35PM
When you go into WalMart, pay attention to the employees that do the menial tasks such as cleaning and stocking.  There are a number of them that can barely accomplish the simple tasks they have to do and not very efficient doing them.  Raise the wages of these people and they will be replaced by more productive employees. 
Jun 3, 2013 3:05PM
How much more aid would the government be giving if there were no Wal-Mart ?????????????
Jun 3, 2013 2:38PM
Hum - well - let's see - work somewhere else?
Jun 3, 2013 3:02PM
Just think as a RN back in 1956 I made $3.00 per hour, when I retired I was up to $14 per hour in 1992 I didn't complain, for I enjoyed helping people and make their live easier so that they could go back home to be with their families.
Jun 3, 2013 2:50PM
How much do all those paper-pushing public sector jobs cost the American taxpayer?  That's money coming directly from our pockets, even more so than food stamps or Medicaid.  I would wager a job at Walmart, while not sexy, is more important to the average person's life than some low level bureaucrat doing busy work so the government can look like it's doing something useful for us.  Cut the fat out of government before you look at businesses for the source of your woes. 
Jun 3, 2013 1:35PM
Am I crazy to think jobs at Wal Mart (non managers) and other minimum wage jobs (servers, gas stations, etc) should be viewed as a starting job for teenagers and college kids?  I'm only 30, so I may not be quite aware of how the world works yet, but I don't see any problem with these jobs paying such low wages to unskilled and uneducated people.

Granted the cost to the taxpayers is a kick in the face, and the idea that people get welfare and have families with these types of jobs is another discussion too...
Jun 3, 2013 2:48PM
Stop with the blame game! People should look at themselves in the mirror first thing in the morning. If you don't make enough, get a second, third, forth job. If you ACCEPT a minimum wage job, that's the pay you get. Nobody force you to work at Wal-Mart, McDonalds, gas stations, restaurants, etc.
If you learn a technical skill or get an education, your chances are better.
When your paycheck is $1000/mo, your living choices is something like: multiple roommates, sharing a room, living with parents. Buying an iPhone 10 is not going to help.

Jun 3, 2013 2:52PM
The last time I checked, Wal-Mart associates applied, interviewed, accepted a position and show up for work without a gun to their head.  If they're not happy, they are welcome to look elsewhere.  Unskilled labor in general is cheap, because pretty much anyone can do it.  If you want more money, get an education and earn a higher paying job.  Just because you can fog a mirror doesn't mean the world owes you a living.
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