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Berkeley report says food stamps, healthcare and housing assistance to workers cost state millions.
CNN Money, August 04, 2004
SAN FRANCISCO (Reuters) - California paid an estimated $86 million
in public assistance in 2001 because workers at Wal-Mart Stores Inc.
earn such low wages, researchers said Tuesday.
"Wal-Mart workers' reliance on public assistance due to substandard
wages and benefits has become a form of indirect public subsidy to
the company," said the report issued by the University of California,
Berkeley Labor Center.
"Reliance by Wal-Mart workers on public assistance programs in
California comes at a cost to the taxpayers of an estimated $86 million
annually; this is comprised of $32 million in health-related expenses
and $54 million in other assistance."
The report said many of Wal-Mart's (WMT: Research, Estimates) 44,000
California employees in 2001 relied on food stamps, Medicare and subsidized
housing to make ends meet and also need more public health care than
typical retail workers.
Report co-author Ken Jacobs said he obtained data on Wal-Mart wages
from a lawsuit that revealed information for 2001. The study said
that 54 percent of Wal-Mart workers earned less than $9 an hour in
2001, 21 percent made from $9 to $9.99, and 16 percent from $10 to
$10.99.
He said that since salaries had risen slightly less than inflation
since then, the costs to California were likely higher today than
in 2001.
It's disappointing that UC Berkeley would release a study whose findings
are questionable," she said. "Their researchers are going
to get faulty conclusions when they are working with faulty assumptions."
For example, she said that two-thirds of Wal-Mart workers were either
senior citizens, college students or second income providers likely
to have health care coverage.
In June, Wal-Mart said it gave raises to some of its workers and called
on employees to counter critics who say the world's biggest retailer
mistreats its staff.
Bentonville, Ark.-based Wal-Mart, whose roughly 1.3 million U.S. employees
make it the largest private-sector employer, has been called the most
sued company in America and faces dozens of cases alleging wage-and-hour
violations.
In addition, Wal-Mart, the world's largest retailer, is in talks to
settle a federal investigation into whether the retailer knowingly
hired contractors who used illegal immigrants to clean its stores,
according to the Wall Street Journal.
Researcher Jacobs said his study was not funded by any union, although
part of the Labor Center's mission is to help train union leaders.
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