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Los Angeles Times, August 03, 2004
Inadequate wages and benefits force workers at Wal-Mart stores in
California to seek $86 million a year in state aid, according to a
report released Monday by the UC Berkeley Labor Center.
Moreover, if other retailers cut their wages and benefits to the levels
offered by Wal-Mart Stores Inc., the cost to California's public-assistance
programs would rise by $410 million annually, the study said.
In their report, Berkeley researchers Arindrajit Dube and Ken Jacobs
contend that more than other retail workers, Wal-Mart employees rely
on a variety of public-aid programs, including food stamps, Medicare
and subsidized housing.
"In effect, Wal-Mart is shifting part of its labor costs onto
the public," the researchers wrote. "Wal-Mart's long-term
impact on compensation in the retail industry has the potential to
place a significant strain on the state's already heavily burdened
social safety net."
Bentonville, Ark.-based Wal-Mart, the world's largest retailer, maintains
that it pays competitive wages and relieves public assistance burdens
by giving jobs to many people who otherwise would not be employed.
"It's unfortunate that these UC Berkeley researchers would release
a study whose findings are questionable," Wal-Mart spokeswoman
Cynthia Lin said. The company employs more than 60,000 people in California.
The public debate about whether Wal-Mart benefits or hurts local communities
has grown considerably louder over the last few years, particularly
in California, where some communities have opposed the company's expansion
plans.
The company's wage and benefit structure was also cited as a reason
behind last year's strike and lockout of unionized grocery workers
in Southern California; the largest supermarket chains said they needed
to revamp costs to compete with the retail giant.
Dube and Jacobs' study took into account statewide data on wages paid
by large retailers, the numbers of workers throughout the retail industry
who use state assistance programs and information gleaned from lawsuits
about Wal-Mart's pay and benefits.
Dube, of Berkeley's Institute of Industrial Relations, and Jacobs,
of the school's Center for Labor Research and Education, said they
did not contact Wal-Mart in preparing their report.
The report found that Wal-Mart's wages on average were 31% below those
of the broader group of large retailers -- $9.70 an hour versus $14.01
an hour.
And with less earning power, Wal-Mart workers rely more heavily on
state resources, Dube and Jacobs found, costing the state $32 million
in health-related expenses and $54 million in other assistance.
The study contends that the average non-management Wal-Mart employee
receives $1,952 in public assistance compared with $1,401 for workers
at large retailers in general.
"The disproportionate use by Wal-Mart workers of the various
healthcare and social safety net programs, and the cost that that
brings to the state, is an important consideration for policymakers,"
Jacobs said in an interview.
Dube and Jacobs noted that other studies have reported similar findings.
In Georgia, a state survey of the state's children's health insurance
program found that Wal-Mart employees' families disproportionately
relied on the program, accounting for more than 10,000 of the 166,000
children enrolled.
In Congress, a report by Democratic staffers on the House Committee
on Education and the Workforce looked at employee eligibility for
assistance programs and found that a typical 200- employee Wal-Mart
store could cost federal taxpayers $420,750 a year, or more than $2,000
per employee.
Wal-Mart has disputed those findings.
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