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Raleigh News and Observer, August 04, 2004
SAN FRANCISCO -- Wal-Mart's wage and benefit policies cost California
taxpayers $86 million a year to provide health care and other public
assistance to the retailer's underpaid workers, a new study says.
Wal-Mart disputed the study by the University of California Berkeley's
Institute for Industrial Relations, contending that many of its key
findings are flawed.
UC Berkeley's analysis is based on the premise that Wal-Mart's low
pay scale forces the retailer's workers to supplement their incomes
with Medicaid, food stamps and other such programs at an unusually
high rate.
The study estimated Wal-Mart employs roughly 44,000 California workers
who make an average of $9.70 per hour. Other retailers with at least
1,000 employees average $14.01 an hour. The study calculated Wal-Mart's
wages using 2001 payroll figures disclosed in a sex-discrimination
lawsuit against the retailer.
But Bentonville, Ark.-based Wal-Mart said the study's estimates for
California are outdated. The world's largest retailer employs 60,500
California workers at an average of $10.37 per hour, said Wal-Mart
spokeswoman Cynthia Lin.
California taxpayers contribute an average of $1,952 per Wal-Mart
worker -- 39 percent more than the average public assistance cost
of $1,401 per worker at other large retailers with at least 1,000
employees, the study concluded.
"People understand the benefits of Wal-Mart -- they have lower
prices," said Arindrajit Dube, a study co-author. "What
might not be obvious is those low prices are fed by taxpayer-funded
compensation."
Wal-Mart maintained that its wages are similar to those of its rivals.
And it said 90 percent of its workers have health insurance, either
through the company or coverage provided by the employer of a spouse
or parent. Wal-Mart also employs many elderly workers eligible for
Medicare, the federal health insurance for senior citizens.
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