Press Room
In the News 2008-09
2007
2006
2005
2004
2003
2002
Union Media Contacts
|
 |
San Francisco Chronicle, August 3, 2004
Employment practices at Wal-Mart, the nation's largest employer with
relatively lower labor costs in the retail sector, cost California
taxpayers about $86 million annually in public assistance to company
workers, according to a study released Monday by a UC Berkeley research
institute.
The study estimates that low wages force employees to accept $32 million
annually in health-related services and $54 million per year in other
assistance, such as subsidized school lunches, food stamps and subsidized
housing.
Wal-Mart questioned the validity of the report, saying the authors
undervalued the wages and benefits the chain's employees receive.
The UC report comes from the Berkeley Labor Center, an institute that
is openly supportive of union causes. Although its researchers have
in the past accepted funding from the grocery workers' union to conduct
studies, this report was not funded by labor, its authors said.
Wal-Mart, and its possible expansion in California, is a major topic
in labor circles as negotiators for 45,000 union grocery clerks in
the Bay Area begin contract talks with Safeway, Albertson's and other
major employers. The current contract expires Sept. 11. The union,
the United Food and Commercial Workers, and management are also working
on a separate pact covering 15,000 Sacramento Valley union workers.
These negotiations follow the disruptive 139-day strike and lockout
of nearly 70,000 union grocery clerks in Southern California that
ended Feb. 29.
In all these talks, management is using Wal-Mart's presence and proposed
California expansion as a negotiating tactic, arguing they must lower
labor costs to be competitive with the company and other low-cost
grocers. Union leadership is backing political efforts to limit Wal-Mart's
growth. Authors Arindrajit Dube of the UC Berkeley Institute of Industrial
Relations and Ken Jacobs of the UC Berkeley Center for Labor Research
and Education make a number of assumptions in their study, beginning
with a workforce estimate of 44,000 Wal-Mart employees at 143 Wal-Mart
and Sam's Club stores in California who earn an estimated 31 percent
less than workers in the large retail sector as a whole.
The wage difference is even greater when comparing Bay Area Wal-Mart
workers with other union retail workers: The estimate is that Wal-Mart
workers earn on average $9.40 an hour compared with $15.31 for union
grocery workers, 39 percent less, and the study estimates that they
are half as likely to have health benefits.
A spokeswoman for Wal-Mart, Cynthia Lin, said, "It's disappointing
that UC researchers would release a study which has such questionable
findings, but then again, they are going to arrive at faulty conclusions
when they work off faulty assumptions.''
She said the study reports wages incorrectly. Bay Area workers earn
an average of $11.08 an hour while statewide it is $10.37.
Also, 90 percent of Wal-Mart's workers have health insurance, Lin
said.
Of them, 50 percent have coverage through Wal-Mart and 40 percent
through other sources. She added that two-thirds of workers are senior
citizens, college students or second-income providers.
The UC authors do not have data on actual public assistance for Wal-Mart
workers. They take information from several sources, including testimony
about company wages in a sex-discrimination lawsuit brought against
Wal-Mart. They say that, at such low wages, many Wal-Mart workers
rely on a public safety net.
The authors extrapolate that if other large California retailers apply
the Wal-Mart model of wages and benefits to their 750,000 employees,
it would cost taxpayers an additional $410 million a year in public
assistance to employees.
David Theroux, founder and president of the libertarian Independent
Institute in Oakland, said it is important to consider who the Wal-Mart
employees are: They may be former unemployed workers, they may be
retirees or have taken a second job out of necessity, or they may
be developmentally disabled or have any number of disadvantages. "If
we eliminate Wal-Mart ... it means those people are unemployed. Is
it better for them to be employed or unemployed?'' Theroux asked.
Theroux also faulted the study for what he said is a presumption that
Wal-Mart employees are more prone to go on welfare rolls. "How
do they know that? They need to show that,'' he said.
He added that, historically, competition drives up wages. It sharpens
workers' skills and boosts productivity so workers can command higher
wages. "It works in high tech. Why would retail be any different?''
Theroux said.
The study authors say in their conclusion, "In effect, Wal-Mart
is shifting part of its labor costs onto the public.'' Co-author Jacobs,
in an interview, said he hopes that policy-makers keep that argument
in mind when Wal-Mart seeks to expand.
Indeed, the Los Angeles City Council will hold a hearing Wednesday
on legislation that would make approval of a big-box store depend
on the city government's evaluation of its economic impact.
|
