Study: Wal-Mart Could Cost Taxpayers Millions Per Year in Employee Subsidies
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LANHAM, Md. (CBSDC/AP) — While the fate of six Wal-Mart stores planned for D.C. remains unclear, a 2013 study says the company could cost taxpayers millions of dollars per year because of publicly funded benefit programs many of its 1.3 million U.S. employees are eligible for.
The information comes from a study analyzing data from Wisconsin’s Medicaid program. In the fourth quarter of 2012, Wal-Mart ranked first on the state’s list of Medicaid enrollment by employer. Factoring in the dependents of the 3,216 enrolled employees, Wal-Mart accounted for a total of 9,207 enrolled individuals.
The Democratic staff of the U.S. House Committee on Education and the Workforce, which authored the study, estimates that a single Wisconsin Wal-Mart Supercenter employing 300 people could cost taxpayers $904,542 per year based on the programs employees are eligible for because of their low wages, including Medicaid. Food stamps, reduced-price school meals and housing assistance are also available to many low-wage workers.
The number of public benefit program recipients inside the Wisconsin Wal-Mart workforce could be larger since the Medicaid data reveals only the number of employees enrolled, not the number who are eligible but not enrolled. The study predicts one 300-employee store in Wisconsin could actually cost taxpayers up to $1,744,590 per year in public subsidies.
The study says estimating taxpayer costs from Wal-Mart stores in other states based on Wisconsin’s data is difficult because Wisconsin’s poverty rate is less than the national average and because Wisconsin’s Medicaid program eligibility requirements are more inclusive than other states.
Still, it concluded that economic growth and deficit reduction would result from increasing wages at Wal-Mart and the rest of the large retail sector.
The Council of the District of Columbia has been trying to do just that.
In July, the council passed the controversial Large Retailer Accountability Act, which would require any non-union District retailer with a parent company making more than $1 billion per year and occupying at least 75,000 square feet to pay employees a minimum of $12.50 per hour.
Wal-Mart said it would scrap plans for three of the six stores planned for D.C. if the legislation was not vetoed by Mayor Vincent Gray. Representatives from six other retailers — AutoZone, Lowe’s, Home Depot, Macy’s, Target and Walgreens – undersigned a letter asking Gray for a veto, as well.
Gray has not publicly announced if he will sign or veto the bill.
Some cities including San Francisco and Santa Fe, N.M., have approved across-the-board minimum-wage hikes, but the bill would make Washington the first city to single out big-box retailers.
The Chicago City Council approved a similar bill seven years ago, but it was vetoed by then-mayor Richard M. Daley. Joe Moore, the city alderman who sponsored the bill, said Wal-Mart made “the same kind of threats” about refusing to open stores in the city when the legislation was being considered. Wal-Mart ultimately opened several stores in Chicago.
New York state raised its minimum wage in March but only after agreeing to provide tax subsidies to stores that hire seasonal workers, including Wal-Mart.
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