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BERKELEY, Calif. - California taxpayers are subsidizing Wal-Mart employees with public assistance programs to the tune of some $86 million annually, according to a report by the UC Berkeley Labor Center here.
According to the study, released this week and conducted by Arindrajit Dube, Ph.D., and Ken Jacobs of the UC Berkeley Center for Labor Research and Education, $32 million of the cost is for health-related expenses, while $54 million is for other assistance.
Using 2001 figures, the study found that Wal-Mart wages average $9.70 an hour and that 54 percent of its employees earned less than $9 an hour.
Bentonville, Ark.-based Wal-Mart disputed those figures and in a statement Wal-Mart spokeswoman Cynthia Lin said Wal-Mart employs 60,500 employees in California and pays them an average of $10.37 an hour. "The [study's] conclusions are questionable because they are based on faulty assumptions," Lin noted.
But Jacobs said $10.37 still doesn't signal any substantial movement in wages. "To keep up with inflation alone, Wal-Mart's wages would have to rise to $10.38 an hour in 2004," he said. "As real [inflation-adjusted] wages are the determinants of eligibility and take-up of public assistance, this signals that the aggregate public assistance receipts by Wal-Mart workers have remained constant since our study period of 2001."
The study noted that unionized workers in the Bay Area have an average wage of $15.31.
"To fully understand the impact of Wal-Mart's compensation policies on public safety-net programs, we must look beyond the number of Wal-Mart workers who participate in these programs and also consider Wal-Mart's growing influence on the retail industry as a whole," the report says.
"Other major retailers, most notably in grocery, have begun to scale back wages and benefits, citing concern over competition from Wal-Mart," according to the report.
If other large California retailers adopted Wal-Mart's wage and benefits standards, it would cost taxpayers an additional $410 million a year in public assistance to employees, the report found.