Last week, non-union Wal-Mart employees began the first “prolonged” strike in the 50-year history of the nation’s largest employer. Last October and November, Wal-Mart employees across the country participated in a series of one-day strikes and walkouts against the company in support of a minimum $13 per hour wage, more predictable scheduling and an end to management retaliation against employees who speak up at work. Wal-Mart has grown accustomed to isolated protests in the past, but has always believed that they would quickly die out, given workers’ understandable fear of management retaliation. But this time it may be different. Wal-Mart workers in California, Florida, Massachusetts, Washington and elsewhere are striking this week for more full-time jobs, a minimum wage of $25,000 per year, improved working conditions, better health and pension benefits and basic respect on the job. Other protesting Wal-Mart workers from across the country will participate in a week-long “Ride for Respect,” joining the strikers as they head for a national day of action at the company’s AGM in Bentonville, Arkansas on June 7.
Wal-Mart’s “low-road” competitive strategy hurts not only the company’s 1.3 million employees – who suffer from lost income and economic insecurity – but it also hurts all American taxpayers. The nation’s largest private-sector employer is also the largest employer of workers who depend on food stamps, subsidized housing and child-care, government health insurance for low-income individuals, and other forms of public assistance.
According to a report by the Democratic staff of the U.S. House Committee on Education and the Workforce, the poverty wages and poor benefits at a single Wal-Mart store may cost taxpayers as much one million dollars per year in higher usage of public-assistance programs by both Wal-Mart employees and their dependents. Data released by Wisconsin’s Medicaid program demonstrates that one 300-employee Wal-Mart Supercenter in the state may cost taxpayers between $904,542 to $1.75 million per year, or about $5,815 per employee.
Wisconsin has 100 Wal-Mart stores, while California has 180 stores. In 2012, 9,207 Wal-Mart employees and their dependents – a higher number than for any other employer -- were enrolled in Wisconsin’s public health care program. Wal-Mart also tops the list of public assistance users in Ohio, with 17,679 employees and dependents on Medicaid.
California taxpayers have an added incentive for supporting better wages and benefits at Wal-Mart. As Medicaid eligibility is expanded in California and about 30 other states under the Affordable Care Act (ACA), the size of Wal-Mart’s subsidy may actually increase.
Some of California’s largest employers already limit the wages and hours of their employees so they can push the cost of their healthcare benefits onto the state’s taxpayers. A June 5 report released by the California Workers Foundation estimates that Wal-Mart’s use of public assistance costs the state $86 million per year and that figure will increase significantly under the ACA.
In a brazen attempt to game the system, large retailers are already reducing the hours (and wages) of their employees, who are then eligible for Medi-Cal. Many of Wal-Mart’s employees work part-time and end up on public assistance not because they want to, but because they have no other choice. Assembly Bill 880 (Gomez), which is supported by unions, doctors and consumer groups, would close the “Wal-Mart loophole” and stop low-wage corporations from dumping their hourly-paid employees on Medi-Cal. Under AB 880, large employers who have employees on Medi-Cal would be subject to a fee – about $6,000 per full-time employee -- that would cover the cost of the taxpayer subsidy.
Higher wages, better benefits and more full-time jobs at Wal-Mart’s 4,000 stores across the country would have a broad-based beneficial economic impact. Improved wages and benefits for Wal-Mart workers would make them less reliant on public assistance, help end the enormous taxpayer subsidy of the world’s largest retailer, which is owned the country’s richest family, and give a much needed boost to the economy of urban America.
Wal-Mart workers cannot rely on the good intentions of management to provide better jobs and benefits. The report demonstrating the enormous cost to taxpayers of Wal-Mart’s low-road strategies was a follow-up to a 2004 report that reached exactly the same conclusions. Nothing has changed in the intervening years, except that Wal-Mart has continued to retaliate against workers who speak up against poverty wages and poor working conditions. The situation of Wal-Mart workers, who according to a Bloomberg study are paid an average of $8.81 per hour, demonstrates the need for a significant increase in the federal minimum wage. And while the current strikes are not over issues of unionization, it is only with a union that Wal-Mart workers will ultimately secure good jobs and respect at work.
John Logan is Professor and Director of Labor and Employment Studies at San Francisco State University.