The Social Costs of Wal-Mart

[boiker]

http://www.chicagotribune.com/busine...i-business-hed

Edit: Registration Required *!@& Chicago Tribune

Inadequate wages and benefits force workers at Wal-Mart stores in California to seek $86 million a year in state aid, according to a report released Monday by the UC Berkeley Labor Center.

Moreover, if other retailers cut their wages and benefits to the levels offered by Wal-Mart Stores Inc., the cost to California's public-assistance programs would rise by $410 million annually, the study said.

[Planderella]

That site requires registration.

[Tranplanner]

This is likely the same article (from the Toronto Start). I haven't read it yet.

[giff57]

Here is a link to the full report.

[NHPlanner]

Here is a link to the full report.

Great link giff....very interesting report.

[Michele Zone]

I have not had a chance to read much of it yet, but I am wondering if it is possible for the government to require Wal-mart to..um...I am not sure.... Maybe reimburse the state? Is there any way this is actionable such that Walmart will have to change its policies?? This is so wrong.

[JNA]

There is also NPR's -
Wal-Mart's Social and Economic Impact
4-Part Series Examines Influence of Largest U.S. Employer

http://www.npr.org/news/specials/walmart/

[Lee Nellis]

I always wanted to write a similar report on the potato processing industry in Idaho, which relies on a labor force that is largely supported by the taxpayers for about 1/2 the year. I could never find time to do it, as it would be a major undertaking to be sure you had it right, but I always guessed that the consumer price of spuds would be about 3X what it is if the potato industry couldn't rely on the "safety net" to keep an easily exploited workforce around. So its not just Wal-Mart. It seems increasingly clear to me that the real underlying principle of capitalism is to make sure that someone else bears the cost while you (the capitalist) enjoys the revenues.

[gkmo62u]

Is Wal-Mart the only place to work?

[giff57]

Is Wal-Mart the only place to work?

That was my question about the topic. If Walmart is the lone bad guy, why don't folks work at the higher wage places. Wouldn't the market move these folks into better benefit paying jobs? Also I thought if this is a nationwide problem, wouldn't raising the minimum wage do the trick? Of course that would raise prices as retailers passed the costs on to the customers, and these folks wouldn't be any better off in the long run. So what is the answer? National Health care? Higher minimum wages?

[boiker]

Higher minimum wages are long over due. We've gone too long without raising with inflation and any adjustment now will cause consumer prices to increase at least proportionally, if not greater.

You can always use the price of McD's extra value meals to gauge inflation. I don't go often, but I remember not 6 years ago getting a quarter pounder meal for under $3. the same one is now often $3.50. Minimum wage has increased in this time too....about 50 cents.

I think back to my first job when I turned 16. I worked as a "utility" employee at a restaurant....dishwashing, floors, trash, grease, bathroom cleaning, etc. $4.25/hr...often working 4pm - 1am in the summer.
I applied at 11 entry level places like fast food, k-mart, restaurants, gas stations.
It took me 2 months to get a minimum wage job. I only got one interview and took that job., everyone else wasn't highering.

It could be the case that the better paying jobs in California aren't available. These people looking for work are taking whatever position they can...even if it's an underpaying position.

The pay discrepency with Wal-Mart isn't occuring in the discount general retailing side... They pay equal to Target, K-mart for entry level positions. They pay significantly less compared to other grocery based retailers though. I also worked for a short time as a grocery store bagger. again.... $4.25/hr 8hr days, no benefits...but you better believe I paid union dues.

[Cardinal]

The first retail job I worked paid me $3.50 per hour, in 1982, when the minimum wage was $3.35. On-and-off through college and my first real job, I worked in retail stores. The last job paid me $7.00 per hour, when the minimum wage was $4.75. I don't think that I was taken advantage of at any time, despite the "low" wages and few benefits. The reality is that these were not skilled jobs, there were many people willing to take them, and that I was a part-time worker. That is true of virtually all retail and many other jobs. Half or more of the people working these jobs are simply working for supplemental income. The image of the poor hardworking person being exploited by the evil capitalist company is largely a myth.

Just for the record, there were a handfull of full-time workers in each department in the stores. They typically received wages and benefits comparable to semi-skilled manufacturing wages in the region. These people also received preferential treatment with regard to scheduling, and the ones who wanted to pursue advancement were generally given the opportunity to move into management within the company.

[The One]

Look no further than the welfare reform laws passed several years ago.....Two year limits and job requirements....These are the low wage jobs being taken and this story illustrates the need for additional benefits (now state) because of the lack of a "living wage." Feds just transfered the problem to the states, granted the problem is smaller in scale when people have a steady income (even minimum wage) but government assistance is still needed.

[SGB]

Feds just transfered the problem to the states....

And in some states (such as New York), the problem is then transferred to the county or local level. Hence, the costs of many of the new employees of our soon-to-be-constructed WM supercenter will be subsidized by county property tax payers.

[giff57]

And in some states (such as New York), the problem is then transferred to the county or local level. Hence, the costs of many of the new employees of our soon-to-be-constructed WM supercenter will be subsidized by county property tax payers.

Who is subsidizing their lives now?

[Mud Princess]

The reality is that these were not skilled jobs, there were many people willing to take them, and that I was a part-time worker. That is true of virtually all retail and many other jobs. Half or more of the people working these jobs are simply working for supplemental income. The image of the poor hardworking person being exploited by the evil capitalist company is largely a myth.

I disagree. I spent a full year after college working for a local department store. Most of us worked full-time for what was minimum wage at the time, around $3.50 an hour. For a pay "raise," I would get an additional 15 cents an hour. It was impossible to save any money... fortunately my sister was able to partially subsidize my rent.

A relative of mine moved to Las Vegas a couple of years ago. She had tons of work experience, but she couldn't find a job...probably due in part to age discrimination (she's over 60). Recently widowed, she is now working for Wal-Mart. I feel bad for her. It's definitely NOT the life she had envisioned for herself at this point...

[Lee Nellis]

Ah, Cardinal. I think you need a tour of places where poor people work hard. They aren't too far away: try any farm that uses hired labor, seasonal food processing plant, packing plant, etc. Unless you are eating all organic/natural food (and even then sometimes) every time you sit down to eat, you are consuming products that were raised and processed by hard working folk who very seldom make a living wage.

And while it is true that many part-time jobs are held by students or retirees who want supplemental income, many are held by people who have two other p.t. jobs are trying to string together a living that way.

[Joe Iliff]

For a good book on the subject, read Nickled and Dimed by Barbara Ehrenreich. A journalist spent a year working in these kinds of jobs, waitress, rent-a-maid, Wal-Mart. She documents her life and those of her co-workers. I found it to be quite the eye-opener into the other side of our "low cost at any price" world.

[BKM]

For a good book on the subject, read Nickled and Dimed by Barbara Ehrenreich. A journalist spent a year working in these kinds of jobs, waitress, rent-a-maid, Wal-Mart. She documents her life and those of her co-workers. I found it to be quite the eye-opener into the other side of our "low cost at any price" world.

This is definitely on my reading list. I was trying to think of the title.

[jordanb]

Yes, that's a great book. I read it a few years ago.

[plannerkat]

Is Wal-Mart the only place to work?

In many small towns where Wal-Mart's low low prices and cheap, sweatshop produced goods have effectively killed downtown and the manufacturing sectors the answer is largely yes.

[Wulf9]

What has really happened with Wal Mart is that it has found a way to "harvest" the maximum number of employees who have government support in one form or another. Most employers don't plan their operations around that factor, but Wal Mart does.

One of the reasons we can't get out of this economic slump is that the government favors corporations with monopoly or oligopoly share of their market with financial support, tax reductions, and legislation that prohibits competition with their monopoly position.

Large businesses tend to slow the economy because they control markets for maximum profit. Small businesses tend to increase the economy because they are competing for customers.

[giff57]

What has really happened with Wal Mart is that it has found a way to "harvest" the maximum number of employees who have government support in one form or another. Most employers don't plan their operations around that factor, but Wal Mart does.

Does Walmart job applications have a blank that says "Do you get food stamps?" I would be interested to know how they plan their operations around getting these workers.

[The One]

Remember, Walmart hires the over 70 crowd to make money off them....they take out large insurance policy's (unkown to the employee) and cash in if they die while on the payroll (even if just for a couple hours a week...) Now that's true corporate love isn't it.... !!!!!!!!!!!!!!

[SGB]

Remember, Walmart hires the over 70 crowd to make money off them....they take out large insurance policy's (unkown to the employee) and cash in if they die while on the payroll (even if just for a couple hours a week...) Now that's true corporate love isn't it.... !!!!!!!!!!!!!!

TO, could you cite your source on this? This is the first I've heard of this.....

Edit: Nevermind - I found citations in this Google search.

Companies routinely take out secret life insurance policies on the lives of their low-level employees and collect thousands of dollars when they die. The families never know the policies are in place and typically receive none of the money.

The policies are called corporate-owned life insurance policies or COLIs for short. But they're better known in the insurance industry as "dead peasant" and "dead janitor" policies.