Wal-Mart’s business practices cost all of us

If you think Wal-Mart saves you money, think again. The giant retailer’s business practices, including its notoriously low pay and stingy benefits, are costing you and other American taxpayers millions of dollars every year.

A report released last year by the minority staff of the U.S. House of Representatives Education and the Workforce Committee, Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart, found that each Wal-Mart store employing 200 people costs taxpayers well over $420,000 annually in public services—staples like food stamps and child healthcare—that Wal-Mart workers have to rely on because their meager pay and health insurance place most of them among the working poor.

“There’s no question that Wal-Mart imposes a huge, often hidden, cost on its workers, our communities and U.S. taxpayers,” said congressman George Miller (D-Calif.). “And Wal-Mart is in the driver’s seat in the global race to the bottom, suppressing wage levels, workplace protections and labor laws.”

To draw attention to how Wal-Mart hurts communities, and to force the retailer to mend its ways—including giving its employees the right to form a union—organized labor is mounting a concerted effort together with elected leaders and community and environmental groups. The effort is being led by several unions, including the United Food and Commercial Workers, whose members’ pay and benefits are squeezed by Wal-Mart’s regressive business practices.

The retailer’s employee healthcare plan may provide the best example of how its business model costs taxpayers. A study by the AFL-CIO in 2003 pointed out that fewer than half of Wal-Mart’s employees are insured under the company plan. And for good reason. The relatively low participation rates by Wal-Mart employees compared with those of other big companies likely result from the plan’s restrictions and cost to workers, the study says. Strict limits on benefits mean that even workers covered under the plan face large out-of-pocket expenses for basic healthcare.

It is not Wal-Mart employees alone, though, who pay for the company’s failure to provide decent health insurance—we all do. As the nation’s largest private employer, Wal-Mart has a huge impact on the kind of health insurance, if any, other employers provide. “Costs are passed on to other employers in the form of higher premiums they must pay in order to compensate for skimping by Wal-Mart and other large employers that shortchange their employees’ healthcare coverage,” the study says.

The giant retailer also has been found guilty of violating child labor laws. Earlier this year, the U.S. Department of Labor cited the company for 24 child labor violations, including one incident in which a minor was injured while operating a chain saw. However, the Bush administration’s response to these violations gives new meaning to the term “slap on the wrist.” Issuing a $135,540 fine to Wal-Mart, whose annual revenues exceed $250 billion, is tantamount to fining the average American worker about 3 cents.

The National Coalition Against Child Labor, co-chaired by AFT executive vice president Antonia Cortese, features Wal-Mart on its site: www.stopchildlabor.org.