(Reuters circulated the following article on August 3.)
SAN FRANCISCO — California paid an estimated $86 million in pubic assistance in 2001 because workers at Wal-Mart Stores Inc. earn such low wages, researchers said on Tuesday.
“Wal-Mart workers’ reliance on public assistance due to substandard wages and benefits has become a form of indirect public subsidy to the company,” said the report issued by the University of California, Berkeley Labor Center.
“Reliance by Wal-Mart workers on public assistance programs in California comes at a cost to the taxpayers of an estimated $86 million annually; this is comprised of $32 million in health related expenses and $54 million in other assistance.”
The report said many of Wal-Mart’s 44,000 California employees in 2001 relied on food stamps, Medicare and subsidized housing to make ends meet and also need more public health care than typical retail workers.
Report co-author Ken Jacobs said he obtained data on Wal-Mart wages from a lawsuit that revealed information for 2001. The study said that 54 percent of Wal-Mart workers earned less than $9 an hour in 2001, 21 percent made from $9 to $9.99, and 16 percent from $10 to $10.99.
He said that since salaries had risen slightly less than inflation since then, the costs to California were likely higher today than in 2001.
Wal-Mart spokeswoman Sarah Clark criticized the study.
“It’s disappointing that UC Berkeley would release a study whose findings are questionable,” she said. “Their researchers are going to get faulty conclusions when they are working with faulty assumptions.”
For example, she said that two-thirds of Wal-Mart workers were either senior citizens, college students or second income providers likely to have health care coverage.
In June, Wal-Mart said it gave raises to some of its workers and called on employees to counter critics who say the world’s biggest retailer mistreats its staff.
Bentonville, Arkansas-based Wal-Mart, whose roughly 1.3 million U.S. employees make it the largest private-sector employer, has been called the most sued company in America and faces dozens of cases alleging wage-and-hour violations.
Researcher Jacobs said his study was not funded by any union, although part of the Labor Center’s mission is to help train union leaders.