The Wal-Mart Problem

I just came across a study done by a state labor policy group at the University of California. They estimate that Walmart costs California taxpayers in the neighborhood of $86 million/year due to the fact that their wages are so low (54% of workers earn $9.00/hr or less) and the fact that they don't offer health insurance. Cali Walmart employees are more likely to be on foodstamps programs and get their health care via the highly expensive route of ER visits which the tax payer is left holding the bag (and the bill) for.

(I know, Beestie, I know. )

[Beestie]

Originally Posted by marichiko

I just came across a study done by a state labor policy group at the University of California. They estimate that Walmart costs California taxpayers in the neighborhood of $86 million/year due to the fact that their wages are so low (54% of workers earn $9.00/hr or less) and the fact that they don't offer health insurance. Cali Walmart employees are more likely to be on foodstamps programs and get their health care via the highly expensive route of ER visits which the tax payer is left holding the bag (and the bill) for.

(I know, Beestie, I know. )

I've already added Wal-Mart to the ever-growing list of institutions (and people, I'm proud to say) that, according to marichiko, lie and cheat. And, while we are on the subject of the list, as a consequence of your profound insights into our foreign policy as documented in another thread, I've sent a memo to Condi Rice that we need to dust off "Cold War" and "Domino Theory" and put them back into the forefront of our foreign policy doctrine where they belong.

But, getting back to the topic at hand, I have three questions:

1. Are you saying that California would be better of by $86M if Wal-Mart closed its doors tomorrow? The only way I can make sense of that assertion is to assume that everyone who works at Wal-Mart turned down a higher paying job to work there.

2. Did the study include in its calculations the income and capital gains California earns by virtue of its holdings (in various state-owned investment portfolios) of Wal-Mart stock?

3. Did the study offer a scenario whereby Wal-Mart raises prices sufficiently high to allow it to raise payroll expense enough to include health-insurance and wages not regarded as "low" and did such a scenario examine whether or not such an increase in its expenses and revenue would "wash out" or have a net decrease in overall profit sufficiently large enough to cause its business model to fail? Or, did the study just assume that Wal-Mart's profit margins are sufficiently large to absorb the increase in payroll expense without raising prices and without suffering a decrease in revenue (and a secondary hit on profit) as a consequence?

Alternatively, you can link the study and I'll answer my own questions.

[Happy Monkey]

Originally Posted by Beestie

1. Are you saying that California would be better of by $86M if Wal-Mart closed its doors tomorrow?

It takes longer to fix things than to break them, so I suspect it would take longer than a day to build up the higher paying jobs that Wal-Mart destroyed.

Originally Posted by Beestie

I've already added Wal-Mart to the ever-growing list of institutions (and people, I'm proud to say) that, according to marichiko, lie and cheat. And, while we are on the subject of the list, as a consequence of your profound insights into our foreign policy as documented in another thread, I've sent a memo to Condi Rice that we need to dust off "Cold War" and "Domino Theory" and put them back into the forefront of our foreign policy doctrine where they belong.

Glad to see you're paying attention. What thread, BTW?

Originally Posted by Beestie

But, getting back to the topic at hand, I have three questions:

1. Are you saying that California would be better of by $86M if Wal-Mart closed its doors tomorrow? The only way I can make sense of that assertion is to assume that everyone who works at Wal-Mart turned down a higher paying job to work there...

Alternatively, you can link the study and I'll answer my own questions.

No, I am not making that leap of logic. I merely quoted what the study says tax payers must pay for Walmart workers. The figure is on page 10 here:

http://laborcenter.berkeley.edu/lowwage/walmart.pdf