Wal-Mart’s low prices are misleading in light of the amount Americans end up paying in taxes to help subsidize the retailer’s low-paid and under-insured employees, a congressional study released Feb. 16 said.
The report, released by Democrats on the House Committee on Education and the Workforce, estimates Wal-Mart’s practices cost taxpayers nearly $1.3 billion annually in medical care, housing assistance and Title I education costs. Employees must tap into these resources, even during full-time employment, in order to survive.
While Wal-Mart touts its low prices, the company’s presence in the American economy has a devastating effect. Store employees earn substandard wages and as a result draw upon government resources. All attempts to unionize workers are quelled and Wal-Mart constantly faces multiple unfair labor practice allegations in court.
U.S. manufacturers are pressured to lower their prices to compete for Wal-Mart contracts, which results in production jobs lost overseas.
Competitors lose market share as Wal-Mart’s low prices attract more customers. Other businesses slash their employee benefits to compete with Wal-Mart’s rock-bottom prices. The five month-long labor dispute between local grocery chains and the United Food and Commercial Workers union is a prime example — the prospects of Wal-Mart Superstores entering Southern California can be potentially crippling if the grocery chains don’t slash employee costs in order to lower prices.
Wal-Mart’s methods must not be the model for U.S. labor practices. Every working family must be able to achieve a standard of living where housing, health care and education are attainable by working alone. Reversing the race toward lower wages and fewer decent jobs must be a greater priority for lawmakers.