The High Cost of Cheap Food

I have been dating a girl. It’s okay, she knows about it. Anyway, since we are responsible adults not all of our time is spent getting drunk and having meaningless sex. I know, responsibility sucks. No, sadly, some of our time is spent doing laundry, making sure her kids’ homework is done and shopping. Speaking of laundry, her teenage daughter recently bought a thong. That made a recent laundry conversation far more awkward than laundry conversations normally are. You see, I thought it belonged to the mom, that would be the female I am dating, and noted how hot she would look wearing it and how much hotter she would look when I peeled it off. I mention this in case the dictionary definition of “awkward” wasn’t clear enough for you. Anyway, as indicated above, we also go shopping. Since I have been on my diet I am easy to shop for. Raw veggies, a chicken breast and …. no, that’s about it. She and her family, however, have a much more diverse diet. So we look for bargains. Up until yesterday I did not realize how evil that made us. Yesterday, as we debated which toilet paper to buy (I will not abide single ply), we got to talking about what stuff really costs. By that we meant what it actually takes to bring me that chicken breast. From the farm to the store and all stops in between. The couple of bucks I spend get shared pretty thin when you break it down.

But, until today, I assumed that the money I spent still amounted to a profit and that, when millions of people spent their pennies it added up to a living for all involved. According to Dave Jamieson & Saki Knafo I was horribly wrong.

Walmart wages are so low that many of its workers rely on food stamps and other government aid programs to fulfill their basic needs, a reality that could cost taxpayers as much as $900,000 at just one Walmart Supercenter in Wisconsin, according to a study released by Congressional Democrats on Thursday.

Though the study assumes that most workers who qualify for the public assistance programs do take advantage of them, it injects a potent data point into a national debate about the minimum wage at a time when many Walmart and fast food workers are mounting strikes in pursuit of higher wages.

The study uses Medicaid data released in Wisconsin to piece together the annual cost to taxpayers for providing a host of social safety net programs, including food stamps and publicly subsidized health care, to workers at one Supercenter in the state.

According to the report, Walmart had more workers enrolled in the state’s public health care program in the last quarter of last year than any other employer, with 3,216 people enrolled. When the dependents of those workers were factored in, the number of enrollees came to 9,207.

“When low wages leave Walmart workers unable to afford the necessities of life, taxpayers pick up the tab,” the report says.

After accounting for the total number of Walmart stores and employees across the state and the per-person costs of BadgerCare, as the state’s health care program is known, the report’s authors estimated that the cost of publicly funded health care comes to $251,706 per year for a 300-employee Supercenter.

The authors then added up the projected costs of other public-assistance programs available to families on BadgerCare, such as reduced-price school meals, Section 8 housing assistance, the earned income tax credit and energy assistance. Assuming all those workers avail themselves of those additional programs — granted, an unlikely scenario — the report extrapolates that the final tab would top $900,000.

In response to the report, Walmart spokeswoman Brooke Buchanan said the company was proud of the opportunities it provides for employees.

“Unfortunately there are some people who base their opinions on misconceptions rather than the facts,” Buchanan said, noting that 75 percent of Walmart managers started as hourly employees. “Every month more than 60 percent of Americans shop at Walmart and we are proud to help them save money on what they want and need to build better lives for themselves and their families. We provide a range of jobs — from people starting out stocking shelves to Ph.D.’s in engineering and finance. We provide education assistance and skill training and, most of all, a chance to move up in the ranks.”

The report, entitled “The Low-Wage Drag on Our Economy,” was produced by Democrats with the House Committee on Education and the Workforce, which is chaired by Rep. George Miller (D-Calif.). The committee says it chose Wisconsin because the state’s data “appears to be the most recent and comprehensive.” The paper is an updated version of an earlier report by the same committee in 2004, which at the time estimated that a 200-employee Walmart store could account for $400,000 in public assistance for workers.

“The labor policies of Walmart, and those of companies that emulate its low-road approach, end up leaving taxpayers holding the bag,” Miller said in a statement.

Critics have long denounced Walmart for paying such low wages that many workers are forced to take advantage of public-assistance programs like food stamps or Medicaid. (Notably, many Democrats who lament this scenario are strong backers of such programs.)

In fact, many workers throughout the retail industry take advantage of these programs, though a 2004 study of Walmart workers in California estimated the chain’s workers availed themselves of 38 percent more non-health, public-assistance money than workers at competing stores. (That report, by the University of California, Berkeley, had findings similar to the committee’s 2004 study.)

The Congressional report’s timing is no accident. Miller, along with Sen. Tom Harkin (D-Iowa), has sponsored legislation that would raise the federal minimum wage to $10.10, a boost that would presumably benefit many Walmart store employees. (The federal minimum wage, which prevails in the 31 states that do not mandate a higher one, is currently $7.25, where it’s been since 2009.) Democrats have argued that boosting the minimum wage would help pull some workers off of these programs.

Following sparse but high-profile walkouts by Walmart employees late last year, the union-backed worker group OUR Walmart announced “prolonged strikes” by employees this week. As of Thursday, organizers said 80 workers had joined the walkouts — a tiny fraction, for sure, of the estimated 1.4 million Walmart workers across the country, though labor activists are hopeful the strikes will inspire other workers.

Aubretia Edick, a Massachusetts woman who earns $11.70 an hour and receives public assistance, food stamps, Section 8 housing, and state-funded health care, said her reliance on the safety net is one reason she plans to join the strikes. “Walmart doesn’t pay my salary,” she said. “You pay my salary.”

When she started working for Walmart, she said, she had expectations that have since proved unattainable. “I thought I could make it on my own,” she said. “That didn’t happen.”

Walmart has a policy which prevents the majority of their workers from working full time. So while the hourly wage may look decent the fact that the employee is only working 25 or so hours a week renders it meaningless. In other words the sole source of income for these people who have jobs provides them with around $200 a week. An increase in the minimum hourly wage won’t help them much.

Walmart isn’t the only company to use lax labor laws to screw its workers and make a buck, they are just the most egregious. A friend of mine has a son who works at Walmart. He said that, when he was hired, the first thing they showed him was how to sign up for various government subsidies. In other words they don’t even pretend to pay a living wage.

Nor will they as long as people shop there.

And since Walmart encourages booty-quaking, people will still shop there.

Mr Ghetto – Walmart from zap jabjiks

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