Last December, Fast Company senior writer Charles Fishman wrote about The Wal-Mart You Don’t Know, whose relentless push for lower prices has crushed many of its suppliers and forced them to send jobs overseas. Today, San Francisco Chronicle staff writer George Raine reports on a new study, which shows that employment practices at the retail giant cost California taxpayers about $86 million annually in public assistance to company workers.
Released by the UC Berkeley Labor Center, a research institute, the study estimates that low wages force employees to accept $32 million annually in health-related services and $54 million per year in other assistance, such as subsidized school lunches, food stamps and subsidized housing.
Naturally, Wal-Mart questions the study, saying the authors undervalued the wages and benefits that the chain’s employees receive. The study estimates that Wal-Mart workers earn $9.40 an hour on average compared with $15.31 for unionized grocery workers — a difference of 39 percent. Wal-Mart, however, says its Bay Area workers earn an average of $11.08 an hour, and that statewide its workers earn an average of $10.37 per hour.
The study also claims that Wal-Mart workers are half as likely to have health benefits as union grocery workers; Wal-Mart counters that 90 percent of its employees have health insurance.
While only Wal-Mart knows the truth, the company is certainly on the defensive after months of negative press and a gathering of legal storm around charges of employment discrimination. FC Now readers: What do you think is behind Wal-Mart’s yellow smiley face? And do you think it’s worth Wal-Mart’s while to defend itself?