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Taxpayer dollars subsidize Wal-Mart

By John Stencel

Consumers who think they save money by shopping at discount chain stores need to think again. A congressional report released earlier this year shows that federal taxpayers pay over $2,000 per Wal-Mart employee to supplement the low wages paid by the mega retailer.

According to the report, a store with 200 employees, will require taxpayer subsidies totaling $420,000. Subsidies include free and reduced school lunches, housing assistance, low-income tax credits, services for at-risk students, health care and low-income energy assistance. This is for just a single store.

The impact of this burden on taxpayers is significant, particularly given that Wal-Mart is projected to control over one-third of all food and drug sales in the United States by 2007. And, Wal-Mart certainly is not the only chain store to pay wages that put employees below the poverty line. When you factor in other discount retailers and fast food restaurants, U.S. taxpayers are footing a stiff bill.

The Wal-Marts of the world are able to push down prices of items on their shelves because they are able to pay bottom dollar to employees, whose needs are, in turn, being subsidized by you and me. Besides being a detriment to workers, these low wages are bad for independently-owned businesses and for communities who need commerce and taxes to support schools, build infrastructure and run local governments. Small businesses, including family farms and ranches, cannot make a middle-class income if they must compete with mega corporations that pay poverty-level wages. When competitiveness means paying the lowest wages possible, communities lose these middle income families that buy homes and contribute time and talent to better their communities.

It’s too bad that those of us who choose to support locally-owned businesses can’t take our portion of the $2,000 per employee paid by the U.S. government to subsidize companies with low-wage workers and contribute directly to our local businesses. But, we could enact public policies that would provide these low-wage companies an incentive to pay better wages and benefits. We can continue to patronize local businesses and co-ops. As citizens, we can encourage creation of a climate where development of locally-owned businesses is encouraged through tax breaks and other incentives.

Stores touting goods at the lowest prices may not be the bargain they seem. Before you make your next purchase, consider not only the price but whether the retailer has a positive impact on your community.