Tuesday, January 4

The discussion continues -- even to the point of becoming a formal academic field (Is the time coming when universities will over a PhD in Wal-Mart Studies?). Some economists are claiming that Wal-Mart is a drain on the government. From Inside the Leviathan an overview of books and studies on Wal-Mart by Simon Head:

One of the most telling of all the criticisms of Wal-Mart is to be found in a February 2004 report by the Democratic Staff of the House Education and Workforce Committee. In analyzing Wal-Mart's success in holding employee compensation at low levels, the report assesses the costs to US taxpayers of employees who are so badly paid that they qualify for government assistance even under the less than generous rules of the federal welfare system. For a two-hundred-employee Wal-Mart store, the government is spending $108,000 a year for children's health care; $125,000 a year in tax credits and deductions for low-income families; and $42,000 a year in housing assistance. The report estimates that a two-hundred-employee Wal-Mart store costs federal taxpayers $420,000 a year, or about $2,103 per Wal-Mart employee. That translates into a total annual welfare bill of $2.5 billion for Wal-Mart's 1.2 million US employees.

Wal-Mart is also a burden on state governments. According to a study by the Institute for Labor and Employment at the University of California, Berkeley, in 2003 California taxpayers subsidized $20.5 million worth of medical care for Wal-Mart employees. In Georgia ten thousand children of Wal-Mart employees were enrolled in the state's program for needy children in 2003, with one in four Wal-Mart employees having a child in the program.

I'm not blind to the weaknesses of Wal-Mart and their system. But I enjoy shopping there -- not just because of the low prices but because it is a true slice of life in the community. I think that the jury is out in regard to the long-term impact of Wal-Mart on the economic and moral soul of society. The company (and its values) is a work in process and what it looks like in 10 years may be significantly different than what it is today.

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