Sunday, February 26, 2012

Dumping Business Costs On Taxpayers

(The above graphic is from the website

A lot of Americans, especially teabaggers and other Republicans, think the problem of poverty in America would be solved if the poor would just go to work (at whatever job is available). The problem with that delusion is that many, if not most, of the poor are already working -- and many are working full-time. But working full-time at a minimum wage job will not pull a family out of poverty. In fact, it may force them to appeal to the government for help, since their full-time employer doesn't provide enough pay or benefits to provide for the needs of a family (or even an individual).

Too many businesses these days refuse to provide their employees with livable compensation. You may think this is just some small businesses struggling to survive, but that is not true. A prime example of this is the giant corporation know as Wal-Mart. Over at the blog Under The Mountain Bunker, there are some very interesting figures. It seems that this huge corporation is dumping nearly $1.6 billion of what they should be providing (through decent pay and benefits) on to the American taxpayers. Consider the following:

  • The Democratic Staff of the Committee on Education and the Workforce estimates that one 200-person Wal-Mart store may result in a cost to federal taxpayers of $420,750 per year – about $2,103 per employee. Specifically, the low wages result in the following additional public costs being passed along to taxpayers:
    • $36,000 a year for free and reduced lunches for just 50 qualifying Wal-Mart families.
    • $42,000 a year for Section 8 housing assistance, assuming 3 percent of the store employees qualify for such assistance, at $6,700 per family.
    • $125,000 a year for federal tax credits and deductions for low-income families, assuming 50 employees are heads of household with a child and 50 are married with two children.
    • $100,000 a year for the additional Title I expenses, assuming 50 Wal-Mart families qualify with an average of 2 children.
    • $108,000 a year for the additional federal health care costs of moving into state children’s health insurance programs (S-CHIP), assuming 30 employees with an average of two children qualify.
    • $9,750 a year for the additional costs for low income energy assistance.”
  • The total figure is based on the average $420,750 per-store figure, multiplied by 3700 (the approximate number of stores currently in the United States).
  • Source: Rep. George Miller / Democratic Staff of the Committee on Education and the Workforce, “Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart”, February 16, 2004.

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