A recent “report” by the Democratic staff of the U.S. House Committee on Education and the Workforce purporting to demonstrate the “cost” of Walmart to taxpayers is politically driven, flawed in its methodology, relies on unrealistic scenarios and, above all, is simply incorrect.
In fact it makes vast generalizations based on data from a single state – Wisconsin - admits its weakness in its own methodology, stating that “extrapolating taxpayer costs for Wal-Mart stores in other states based on the Wisconsin data is difficult,” because Wisconsin has extremely inclusive Medicaid eligibility requirements. The report entirely relies on what has been called an “unlikely scenario” to arrive at its topline conclusion.
The report fails to account for Walmart’s size, or any other factors. In a 2005 paper, Jason Furman, an Obama administration adviser, noted that President Clinton’s welfare reform law changed public assistance programs to focus on helping working families, increasing Medicaid eligibility by as much as 300 percent above the poverty line:
Furman also indicated that the percentage of Walmart associates on Medicaid is similar to the percentage for other large retailers and comparable to the national average of 4 %.
President Bill Clinton, “changed the nature of social assistance in America, shifting from assistance to the non-working indigent to assistance that supports families who work…. In some states, Medicaid eligibility extends up to as much as 200 percent of the poverty line for parents and 300 percent of the poverty line for children.”
As a matter of fact, Walmart provides more than 1 million Walmart associates and their families health care plans with access to affordable, comprehensive medical coverage. In fact, an annual report on average U.S. health care costs from the Kaiser Family Foundation/Health Research & Educational Trust (HRET) 2012 Employer Health Benefits Survey confirmed that Walmart’s 2012 health care premiums were below the national average.
Moreover, any credible cost-benefit analysis weighs both sides, and aside from grossly overstating Walmart’s “cost” to communities, this piece ignores the common-sense economic benefits the company provides, such as jobs, low prices, tax revenue and philanthropic contributions.
Consider the following benefits Walmart provides to associates, customers and communities throughout the country:
- According to independent research firm IHS Global Insight, in 2009, regardless of where they shop our presence “translate[d] directly into savings for consumers amounting to $330 billion in 2009. This correspond[ed] to savings of $1,080 per person and $2,800 per household.”
- Since 2006, Walmart has helped save customers $4.8 billion through our $4 generic prescription program and $2.3 billion on fresh fruits and vegetables in the past two years alone.
- Walmart and the Walmart Foundation have given more than $1 billion in cash and in-kind contributions to organizations throughout the United States. In addition, our associates volunteered more than 2.2 million hours, generating $18 million to U.S. non-profits.
- In just the state of Wisconsin last year, Walmart collected more than $198 million in sales taxes and paid more than $74 million in state and local taxes. This is revenue used for education, public safety and infrastructure needs.
- Walmart U.S. employs 1.3 million people in a range of jobs – from people starting out stocking shelves to Ph.D.’s in engineering and finance.
- According to a June 2012 study from the University of Chicago and Brigham Young University, property values increase an average of 2 to 3 percent for homes within half a mile of a Walmart store and 1 to 2 percent when the home is a half mile to 1 mile from a store.
- The company promoted 165,000 people last year to positions with more responsibility and higher pay.
- About 75 percent of our store management teams across the country started as hourly associates, and their average pay is between $50,000 and $170,000 a year. Our highest earning store manager last year earned more than $250,000.
- In the past fiscal year alone, Walmart associates received more than $1.5 billion in bonuses, $800 million in 401(k) contributions and $550 million in savings via our 10 percent employee discount.
Finally, it’s ironic that the committee would use taxpayers’ dollars on a publicity stunt aimed at misrepresenting Walmart’s cost to taxpayers. Based on the facts, it’s clear that this is yet another disingenuous attempt to demonize Walmart while ignoring all the positive economic impacts that the brand and its stores make every single day.