| Congressional Report Finds U.S. Taxpayers Subsidize Low Wages
Low wages not only harm workers, they devastate small business and communities as well. Policies should encourage reform.
Each Wal-Mart store costs federal taxpayers over $2,000 per employee to supplement low wage levels, according to a congressional study released by U.S. Representative George Miller. For a store with 200 employees, the report estimates taxpayers each year pay:
- $36,000 for free and reduced school lunches
- $42,000 for housing assistance
- $125,000 for low-income tax credits and deductions
- $100,000 for services to at-risk students
- $108,000 for health care subsidies
- $9,750 for low-income energy assistance
The significance of these findings is underscored by estimates that Wal-Mart will control over one-third of all food and drug sales in the United State by 2007. This report reflects not just one company. It reflects one of the world's most profitable and rapidly growing corporations and the emerging global economy.
Simply put, major companies are seeking a competitive edge by running a race to the bottom for worker pay and benefits. It goes without saying that this is bad for workers. But it's equally bad for small business and communities.
Farmers and small business people are also working people. As wages for working people are depressed, their incomes fall too. Self-employed small retailers cannot pay themselves a middle class income for the work they do in their own business and compete with large companies that pay poverty-level wages. Family farmers face the same problem in competing with low-wage corporate farms.
It's devastating for communities. As chain stores replace independent businesses, profits are drained out of the community. And as self-employed business people are replaced by low-wage workers, communities lose their middle class who can buy homes, put down roots, and give back.
It does not have to be that way. But if we want to take America in a better direction we must make a different set of policy choices. We must make companies pay a living wage in return for the things they expect of government.
If corporations want access to American markets for goods produced outside our borders, they should be required to respect the rights of workers to organize and elevate living standards. If they want access to the special tax breaks states and the federal government provide, they should be required to pay a living wage and provide decent benefits. It does not serve the common good to subsidize companies to create poor jobs.
Finally, we must return to the time when competition was based on efficiency and service to customers rather than economic power. We must enforce anti-trust laws, including those that prohibit the giants from using their size and power to gain unfair price advantages.
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