Walmart Prices: The High Costs Of Walmart's Low Wages (and Why You're Paying Them)


Everyday low prices? Think again.

The House Committee on Education and the Workforce just released a report that analyzed data on public-assistance services in Wisconsin (which has the most up-to-date data) in terms of how many Walmart workers were using these programs in the state. Its findings were startling. On average, every Walmart Supercenter costs taxpayers close to $1.3 million in public benefits because the company's low wages and lack of benefits keep their employees in perpetual poverty and reliant on public assistance.

The inability of Walmart to provide its workers with a satisfactory job is significant because it's the largest private employer in the country and one of the largest in the world. In the U.S. alone, a full tenth of the country’s retail workers are employed by Walmart, and they make an average of $8.81 an hour with incredibly limited benefits. That is nowhere near enough for a decent quality of life.

Some might be tempted to write this off as a necessary cost of maintaining such cheap prices, but several other similar retailers use much more humanizing models of employment. Costco is one of Walmart’s biggest rivals, and it pays its workers an average of $17 an hour as well as covering the majority of them under company benefits. And unlike Walmart, which often hires the bare minimum of workers to keep costs down but runs into problems when shelves aren’t restocked or lines are long, Costco has no such issues with customer satisfaction.

What’s more, Costco is doing better as a business, even with the added costs of paying living wages. Profits for Costco actually rose by 19% last quarter, whereas Walmart’s are struggling. True, Costco could make even more profits by decreasing wages, but their CEO has refused to do so, and that means not only that Costco doesn’t have nearly as many workers on public assistance, but also that its employees are happier than Walmart’s.

The bottom line here is that Walmart doesn’t really keep prices down. We already knew that Walmart hurts the people making their products, and I don’t think anyone was under the impression that a Walmart job is particularly covetable, but we now also know that those cheap price tags are offset by the taxpayers’ contributions to keeping Walmart employees afloat, since Walmart refuses to.

So who exactly is benefiting from these low prices?