Quick Hit Ellyn Fortino Friday May 8th, 2015, 1:41pm

Report: Despite Walmart's Pay Hike, Employee Wages Will Still Cost Taxpayers Money

Even though Walmart has moved to increase employee wages, new data shows that the company's workers will still cost U.S. taxpayers a pretty penny to make up for the dismal earnings they bring home from working for the retail giant.

Last year, Americans for Tax Fairness issued a report stating that U.S. taxpayers pick up a $6.2 billion tab annually to cover public aid expenses for Walmart workers earning low wages.

That report came months before Walmart announced in February that 500,000 of its full- and part-time U.S. workers would be getting a wage hike. The hourly minimum wage for Walmart employees went up to $9 in April and will increase to $10 by February 2016.

In light of Walmart's new wage policy, Americans for Tax Fairness re-examined the taxpayer subsidy issue.

"Even after Walmart's planned wage increases are fully implemented, large taxpayer subsidies will still be required to compensate for Walmart's low wages," the group concludes in its newest report.

Americans for Tax Fairness, a coalition of over 400 organizations advocating for progressive tax reforms, was unable to provide a dollar figure for those large subsidies it says taxpayers will have to shoulder after Walmart's higher wages are fully in place.

"Precise measurements are impossible given Walmart's unwillingness to disclose comprehensive wage information," the report explains.

Americans for Tax Fairness was able to determine that a Walmart employee working 34 hours a week -- the company's full-time standard -- at $9 an hour would make $15,912 a year. A single worker earning that salary would qualify for three out of eight government assistance programs examined in the report. And a full-time Walmart worker with children making $9 an hour would qualify for all eight public programs.

A Walmart employee working 34 hours a week at $10 an hour would earn $17,680 annually. That salary would qualify a Walmart worker in a household size of two or more for all eight government aid programs.

"The size of the wage increases, combined with the lack of a real commitment for 40 hours of full-time work for those who want them, means taxpayers will continue to subsidize Walmart's low-wages with billions of dollars a year," the report reads. "Walmart needs to provide a livable wage of at least $15 an hour in order to stop shifting the costs of its low wages to other taxpayers."

At $15 an hour, a person working full-time at 40 hours per week would earn an annual salary of $31,200 -- enough to pull many Walmart workers above the income level at which they qualify for public assistance programs, Americans for Tax Fairness finds.

For its part, Walmart has disputed the claim that it costs U.S. taxpayers $6.2 billion per year to cover public aid expenses for Walmart workers, saying American For Tax Fairness' study used inaccurate information and was "based on promoting their agenda rather than on the facts."

In response to the group's latest report, Walmart spokesman Kory Lundberg issued the following statement to Progress Illinois:

Walmart is proud to have some of the highest starting wages in the retail industry.

In addition to wages, Walmart is also implementing a scheduling choice program that gives workers more control over their hours, including access to fixed schedules (same days and hours every week for up to a year) and flex schedules (ability to choose their hours week to week to better meet their needs).

Walmart is also creating a new training program to give people the skills they need to go from the job they have to the job they want. Through these programs, associates are able to go as far and as fast as their hard work and talents will take them. These new skills will help ensure someone's next job is beyond a starting job, whether they stay at Walmart or choose to go somewhere else.

Bottom line, these new programs will make people better for having worked at Walmart.

But Americans for Tax Fairness argues that Walmart, the world's largest retailer, could well afford to pay its workers a minimum hourly wage of $15.

Frank Clemente, the group's executive director, points out that Walmart "is majority owned by four of the nation's richest billionaires."

"This report has a simple finding: if Walmart paid its workers $15 an hour, taxpayers wouldn't have to pick up Walmart's tab," Clemente added.


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