State can't overlook store that undersells

November 25, 2005|By MICHAEL OLESKER

By actual count, I went to a Wal-Mart once in my whole life. My wife and I found the section where they sell outdoor sporting goods. She needed a pair of those heavy-duty earplugs that hunters wear so they won't be deafened by the thunderclaps of their weapons when they're pulverizing wild animals. My wife uses the plugs strictly at night. She says she can almost blot out the sound of my snoring.

But I am not a regular Wal-Mart customer, and I will not be among the hordes arriving there today, the day after Thanksgiving, when Americans begin celebrating their bountiful national gifts in the traditional patriotic ritual of searching for holiday bargains.

I do not shop at Wal-Mart for a couple of reasons. One, because there's no Wal-Mart particularly close to my house. But also because of the ambivalence that so many of us feel about this corporate behemoth whose revenues are now an astonishing 2 percent of the entire U.S. gross domestic product and whose dominance of the business world is now larger than GE, Ford, GM and IBM combined and eight times larger than Microsoft's. It's a behemoth that now prepares for a showdown with its own work force at this winter's Maryland legislative session.

It'll take more than earplugs to blot out the flak that's coming over Wal-Mart this winter in Annapolis.

In April, the General Assembly passed a landmark bill (vetoed by Gov. Robert L. Ehrlich Jr.) that would require companies with more than 10,000 workers to spend at least 8 percent of their payrolls on health benefits or contribute to the state's health insurance program for the poor.

Wal-Mart, with about 15,000 employees in Maryland, is the only company in the state with that many employees that doesn't meet the 8 percent threshold. At last winter's legislative session, health care advocates backed the bill. Union officials backed it. African-American legislators, noting that Wal-Mart is the largest private-sector employer of blacks in the country, backed it. Then Ehrlich vetoed it. He called it unwanted intrusion by government.

Yeah, it's unwanted. Especially by Wal-Mart.

But Maryland's only a piece of the current fighting. The company's got a national reputation for stinginess because its wages and benefits are so low that some of its workers have to rely on public assistance.

Wal-Mart is fighting Maryland legislation in a couple of ways. One is diplomacy. The company recently announced an expansion of health insurance options for its employees. Then it really got serious - spreading money around for this winter's political fight.

Wal-Mart hired at least a dozen lobbyists to make moves on African-American legislators, including a promised $10,000 donation to help these lawmakers pay for a recent conference, at which Wal-Mart lobbyists would have a chance to do a little arm-twisting. Wal-Mart calls this "educational." Some legislators refer to it as trying to buy votes.

The Wal-Mart controversy is part of a larger modern problem: the grotesquely large divide between economic haves and have-nots. How does Wal-Mart undersell its competitors? Critics say they do it by keeping wages and benefits painfully low.

How low? For its rank-and-file workers, poverty-line low. As of last year, the average pay of a Wal-Mart sales clerk was about $14,000 a year - about $1,000 a year below the government's definition of the poverty level for a family of three. According to several recent books, more than 40 percent of Wal-Mart's employees couldn't afford even the least-expensive health care benefits offered by the company.

And this translates to the rest of us who don't even work for Wal-Mart.

A report last year by the Democratic Staff of the House Education and Workforce Committee, "Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart," analyzed the company's books and assessed the costs to U.S. taxpayers of so many employees so underpaid that they qualify for welfare benefits.

For a 200-employee Wal-Mart store, the report said, the government spends $108,000 a year for children's health care, $125,000 a year in tax credits and deductions for low-income families, and $42,000 a year in housing assistance.

The report also estimates that a 200-employee Wal-Mart store costs federal taxpayers $420,750 a year, or about $2,103 per Wal-Mart employee. That translates into a total annual welfare bill of $2.5 billion for the company's 1.2 million U.S. employees.

And all of this translates to a burden on every state government - even though the governor of Maryland chooses to see it as government intrusion when his General Assembly attempts to lighten the burden for Wal-Mart's 15,000 employees here.

That's why we'll be hearing so much noise in Annapolis this winter - and why it'll take more than Wal-Mart's fine earplugs to blot out the sound.

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