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Reason Foundation

Wal-Mart Welfare

Ted Balaker
August 8, 2004, 11:13am

A new study from Berkeley's Labor Center says that Wal-Mart costs California $86 million per year. How? When workers don't make enough money to support themselves and their families, they turn to government programs to make up the difference. Michael Munger isn't impressed: The study authors treat the entire amount of public assistance to Wal-mart workers as a cost to the state. But since Wal-mart workers are at the bottom of the economic ladder, why doesn't it make more sense to add up all the wage payments by Wal-mart to the workers, and count those as a saving to the state? The question is: what would these workers be doing without their Wal-Mart jobs? I would confidently assert a lot of them would be unemployed, and then the full cost of their subsistence would be borne by the state. No one's going to get rich working an entry-level job at Wal-Mart, but these jobs are just that, entry-level. Most are temporary training grounds for better, future jobs. But I do get queasy when I hear how Wal-Mart reportedly gives new employees lessons on how to get as much government stuff as possible. It's a good reminder that, although they're often cast as fans of laissez-faire, business owners aren't usually after free markets, they're after victory for themselves. (Another example of this is Wal-Mart's willingness to benefit from eminent domain.)

Ted Balaker is Producer


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