Wal-Mart: No Bargain?

Wal-Mart, the nation's largest employer, perhaps is best known for low prices. But now, reports CBS News Correspondent Bill Whitaker, there are charges that the superstore isn't such a bargain.

A recent University of California, Berkeley study found that the fast growing retailer takes more from communities than it gives.

"Because of the low wages and because people do not have health insurance through their employer, people rely on public support to make ends meet," says the school's Ken Jacobs.

Estimates are the result is a tab to California taxpayers of $82-million a year for health care, food stamps, and other social services.

Current and former employees say that sounds right, Whitaker observes.

"I don't have any health benefits, so I just got to make it," points out Wal-Mart employee Anthony Wilson.

Former Wal-Mart worker Brandon Police adds, "I've seen Wal-Mart employees have to rely on government welfare, housing, etc."

UC Berkely's Jacobs asserts, "This is a subsidy for Wal-Mart. Wal-Mart is, effectively, in California and the rest of the country, shifting their labor costs onto the public."

But counters Wal-Mart's Cynthia Lin, "Frankly, it's outrageous!"

The big store fires back that it pays far more in taxes and hires out-of-the-mainstream workers -seniors, students, immigrants, part-timers, says Whitaker.

Lin says, "Wal-Mart actually reduces the taxpayer burden for public assistance, because they say without Wal-Mart, at least some workers would be on unemployment, while still others would be depending on pubic assistance for support."

This hot debate comes at a time when Wal-Mart already is feeling the heat from charges of gender discrimination and hiring illegal immigrants, Whitaker notes.

And in California, he continues, Wal-Mart is up against growing political resistance to the store's aggressive expansion plans. Community pressure recently blocked one L.A. store and the city council may require proof any new superstore will help, not hurt a community.

"On the one hand," comments L.A. City Councilman Eric Garectti, "they might save five-cents on their carrots, but they're going to see their taxes go up with more emergency room visits."

Wal-Mart contends the math is simple: Low prices and entry-level jobs are a plus. The question, concludes Whitaker, is whether that equation holds when you add in social costs.
  • Brian Dakss

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