Study finds taxpayers subsidize big-box stores at cost of $150 million per year in Minnesota

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Black Friday protests last year drew more than 200 people to the Midway Walmart in St. Paul.

Retail workers and activists who join the protest outside Walmart in St. Paul on Black Friday will be armed with a scathing new report shedding light on the public cost of poverty-level wages paid by Walmart, Target and other big-box department stores.

“At What Cost,” released Nov. 12 by the union-backed Minnesotans for a Fair Economy, reveals how Minnesota taxpayers, by picking up the cost of basic necessities thousands of retail workers can’t afford, are subsidizing big-box stores’ low wages.

“We estimate that over 20,000 big-box department store workers in Minnesota are enrolled in some form of public assistance program, either for themselves or family members, at a cost of over $150 million a year to taxpayers,” the report says.

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Not surprisingly, the majority of retail workers accessing safety-net programs for themselves or their families come from Walmart and Target. The report estimates 5,850 Target workers in Minnesota access public assistance at an annual cost to taxpayers of $44.7 million, while 5,311 Walmart employees statewide seek about $40.6 million in public assistance annually.

That these two retailers are the worst offenders is hardly surprising, considering the wages paid in their stores.

The average hourly wage of a Walmart sales associate, according to the report, is $8.81, while the average pay for Target’s frontline staff ranges from $8.10 per hour for cashiers to $8.34 per hour for “team members” on the sales floor.

A full-time worker earning those wages wouldn’t sniff the federal poverty line, which explains why so many turn to food stamps and other safety-net programs to support themselves and their families. What’s worse, over half of retail workers are “involuntarily part-time,” making it even harder to make ends meet without public assistance.

The public cost of health care for big-box store workers, meanwhile, is particularly taxing. Roughly half of Walmart associates and a third of Target “team members” are enrolled in the companies’ health insurance plans. Workers “say that the health plans are too expensive or inaccessible,” according to the report.

The report provides the first local look at findings introduced by Democrats on the U.S. House Committee on Education and the Workforce in May.

Analyzing Medicaid data, the committee report found that a single 300-employee Walmart Supercenter in Wisconsin cost taxpayers between $900,000 and $1.75 million per year – or roughly $5,815 per employee.

At the conclusion of “At What Cost,” the authors offer three suggestions for reducing the strain on public assistance created by big-box retailers, particularly Target and Walmart.

Big-box retailers should pay a living wage of $14.41 per hour, state lawmakers in Minnesota should raise the minimum wage to $9.50 per hour and, the report says, retailers should “stop interfering with their employees’ rights to speak out for better jobs.”

“Big-box retail employers could listen to their employees’ calls for change, rather than retaliate against them for speaking out.”

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