How much will Walmart cost DC taxpayers?

What if it cost you two cents on the dollar at the discount store to ensure that your neighbor, who works long hours at the store, has adequate health coverage through his employer? What if paying those two cents reduced the number of people relying on Medicaid for health care, and thereby reduced your taxes?

These are among questions the DC Council needs to address before large retailers like Walmart open new stores in the District.

As we debate the need to trim local and national spending, we need to ensure that no one gets off with a free ride, and that includes prosperous corporations that get backdoor subsidies by not providing competitive benefits for their employees. A 2005 study found that the rate of uninsurance and public coverage for the children of Walmart workers was significantly higher than the average for other large retail workers.

This study found that by increasing costs by two pennies on the dollar, Walmart could match the wages and benefits of other big retailers. This would cost $3.66 billion annually. In 2005, Walmart spent $1.5 billion annually on health benefits.

If Walmart were to provide a competitive wage and benefits package, it could mean real savings for the District. A Wisconsin Department of Health and Family Services study found, in 2007, that it cost the state $3.7 million annually to provide care to Walmart employees and dependents. Such costs could be significant in the District, where the Mayor has proposed $12 million in cuts this year to health care programs for low-income residents.

While Walmart changed its plan to include a $1,000 contribution from the company to a health reimbursement account, it still has an unusually high out-of-pocket limit. In 2011, Walmart continued to have more employees relying on public care in Wisconsin than any other employer in the state.

The DC Council could require a community impact analysis, like those required in the city of Los Angeles, to determine if Walmart’s new benefits plan significantly reduces the burden on taxpayers. Or, the Council could follow New York City’s example (see page 196) and mandate that big retailers pay a minimum amount to ensure that their employees have affordable health care.

The Council has a responsibility to protect taxpayers from secret subsidies to huge corporations. And it has the power to do something about it by requiring large retailers to provide adequate wages and health coverage so that it does not force a disproportionate number of employees to rely on public benefits.