Walmart routinely defends its practice of paying poverty-level wages by pointing to its low prices. Sure, taxpayers end up subsidizing Walmart employees who qualify for Medicaid and food stamps, but the company’s low, low prices mean that even Walmart employees can afford those tube socks!
That assertion–that low pay is what allows Walmart to offer goods at low prices–just took a hit.
The most recent issue of Consumer Reports contains a very interesting comparison of grocery prices. Titled “Getting More from Your Store,” the article had the usual number of helpful hints; what really caught my eye, however, was the chart comparing prices for the same brand of purchases like flour, coffee, tall kitchen bags, toilet paper and similar items. The folks from Consumers compared the costs of store brands, Costco, Walmart, various regional chains and Walgreens for each item. Store brands, unsurprisingly, were cheapest overall.
Next was Costco.
Costco pays its employees roughly twice as much per hour, on average, as Walmart, and also provides health insurance. Yet Costco was cheaper than Walmart for eleven of the twelve items sampled. The totals for the “basket” of twelve items were: store brands, 49.59; Costco, 55.49, Walmart 70.52. The regional chains averaged 72.93 and Walgreens came in at a whopping 96.90.
Um…tell me again why taxpayers are subsidizing Walmart employees?
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