Hidden State Subsidies
Here's an article in The New York Times that points to hidden costs for taxpayers as part of "economic development." Wal-Mart is well known as squeezing everything possible to provide the lowest price for consumers. Here's another one. By providing little insurance for its employees, it drives them into the subsidized state health care system. Therefore, the state is picking up the tab for healthcare that other companies are paying. A neat trick.
I wonder where this spiral will end, that is, the lower price, but lower wages spiral. People without sufficient training and education continue to see wages bottom out. Unskilled workers, even in manufacturing, have seen real wages plummet. Jobs are still begging for skilled workers, but a middle class life is no longer available to ordinary people. And not everyone has the aptitude for skilled work. I guess they'll continue to be left behind.
There is another paradox in this whole scene. Even through the recession (or quasi-recession or whatever we had), there seemed to be plenty of cash in the economy. Even these poorer people of whom I just spoke seemed to have plenty of cash for electronic gadgets and "label" clothes. It's a weird thing, almost deflationary in some parts of the economy, where wages are either not rising or actually falling, yet the low price offerings allow them the opportunity to buy many of the latest things advertised on TV.
I don't know where it's heading, but it can't last. Meanwhile, I don't think I like seeing my tax dollars supporting Wal-Mart.
States Are Battling Against Wal-Mart Over Health Care. Wal-Mart is under attack for what critics see as a miserly approach to employee health care. By By REED ABELSON. [NYT > Health]
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