Commenting on the “Old Gold” diary below, Witchcat raised the interesting possibility of taxing large-scale employers who routinely underpay their employees, for the burden they place on public assistance.  It is an intriguing idea that deserves stand-alone consideration.

With the largest Walmart in Vermont poised to open roughly one month from now in St. Albans; and the demand for public assistance in Vermont recently falling under criticism; it seems like an opportune moment  to re-consider funding of our “social safety net.”

While there are certainly many examples of malingerers gaming the system, the number of individuals genuinely in need shows no sign of declining; and it is on this need that we should be focussing.

The governor has proposed his own “rob-Peter-to-pay-Paul” solution to the deficiencies.  Witchcat may have hit upon a supremely just alternative.

The Job Gap Study, concluded in 1998 for the Peace and Justice Center by current State Auditor, Doug Hoffer, delved into the impact of systemically low-wage employment  on Vermont’s limited financial resources.  

I was reminded of the Job Gap Study by Auditor Hoffer, who kindly provided me with a link to some tables developed back in 2005 to illustrate the proportionate effect of different  large-scale employers on the public purse.  

What jumps out from the tables is the unmistakable evidence that, with just four stores in the state at the time, proportionately,  Walmart employees grossly outnumbered those of any other employer when it came to requiring public assistance just to get by.

The study went beyond evaluating Vermont’s economic well-being based simply on the percentage of individuals who are employed, introducing the idea that we need to track how many of the employed are actually earning a “living wage.”

It was a fairly novel approach at the time, which proved prescient as the fortunes of the “employed” continued to decline throughout the first decade of the twenty-first century and beyond.

The entire country is beginning to understand that no matter how low unemployment goes, we cannot hope to rebuild a middle class on poverty wages.

Companies like Walmart, whose business model is heavily dependent on deliberately underpaying workers, are subsidized by the rest of us through tax-supported social services that must make-up for the shortfall between what the company pays and the amount it takes to simply make ends meet in the current economy.

There is ample evidence of this effect, but consumers and lawmakers have so far failed to connect the dots in order to hold those companies accountable.

Attempts to collect data to illustrate the impact have, in the case of Walmart (and other large scale retailers who take their cue from the granddaddy of them all) been frustrated by the company’s refusal to share information.

The real volume of Walmart’s drain on public assistance programs may therefore be assumed to be severely under reported in attempts at statistical representations of this burden.  

Nevertheless, as in the case of the 2005 report, it has occasionally been possible to capture a representative picture through employment information volunteered by social services applicants.  

The overwhelming take away from all of this is that, setting aside for a moment the question of social services provided to the unemployed and disabled communities,  a huge opportunity to close the funding gap exists in simply demanding that large-scale employers either pay wages sufficient to lift their entire staff off of the public roles or offset the cost of that state burden through a targeted tax such as Witchcat has proposed.

You want to stimulate the economy?  Pay these folks a living wage.  They’ll get off of public assistance; and, unlike the 1%, whose wealth the governor would prefer to protect, they will actually spend that living wage in order to, you know… live?  

And a whole bunch of other indicators suggest that the social stability provided by earning a living wage will relieve a lot of the other hidden costs borne by the state when too many people are crushingly poor.

Let us put on our thinking caps, Governor; Ladies and Gentlemen of the Legislature.  

Wouldn’t this be a more strategic place to look for revenue than in the earned income tax credit of the poor?