September 20, 2015

Low pay leads to double subsidies for retail companies, group says

Many retail employees make so little they qualify for government assistance

Good Jobs First, a Washington, D.C.-based nonprofit that advocates for accountability in economic development, generally recommends against taxpayer subsidies for retail companies such as Kohl’s Corp.

The group’s research director, Philip Mattera, said retail positions tend to be low-paid, part-time jobs.

“Retail jobs are substandard jobs,” Mattera said. “They really don’t deserve public subsidies. Ideally, they (subsidized jobs) are significantly above average.”

Glassdoor, which compares jobs and benefits of employees who report them to its website, lists the average wage of a Kohl’s cashier in the Milwaukee area at $9 an hour, or $17,102 a year. That wage could qualify a full-time employee for food stamps or subsidized child care.

Some Kohl’s employees also qualify for BadgerCare Plus, the state’s Medicaid-funded health insurance program for low-income residents. The state Department of Health Services said as of June 30, there were 1,232 Kohl’s employees and their children receiving BadgerCare Plus. It ranked No. 14 among Wisconsin employers with 558 employees whose families receive subsidized state-run health care.

Under terms of the Wisconsin Economic Development Corp.’s contract with Kohl’s, qualifying jobs must be located at the company’s corporate offices in Menomonee Falls — not its retail stores — and new employees must earn $30,000 or more plus earn benefits for the company to qualify for tax credits.

Nevertheless, Mattera’s group believes government should not subsidize companies paying their employees so little that they qualify for public benefits.

“Taxpayers are essentially subsidizing the companies two times,” Mattera said. “There is already a proliferation of poverty-level jobs at companies that could well afford to pay their employees better and provide better benefits.”