In addition to its reputation for low prices, Wal-Mart is recognized by some as a company that puts profits ahead of its workers’ well-being. State Rep. Robert Hagan, a Youngstown Democrat, capitalized on that distinction last month when he publicly chastised the megastore for all the public assistance its workers in Ohio receive.
Ohio taxpayers’ contribution to public assistance for Wal-Mart workers was the focus of a Dec. 8 speech Hagan gave on the floor of the Ohio House of Representatives as he advocated for legislation he sponsored to shed light on employers with high number of workers on welfare. The bill failed that day, the last day of session.
Ohio taxpayers spent more than $67 million "for the year" on food stamps and Medicaid for Wal-Mart workers, Hagan said.
Hagan made clear he does not wish to reduce public assistance to those who need it. But he questioned why so many workers at Wal-Mart — which boasted $405 billion in sales last year — live in poverty and need Medicaid and food stamps.
Spending on welfare programs, especially Medicaid, will be under the microscope this year as state officials confront a multibillion-dollar budget deficit. So PolitiFact Ohio decided to look more closely at Hagan’s claim.
We checked with his office and were told the claim was based on a report the Ohio Department of Job and Family Services generated last year at Hagan’s request.
The report listed companies on a monthly basis who employed the most workers receiving various forms of public assistance, including Medicaid and food stamps, from July 2008 to August 2009.
Hagan zeroed in on June 2009 for his attack on Wal-Mart, which topped the Medicaid and food stamps lists in the report nearly every month.
As we studied the report, we realized Hagan had to extrapolate certain figures to reach the conclusion that $67 million was spent on Medicaid and food stamps for Wal-Mart workers.
Despite the overall fuzziness of Hagan’s math, which we will attempt to clarify momentarily, he did nail one statistic in his formula: the number of Wal-Mart workers and their dependents on public assistance.
The Department of Job and Family Services tapped into its centralized system that caseworkers use to issue benefits and reported to Hagan that 15,484 Wal-Mart workers and dependents received Medicaid benefits in June 2009, and 12,872 Wal-Mart workers and dependents got food stamps.
Hagan then multiplied those totals by the average costs in June 2009 of Medicaid and food stamps per recipient. The resulting costs for June 2009 then were annualized to calculate the annual total.
This is what it looks like:
$245 average cost (X) 15,484 recipients (X) 12 months = $45.5 million.
Hagan used the same formula and the same reports to figure the annual amount of food-stamp assistance Wal-Mart workers received.
$142.40 average cost (X) 12,872 recipients (X) 12 months = $22 million.
Put both figures together and you get $67.5 million.
While the number matches Hagan’s claim, it also has some problems.
First, his cost-per-recipient figures are averages and are not specifically tied to the thousands of Wal-Mart workers on welfare.
The food-stamp average of $142.40 was derived from a Department of Job and Family Services report — separate from the one Hagan requested — that dissected public assistance spending in June 2009. The report showed more than $205 million in food stamp coupons were issued to more than 1.4 million people for an average of $142.40 per person.
The Medicaid average only accounts for only one type of Medicaid coverage, the Covered Families and Children program, which is most common among numerous types of Medicaid benefits. Using just the Covered Families and Children figure assumes all of Wal-Mart’s recipients are on that plan.
Department of Job and Family Services spokesman Ben Johnson said there’s no way to tell what type of Medicaid coverage was applied to the more than 15,000 Wal-Mart workers and dependents who received assistance in June 2009.
Lastly, Hagan’s math assumes the assistance Wal-Mart workers received in June 2009 is consistent each month for a year. A closer look at the report, which lists public assistance recipients on a monthly basis, shows little fluctuation in the number of recipients connected to Wal-Mart. But the monthly totals are never exactly the same.
For all those reasons, Johnson said Hagan’s formulas produced an inexact figure to quantify the annual amount of public assistance Wal-Mart receives.
"We would certainly take issue with that premise," Johnson said.
Hagan’s method is something PolitiFact Ohio and The Plain Dealer might try to get a ballpark figure when exact figures aren’t available, but Hagan presented it as a precise figure. He later acknowledged his figures were not 100 percent exact, but said the goal of his failed legislation was to shed light on companies with thousands of workers on welfare.
Even if Ohio taxpayers don’t pay exactly $67 million in Medicaid and food stamps, it is clear they are subsidizing Wal-Mart’s health care costs, Hagan said.
So where does Hagan land on the Truth-O-Meter?
- He might have fared better if he had made his point by citing the number of Wal-Mart workers on welfare — an exact number at his fingertips — rather than swing for the fences by throwing out a juicy, and inexact, multimillion-dollar cost to Ohio taxpayers.
- While it is clear thousands of Wal-Mart workers and their dependents are on welfare, neither Hagan nor the Ohio Department of Job and Family Services knows the precise cost.
- There is an element of truth to his statement, but knowing that his dollar figure is extrapolated from one-month’s totals is an important detail needed to keep the statement in proper context.
On that basis, we rate the statement Half True.