You are paying for the health care of low-wage Walmart employees. Here is why | Opinion

Californians are paying for their bargain shopping twice — once at the cash register and again through taxes that help underpaid workers survive.

That’s because too many low-wage employees can’t afford enough food, much less pay health insurance premiums, so they turn to government-funded programs.

At a moment when Congress is threatening deep reductions to the social safety net, California cannot continue absorbing costs that some of the world’s most profitable corporations are unwilling to bear themselves.

Gov. Gavin Newsom should have adopted the Senate’s proposed “fair share contribution” in his revised May budget to begin recovering a portion of the public dollars now propping up low-wage business models.

Since he didn’t, both houses of the Legislature should push for this common-sense step.

The Senate proposal would require the largest corporations — the top 1% to 2%, not small businesses or local franchisees — to contribute toward the Medi-Cal costs of workers whose wages are so low they qualify for public assistance. Medi-Cal is California’s public insurance program that provides free or reduced health care services to low-income families.

Senate Democrats estimate the proposal could raise between $5 billion and $8 billion annually for Medi-Cal, struggling hospitals and county health and human services programs.

These programs are helping large numbers of full-time workers survive in places like Sacramento, Fresno, Merced, Modesto and San Luis Obispo.

“Currently, 42% of Medi-Cal enrollees are full-time workers who are not enrolled in their company’s healthcare plan,” the senators reported in justifying their plan. “This is often because their wages are low enough to qualify for state-subsidized health care.”

UC Berkeley researchers, studying “the public cost of low-wage work,” have found that, when employers fail to pay sufficient wages to survive in California, workers are relying on housing assistance, Medi-Cal and CalFresh, formerly known as food stamps.

If a corporation’s workforce depends heavily on public assistance, that company should help reimburse the public systems supporting that workforce. California already has the ability to identify these employers.

Americans have been told for generations that Walmart’s low prices were a triumph of efficiency and scale. Well, that’s not the whole story. Low-wage employers are leaving it to taxpayers to subsidize the doctor visits, rent and groceries of their employees.

One widely cited national study estimated Walmart’s workforce costs taxpayers roughly $6.2 billion annually through Medicaid, SNAP (what CalFresh is called nationally) and housing assistance.

This goes beyond Walmart, though. A 2024 University of Illinois Chicago study found that nearly half of Amazon warehouse workers experienced food or housing insecurity while many relied on SNAP or Medicaid.

Retail is brutally competitive, and economists rightly debate whether higher labor costs would accelerate automation or drive companies elsewhere.

But California can no longer ignore the extent to which taxpayers are subsidizing labor costs. In Yuba County, for instance, 90% of households receiving CalFresh benefits had at least one household member who worked, according to a UC Davis study released in March.

Workers don’t end up on public assistance by accident. Low pay, unstable schedules, reduced hours and limited benefits are often exactly why they qualify in the first place.

A 2026 Institute for Policy Studies report found that many corporations spent billions on stock buybacks, artificially inflating their share prices. Meanwhile, taxpayers pick up the tab to sustain low-wage workers but receive no share of any corporate earnings.

And in California, the cost of all this is magnified. Wages that might sustain survival in Mississippi or Alabama cannot cover rent in Sacramento, Los Angeles, San Diego or the Bay Area.

California cannot indefinitely fund public assistance for employees of low-wage corporations while relying on volatile capital gains taxes from wealthy individuals and personal income taxes.

The role these companies play in working-class instability is shockingly well-documented, yet federal and state officials have done little to discourage it. Rather, they offer these employers tax advantages and accounting structures unavailable to ordinary wage earners.

Sen. Caroline Menjivar, D-Panorama City, said lawmakers proposed the fair share plan to avoid balancing the budget through cuts to indigent and working-class Californians.

“When 42% of the people on Medi-Cal are working, we know something needs to change,” she said.

Rather than adopting the fair share plan, Newsom proposed reinstating Medi-Cal asset limits for seniors and disabled adults, increasing premiums for some immigrants and cutting programs or services intended to prevent repeated ER visits, psychiatric crises and hospitalizations.

Healthcare advocates warn the cuts would destabilize programs designed to keep medically fragile Californians out of emergency rooms and repeated crises.

Fair share revenue could reduce pressure to cut Medi-Cal services and free up funds for CalFresh and food banks. It could support CalWORKs grants, child care and county staffing. It could help stabilize homelessness programs and affordable housing investments.

Economists and business groups have raised legitimate concerns. Would higher labor costs accelerate automation? Would some firms relocate? Can consumers tolerate the inevitable higher prices? Would pension funds lose investment returns?

But California now faces a question that tops these: What happens if the federal government continues retreating from the social safety net?

California cannot continue functioning as the health insurer of last resort, allowing the hidden cost of Wal-Mart and Amazon “savings” to pile up in public assistance programs.

Some will argue corporations already pay taxes to support these systems. But those revenues should be used to support the overall functioning and quality of life of the state: schools, infrastructure, public safety, parks, transportation and more.

Those taxes were never intended to permanently underwrite corporate compensation strategies that trap workers in a cycle of deprivation. California’s governor and legislators must start billing the companies behind these low-wage models.

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