Employees at some of Ohio’s largest companies increasingly rely on public assistance such as food stamps and Medicaid, illustrating the cost to taxpayers from an economy where low wages and limited hours are mainstays in many households.
The Dayton Daily News obtained data on the top 50 employers in the state with workers and their household members on some form of public assistance.
These companies include Walmart, Kroger and Bob Evans, whose collective payroll has been reduced by more than 5,000 over the past five years.
The number of people on food stamps with someone in their household working at one of these 50 companies grew 47 percent between February 2008 and February 2013 to 117,890 people, the Daily News found. During the same time, Medicaid recipients associated with these employers increased by 59 percent to 141,182 people.
State officials could not point to specific reasons for the increase, but say it matches general increases in the use of these programs amid the recent recession. All told, the cost of Medicaid in Ohio grew $4 billion since fiscal year 2008 to $17.5 billion last year. The cost of food stamps grew from $1.4 billion in 2008 to $3 billion last year.
Some labor advocates claim taxpayers are essentially subsidizing the profits of massive corporations by paying the health care and other living expenses of their workers who are not paid a living wage.
“This is a way America subsidizes our largest employers who don’t pay people enough to make ends meet,” said Wendy Patton, senior researcher at Policy Matters Ohio, a liberal think tank. “We need to think of this (welfare, food stamps and Medicaid) as corporate support as well as a safety-net service.”
But some policy groups contend these companies’ wages are determined by the market, and say many Ohioans work for these corporations because they offer fair and attractive pay and benefits.
“(Employers) are not going to pay workers more than the value they provide,” said Michael Tanner, senior fellow with the Cato Institute, which promotes limited government and free markets. “It is a competitive marketplace, and (employers) have to compete for labor and they have to compete for customers on the basis of price, and they have to balance those things out.”
Making ends meet
Jennifer Slorp, 23, of Huber Heights, said she worked at United Dairy Farmers from December 2011 through late last month.
In 2008, nearly 700 UDF workers and their household members in Ohio received food stamps, which was the last year the company made the list of top 50 employers in the state. The company last appeared on the top 50 list of employers associated with Medicaid recipients in 2009.
Slorp, who has a 5-year-old autistic son, said she received food stamps for several months when she began working at UDF, and received Medicaid until she was promoted to manager about six months after she was hired.
Slorp said the raise she received from her promotion increased her wages beyond the threshold that would qualify her for Medicaid.
“I made $40 a month too much is what they told me,” she said.
Slorp said she made good money at UDF and earned about $10.50 per hour before she was fired. She said she could have received health insurance through UDF, but she did not want to pay for coverage that was no better than what she previously received for free.
“I didn’t want them taking the money out of my check,” she said. “But the (insurance) was pretty good for managers.”
About 25 percent of food stamp recipients in Ohio live in a household where at least one family member works, but many recipients are children or disabled or retired residents.
Ohio’s minimum wage is $7.85 per hour. This means a single parent of one child working full time on minimum wage would qualify for food stamps.
Walmart tops list
The Daily News reviewed state data on recipients of welfare, food stamps and Medicaid and where members of their households worked.
The newspaper found cash assistance rolls declining across the board, which is in line with the state’s efforts to comply with a federal mandate to toughen work requirements to receive welfare. Topping the list of employers with workers and their family members on welfare was McDonald’s, with 525 people listed. This is down more than 30 percent, which is in line with other employers.
The list of the top 50 Ohio employers with workers and their housemates on public assistance was dominated by chain businesses.
Walmart topped both the food stamp and Medicaid lists. As Ohio’s largest private employer, Walmart in February had 14,684 employees or their household members on food stamps and 14,056 on Medicaid.
The average food stamp payout that month was $131 per recipient, which suggests Ohio spent an estimated $1.9 million in February alone feeding families of Walmart workers.
In the last five years, the number of Walmart employees or their household members in the state on food stamps grew 74 percent and the pool of Medicaid recipients grew 95 percent.
The increase is not related to Walmart growing its payrolls: Since 2009, Walmart has reduced its Ohio workforce 10 percent to 48,630 employees.
Dan Behnken, 23, of Riverside, said he worked nearly 40 hours per week at Walmart in Bellbrook until he was fired in May for showing up late, which he attributed to his long bus commute.
Behnken said some of his co-workers relied on food stamps, most having families to feed. He said he is not sure whether his wages qualified him for government assistance. But he said he was not interested in receiving taxpayer support and he earned enough to cover his expenses.
“I was making OK money for a cashier at Walmart,” he said. “And some people make the cashier at Walmart job out to be the worst thing ever — like everybody is always screaming at you — but it’s not that way, and there’s a lot of friendly people … I had a lot of fun.”
Kroger, Bob Evans
The data tell similar stories for other major employers in the state. Kroger’s workforce has grown nearly 7 percent to 39,000 since 2008. But the pool of company employees and those they live with receiving food stamps has grown 75 percent while the pool of Medicaid recipients increased 82 percent.
Bob Evans has shed thousands of Ohio jobs since 2008, leaving it with a workforce of 12,500. But the number of its employees and household members on food stamps has grown nearly 29 percent to 4,066, and Medicaid participation has risen 40 percent.
Food stamp payments to households with at least one member employed by Walmart, McDonald’s, Kroger, Wendy’s and Bob Evans has grown to an estimated $6 million a month.
Burger King and Wendy’s were the other companies that consistently have the most employees and members of their household on food stamps, Medicaid and welfare.
Some workers who are represented in the data may not be the head of the household on public assistance, said Ben Johnson, spokesman for the Ohio Department of Job and Family Services. An entire family on public assistance is counted if a teenager or grandparent in that household works at one of these large employers.
Ohio requires food stamp recipients to work, but carves out numerous exemptions including for single mothers with small children, anyone age 60 or older, the disabled or those collecting unemployment.
About 25 percent of food stamp recipients in Ohio live in a household where at least one person works; the others have a source of income such as Social Security or disability income. About 42 percent of food stamp recipients are children.
About half of the households on Medicaid in Ohio appear to include a working individual, according to Ohio Medicaid officials.
Tough to compete with free
Part of the reason these companies have a significant share of workers who receive government benefits are because they are large and successful companies with lots of stores, company officials said.
“When you look at Walmart, as big as we are, we’re gonna be the tops on lots of lists,” said Kory Lundberg, national media relations manager for Walmart.
Walmart officials said they try very hard to keep their wages and benefits competitive. They said the average Ohio Walmart employee makes $12.69 an hour, and more than half of the company’s Ohio workforce is full-time, meaning they work more than 34 hours a week.
Employees who work at least 24 hours a week over a year are eligible for Walmart’s health insurance, which costs $17.40 per employee every pay period. Lundberg said more than half of the company’s employees have signed up for health insurance, covering 1.1 million people nationwide.
“We think $17.40 a pay period is a pretty good price for benefits, but it’s very tough to compete with what the state charges (nothing),” Lundberg said.
But some policy groups claim that employees of Walmart and other large chains do not sign up for their companies’ health insurance because they cannot afford it or the coverage is poor.
“Either the workers cannot afford the premiums, and they decline to participate in the plan, or the plan itself is a bare-bones plan with huge deductibles and co-pays,” said Philip Mattera, research director of Good Jobs First, a Washington-based taxpayer watchdog organization.
Medicaid and federal food stamp and cash-assistance programs were not designed for people who have jobs and work for very large and profitable companies, Mattera said. Instead, he said these programs were intended to serve people who are unemployed or work for marginal employers that are unable to afford to provide benefits.
“We feel that companies like Walmart have been taking advantage of those programs, and allowing the taxpayers to pick up the bill for something that they should be paying for,” he said. “Employers, especially large profitable ones, have some obligation to provide at least decent, basic benefits to their employees.”
Hours being reduced
National trends suggest the ranks of the working poor are growing partly because employers are reducing workers’ hours to save money, said Patton, senior researcher at Policy Matters Ohio.
She said that could help explain why more workers for these large chains are receiving government assistance.
“I suspect people are getting less hours per week,” she said. “I suspect what we’re seeing is a diminishing hourly work week on average.”
In June, there were 8.2 million workers nationwide who were employed part-time for economic reasons, meaning either their hours were cut back or they could not find full-time work, according to labor data released earlier this month. This segment of the workforce rose sharply by 322,000 workers last month. In 2011, about 280,000 Ohioans worked part-time involuntarily, up 30 percent from 2008, according to the most recent data.
As employers cut hours, some workers’ wages decrease to the point where they qualify for government assistance.
Patton said the increase in Medicaid recipients is particularly worrisome, because as more eligible people for the program increase the rolls, another “invisible cohort” of people who make slightly more money or don’t have children will be left without insurance.
“We’re seeing a growth in the number of working poor that … can’t afford health insurance,” she said.
Market drives pay
Some groups claim that these companies should not be blamed for the way the economy works. Some employees of Walmart, McDonald’s, Kroger and similar companies may receive government assistance, but they would need much more of it if they were unemployed, said Tanner, with the Cato Institute.
These companies provide jobs to people who need them while also selling affordable goods and services that benefit low-income families, he said.
“Bill Gates doesn’t generally shop at Walmart — people who shop at Walmart usually have limited incomes,” Tanner said. “And the fact that Walmart provides them with cheaper products enables them to live better lives and stretch their dollars in ways that mean they don’t have to be subsidized by taxpayers.”
These companies pay competitive wages for low-skilled labor, and it is unreasonable to ask businesses to arbitrarily raise wages and increase benefits without increasing the value of the work they get in return, Tanner said.
In addition, many employees at the companies start in entry-level positions that do not pay extremely well, but they can work their way up to management and leadership positions, he said.
“As people gain skills, they become more productive and they have more value to the company, and the company pays them for those skills out of fear of losing them,” he said.
‘The poor and shameless’
Sigmond Dillard, 57, of Dayton, said he used to work part-time for Frisch’s Big Boy restaurant. In February, the chain had 1,379 workers in households on food stamps and 1,607 on Medicaid.
Dillard said he was told when he was hired that he had the potential to receive more hours. But he said his boss never offered him a full-time position, which would have included health insurance.
Dillard said he receives food stamps because they help make his life just a little bit easier.
“You have to have two or three part-time jobs to make a full-time salary,” he said. “What can you say? This is not the lifestyle of the rich and famous — it’s the poor and shameless.”
WHIO-TV reporter Jim Otte contributed to this story.
Top 50 employers of households on public assistance
Numbers represent employees and members of their households on public assistance. Source: Ohio Department of Job and Family Services, Ohio Medicaid.
|INTERIM HEALTH CARE||1,942||2,328|
|DOLLAR TREE STORE||1,619||1,586||50|
|ARAMARK FOOD, FACIL, UNIFORM||1,433||1,550|
|BELCAN SERVICE & STAFFING||1,341||1,661||31|
|MARC GLASSMAN STORES||1,317||1,408||56|
|KENTUCKY FRIED CHICKEN||1,208||1,314||68|
|UNITED PARCEL SERVICE||1,106||1,264|
|CIRCLE K STORES||1,087|
|STEAK N SHAKE||1,053||1,314||55|
|THOMAS 5 LIMITED||33|
|BURLINGTON COAT FACTORY||34|
|TOYS R US||41|
|RANDSTAD NORTH AMERICA||49|
|SNIDER BLAKE PERSONNEL SVC||33|
|IMPACT EMPLOYMENT SOLUTION||34|
|OHIO STATE UNIVERSITY||1,232|