Wal-Mart is the largest retailer in the world. It employs 1.8 million, more than any other American institution besides the federal government. Its 2006 revenues surpassed $315 billion. But statistics serve only to reinforce what most Americans already know: Wal-Mart is big business.

Wal-Mart often shares its success. The Walton family has donated over $1 billion to a vast number of philanthropic and political causes, including youth organizations and scholarship funds. More importantly, Wal-Mart supplies diverse goods at low prices, benefiting people with low incomes.

When choosing where to shop, consumers naturally try to weigh these benefits against costs. But not all costs show up on the receipt. Hidden costs come from a number of sources.

One source of hidden costs is Wal-Mart’s treatment of workers. Wal-Mart’s wages are low; salary after two years is 75 percent of the industry standard. It offers healthcare insurance to only 44 percent of its staff, compared with rival Costco, which manages to offer such benefits to 96 percent of its employees. The average Wal-Mart employee with children lives on an annual income $1,000 below the poverty line. As a result, taxpayers end up paying more for Medicaid, food stamps, subsidized school lunches, and childcare. As the children of the poor suffer from higher rates of drug use, crime, and disease, the long-term costs to the taxpayer are incalculable.

It’s apparent that Wal-Mart employees are unhappy with this situation; they express their dissatisfaction by quitting. Seventy percent leave the company within a year of being hired, a rate significantly above industry norms. Surveys indicate that they quit because they feel underpaid and underappreciated. High turnover translates directly to more unemployment insurance claims, another cost to the taxpayer.

Wal-Mart also inflicts hidden costs on the taxpayer by making government bigger. Their work with alleged sweatshops in South Asia, China, and Africa prompts calls for increased government monitoring of international trade. Wal-Mart, as a defendant in the largest class-action lawsuit in history, with over 1.6 million plaintiffs, consumes the time and resources of the judicial system. The company has also run afoul of the U.S. Immigration and Naturalization Service. Several years of surveillance recently culminated in hundreds of arrests of illegal aliens across 21 states and the seizure of records from Wal-Mart headquarters. All firms generate spillover costs, but Wal-Mart’s unique size and history of ethical lapses have spawned exceptional costs. All of these activities -- monitoring human rights violations, trying gender discrimination cases, and enforcing INS policies -- are worthy governmental pursuits, but our taxes pay the bill. And following the paper trail back to Wal-Mart is not always easy.

What makes Wal-Mart so insidious is that its benefits are in plain sight, but its costs are hidden. To see Wal-Mart’s benefits, you just have to compare receipts; Wal-Mart is eager to tell you how much you save. But understanding the full complement of costs requires careful consideration of the socioeconomic implications of Wal-Mart’s policies. While it’s easy to calculate savings, it’s nearly impossible to know exactly how much Wal-Mart increases your taxes.

The good news is that there are business models that offer low prices without creating as many hidden costs.

Costco, like Wal-Mart’s Sam’s Club, offers its communities bargain prices. But Costco takes care of its employees, offering an average wage of $17 per hour and a health care plan that covers nearly all of their staff. Because Costco employees are happier, they tend to stay. Turnover is around a third of Wal-Mart’s, so Costco recruits fewer new employees, keeping training costs low. Is this plan successful? Costco is the largest wholesale club in the United States, surpassing even Sam’s Club’s market share in this sector.

I am not advocating a boycott. But here is something the consumer should think about: When making decisions on spending your dollar, be suspicious. The calculus of deciding where to shop ought to include hidden costs -- there is an ethical dimension to economic decisions. The difficulty of precisely determining hidden costs does not give us license to ignore them. It’s hard to know whether or not Wal-Mart is the best deal for the individual, let alone for society. But the responsible consumer knows that not all costs show up on the receipt.