Vol. 20, No. 5,044 - The American Reporter - August 29, 2014




by Randolph T. Holhut
American Reporter Correspondent
Dummerston, Vt.
April 3, 2014
On Native Ground
CORPORATE WELFARE AND THE WALMART ECONOMY

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DUMMERSTON, Vt. -- In yet the latest example of why we need unions, a living wage law - and labor laws that are actually enforced - Walmart admitted in its annual report filed with the Securities and Exchange Commission (SEC) that their profits depend on taxpayer-funded public assistance programs.

Here's a choice nugget from the SEC report: "Our business operations are subject to numerous risks, factors and uncertainties, domestically and internationally, which are outside our control ... These factors include ... changes in the amount of payments made under the Supplement[al] Nutrition Assistance Plan and other public assistance plans, changes in the eligibility requirements of public assistance plans... ."

So Walmart, the nation's largest private employer, not only has to pay its employees poverty wages to maintain its huge profits, it needs to have the states and the federal government to continue paying for food stamps, health care, and other social programs for its employees, and for many of its customers too. That may be bad news for Rep. Paul Ryan, whose House Budget Committee just released a 2014 budget that sharply cuts them all.

But the biggest irony is that Walmart has done more than just about any U.S. company to create poverty.

Stacy Mitchell, senior researcher with the Institute for Local Self-Reliance, told commondreams.org last week that there is abundant research that shows that Walmart "is a company that everywhere it goes it creates poverty."

Specifically, when Walmart opens a store, Mitchell said "poverty rates are negatively impacted," and that the more stores that have opened in a particular county, the worse that poverty becomes.

But the kicker in this story is that the low-wage economy Walmart helped to create, and that Walmart profits from, is totally dependent on the levels of government benefits paid to low-income Americans.

Since one in 10 retail workers in the United States are employed by Walmart, how Walmart treats its workers has an impact on workers everywhere.

The average hourly wage of a Walmart worker is about $8.81 an hour, and many earn the federal minimum wage of $7.25 per hour with few or no benefits. Few work a full-time schedule, even if they want to do so. That may be one reason the lines are long but the cashiers' stations are mostly empty at peak hours in many Walmart stores.

Those low wages and long waits are subsidized by the taxpayers. A congressional report last year found that the 300 employees at one Walmart Supercenter in Wisconsin required about $900,000 a year in public assistance.

The last time the minimum wage constituted a living wage in this country was in 1968. Adjusted for inflation, the minimum wage would have to be close to $11 an hour to equal the buying power that a minimum-wage worker had in the late 1960s.

Instead, we live in a nation where the average pay of CEOs has gone up by 900 percent in the last 45 years, while the pay of minimum wage workers has lost 50 percent of its value. That's why 1 in 6 Americans are living in poverty and not getting enough to eat.

We live in a nation where the Walton family, which owns more than 50 percent of Walmart stock, have a combined net wealth of more than $144 billion, or more than the entire bottom 40 percent of the U.S. population, yet cry poverty when if come to paying their workers a fair wage. Thanks to a new Supreme Court decision April 2, the family of billionaires is now permitted to contribute as much as he or she wants in the November elections to Members of Congress and Senators who would oppose President Obama's minimum wage hike.

We live in a nation where wage theft is epidemic, with plenty of documented cases of employers shortchanging employees on overtime and benefits. This is estimated to cost workers as much as $19 billion a year, and employers know they can get away with it because enforcement of labor laws is lacking.

Yet the one of the biggest and most profitable companies on the planet says it may not make the levels of profit it is accustomed to because a Republican Congress is cutting social welfare spending.

Have they no shame?

AR's Chief of Correspondents, Randolph T. Holhut, holds an M.P.A. from the Kennedy School of Government at Harvard University and has been an award-winning journalist in New England for more than 30 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at randyholhut@yahoo.com.

Copyright 2014 Joe Shea The American Reporter. All Rights Reserved.

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