You are Paying Wal-Mart’s Workers as the Company Keeps Its Money

You are paying Wal-Mart employees’ wages. Yep, you.

The notoriously stingy company cuts every corner to keep prices low, and one of those corners is the payroll. It pays employees peanuts (and then cheats them of their overtime peanuts, but that is another story). By “peanuts” I mean an average of $8.81 per hour.

Many of these workers need welfare to survive. Thus you, the taxpayer, are paying part of Wal-Mart employees’ incomes, to the tune of between $900,000 and $1.75 million per store, and about $5,815 per employee. The welfare programs Wal-Mart workers rely on include Medicaid, subsidized housing and SNAP (aka food stamps — contrary to popular belief, over 40 percent of SNAP recipients live in a household with a wage-earner). Mother Jones breaks down the dollar figures each welfare benefit pays Wal-Mart employees in just the state of Wisconsin, concluding that taxpayers pay up to $67.5 million every year to support the company’s Wisconsin workers. And there are 49 more states full of Wal-Marts to pay for.

Meanwhile the company is setting records for corporate profits. It could raise pay rates and remain well in the black, but instead actively resists paying anything like living wages.

Being a behemoth, what Wal-Mart does affects its whole supply chain, its competitors, even the retail industry generally — and beyond. The Democratic staff of the U.S. House of Representatives Committee on Education and the Workforce issued a report in May 2013 called “The Low-Wage Drag on Our Economy: Wal-Mart’s Low Wages and Their Effect on Taxpayers and Economic Growth” which concluded that “Wal-Mart’s business model exerts considerable downward pressure on wages throughout the retail sector and the broader economy.”

24/7 Wall Street tagged Wal-Mart as the company “paying Americans the least.” In the retail sector Wal-Mart employs one of every ten employees, but they earn 28 percent less than other large retailers’ workers. That leaves the company’s competitors with a lot of room, and perhaps a lot of pressure, to slash their payrolls too.

Workers Strike Back

Democracy Now! reports that a group called Organization United for Respect at Walmart (OUR Walmart) has launched a strike it bills as its longest to date, coordinating protests by workers in Florida, Massachusetts and California. They want their pay increased to $13 per hour.

The Executive Director of labor coalition Jobs with Justice said the strikers were fighting for economic justice. “We believe that workers, people who work there, should not have to rely on food stamps and other public assistance to survive,” she said.

The strikers are picking up support on a bus tour that will visit 30 cities and end at Wal-Mart’s annual shareholder meeting in Bentonville, Arkansas.

In the past the corporation has retaliated against organized strikes and even individual employees who complain. Labor Notes describes several examples, including a 17-year-employee who won employee-of-the-month, but was fired the next year because he called for change at the company.

This time Wal-Mart is armed and ready with a restraining order forbidding anyone affiliated with OUR Walmart from entering any Wal-Mart in Arkansas for any reason other than buying merchandise. Current employees are excepted from the order, meaning that the workers who come in on the bus tour can apparently protest on Wal-Mart property without violating the order.

Governmental Fixes

California is considering action to prevent Wal-Mart from handing taxpayers the bill for supporting its underpaid employees. The state legislature will soon review a proposal to fine Wal-Mart and similar employers up to $6,000 for every full-time employee who signs up for the state’s version of Medicaid. Though initially appealing, this measure could make matters worse. Because it would apply only to full-time employees, it could exacerbate an existing problem: the company hires people for part-time rather than full-time work, which further reduces their incomes. If California adopts the proposal and part-time employees register for California’s health subsidy, no fine will be levied, creating an incentive for Wal-Mart to offer even fewer full-time positions.

The report by the Democratic staffers in the U.S. House recommends broader reforms.

The minimum wage should be increased to restore the value eroded by inflation. Strengthening equal pay laws would help close the gender pay gap. Congress should enact labor law reforms to ensure that workers can freely exercise their right to organize and collectively bargain. Legislation to increase employment – through direct job creation – should be enacted as well, as unemployment remains a significant drag on wage growth.

Let’s add tax reform that makes corporations and the wealthiest Americans (like the Walton family that owns Wal-Mart) pay their fair share, and we have a plan.

Start by signing this petition asking Wal-Mart to make 40 hours of work available to every worker every week, and to pay at least $25,000 a year for full-time work.

Photo credit: Hemera/Thinkstock

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J. J.2 years ago


Robert H.
Robert Hamm2 years ago

Correction Janet T they don't NEED subsidies……they are just rich enough to pressure congress into giving them one. Or a more correct term would be Blackmailing them.

janice b.
jan b.2 years ago

If it was ONLY Walmart.....But it's not.

Kevin Brown
Kevin Brown2 years ago

Now, more than ever, we need unions!

Kevin Brown
Kevin Brown2 years ago

Yep, our tax dollars subsidize Wal-mart's evil practices and the billions and billions in corporate profits.

Sarah Hill
Sarah Hill2 years ago

They company was totally different when Sam was alive, from a customer's viewpoint and worker's.

David Johnson
David Johnson2 years ago

Solidarity with the OUR Wal-Mart workers union!!!

Athena Milios
Athena Milios2 years ago

for shame walmart, for shame!!!!!!!!!!!!!!!!

Gene Jacobson
Gene Jacobson2 years ago

Old Sam taught his children well. How to be horrible bosses, horrible stewards of the planet and horrible corporate citizens. That Walmart is allowed to force EVERY state to subsidize its workforce only speaks to the gutlessness of every state legislature that allows Walmart's labor costs to be passed on to and paid by their own constituents. They epitomize the complete failure of the 1% to understand, let alone empathize with their employees, indeed anyone who isn't already rich. Rather than look for ways to help their employees, these spend their time looking for ways to cheat them and pass the cost on to the taxpaying public as a whole while stashing their own wealth in friendly out of country places like the Caymans. Would that we could exile this family and all like it to the Cayman's and let them eat their cake there.

janet T.
janet T.2 years ago

Walmart is a scam. We are told that free markets will offer us low prices etc. but it seems to take government subsidies to keep many businesses in business. The oil companies, agro business, and Walmart, one of the largest retailers, all need subsidies in one form or another.