In the days leading up to Thanksgiving, a sign in the employees-only area of a Walmart in Canton, Ohio urged workers to "Please donate food items here so Associates in Need can enjoy Thanksgiving Dinner." When news of this got out, there was a storm of angry comments about Walmart. Critics suggested Walmart should try paying its employees a living wage rather than asking its poorly paid workers to help feed each other.
Walmart quickly dismissed the criticism. Kory Lundberg, a Walmart spokesman, said: "This is part of the company's culture to rally around associates and take care of them when they face extreme hardships [such as a spouse losing a job]."
He added that the food donations reflect the same spirit that led Walmart employees to create a company-wide Associates in Critical Need Trust to help co-workers in financial trouble. As Walmart's website explains, associates fund the Trust through payroll deductions or direct contributions. This shows that "associates feel as if they are part of a family."
However, this happy-family story doesn't fit the facts of life as a Walmart associate. Yes, members of an oppressive and dysfunctional family can help each other cope with their situation. But the family Walmart resembles would be one in which the parents finance a life of leisure and luxury with their children's paychecks.
As a result of the Great Recession, median family wealth fell by 38.8 percent between 2007 and 2010. During the same period, according to the Economic Policy Institute (7/17/12), the combined wealth of six members of the Walton family rose 22%, from $73.3 billion to $89.5 billion. Since then, it has grown another 62%, to $144.7 billion ( Politifact , 12/8/13).
With its 1.4 million employees, Walmart is the nation's largest private employer. The Waltons don't share their immense riches with this huge Walmart "family." Walmart lead the Wall Street Journal's 2012 and 2013 lists of "Companies Paying Americans the Least."
Not content with paying miserable wages, it also has a record of cheating its employees. "In 2008, Walmart agreed to pay $640 million in settlements of dozens of class-action lawsuits that claimed the company deprived workers of pay for time worked" ( WSJ , 11/21/12). In a separate 2010 case , it agreed to pay $86 million for "failing to pay vacation, overtime and other wages to thousands of former workers in California" (Reuters, 5/12/10).
Walmart claims that it pays its associates an average of $12.83 per hour, but that applies only to full-time workers. The average for all associates is about $9.00 per hour. It tries to make do with as many part-time workers as possible to avoid paying its meager benefits. By Walmart's definition of full time as 34+hours per week, a full-time associate earns as little as $21,811 per year.
That salary, according to the Living Wage Calculator of Penn State University's Poverty in America Project, is $13,000 less than a "living wage" for one adult supporting one child in Boyle County, Kentucky, and $26,000 less in Dutchess County, New York. (A living wage is one that enables a household to meet basic needs such as housing, food and medical care.)
With its enormous purchasing power, Walmart constantly pressures its suppliers to lower their prices. This depresses wages, benefits and working conditions in these firms. Walmart also drives down compensation for employees of competing retailers.
In case associates show any sign of organizing to improve their compensation and working conditions, Walmart has a history of fierce union busting. On Nov. 18, the National Labor Relations Board ruled that Walmart stores in Kentucky and twelve other states "unlawfully threatened, disciplined, and/or terminated employees for having engaged in legally protected strikes and protests."
Because Walmart doesn't pay most of its workers a living wage, its employees commonly depend on welfare programs such as food stamps, Medicaid and Earned Income Tax Credit. The Democratic staff of the House Committee on Education and the Workforce issued a report in May of 2013 called "The Low-Wage Drag on Our Economy." It estimated that the cost in taxpayer-funded benefits for a typical Walmart Supercenter in Wisconsin was at least $904,542 per year --about $3,015 per employee.
In effect, Walmart's labor costs are subsidized by the public. Its employees couldn't do their work if they had inadequate food and medical care. Yet, its workers aren't paid enough to afford these goods. We taxpayers make up the difference by funding Medicaid, food stamps and other welfare benefits.
Walmart's parasitic business plan is becoming the new normal in America's economy. For instance, "taxpayers are doling out nearly $900 million a year to supplement the wages of bank tellers, which amounts to a public subsidy for multibillion-dollar banks" ( Washington Post , 12/3/13). As reported in Forbes Magazine (10/16/13), American fast-food companies have "outsourced a significant chunk of their labor costs to the taxpayer, with more than half of the industry's 3.65 million low-wage workers on public assistance at a cost of $7 billion each year."
As Catherine Ruetschlin and Amy Traub of the progressive think tank Demos have pointed out, "Walmart spent $7.6 billion last year to buy back shares of its own stock. The buybacks did nothing to boost Walmart's productivity or bottom line. If these funds were redirected to Walmart's low-wage workers [those getting less than $12 per hour], they would each see a raise of $5.83 an hour." Walmart could have done this without raising its prices.
Walmart's business is extraction; it is the great American Taker. Its goal is to pile up ever more wealth for the Waltons and other investors by underpaying its intimidated workers, violating their right to organize, and getting taxpayer subsidies for its antisocial behavior.