Market Overview

Wal-Mart: America's True Welfare Queen


Editor's Note: This is an opinion-based contributor piece. The views expressed by the author do not necessarily reflect Benzinga.

If America ever descends to hell in a handbasket, it will be Wal-Mart (NYSE: WMT) that imports the carefully crafted, four-cents-an-hour basket straight from a Chinese labor camp.

How can I be so sure? Because this corporate giant manages to be on the receiving end of both angles of the Food Stamp program – it is the largest reason why we need a Food Stamp program and yet it reaps the ultimate benefit of the program. Like Homer Simpson once said of alcohol, Wal-Mart is the cause of, and its own solution to, all life's problems. How can it be that it is both? Simple.

First, the benefits. Wal-Mart receives between 25 and 40 percent of all Food Stamp spending. Yes, you read that correctly. Up to 2 in 5 dollars spent by all Food Stamp recipients is spent at Wal-Mart.

Considering that the federal government spent approximately $72 billion on Food Stamps last fiscal year , Wal-Mart would have earned up to $28.8 billion in sales from the program alone. The company brought in $448 billion in sales last year, so this government program is clearly a big winner for them. Unfortunately, their win is our loss, at least as far as taxpayers go. You see, Wal-Mart is the reason why many of these people are on Food Stamps to begin with. Wal-Mart's low wages and purposeful underemployment keep their workers just rich enough to occasionally make rent and just poor enough to be eligible for public assistance like Food Stamps.

Let's see what happens to communities when Wal-Mart starts peeling off its nightie. According to the Winning Words Project, who studied Wal-Mart's effect on the economy, Wal-Mart's very existence has been a net loss for communities. Consider what they found.

  • Wal-Mart's intentionally low wages force employees to need approximately $420,000 per year, per store, totalling $2.66 BILLION annually in Food Stamps and other taxpayer survive.
  • Wal-Mart's intentionally low wages cost the country HUNDREDS OF MILLIONS of dollars in payroll tax deductions for Federal, State, and Local taxes.
  • Wal-Mart's intentionally low wages cost our communities the ability to hire and retain important public service workers like firefighters, police officers, maintenance workers, and teachers.
  • Wal-Mart's intentionally low wages cost our communities with their increased need for those same public services they are underfunding.
  • Wal-Mart's intentionally low wages and lack of covered benefits cost taxpayers over $1.02 BILLION a year in healthcare costs.
  • Wal-Mart's intentionally low wages cost taxpayers as much as $225 MILLION in free and reduced price lunches for school-age children.
  • Wal-Mart's intentionally low wages cost taxpayers over $780 MILLION in tax deductions for low-income families.

Got all that? Wal-Mart purposefully underpays and under employs its workers, reaps the high profits of doing so, and then profits a second time as employees (and others crushed by the economy that the Wal-Marts of the world sunk) spend their welfare dollars. Talk about having your cake and eating it too! It's almost like maybe we should get off our collective rears and do something about this.

Under any sane policy, it would be illegal for a company to underpay its employees so it could benefit from their employees' welfare benefits. A normal person might look at such an arrangement and wonder when the CEO will be given the boot.

This is theft, graft – outright stealing and exploitation of the poor.

Then again, stealing a boatload of cash is only a felony for real people. As we all know, corporations are only people when they are buying elections. When it's time for accountability, the only phones anyone answers at Wal-Mart are in accounting. Well, bad accounting brought down Al Capone. Maybe gaming the numbers will do the same for Wal-Mart.

Posted-In: News Politics Psychology Retail Sales General


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