We Are All Paying For Walmart's Profits

Every year, as is their duty as a public-traded corporate entity, the folks at Walmart issue a long, dry fiscal report to the SEC detailing important things like where exactly they're making their money, how many stores they own, where they're located, future plans for the company, and any possible factors their shareholders should be aware of going forward. Unless you have the patience for this kind of legalese, these reports are pretty boring.

But in this year's report, there was one particular passage that should be of interest to even the most impatient of legal brief readers. In it, Walmart admitted -- for the first time in their history as a company -- that they rely on food stamps for a portion of their profits.

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The passage comes in the midst of Walmart alerting stockholders of a long list of "risks, factors and uncertainties" that are out of their control and could affect their bottom line. Things like inflation, or a national recession, or the timing of people getting their tax refund checks from the government. Pretty much any scenario in which the ability of consumers to spend money is compromised is on the list. And in the muck all these possibilities is this phrase:

[C]hanges in the amount of payments made under the Supplement Nutrition Assistance Plan and other public assistance plans.

Now, this admission isn't all that shocking. Walmart generally serves shoppers in the lower income brackets, so it makes sense their cash register drawers would be full of SNAP benefits. In short, they earn their profits from government-issued money that's funded by taxpayers. Which is all fine and good, and just one of the side effects of a nationwide food stamp program. But where it starts getting insidious is when you realize they're also being funded from taxpayer money in another way as well.

See, instead of taking those profits and putting them back into their workers through say, a living wage, they simply pay the minimum wage and rely on the government to foot the rest of the bill:

[I]n many states, Wal-Mart employees are the largest group of Medicaid recipients. They are also the single biggest group of food stamp recipients. Wal-mart's "associates" are paid so little, according to Grayson, that they receive $1,000 on average in public assistance.

In reality, the American taxpayers are subsidizing Walmart from two sides: SNAP benefits for consumers to purchase goods, and SNAP benefits to Walmart employees because the company doesn't pay them enough to live. And where does the money go instead?

One big place is to their stockholders, who got to split a large chunk of $116.67 billion in gross income in 2013. Another place is to the pocketbook of the company's CEO, whose 2012 income was $23.2 million. (Or, if you want another way of looking at it, 1,034 times the amount that the average Walmart worker earns.) And instead of using some of those profits to actually pay their workers a decent wage, they sit back and let the government fill in the blanks.

This, my friends, is what we call a scam. And, sadly, it's not all that unique.

While McDonald's doesn't accept food stamps nationally, they do pull the same move of allowing the government to take care of their workers. (They actually use their official Helpline to assist in getting their employees on food stamps, an act so full of conflicting priorities it nearly camouflages how maddening that concept should be.) Which all makes sense from a corporation's standpoint, as its goal is to earn money for stockholders and CEOs through any legal means necessary. If those means are having the taxpaying public unknowingly give them subsidies, all the better. And until the government steps in and forces change, it will continue to occur.

So, the next time you hear an argument about why the minimum wage shouldn't be raised, or why fast food workers shouldn't earn more, just remember that workers are earning a living wage one way or another. And if it's not coming from the companies that are making profits from their labor, then it's coming from you.

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About the Author

Rick Paulas has written plenty of things, some of them serious, many of them not, scattered over the vast expanses of the Internet. He lives in Los Angeles and is a White Sox fan.
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