Thursday, March 12, 2015

Your taxes subsidize Walmart operating costs

Workers at Walmart have protested the fact that they have to hold food drives for their own employees, and that they are having to work two or three jobs in order to survive. 

Walmart has been under scrutiny lately for costing taxpayers $6+ billion a year in social assistance because of low wages and the carefully limited hours they give employees.  

“A single Walmart Supercenter cost area taxpayers between $904,542 and $1.75 million per year," according to The Americans for Tax Fairness.  (That's  $3000 to $5,800 on average for each of 300 workers).

Walmart is the nation's largest retailer, accounting for ~10% of U.S. retail sales.

CEO Doug McMillon has made a first change, a $9/hr minimum wage. We'll see if anything more of substance appears. For now, working at Walmart means you can qualify for SNAP, EITC, and housing assistance programs if that employment is the larger part of your family income.  
Competitors Costco and Kroger are doing well; their stocks out-performed Walmart, rising 2-3 times higher. Both Costco (COST) and Kroger (KR) already pay higher wages and provide better hours & benefits for their employees.
"The Walton family, which owns Wal-Mart, controls a fortune equal to the wealth of the bottom 42 percent of Americans combined."  The six heirs took about $6.32 billion in dividends from their ownership share of Walmart last year.  The new employee minimum wage could cost them about 8% of their profits.  Poor things, their life is so hard!

Neither Walmart nor the minimum wage are the problem or the solution, of course.

UPDATE APR 2015: McDonald's CEO announced enhanced benefits for employees at its company-owned restaurants, including a wage increase and paid time-off for full and part-time crew employees. Education benefits include free high school completion and college tuition assistance.