Moral Low Ground

Economy

Study: Walmart Benefits from Billions in Taxpayer Subsidies

(Aled Betts)

(Aled Betts)

Nonpartisan tax reform group estimates retail giant’s massive corporate welfare at $6.2 billion

A new study has found Wamart’s low- and poverty-wage workers cost the US government an estimated $6.2 billion per year, a case of massive corporate welfare paid for by American taxpayers.

A report published by the nonpartisan progressive group Americans for Tax Fairness claims that Walmart and the Walton family, co-founders of the world’s largest retail chain, collectively profit from $7.8 billion in federal government subsidies and tax breaks. Of that staggering figure, an estimated $6.2 billion funded public assistance for Walmart workers in the form of food stamps, subsidized housing and Medicaid.

Americans for Tax Fairness calculated the $6.2 billion figure using data from a May 2013 report prepared by the Democratic staff of the US House Committee on Education and the Workforce which estimated that Wisconsin taxpayers spend as much as $1.75 million on public assistance for every Walmart Supercenter in the state, or between $3,015 and $5,815 per Wisconsin Walmart worker.

Americans for Tax Fairness multiplied the midpoint figure of $4,415 per Wisconsin Walmart worker and multiplied it by the total number of US Walmart employees– about 1.4 million– to determine an estimate of the total amount American taxpayers contribute to public assistance for the company’s low-paid employees. The report provides a state-by-state breakdown, as well as an analysis of Walmart’s profiting from the use of food stamps in its stores, where millions of poor Americans shop for groceries, clothing, toys, household goods and other staples.

“Walmart told analysts last year that the company has captured 18 percent of the SNAP (Supplemental Nutrition Assistance Program, or ‘food stamps’) market,” the report states. “Using that figure, we estimate that the company accounted for $13.5 billion out of $76 billion in food stamp sales in 2013.”

Walmart has also come under fire for its practice of encouraging employees to apply for welfare in order to bridge the gap between their meager wages and the cost of living, then reaping massive profits when those employees spend their welfare benefits in Walmart stores.

Forbes reports Walmart has refuted the Americans for Tax Fairness report as “inaccurate and misleading.”

“More than 99 percent of our associates earn above minimum wage,” asserted company spokesman Randy Hargrove. “In fact, the average hourly wage for our associates, both full and part time, is… $11.83 per hour.”

Independent market research group IbisWorld says the average hourly wage of a Walmart associate is actually only $8.81 per hour.

“The bottom line is Walmart provides associates with more opportunities for career growth and greater economic security for their families than other companies in America,” added Hargrove. “Our full and part-time workers get bonuses for store performance, access to a 401-K retirement plan, education and health benefits.”

Walmart has been targeted by anti-poverty and anti-inequality activists who have said that Walmart workers are the largest group of food stamp and Medicaid recipients in many states. Walmart opponents also point to the fact that the six heirs of Walmart founder Sam Walton are as wealthy as the the lowest-earning half of all American workers combined– some 45 million people– even while those six Walton billionaires spend millions lobbying Washington lawmakers for lower taxes on the rich and an end to the estate tax, which they call the “death tax.”

The company, which once advocated for a higher minimum wage, has also actively thwarted attempts to pass higher minimum and living wage legislation. When pressed on the issue, Walmart CEO Mike Duke, who makes more in one hour than the average Walmart associate earns in an entire year, has defended paying his employees poverty wages.

Various advanced nation pension funds, such as Algemeen Burgerlijk Pensioenfonds (ABP), the largest pension fund in the Netherlands, have divested themselves of Walmart shares, citing the Bentonville, Arkansas-based company’s poor labor practices. Among these are:

-Intimidating and firing employees who seek to strike or unionize.

-Sourcing from foreign suppliers who use child labor.

-Sourcing from foreign suppliers who brutally attack workers who attempt to unionize or even speak out about their appalling working conditions.

-Sourcing from foreign suppliers who lock workers in unsafe factories.

-Sourcing from foreign suppliers Walmart claimed it had banned due to safety or labor violations.

-Violating US child labor laws.

-Knowingly hiring undocumented immigrants, who were forced to work seven days a week for less than minimum wage.

-Illegally denying overtime pay to US employees.

-Forcing US employees to work unpaid overtime hours.

-Failing to provide meal breaks to US employees as required by law.

-Wage violations in 63 federal and state cases in 42 states, resulting in a record $352 million settlement.

-Denying 230,000 US employees pay for unused vacation or personal leave time.

-Allegedly discriminating against hundreds of thousands of US female employees.

-Discriminating against black Americans in the recruitment and hiring of truck drivers.

-Purchasing life insurance policies for unwitting US employees and naming Walmart as the sole beneficiary, so-called “dead peasant” insurance.

Walmart has also been fined tens of millions of dollars for toxic dumping, violations of the Clean Water and Clean Air Acts. It has also been accused of bribing foreign officials, dodging billions in corporate taxes and skimming sales taxes.

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