Businesses succeed or fail based on providing a quality product consumers demand, but they also depend on delivering good service and it is why courteous and proficient employees are as important an asset as product line. In the service industry, employees are a company’s greatest asset and it is why business owners are wise to take care of their workers and provide incentives for them to give customers an experience that encourages return business. Large retailers have an advantage over small businesses because volume buying allows them to reduce prices and still make a profit, but without friendly and courteous service, many customers will pay more to be treated well. In a different era in America, employees were treated with deference according to their worth to the business, and although employee salaries and benefits were a major expense, their value was instrumental to success.
Every business seeks to keep payroll costs to a minimum, and any business would jump at the opportunity for government to subsidize their employee’s salaries, but when a giant profitable corporation uses taxpayer dollars to supplement their payrolls, voters should be outraged. WalMart posted profits of $15.4 billion in 2011, and it enriched 6 WalMart heirs and heiresses whose combined worth is greater than the bottom 41% of American families (48.8 million households). Part of WalMart’s profits come from paying employees below poverty level wages, and to keep WalMart associates from going hungry and falling ill, taxpayers provided food stamps and Medicaid to make up the difference.
Because WalMart pays their employees slave wages, workers are forced to rely on food stamps and Medicaid which is how WalMart siphons money from taxpayers. The taxpayer dollars allow WalMart to pay their workers an average of $8.81 an hour without having them starving and homeless. Last week, WalMart Vice President of Communications, David Tovar, attempted to downplay their associates’ concerns about low pay, and reassure shoppers that WalMart has “got great associates” who are “going to do a great job for us this holiday season.” Tovar claimed WalMart was “working hard every day to provide more opportunities for associates” that included providing “a 10 percent discount card.” With the current poverty level for a family of four at $23,050, the typical WalMart employee is paid $22,100 a year, and because associates get a 10% discount to buy WalMart products, they are investing their below poverty pay checks back into the company that reported a 9% percent increase in third-quarter net income, earning $3.63 billion.
At a time when Republicans are proposing deep cuts to programs like SNAP (food stamps), and WalMart heavily supported Republican candidates in the recent election, it appears they have greater disregard for their employees than just paying them below poverty wages. A fallacy among many Americans, and one Republicans parrot mercilessly, is that food stamp recipients are lazy and living off other taxpayers, but a substantial number of Americans who rely on Food Stamps work full-time but are not being paid a living wage by employers like WalMart. In June, the House Agricultural Committee passed a five-year reauthorization of the farm bill that cuts $16 billion in food stamps, but they kept several subsidies for corporate agriculture intact. The bill, if it became law, would cut 2 to 3 million people from receiving food assistance and 28 million children would lose free school lunches, but the tea party caucus held out for larger cuts and as of yesterday, there is still not a farm bill.
The idea that large profitable corporations like WalMart uses taxpayer dollars to subsidize their payrolls and pad their profits because they pay employees slave wages is an outrage. Very few Americans would deny giving food and healthcare assistance to those in need, but when WalMart earns record profits and supports Republicans working to slash food stamps and Medicaid, taxpayers have a right to demand that WalMart pay their employees a living wage. If WalMart paid every one of their 1.4 million employees an additional $5,000 per year, besides lifting their employees out of poverty and over the low-income threshold, they would still make over $7 billion in profits for themselves and their shareholders. Additionally, by elevating the retail worker’s wages, more dollars would flow into local businesses, tax revenue would increase without raising taxes, there would be lower unemployment, and cities could hire more teachers, fire fighters, and police officers.
However, WalMart will not raise employee wages because they know taxpayers will make up the difference that costs them $2.66 billion annually in food stamps and Medicaid. WalMart’s intentionally low wages cost the country hundreds-of-millions of dollars in payroll tax deductions, restrict communities ability to hire and retain important public service workers, cost over $1.02 billion a year in healthcare costs, and $225 million in free and reduced price school lunches. As WalMart increases its wealth, its workers live in poverty and taxpayers subsidize WalMart’s payroll, and their profits.
In fiscal cliff negotiations, Republicans will demand the poor and middle class shoulder all the responsibility to cut spending, but reducing the number of people who need assistance is a better solution and since WalMart refuses to raise employee pay, increasing the minimum wage will force them to stop using taxpayer money to supplement their payrolls. Republicans have protected businesses from paying a living wage by refusing to consider a minimum wage increase because their ideology is that government exists to benefit corporations. Founding Father and second President of the United States, John Adams, America’s first conservative president had a different vision of government and he said, “Government is instituted for the common good; for the protection, safety, prosperity, and happiness of the people; and not for the profit, honor, or private interest of any one man, family, or class of men,” and that includes WalMart.
WalMart is not alone in taking advantage of social safety nets to supplement their employees’ low wages, but they are the worst offenders and the most visible. They pay all of their employees substantially less than other large retailers, and while their employees live below poverty, they are posting huge profits. In a free market system, and without a decent minimum wage requirement, there is little prospect for change and it is troubling that the Walton family donated heavily to Republicans who demand drastic cuts to the programs that keep WalMart employees from starving or going without healthcare. The Black Friday protests were commendable, but until WalMart starts respecting their workers and sharing their obscene profits that employees helped generate, they will continue paying poverty level wages and demanding taxpayers supplement their payrolls. It is time for taxpayers to demand that Congress do what giant corporations like WalMart refuse to do, increase the minimum wage and reduce poverty.