Walmart’s Hidden Employee Food Stamp SubsidyBy: Mike Tuttle - March 26, 2014
A few days ago, Val Powell brought you some information about how Walmart is showing its business’ dependence on food stamps.
In the filing of a form 10-K with the Securities and Exchange Commission, Walmart noted that its bottom line would be adversely affected if the Federal government were to cut food stamp benefit levels.
Now, this is not necessarily shocking news, given that Walmart sells groceries. But it is not just their grocery numbers that would suffer. If shoppers have less in food stamps to buy groceries, they have to use cash. Cash that they can not then spend on other things in Walmart.
In that sense, perhaps Walmart is only making obvious what any retail business that might sell to food stamp recipients could tell you.
However, there is another area of business that Walmart and other low-wage paying businesses are not talking about. That is a de facto “subsidy” that their business gets thanks to the food stamp program. While it is not an intentional subsidy in the sense that it is approved and voted for by Congress, some say that Walmart and others like it count on it just the same. And in this case, it is not about Walmart’s customers, but its employees.
The way it works is like this:
Walmart is accused of intentionally paying low wages, counting on federal programs like food stamps and Medicaid to make up cost of living levels for it employees. By factoring this into the operating costs of their business, Walmart arrives at a wage level that makes it just barely worth it for employees to keep a job there, but not so high that they lose their federal benefits.
Studies show that Walmart employees have some of the highest percentages of food stamp program participation. In fact, Walmart has become the number one driver behind the growing use of food stamps in the United States with “as many as 80 percent of workers in Wal-Mart stores using food stamps.”
What the means is that taxpayers are picking up the slack where Walmart refuses to pay. It is a long-and dearly-held tradition in America to not demonize those who do well. Anyone who succeeds should get the spoils of their success. It is how America was built and continues to thrive.
But how many companies get their money by counting on such hidden subsidies out of the public’s pockets?
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