Wednesday, November 28, 2012

A non-productive business model


For reasons that baffle this writer, Walmart is pursuing a policy that would seem to run counter to their desire for continued obscene profits.
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.
So why does Walmart want to starve its employees and deny them health care when those same services also provide the average Walmart customer with extra funds to spend in Walmarts own houses of ill repute?

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