November 1, 2013 by David K. Sutton
Profiting From Government Subsidy: That’s The Real Walmart
Walmart has been running a new ad campaign with the tagline “That’s The Real Walmart.” The ads started earlier this year and they are designed to trumpet career growth opportunities for Walmart “associates.” Every time I see one of these ads I can’t help but think it’s a slap in the face to the thousands of Walmart workers who have organized and protested the company’s low wages and minimal benefits. But these commercials offer a completely different message. If you didn’t know better, you’d think Walmart was the ideal company to work for. I’m sure there are positions within Walmart that pay good wages and offer adequate benefits, but what about the average Walmart floor worker? And don’t get me wrong, I’m not trying to critique Walmart employees, because in this economy, with so many people still looking for work, a job is a job. I’m not judging Walmart employees, I’m judging Walmart.
This is the real Walmart:
Walmart Is One Of The Biggest Beneficiaries Of Food Stamps — Americans spend about 18 percent of all food stamp dollars at Walmart, according to company estimates told to the Wall Street Journal and confirmed by The Huffington Post. That’s about $14 billion of the $80 billion Congress set aside for food stamps last year. The company’s total profits for 2013 were $17 billion.
So wait, is this math for real? All but $3 billion of Walmart’s 2013 profits were from food stamp dollars? I know that’s my way of spinning the numbers, because there’s immense operating costs for a corporation the size of Walmart. But nonetheless, if you take away the $14 billion food stamp dollars, Walmart is left with “just” a $3 billion profit. First, I’m not exactly going to lose sleep over that, it’s still an incredible profit. Second, obviously the ONLY concern (if those food stamp dollars went away) would be for the people who will go hungry.
And yes, it gets worse.
The news comes just as food-stamp benefits are about to be cut for 47 million Americans. On Friday, a key provision boosting the program is set to expire.
After that, 47 million Americans will struggle even more than usual to afford the basics. Walmart isn’t too concerned: When shoppers become more concerned about price, they’re more likely to turn to Walmart, Bill Simon, the retailer’s U.S. CEO, said at an analyst meeting earlier this month.
“I would say we’re cautious but modestly optimistic,” Simon said. “When the [food-stamp] benefits expanded, our market share actually went down.”
It is good to know where the priorities are. But okay, that’s probably not fair. Walmart is not in the business of making sure people don’t go hungry, they are in the business of making money for their shareholders. And we can accept that is how corporations do business. Their profits and bottom-lines are the most important consideration when it comes to their business decisions and their lobbying efforts in Washington.
And now you see why “letting the market work it out” is not always the best course of action.