Walmart: America's real 'Welfare Queen'

By Paddy Ryan

Walmart, one of the richest corporations in the world, refuses to pay its employees a livable wage or provide any form of decent healthcare, increasing reliance on government assistance, and the need for a social safety net.

At over $446 billion per year, Walmart is the third highest revenue grossing corporation in the world. Walmart earns over $15 billion per year in pure profit and pays its executives handsomely. In 2011, Walmart CEO Mike Duke – already a millionaire a dozen times over – received an $18.1 million compensation package. The Walton family controlling over 48 percent of the corporation through stock ownership does even better. Together, members of the Walton family are worth in excess of $102 billion – which makes them one of the richest families in the world.

What is shameful is that CEO Mike Duke makes more money in one hour, than his employees earn in an entire year. Yet, Walmart – which employs millions of people in its stores, distribution centers, and warehouses – continues to abuse its employees and refuses to pay them a livable wage. The company has frequently been charged with wage theft claims by workers who point to the most common forms of wage theft: the refusal to pay proper overtime, the refusal to honor the minimum wage, and illegal paycheck deductions.

Meanwhile, Walmart routinely blocks any attempt by workers to organize, using anti-union propaganda and scare tactics, firing employees without just cause, failing to provide any form of decent healthcare coverage or a livable wage.

To make matters worse, these abusive Walmart policies have increased employee reliance on government assistance and the need for a government funded social safety net. 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."

Wal-Mart's poverty wages force employees to rely on $2.66 billion in government help every year, or about $420,000 per store. In state after state, Wal-Mart employees are the top recipients of Medicaid. As many as 80 percent of workers in Wal-Mart stores use food stamps.

Walmart's employees receive $2.66 billion in government help every year, or about $420,000 per store. They are also the top recipients of Medicaid in numerous states. Why does this occur? Walmart fails to provide a livable wage and decent healthcare benefits, costing U.S. taxpayers an annual average of $1.02 billion in healthcare costs. This direct public subsidy is being given to offset the failures of an international corporate giant who shouldn’t be shifting part of its labor costs onto the American taxpayers.

Wal-Mart workers’ reliance on public assistance due to substandard wages and benefits has become a form of indirect public subsidy to the company. In effect, Wal-Mart is shifting part of its labor costs onto the public.

Recently, Walmart workers have been speaking out against the abuses they face because of excessive corporate greed. For the first time in Walmart's 50 year history, workers at multiple stores are striking. Last week, over 70 Walmart workers in Los Angeles decided to walk off the job.

The Huffington Post reported this week that the recent wave of Walmart strikes has now grown to 12 cities across the United States, with workers walking off the job in Dallas, Seattle, the Bay Area, Miami, the Washington D.C. area, Los Angeles, Sacramento, Chicago and Orlando, in addition to cities in Kentucky, Missouri and Minnesota. 

According to the United Food and Commercial Workers, 88 workers from 28 different stores went on strike yesterday.

And it's not just Walmart's storefront employees speaking out for justice. The warehouse workers that Walmart employs through its supply chain have been striking as well. Walmart warehouse workers in Illinois and California also went on strike earlier this month.

They are fed up. And we should be too. Walmart should no longer be allowed to turn its back on the American worker and push its labor costs onto the American taxpayer. We need to protect our social safety net, American workers and American taxpayers. If Walmart can afford to pay CEO Mike Duke an $18.1 million bonus package, it can afford to provide a living wage for those whose sweat and hard work has made Walmart one of the richest corporations in the world.

Whippings for Workers and Locusts for Savers

By masaccio from firedoglake
republished by Paddy Ryan

The strike at Caterpillar‘s Joliet plant has ended in a crushing defeat for the union. Members agreed to accept a pay freeze for six years for most workers, and one 3% raise for those hired after May, 2005, a freeze on pension benefits, and a sharp increase in the worker share of health care premiums. Caterpillar is immensely profitable. It just gave its CEO a 60% increase in compensation, to $16.9 million. Based on the figures in the New York Times, I estimate the payroll at the Joliet plant at about $39 million.

At one level, this is just more evidence of the death of the liberal bargain. The old deal was that as productivity increased, some of the increased profits went to workers, and some to capital. The revised deal, effective about 1980, is that the workers only share in the gains from productivity if we are at full employment, and then much less than before. As Caterpillar explains, its employees at the Joliet plant were making more than market wages, and they needed to be whipped into line. In pursuit of its own self-interest, Caterpillar might increase wages at this plant if local labor markets tighten. In other words, no matter about productivity, work harder and Caterpillar gets all the profits. Not much incentive to work hard, is there? Perhaps CEOs are not subject to the same incentives as those stupid people who operate the machines to build hydraulic parts.            

And in the comedy portion of this post, think about the CEO, Douglas R. Oberhelman, running a milling machine. On the other hand, I’m sure he’s pretty good at setting up asset-backed securities to off-load Caterpillar’s accounts receivable. Ayn Rand would be so proud.

At another level, this is the inevitable outcome of the failure of the government, led by conservatives of both parties, to deal with massive unemployment. Caterpillar union members aren’t cowards. They went months on next to nothing, but in the end, facing an intransigent management, and recognizing that a single plant can’t halt a world-wide enterprise, that other people are desperate for jobs, and with minimal support from their parent union, they surrendered. When management says “paid above local market levels”, they mean they can find acceptable replacements who would love to work for minimum wage. As long as unemployment continues, workers have no leverage against greed.


That liberal bargain about shared productivity gains isn’t the only part of the deal that has been destroyed. The old deal was that if you work hard, live within your means and save for retirement, you can accumulate enough money to provide for a good retirement and still leave something to help your kids. Lots of Americans lived by those principles, didn’t refinance their homes, didn’t borrow heavily, saved up to educate their kids and for retirement, and hoped to retire on Social Security, perhaps a small pension and the income from a small pile of financial assets.

That deal is over. David Cay Johnston explains in a blog post (currently having some kind of technical problem, here’s a link to excerpts):

The crisis next time: collapsing investment incomes for older Americans as artificially reduced interest rates force them to use up their savings and drive more pension plans into failure.

The Fed has been keeping interest rates low for more than ten years. The stated rationale for this policy is to encourage people to borrow and invest, making capital available to create jobs. Ha. Or as Johnston says:

Holding down interest rates to prop up banks and the economy and help the already rich buy assets on the cheap, amounts to an official policy to take from the ants who saved for their old age and give to the Wall Street grasshoppers. Given the economic devastation this causes, it is more accurate to say to give to the financial locusts.

Millions of everyday people, some in unions, some not, lived in accordance with these unstated bargains. They worked hard, they saved, they lived within their means, and now their savings are food for locusts. Mitt Romney and Paul Ryan are the spokesmen for the Oligarchy, telling all those people that the big problem is that government gives money to the poor bastards who bought the official line of borrow and consume as if tomorrow didn’t matter. That’s all worked out well for the pigs on Wall Street and their sleazy clients, because when push came to shove, the entire government apparatus fell all over itself to come up with creative ways to give them money. It really sucks for everyone else.