Walmart Admits that its Business Model Requires Employees to Depend on Food Stamps

Critics cite irony of annual report filing: ‘This is a company that everywhere it goes it creates poverty’

(By Lauren McCauley)

[ Walmart employees are known to be among biggest Medicaid and Food Stamp recipients in over half of the states. – JRIC]

Although a notorious recipient of "corporate welfare," Walmart has now admitted that their massive profits also depend on the funding of food stamps and other public assistance programs.

In their annual report, filed with the Security and Exchange Commission last week, the retail giant lists factors that could potentially harm future profitability. Listed among items such as "economic conditions" and "consumer confidence," the company writes that changes in taxpayer-funded public assistance programs are also a major threat to their bottom line.

The company writes:

Our business operations are subject to numerous risks, factors and uncertainties, domestically and internationally, which are outside our control … These factors include … changes in the amount of payments made under the Supplement[al] Nutrition Assistance Plan and other public assistance plans, changes in the eligibility requirements of public assistance plans …

Walmart, the nation's largest private employer, is notorious for paying poverty wages and coaching employees to take advantage of social programs. In many states, Walmart employees are the largest group of Medicaid recipients.

However, this report is the first public acknowledgement of the chain's reliance on the funding of these programs to sustain a profit.

According to Stacy Mitchell, senior researcher with the Institute for Local Self-Reliance, the irony of their admission is that Walmart "is the company that has done, perhaps, more than any other corporation to push people into poverty."

Citing a Penn State study, Mitchell told Common Dreams that research has proven that "when Walmart opens a store, poverty rates are negatively impacted" and that the more stores that have opened in a particular county, the worse it is. "This is a company that everywhere it goes it creates poverty."

In addition to their own worker's low wages, Mitchell explains that Walmart, because of their enormous size and market power, have "held down wages for the whole sector."

As a retailer that specifically targets a low-income demographic, Mitchell adds that the "insidious genius" of their business model is that "they have so squeezed American workers […] many feel that their only choice is to shop at Walmart."

The International Business Times reports:

Prior to the earnings report, Walmart Chief Financial Officer Charles Holley said the company didn't anticipate how much the end to such programs as the unemployment benefits extension would affect it. Specifically, reductions to the Supplemental Nutrition Assistance Program that went into effect on Nov. 1, the first day of the company’s fourth quarter, pose a potential concern. The cuts led to a between $1 and $36 reduction in SNAP benefits per household, or up to $460 a year. Congress is debating reinstating the extension to the program and making the benefits retroactive to Nov. 1, something Walmart would clearly consider beneficial to its growth.

Previously, Walmart has joined forces with Big Food labels such as Coca Cola and Kelloggs to lobby the United States Department of Agriculture and Congress against any measures that would restrict SNAP use to healthy food choices. According to an earlier study by Michele Simon at Eat Drink Politics, in just one year, nine Walmart Supercenters in Massachusetts received more than $33 million in SNAP revenues.

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Mirrored from Commondreams.org

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from last fall: RT – “Black Friday protests at Walmart stores nationwide”

9 Responses

  1. The report you cited admits no such thing. If you read the section, it makes no mention of employees receiving SNAP and other public assistance. It does however mention in the same section “, credit availability to consumers and
    businesses, levels of consumer disposable income, consumer confidence, consumer credit availability, consumer spending patterns, consumer debt levels,
    consumer preferences, including consumer demand for the merchandise we offer for sale, the timing of consumers’ receipt of tax refund checks, changes in the
    amount of payments made under the Supplement Nutrition Assistance Plan and other public assistance plans, changes in the eligibility requirements of public
    assistance plans, inflation, deflation, commodity prices, the cost of the goods we sell, competitive pressures, the seasonality of our business, seasonal buying
    patterns in the United States and our other markets,:

    The clear implication is that a segment of Walmart’s CUSTOMERS receive public assistance, and that changes in such programs could affect the company’s business. Seems reasonable to me, and hardly the evil that you portray.

    • Oh, come on. Everyone knows Walmart offloads employee costs (food insecurity, health care) onto government. Maryland even passed a law targeting only Walmart among corporations insisting that it cannot do that. The filing admits that changes in SNAP could affect their bottom line, implying that it would have a negative impact on their employees.

      • You have made a very serious charge and one that is not clearly borne out by your quotation.
        You answer, “Oh, come on ” shows how careless you have let yourself become in recent years, especially in reporting in fields outside of your Middle Eastern specialty.

    • It appears that Dave either did not read or is willfully misrepresenting the report about Walmart provided in the link under the byline. As one who has worked in food banks I can state that it is unfortunately not uncommon for members of the business community (i.e., the so-called “job creators”) to be utterly clueless about the lives led by their employees.

      Often these people are simply unaware that their businesses do not provide a living wage to their employees. When told that their employees are patrons of the local food bank they are stunned – this is especially inexcusable in small poor communities where they can walk into any of the local stores and see an employee working elsewhere to make ends meet. Two jobs? Food stamps? Of course, because we’ve decided that a harsh existence is somehow “toughening” and that “pulling oneself up by one’s bootstraps” is character building and essential to American identity.

      Of course this is nonsense: lack of a living wage law in this country is nothing less than wage slavery. It impoverishes families, children, and life in general. It is a form of exploitation, and yes Dave, a system of Evil (of which Walmart is a part), especially when it leads, as it often does, to child neglect, malnutrition, and despair.

  2. “Everybody knows” is not reason to intentionally misrepresent what the report says. “Affecting their bottom line” does not equal “requires employees to depend on food stamps.” If you want to criticize Walmart, at least be honest about it and not make stuff up. I was going to go with intellectually lazy as the excuse for your headline. I was wrong. Intellectually dishonest is more accurate.

    • Again, read the link under the byline of the initial post. While there has been no definitive study on the issue, it is indisputable that Walmart, half of whose earnings now come from groceries, is also one of the largest SNAP (possibly the largest SNAP) beneficiaries in the country. Check out Marion Nestle’s discussion at:

      link to foodpolitics.com

      As for intellectual dishonesty and laziness, again it appears you have yet to go over the report in the link under the byline. The upshot is that there is a pretty hefty body of evidence that indicates that not only do Walmart employees rely inordinately on SNAP, but that Walmart double-dips by actually profiting from the program. That is to say, Walmart is in no small part a tax-payer supported enterprise. Again, I strongly urge people to read Marion Nestle on this issue – she is an outstanding blogger on the politics of food in this country.

  3. For all those “serious” critics of “everyone knows”ism, and regarding the impeachment-by-link-selection-live-or-die-by-interpretations-of-text-from-contributors game, maybe you serious folks could go Google “Walmart employees food stamps” and shake hands with articles from Bloomberg, Forbes (“Capitalist Tool”), IBTimes, LA Times, WSJ and other wild-eyed Liberal Lairs. And for some more chances to cast aspersions on what everybody knows, here’s another interesting link, with pictures! “The Walmart Death Spiral,” link to dailykos.com

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