Why Walmart Should Defend Food Stamps

It is easy to see how the House of Representatives could pass a farm bill jammed with goodies for agribusiness while leaving food stamps out of the equation. The wealthy have powerful friends in Washington while the poor do not. What is less understandable is why some of the biggest beneficiaries of the food stamp program in corporate America aren't leaping to SNAP's defense. 

I'm not talking about grocery store chains who get subsidized customers. I'm talking about low-road employers who can get away with paying poverty wages thanks to programs like SNAP, Medicaid, and the EITC which make life endurable for the working poor. 

Recently, the Democratic staff of the U.S. House Committee on Education and the Workforce undertook an analysis of just how much workers at America's largest private employer, Walmart, rely on public assistance and how much this costs taxpayers. They used data from Wisconsin to estimate the costs. The report found that:

a single 300-person Wal-Mart Supercenter store in Wisconsin likely costs taxpayers at least $904,542 per year and could cost taxpayers up to $1,744,590 per year – about $5,815 per employee.

The authors came up with that number by piecing together how many Walmart workers were likely to be on specific forms of public assistance. The foundation of this analsyis was data published by Wisconsin in 2012 that found that 3,216 Walmart workers relied on the state's Medicaid program, with another 6,000 or so children and dependents of these Walmart workers also receiving Medicaid benefits -- for a total cost of $251,706 per supercenter store.

The authors then extrapolated from these figures to estimate participation in other programs that Medicaid recipients typically use, from school lunch programs to energy assistance to child-care subsidies and -- of course -- food stamps. Indeed, the cost to taxpayers of Walmart workers on food stamps was nearly as high as Medicaid: $219,528 per supercenter store.

Because of wide variations in state public assistance programs, it is difficult to move from these findings about Wisconsin to a broader national estimate of how much Walmart's low-wage business model costs American taxpayers every year. 

But the math looks rather disturbing: Walmart has 3,188 supercenter stores around the United States. If the employees of those stores cost taxpayers anywhere near the $900,000 to $1.7 million that each supercenter costs in Wisconsin, we're talking about several billion dollars a year in de facto subsidies to this hugely profitable company. 

And that's just Walmart. A large swath of the U.S. workforce is now employed by low-wage employers. One reason that food stamp usage has continued to be so high even as unemployment has fallen is because so many of the new jobs that have been created since 2009 have been in the low-wage sector. 

So I'll say it again: Companies like Walmart and McDonald's should be fighting hard to protect SNAP from conservatives in Congress, given that their workers would go hungry without the program. And while they are at it, they should push recalcitrant governors to embrace Medicaid expansion under the Affordable Care Act, which will be a boon to low-wage workers. 

Or, how about this radical idea: Those companies should simply share more of the profits that only are possible because their workers show up every day. 

Comments