A Thanksgiving Tale

It seemed an interesting gesture for Wal-Mart to announce by television commercial that it would give any returning honorably discharged veteran a job. Given my peculiar view of good deeds, that an act isn’t truly charitable if there is a self-promotion component to it, Wal-Mart’s commercial was banal pandering. Still, it was a better advertisement than “come to Wal-Mart and meet interesting people.”

But a post by Turley’s permanent weekend guest-blogger, Mike Spindell, put a different light on the offer.  While I don’t think I’ve ever been in a Wal-Mart, and frankly have neither a clue nor interest in finding out whether there is one anywhere near me to visit, I have enjoyed images of Wal-Mart shoppers from time to time, which makes me feel as if I have a connection to it. From a distance.

So Wal-Mart’s ironic attempt at concern for its employees was rather, well, shocking.

bins1-15660341jpg-b2a282e054d52e53 walmart

As Spindell explained:

The picture above really says it all. Walmart, our country’s largest retail operation is run by people who are so clueless that they’ve created a culture that doesn’t even understand the massive irony in running a Thanksgiving Food Pantry for its own employees.  The photo comes from a Walmart in Canton, Ohio. The concept of food collections for the poor at retail establishments is widespread in America, even as many Americans deny that anyone in this country goes hungry. The irony of this food drive though is that it is asking Walmart employees, who are already low paid, to donate food to fellow employees who are even worse off than they are.

This is ironic on too many levels to count, but then, nobody ever accused the Walton family of being unduly sensitive to their employees’ needs.  Had this been between Wal-Mart and its employees, that would be one thing. Volitional acts have consequences, and whether they are too severe as to require intervention, say unionization or consumer boycott, is a matter of debate.

But as Spindell notes, Wal-Mart isn’t just playing with its own money and the lives of its employees. It’s playing on the public fisc.

The average Walmart Associate makes $8.81 per hour which translates into a yearly income of $15,576 if the Associate works a full time schedule.  Most Associates don’t work full time because working full time would entitle them to benefits that Walmart doesn’t want to pay. Interestingly, the current U.S. poverty level for a three person family in our country is $19,530. So we see that the rare Walmart full time employee, with two dependents, earns about $4,000 per year below the nation’s poverty level. Indeed, Walmart has made it a practice to inform its employees about benefits like Snap and Public Assistance.

That last sentence caught my attention. Part of Wal-Mart’s “employee benefit” program is to point toward public assistance?

Here is an insider’s view on the specific Walmart situation in Ohio, from an Ohio State Representative:

“A recent study concluded of all the companies in Ohio, Wal-Mart has the highest number of employees on public assistance. Of the 50,000 Wal-Mart employees and dependents, almost 13,000 are on food stamps, and 15,000 on Medicaid. What part of the American dream can the employees of this giant “welfare queen” expect?

My issue isn’t that employees are on food stamps or Medicaid. If they need it, that’s what it’s there for.  But Wal-Mart is free-riding off public assistance to supplement its salary structure? Our tax dollars are used to subsidize Wal-Mart’s wage structure for the benefit of the Waltons’ business?

While an argument can be made that we all benefit from the existence of cut-rate stores like Wal-Mart, where we can purchase items inexpensively, and the taxpayer gets a return on his investment in the Walton fortune, it’s a disingenuous argument. It requires us to shop at Wal-Mart and thus further enrich the Waltons, who may be selling things cheap but not at a loss.  Sam Walton may be a swell guy, but if I’m going to give him my money, I would much prefer it be my choice.

Yet, Wal-Mart has that television commercial that shows its colors, red, white and blue.  And we patriotic Americans may hate or love our wars, but never blame our soldiers for doing their duty.  That’s a good thing, and so we are naturally inclined to feel warmly toward those who provide them with help and support in their transition back.

But when seen through the prism of Wal-Mart’s freeloading, the warm and fuzzy feeling of the Waltons’ generosity of offering to put American veterans on welfare doesn’t seem nearly as kindly as Sam’s self-promotional charity first appears.

It’s long been well known that Wal-Mart’s employment practices haven’t served to place its employees in middle class security.  That was the giveback for cheap prices. That’s economics. Something has to give. But when the economics of Wal-Mart is bolstered by transfer payments, that’s a problem.

Keep your hands out of my pockets, Sam.  If you’re going to falsely promote yourself as charitable, do it on your own dime.

14 comments on “A Thanksgiving Tale

  1. Fubar

    SHG concluded:

    But when the economics of Wal-Mart is bolstered by transfer payments, that’s a problem.

    Keep your hands out of my pockets, Sam. If you’re going to falsely promote yourself as charitable, do it on your own dime.

    Dang toot’n!

    I don’t compliment your succinct summary of facts and decidedly correct conclusion above from a purely seasonal impulse, although turkey day’s imminence probably doesn’t hurt. At risk of the Wrath of Khan the Off-Topical ™, I’ll tell you: it’s one primary reason I read Simple Justice regularly.

    Your Wal-Mart post here, and your previous LIRR posts exemplify that reason. I know a bit about Wal-Mart due to vagaries of historical accident and experience. I know zilch about LIRR for similar reasons. In each case your accounting of the facts, and application of fundamental principles of human decency and justice, both enlighten about things I don’t know, and clarify the applicable underlying principles about things of which I do know something.

    So there!

    Better than getting stuck in the eye with a sharp stick, amirite?

    1. SHG Post author

      Better than getting stuck in the eye with a sharp stick, amirite?

      Damn right! I’m thinking of using that as my new slogan.

  2. UltravioletAdmin

    There’s another article I saw on the effects of the SNAP benefits cuts to Walmart. It’s actually a tremendous hit, as something like 1/3 of SNAP money ends up at Walmart. So not only do they get effectively subsidized by the government due to their low wages, but then they dip their tools in the pool again.

    1. Lucky Zealot

      The reason that SNAP money ends up at Wal-Mart is because they offer generic, store-brand cheap food that stretches a dollar. Other grocers benefit in the same way: huge discounts for low or medium quality food in medium and large quantities.

      Anecdotally, my wife earned two (small) raises in only one summer as a part-time employee at Wal-Mart, and it was enough to get her through summer until school started back up. Most employees eventually earn more, just like any other job. Part-time jobs are cruddy anywhere, though, so the problems that Mr. Spindell notes aren’t unique to Wal-Mart. Full-time jobs have become more and more expensive for the employer, particularly for higher-volume companies that have to pay for more employees’ benefits, so the mandatory benefits have really hurt the prospect of having more full-time employees in the eyes of the manager or business owner.

      Also… picking on the Thanksgiving boxes is a cheap shot. Tons of companies do this. The military has these donation drives, too. Why can’t the Federal government pay its employees “enough” to have a nice Thanksgiving dinner? For reasons various and sundry: long-term irresponsibility, including too many kids, too many purchases, too much debt, etc., etc. Or someone wants something nice this Thanksgiving, or someone had a big emergency this year and it wiped out their savings. Things happen. Thanksgiving for people without substantial savings means potluck-style dinners sometimes, or accepting donations. I could see Mr. Spindell’s point if Wal-Mart was running a food pantry for its employees in general on a monthly basis, but Thanksgiving donations around the workplace are not as unusual as is being portrayed.

      1. SHG Post author

        I’ve always found the argument in response to “you’re ugly” that “you’re ugly too” to be curious. It doesn’t make the first one any less ugly. No doubt there are other companies (or the army, which is a poor analogy in so many ways) who also behave similarly, but that doesn’t show that Wal-Mart isn’t ugly, and the others aren’t Wal-Mart.

        1. Lucky Zealot

          I suppose I took your meaning to be that Wal-Mart was singularly ugly, rather than commonly ugly.

          You and Mr. Spindell did make the point better than Gawker, though.

          1. SHG Post author

            It may not be singularly ugly, but it is specially ugly because it’s the behemoth Wal-Mart, because of its effort to promote itself as being specially charitable and because of the vast wealth it’s brought the Waltons.

            1. A Voice of Sanity

              I find it interesting that employee owned chains like WinCo and Publix offer a better employee environment and still do perfectly fine as companies.

              I also observe that Walmart has gone into markets, destroyed all the existing businesses and then pulled out when the market proved unprofitable leaving nothing behind.

  3. John Thacker

    “Our tax dollars are used to subsidize Wal-Mart’s wage structure for the benefit of the Waltons’ business?”

    Our tax dollars are used to allow Wal-Mart to hire more people at their current wage structure. However, the economics suggest that it’s very unlikely that wages would go up if SNAP were cut or eliminated. (In the very unlikely event that that were the case, which it’s not, that would actually be an argument for cutting SNAP.) By being able to hire more people, it is the case that Wal-Mart as a whole makes more total profit (but not higher profit margin), but not by affecting wages at Wal-Mart, which are the same as at Target or other retailers with a similar business model– which is evidence that Wal-Mart is not a monopsony. (CostCo is different, largely by focusing on a wealthier audience combined with much fewer staff per revenue.)

    This argument in favor of cutting food stamps and welfare going around is disconnected from reality.

    1. John Thacker

      Economic parameters such as the elasticity of labor supply and demand largely determine “who benefits” from a government program, regardless of who is stated to benefit. For example, despite the division of Social Security taxes into an “Employer Portion” and “Employee Portion,” most economists believe that employees pay most of the taxes (i.e., even the employer portion comes out of lower wages). So too do employer mandates for health care and other benefits come out of lower wages or other conditions.

      However, the same economic parameters that lead to that result also lead to the corresponding result when the employee is subsidized instead of taxed– it is the employee that benefits or is penalized, not the employer. The case is symmetric. Therefore, just as social security taxes are paid by employees, employees get the benefit of food stamps.

    2. SHG Post author

      Our tax dollars are used to allow Wal-Mart to hire more people at their current wage structure.

      Wal-Mart hires as many people as it needs. If it needed more than it could obtain at its prevailing rate, it would pay more, but it doesn’t hire any more employees than it needs to have them standing around with their thumb up their butt. It’s not merely diminishing returns, but to suggest that it hires people at below-subsistence wages out of kindness rather than necessity isn’t credible.

  4. Brett Middleton

    When I was a teen, I got my first job flipping burgers for minimum wage (a buck an hour back then) in a Marriott Corp. chain restaurant. Most of my meager earnings went into a savings account for my college education, while my parents continued to clothe, feed, and shelter me. Pretty typical teen employment scenario, right?

    Would you say that Marriott Corp. was making their profits by sticking their hands in the pockets of my parents? That Marriott was free-riding off my parents to supplement their salary structure? That my parents were subsidizing Marriott’s wage structure for the benefit of the no-doubt-wealthy owners?

    Or were they just paying me what my unskilled labor was worth, without concern about how I made up any difference between that worth and what I required to sustain myself?

    1. SHG Post author

      You, your parents, your grandparents, the Kiwanis, are all free to subsidize you any way they please, and it’s all fine. That’s their money and their choice. If they chose not to subsidize you, you couldn’t afford to work there (and kids working for minimum wage present a very different issue than adults with families). If they needed burger flippers and couldn’t get them for minimum wage, they would have to pay more.

      But when the subsidy comes from the government via transfer payments, it’s my money, but without my choice. There’s the difference.

  5. John Barleycorn

    Swim

    Relax it’s OK.

    Terrible peril find parable.

    ET phone home WTF?

    Extra terrestrial disturbance lately or simple floor flowing float disturbance.

    Fighting the retailer is myth. Watch your six become midnight nightmare figured for whatever reason.

    What is that fight?

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