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WALMART AND WELFARE

April 28, 2017

WALMART AND WELFARE

Professor Shelia Kennedy’s blog today complained of how Walmart’s poor wages paid to their help trigger welfare payments paid by you and me to such grossly underpaid employees. We the taxpayers have to support Walmart’s employees with food stamps and other welfare programs because these employees are paid so poorly, and all the while Sam Walton’s heirs and devisees are raking in enormous profits from Walmart’s operations, heirs and devisees who control more of the nation’s wealth than the lower 40 percent of all Americans, and you and I are involuntary sponsors of this obscenity. The welfare payments we make for Walmart’s employees to keep body and soul together go directly to Walmart’s bottom line for distribution to Sam’s heirs and devisees. This is wage inequality on steroids and the best example of corporate welfare I have seen, though there are many other corporations which are also on corporate welfare in one guise or another. This, unfortunately, is no minor expense since Walmart is the biggest employer in the country.  I responded to Sheila’s request for commentary as follows, as slightly edited for this blog.

I have not darkened the door of a Walmart for 12 years in protest to the way they treat their labor force and how (as Shelia documents) I am forced through certain government programs to maintain their profit margins that accrue directly to Sam’s heirs and devisees, whose combined wealth exceeds that of the combined lower 40 percent of all Americans. This is an obscene result and I, like the rest of us, am knee-deep in a dilemma, i.e., I am in favor of these government programs to help the working poor but opposed to how government largesse works out in practice in padding the profit margins of the superrich. No wonder superrich monopolists quietly favor such government programs; the “government” by its programs and policies in providing welfare for the poor also provide corporate welfare for the superrich under cover of nobility of purpose and is so to speak by far the latter’s best-paying “customer.”

The culprit is not to be found in such welfare programs for the poor and underserved; it is rather the four decades-old and ongoing program of wage inequality, commented upon by Piketty and Stiglitz in their books and papers (along with Piketty’s extensive discussions of patrimonial capitalism, or being born on third base – see Trump, Bush, Romney, Sam’s heirs and devisees et al.). Few of us are born on third base; the vast majority of us are at the plate with two strikes already assessed for our future(s). Those who work at Walmart are by and large standing at the plate with three strikes already assessed against their future(s), victims of chronic wage inequality trying to exist while the money Walmart should be paying them but for chronic wage inequality is diverted to Sam’s heirs and devisees.

Walmart has recently stated that they are going to be paying their help a minimum wage of $15 per hour, a welcome announcement not in keeping with their business plan history. How to pay for such raises? With big competitive heat from Amazon it may be that Walmart like other brick and mortar stores has decided to attract better customer service with more efficient help and finally understand that wage inequality is abating as policy with a tightening labor market. It also could be because they intend to insert more automation into how they do business, or that they will fare better on taxes and regulation as Trump has promised, or raising prices, or going head to head with Amazon in electronic sales and delivery while making their present stores into warehouse sites for delivery, or anything else they can conjure which will keep the profit margins secure or even enhanced for Sam’s heirs and devisees.

I suspect without knowing that unless Walmart reconfigures its business plan to meet market realities it is ultimately headed for a Chapter 11 experience. Walmart, after all, produces nothing; it is a mere marketing scheme for the goods and services produced by others, and it appears that brick and mortar distributive schemes are about to become horse and buggy efforts outdone by new and better and cheaper electronic distributive schemes. Now if Walmart provides living wages and health insurance and pension plans for their help, I may darken their door once again and/or order electronically. Their call.     GERALD      E

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