Wal-Mart - $15 billion in profit, asks workers to donate food for Wal-mart workers

I think their argument is misguided and poorly considered.

The fact is that Walmart is organizing a food drive, and the argument presented is that it’s bad because Walmart should just donate everything itself.

It’s a silly, childish perspective.

Corporations really don’t care. They have never cared, really. That’s their nature, unless a corporation has very unusual management, they focus on financial rewards for the top tier of management and shareholders, if they’re public. There are occasional exceptions, Costco being particularly appropriate for this thread, since they’re also a big-box retailer and yet they’re dedicated to sharing a significant slice of the gross profit with the employees. That’s not the norm, though.

It’s not a societal problem, it’s the imbalance of power between management and individual workers. Even if there’s plenty of gross profit to go around, management wants it all to go to themselves and to shareholders. It’s well-documented that if a company has no constraints, it will pay labor barely enough to eat, no matter how profitable it is. The conditions at the Chicago stockyards documented in Sinclair’s The Jungle and coal-mining company towns of the late 19th century being prime examples.

It’s only a “society problem” in the sense that the only solutions are ones forced on companies by society. Labor regulations, minimum wage laws, and the like. Such solutions are often imperfect, but they’re a lot better than what preceeded them.

The willful blindness of the Timexes and the Lemons of the world is frustrating. “Why should Wal-mart take on the role of the state?” he asks - when the real issue is that the “role of the state” is to prevent Wal-mart from robbing its employees. It would be nice if Wal-mart would take on the “role of the state” in ensuring its employees get a reasonable share of the gross profits they generate. But they won’t.

Public corps are incapable of caring- all they are capable of is being driven by profit motives. That’s why you need the state, to protect the public from these giant corps becoming too all-powerful.

We’ve already seen the damage Wal-Mart has done.

If Wal-Mart doesn’t want to be pilloried for their food drives for their own employees, they can pay their employees enough so that they don’t need government assistance.

They might only make $8 billion in profit instead of $15billion. Oh the horror.

So you’re saying that it is the responsibility of the state to feed to hungry and provide benefits to the working poor? I’m glad to see we’re finding common ground. Still, when a large corporation like Walmart goes out of their way to ensure that employees qualify for welfare, it starts to feel a bit like the taxpayers are subsidizing their profit and I suspect you and I would also agree that this is not an acceptable state of affairs.

Fortune magazine did an analysis and determined that Walmart could give all of their employees 50% raises without adversely affecting their stock:


To be fair, this isn’t entirely true. If the tiny handful of people in charge of a corporation are ideologs, the company can care. Costco cares. Ben and Jerry’s used to care, but then the ideologs retired, and the new owners didn’t care. It’s not a stable situation since it depends on people in power acting against first-layer financial self-interest in the name of principle.

Or, arguably, seeing long term benefits to themselves from a wealthier working class, but that’s pretty abstract, and hard for most people to grasp. I didn’t quite grasp how our society’s safety nets make everyone in the country wealthier, not just the immediate beneficiaries, until I spend 3 weeks in India and saw how it works without them.

Here’s a fun article in Forbes about a (now sadly failed) attempt in California to penalize Walmart for foisting its employees onto public welfare rolls:

After analyzing data released by Wisconsin’s Medicaid program, the Democratic staff of the U.S. House Committee on Education and the Workforce estimates 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.”

That’s $1.7 million per Superstore. If you have Walmarts in your state, your tax dollars are subsidizing their profits. I know how angry conservatives get about people on Welfare stealing their hard earned tax dollars so I’m going to assume that all conservatives are angered by this and feel that Walmart should enough to keep its employees off the poverty rolls.

This morning on the radio I heard that this food drive is self-organized by the employees – i.e. it’s not sponsored by Wal Mart, but is rather an effort of the associates at this particular store to support one another (or the least among them, or whatever pithy phrase you want to insert). I don’t know that this changes things all that much, but I think it does make at least a little difference that it’s independent of (although closely related to) how badly Wal Mart is screwing their employees.

This is my point, corporations exist to sell products and generate wealth. To expect them to be social stewards is unrealistic and I think unfair. Should we expect them to play by the rules? Absolutely. Mitigate poverty? No.

That’s a job for government.

A society is measured by how it treats the least fortunate. No one should go hungry, or want for shelter. If society at large fails to provide for the poorest, then the government should step in.

I’m glad to see we’re finding common ground. Still, when a large corporation like Walmart goes out of their way to ensure that employees qualify for welfare, it starts to feel a bit like the taxpayers are subsidizing their profit and I suspect you and I would also agree that this is not an acceptable state of affairs.


This graph is useful. It shows the level of public assistance for Wal-Mart employees compared to other big box stores. Unfortunately they do not define All Large California Retailers, the group they compare Wal-Mart to. W-M requires workers require more public assistance than their rivals, but their rivals still require public assistance just the same.

The issue is complex though, they don’t explore the role of W-M in reducing costs for the poor for example. W-M employees may not make much, but the stores do help by offering much lower prices that allow employees and the poor in general to stretch their dollars. The costs at W-M union competitors are higher and their reflected in the prices of their goods. In that respect W-M is certainly a good thing.

and I have to sprint to work, I’ll pick this up later

My gawd man, how dare you even attempt to defend the evil Satan Wal-Mart. People wearing chains forced to work for a company that holds their families hostage while they work.

My daughter has done both and she does much better working in a restaurant. Retail does everything based on the 30 hour rule.

Not to defend WalMart, but that immediately begs the question of what the tax income is for a Superstore. E.g., if your typical Superstore costs Wisconsin $1.75M year in services but it generates $1M in taxes, that’s clearly terrible. But what if it actually generates $3M in state taxes each year? What if it’s $20M per year?

You’d be hard-pressed to point to a brick-and-mortar business that is not subsidized in some way by the State and/or county: construction of roads, pre- or post-school daycare for employee kids, construction of water or electric (in some states and counties), sidewalk maintenance, etc. etc. Most of these are expected expenses, obviously, but my point is that you can’t just point to a business and say “It’s costing taxpayers money!” Yes, it is. Every single one of them does. The better question is whether they are a net drain on the local tax situation, and if so, it that repaid in some non-monetary fashion?

Why do municipalities fight to get Wal-Marts if they are such a drag their taxpayers?

Because it doesn’t cost the city a dime. It’s the State and Feds that have to pay.

But the cities benefit through employment and taxes. You can’t just remove that from the equation.

I wouldn’t call it defending Walmart, just pointing out that as someone who has had a lot of retail experience (mostly in management though that is not the case with my Walmart position) that they aren’t as different as everyone thinks. I responded because of the inaccuracies about health care and bonus payments in some early posts.

Besides, the main reason why Walmart is so profitable isn’t because they pay less in wages and benefits to each worker, its because they operate on a lower worker to sales ratio then most of their competitors.

Come on, jpinard. You can be better than this. This Walmart bashing comes off as a little provincial, don’t you think? And for organizing a food drive, no less?

There is no way to make asking your low-wage employees to provide Thanksgiving dinner for your other low-wage employees look good. And you think it’s jpinard that needs to be better? Jesus Christ.

This isn’t just lefty blogs…every news org in the country has picked this up now. “The Walton family and friends stuff their faces while their employees have to scratch for some old canned goods and taxpayers pick up the tab” is pretty much the story now.

So your argument is that the media only runs accurate, well researched, well thought out stories?

I’m not sure media attention actually helps your argument. Perhaps taking an economics course would help.

Haha. OK.

You also can’t assume that in the absence of Wal-Mart, there would be no grocery store or hardware store making up the employment deficit. I wish I could find a link that explained this, but the net city benefit is negative as Wal-Mart contributes considerably less in tax revenue than would individual local stores that would serve the same basic consumer needs. And Wal-Mart profits don’t stay in the city, unlike those of local businesses.

Ah, here it is. Ignore the inflammatory headline (if you can).

Adding up the property and sales tax paid on each piece of land, Minicozzi found that the Walmart contributed only $50,800 to the city in retail and property taxes for each acre it used, but the JCPenney building contributed a whopping $330,000 per acre in property tax alone. In other words, the city got more than seven times the return for every acre on downtown investments than it did when it broke new ground out on the city limits.

When Minicozzi looked at job density, the difference was even more vivid: the small businesses that occupied the old Penney’s building employed fourteen people, which doesn’t seem like many until you realize that this is actually seventy-four jobs per acre, compared with the fewer than six jobs per acre created on a sprawling Walmart site. (This is particularly dire given that on top of reducing jobs density in its host cities, Walmart depresses average wages as well.)