Walmart routinely defends its practice of paying poverty-level wages by pointing to its low prices. Sure, taxpayers end up subsidizing Walmart employees who qualify for Medicaid and food stamps, but the company’s low, low prices mean that even Walmart employees can afford those tube socks!
That assertion–that low pay is what allows Walmart to offer goods at low prices–just took a hit.
The most recent issue of Consumer Reports contains a very interesting comparison of grocery prices. Titled “Getting More from Your Store,” the article had the usual number of helpful hints; what really caught my eye, however, was the chart comparing prices for the same brand of purchases like flour, coffee, tall kitchen bags, toilet paper and similar items. The folks from Consumers compared the costs of store brands, Costco, Walmart, various regional chains and Walgreens for each item. Store brands, unsurprisingly, were cheapest overall.
Next was Costco.
Costco pays its employees roughly twice as much per hour, on average, as Walmart, and also provides health insurance. Yet Costco was cheaper than Walmart for eleven of the twelve items sampled. The totals for the “basket” of twelve items were: store brands, 49.59; Costco, 55.49, Walmart 70.52. The regional chains averaged 72.93 and Walgreens came in at a whopping 96.90.
Um…tell me again why taxpayers are subsidizing Walmart employees?
Here we go again with the Costco praises vs Wal Mart complaints. Costco is primarily a wholesale warehouse membership club. It is also an internet broker and travel agent. Through Costco membership they also offer auto and home insurance and have a photo center. They are more of a business conglomerate than Wal Mart’s big box stores so they can afford to pay employees more – below are a few of the reasons for this:
They usually offer bulk packaged items in a warehouse setting with many items on floor pallets vs shelves with merchandise displayed and within easy reach. They do not carry multile brands or varieties of many items. They do not provide bags for purchases nor do they bag items for customers. They reduce their lighting costs on sunny days by depending on skylights. They are similar to Sam’s Club in this way; what both offer is NOT what the majority of shoppers need. Families often do not need and cannot afford to buy in bulk; carrying in used bags and boxes to carry out purchases means customers are working for Costco…fewer employees means more profit to pay higher wages.
There has always been and will always be different levels of pay scales in different places of employment. This is true in all levels of business. It all gets down to personal qualifications, availability of job openings for employees and the personal needs and income of customers. There is also the issue of location of and number of Cosco vs. Wal Mart stores. Those who prefer Costco should continue paying membership fees, taking in their own carry out bags and/or boxes and loading them at the checkout.
Some people are “so hopelessly dependent on the system, that they will fight to protect it”. I see this with loyal WalMart consumers. Personally, I do not enjoy tax dollars subsidizing a company that has killed American jobs that were NOT government subsidized, and then turn around and create government subsidized jobs by working through them. “Walmart boasts of direct relationships with nearly 20,000 Chinese suppliers,[iv] and purchased $27 billion worth of Chinese-made goods in 2006.[v] According to the Economic Policy Institute, Walmart’s trade with China alone eliminated 133,000 U.S. manufacturing jobs between 2001 and 2006 and accounted for 11.2 percent of the nation’s total job loss due to trade…. With $419 billion in annual net sales, Walmart’s market power is so immense that the even the largest suppliers must comply with its demands for lower and lower prices because they cannot afford to have their goods taken off its shelves. Companies that used to manufacture products in the United States, from Levi’s jeans to lock maker Master Lock, were pressured to shut their U.S. factories and moved manufacturing abroad to meet Walmart’s demand for low prices.” http://www.demos.org/publication/not-made-america-top-10-ways-walmart-destroys-us-manufacturing-jobs
I PERSONALLY seen WalMart into a small community and a few month later I PERSONALLY seen a previous store owner that HAD his own Hardware Store working at Walmart because they drove him out of business. There was no way he could compete. There is nothing good I can say about WalMart. They represent textbook Socialism and I will never shop there again.
Walmart gets 18% of all food stamp business. So, they are doing pretty well at the government trough.
I am no Walmart defender, but I do think you need to compare apples on store format. I don’t go to Costco because I don’t want a gallon drum of mayonnaise. Also, everybody else shouldn’t get a free pass because one chain is more “evil.” How does Kroger do? The last time I checked their average wages , they were basically the same as Walmart. I love them for being one of the nation’s best philanthropic companies (and. Midwestern one at that), but does that buy immunity from scrutiny or criticism on wages? Also, I want to believe that unions matter, but I can’t find the union-rep grocer where in-hand wages (minus union dues) are better. If there is a reference that shows this, I want to know what it is so I can support the right places. Gotta beliefe a UCFW buddy who sees this can help me out. I will post on social media.
I (and several of my friends) do not shop at Walmart and have not shopped there for several years. Does this small boycott hurt Walmart in any way? Of course not, but I feel better by refusing to support one of the MANY US companies that refuses to pay it’s workers a living wage.
I have read both comments posted here and I thank JoAnn Green for pointing out many of the obvious differences between Costco and Walmart, as well as for informing me of why there will always be differences in pay scales. However, at no point does JoAnn mention or offer justification the of why these differences result in such low pay that the US taxpayers must subsidize the workers that are not being paid a living wage. It appears to me as though her defense of companies like Walmart and their immense profits somehow outweighs the idea behind the American Dream that if one is willing to work, then one should be compensated with a living wage. JoAnn, all your explanation did for me was to highlight the fact that you do not value or support that all human beings should be treated on an equal level or deserve the basic needs of food and shelter.
Wendy, I found your comments to be so much better researched and worthwhile to inform. Sheila, as always, thank you for discussing a topic that should be front and center. You always make your reader think and provide them with the information needed to speak up and out. This is an important issue and it needs to be addressed.
Thank you, Chris; so far two of us are aware Wal Mart is not the only company with low wages and I doubt that 18% of food stamp recipients are Wal Mart employees as stated by Jan. I would like to see a list of businesses paying low wages whose employees qualify for public assistance; it is not only wage levels that determine qualification for food stamps. I would also be interested in how many employed vs. unemployed receive public assistance; especially mothers with children whose fathers do not pay court ordered child support. I was in that position several years ago with five children; I qualified for and received food stamps because my take-home pay was $64 per week. I worked for the City of Indianapolis at the time.
Mary Kay; I certainly do value and support that all human beings should be treated on an equal level and deserves the basic needs of food and shelter. But I am aware that this is not reality nor is it a rational expectation for all. I would exempt the 1% unless and until they change their greedy ways. I have been in the postion of needing and deserving assistance which I was denied. So was my 55 year old son who was rear-ended, resulting in 7 fractured vertibrae, permanent disabiity and was then diagnosed with terminal cancer. These denials were due to ridiculous demands in government requirements. I sign petitions and surveys supporting public assistance for all in need; I also donate to specific people or causes when possible. I wil be 77 this month, am profoundly deaf, disabled, have COPD, osteoarthritis in all joints, live alone and am self-supporting on a limited income. I have no idea of your situation so will not presume you are not fully aware of realities in this country today. I will consider you posted your definitiion of what I said and what you believe my beliefs are, are based on your own views.
I avoid Wal-Mart and prefer shopping at locally owned stores, most of whose owners don’t make the multi-millions of the Walton family.
I apologize for misreading Jan’s comment regarding 18% of food stamp recipients; the statement was that Wal Mart gets 18% of their business – not that 18% Wal Mart employees get food stamps, any idea what that percentage is? I do wonder if they shop there because it is a one-stop-shopping location. Food prices are better at Save-A-Lot and Aldi’s. Wal Mart prices on OTC drugs/medications and personal care items are the lowest. You have the option of brand name items or Wal Mart Equate which contains the same ingredients. Yes; I am a Wal Mart shopper – for specific items. Due to my income level I must compare prices on everything. K Mart is much closer but their prices are out of line; have been for years since Martha Stewart became involved. Any idea what K Mart salary range and/or benefits are? I do understand the upset at employed people not being paid what is referred to as “a living wage”; this should be even more reason to demand the government force raising minimum wage level and stop concentrating on one major company to blame for the high number of food stamp recipients.
“Although there are no federal numbers on where employed SNAP participants work, the state of Ohio . . . does keep a list of the top 50 companies with the most workers and their family members on food stamps. Ohio’s list includes lots of fast food chains and discount and big-box stores: McDonald’s, Target, Kroger supermarket, Dollar General. At the very top is Walmart, which had an average of more than 14,500 workers and family members on food stamps last year. If you take into account the average size of a family on food stamps, as many as 7,000 individual Walmart employees were on food stamps last year—nearly 15 percent of the company’s workforce across Ohio. That means the same company that brings in the most food stamp dollars in revenue—an estimated $13 billion last year—also likely has the most employees using food stamps.”
From one in a series or broadcasts about food stamps on Marketplace, courtesy of NPR.
http://www.marketplace.org/topics/wealth-poverty/secret-life-food-stamp/save-money-live-better
Just a few comments –
Chris – I have been shopping at Costco and Price Club before that for years – mostly as a single person – I have no more need for a gallon jar of mayo than you do, but I do enjoy the savings on buying a dozen cans of tuna fish and other non-perishables for maybe 2/3 of grocery store prices, not to mention deals on electronics and such – I find that my AmEx rebate more than pays for the membership cost, but I also shop at Kroger — and now at Good Earth
JoAnn – You are correct, in part – Sam’s Club is Walton’s take on Costco/Price Club; Walmart is his take on Meijer’s
But mostly — Sheila is right – the Waltons grow rich on public funding. Sam Walton used to go to East Nowhere and tell them to give him incentives to build or that he would build in West Nowhere; he pressured suppliers to cut prices and some people have said he specifically would tell them to quit treating their employees well – Walmart employees can’t even afford their “low” prices without their tax-payer provided food stamps
Costco’s James Sinegal, on the other hand, was mentored by Sol Price, who created the concept of warehouse clubs. He also believed that you should treat your employees like family and take care of them. If I sound attached to Costco/Price Club, it may be because my father taught me the same philosophy of running a business. His wholesale bicycle warehouse was one of the few air conditioned non-food warehouses in Detroit — because he thought it was immoral to sit in an air conditioned office and leave his employees to the summer heat. Bottom line, you can do well and do good at the same time; you don’t have to be the abusive bully that is Walmart’s deserved reputation and you can offer even lower prices and better service – Walmart is also known for poor customer service
Last thought – the Walton’s Sam’s Club, more comparable to Costco, also rates poorly on price in repeated Consumer Reports surveys.
I have my own personal boycott of Wal-Mart. When Wal-Mart opened their store decades ago in my neighborhood it was all decked out in American Flags -rah-rah-rah.
I began my working career at McDonalds making $ .95 an hour in 1966 in South Chicago. I went on to a Steel Mill where I made $2.385 an hour. Many of my co-workers were WW 2, Korean War, and a few at that time Vietnam War Veterans. Some were also veterans from the peace time 50’s. Other co-workers were in the National Guard or Army Reserve. I was drafted into the Army and sent to Vietnam as a Combat Infantryman. I briefly returned to the Mill after my discharge from the Army.
Several years after I left the Steel Mill it closed it’s doors without warning. Several thousand men and woman were now with out jobs. The other Mills in the area were also closing or “downsizing” as we now say. These men and woman who made the World Safe for Democracy either in the Military or who labored in mill during World War 2 were suddenly unemployed.
Oddly enough I was told we were fighting in South East Asia to stop Communism. One of the major suppliers to North Vietnam was Communist China. Communist China had also committed thousands of troops during the Korean War.
Now we have our Big Box stores Wal Mart included chock fall of items from Communist China and some manufactured in Vietnam. What we did in retrospect was made the World Safe for Multi-National Corporations. The McDonalds is still there, but the Steel Mill I worked in has wiped from the face of the earth. A young person passing by the Steel Mill site would never know it existed. The opportunity for a decent, although hard, Living Wage job in the Mill is gone. Our Corporately bought American Politicians betrayed us.
Wal-Mart is just one example of the Outsourcing of American jobs to stock their stores and at the same time paying wages to their American Workers so low they are eligible for Government assistance. The Multi-National Corporations expect our Military to preserve Pax Americana.