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Life in the New American Minimum-Wage Economy with the Ghosts of Tom Joad
There are many sides to whistleblowing. The one that most people don’t know about is the very personal cost, prison aside, including the high cost of lawyers and the strain on family relations, that follows the decision to risk it all in an act of conscience. Here’s a part of my own story I’ve not talked about much before.
At age 53, everything changed. Following my whistleblowing first book, We Meant Well: How I Helped Lose the Battle for the Hearts and Minds of the Iraqi People, I was run out of the good job I had held for more than 20 years with the U.S. Department of State. As one of its threats, State also took aim at the pension and benefits I’d earned, even as it forced me into retirement. Would my family and I lose everything I’d worked for as part of the retaliation campaign State was waging? I was worried. That pension was the thing I’d counted on to provide for us and it remained in jeopardy for many months. I was scared.
My skill set was pretty specific to my old job. The market was tough in the Washington, D.C. area for someone with a suspended security clearance. Nobody with a salaried job to offer seemed interested in an old guy, and I needed some money. All the signs pointed one way — toward the retail economy and a minimum-wage job.
And soon enough, I did indeed find myself working in exactly that economy and, worse yet, trying to live on the money I made. But it wasn’t just the money. There’s this American thing in which jobs define us, and those definitions tell us what our individual futures and the future of our society is likely to be. And believe me, rock bottom is a miserable base for any future.
Old World/New World
The last time I worked for minimum wage was in a small store in my hometown in northern Ohio. It was almost a rite of passage during high school, when I pulled in about four bucks an hour stocking shelves alongside my friends. Our girlfriends ran the cash registers and our moms and dads shopped in the store. A good story about a possible date could get you a night off from the sympathetic manager, who was probably the only adult in those days we called by his first name. When you graduated from high school, he would hire one of your friends and the cycle would continue.
At age 53, I expected to be quizzed about why I was looking for minimum-wage work in a big box retail store we’ll call “Bullseye.” I had prepared a story about wanting some fun part-time work and a new experience, but no one asked or cared. It felt like joining the French Foreign Legion, where you leave your past behind, assume a new name, and disappear anonymously into the organization in some distant land. The manager who hired me seemed focused only on whether I’d show up on time and not steal. My biggest marketable skill seemed to be speaking English better than some of his Hispanic employees. I was, that is, “well qualified.”
Before I could start, however, I had to pass a background and credit check, along with a drug test. Any of the anonymous agencies processing the checks could have vetoed my employment and I would never have known why. You don’t have any idea what might be in the reports the store receives, or what to feel about the fact that some stranger at a local store now knows your financial and criminal history, all for the chance to earn seven bucks an hour.
You also don’t know whether the drug tests were conducted properly or, as an older guy, if your high blood pressure medicine could trigger a positive response. As I learned from my co-workers later, everybody always worries about “pissing hot.” Most places that don’t pay much seem especially concerned that their workers are drug-free. I’m not sure why this is, since you can trade bonds and get through the day higher than a bird on a cloud. Nonetheless, I did what I had to in front of another person, handing him the cup. He gave me one of those universal signs of the underemployed I now recognize, a we’re-all-in-it, what’re-ya-gonna-do look, just a little upward flick of his eyes.
Now a valued member of the Bullseye team, I was told to follow another employee who had been on the job for a few weeks, do what he did, and then start doing it by myself by the end of my first shift. The work was dull but not pointless: put stuff on shelves; tell customers where stuff was; sweep up spilled stuff; repeat.
Basic Training
It turned out that doing the work was easy compared to dealing with the job. I still had to be trained for that.
You had to pay attention, but not too much. Believe it or not, that turns out to be an acquired skill, even for a former pasty government bureaucrat like me. Spend enough time in the retail minimum-wage economy and it’ll be trained into you for life, but for a newcomer, it proved a remarkably slow process. Take the initiative, get slapped down. Break a rule, be told you’re paid to follow the rules. Don’t forget who’s the boss. (It’s never you.) It all becomes who you are.
Diving straight from a salaried career back into the kiddie pool was tough. I still wanted to do a good job today, and maybe be a little better tomorrow. At first, I tried to think about how to do the simple tasks more efficiently, maybe just in a different order to save some walking back and forth. I knew I wasn’t going to be paid more, but that work ethic was still inside of me. The problem was that none of us were supposed to be trying to be good, just good enough. If you didn’t know that, you learned it fast. In the process, you felt yourself getting more and more tired each day.
Patient Zero in the New Economy
One co-worker got fired for stealing employee lunches out of the break room fridge. He apologized to us as security marched him out, saying he was just hungry and couldn’t always afford three meals. I heard that when he missed his rent payments he’d been sleeping in his car in the store parking lot. He didn’t shower much and now I knew why. Another guy, whose only task was to rodeo up stray carts in the parking lot, would entertain us after work by putting his cigarette out on his naked heel. The guys who came in to clean up the toilets got up each morning knowing that was what they would do with another of the days in their lives.
Other workers were amazingly educated. One painted in oils. One was a recent college grad who couldn’t find work and liked to argue with me about the deeper meanings in the modern fiction we’d both read.
At age 53, I was the third-oldest minimum-wage worker in the store. A number of the others were single moms. (Sixty-four percent of minimum-wage employees are women. About half of all single-parent families live in poverty.) There was at least one veteran. (“The Army taught me to drive a Humvee, which turns out not to be a marketable skill.”) There were a couple of students who were alternating semesters at work with semesters at community college, and a small handful of recent immigrants. One guy said that because another big box store had driven his small shop out of business, he had to take a minimum-wage job. He was Patient Zero in our New Economy.
State law only required a company to give you a break if you worked six hours or more under certain conditions. Even then, it was only 30 minutes — and unpaid. You won’t be surprised to discover that, at Bullseye, most non-holiday shifts were five-and-a-half hours or less. Somebody said it might be illegal not to give us more breaks, but what can you do? Call 911 like it was a real crime?Some good news, though. It turned out that I had another marketable skill in addition to speaking decent English: being old. One day as a customer was bawling out a younger worker over some imagined slight, I happened to wander by. The customer assumed I was the manager, given my age, and began directing her complaints at me. I played along, even steepling my fingers to show my sincere concern just as I had seen actual managers do. The younger worker didn’t get in trouble, and for a while I was quite popular among the kids whenever I pulled the manager routine to cover them.
Hours were our currency. You could trade them with other employees if they needed a day off to visit their kid’s school. You could grab a few extra on holidays. If you could afford it, you could swap five bad-shift hours for three good-shift hours. The store really didn’t care who showed up as long as someone showed up. Most minimum-wage places cap workers at under 40 hours a week to avoid letting them become “full time” and so possibly qualify for any kind of benefits. In my case, as work expanded and contracted, I was scheduled for as few as seven hours a week and I never got notice until the last moment if my hours were going to be cut.
Living on a small paycheck was hard enough. Trying to budget around wildly varying hours, and so paychecks, from week to week was next to impossible. Seven hours a week at minimum wage was less than 50 bucks. A good week around the Christmas rush was 39 hours, or more than $270. At the end of 2013, after I had stopped working at Bullseye, the minimum wage did go up from a little more than $7 to $8 an hour, which was next to no improvement at all. Doesn’t every little bit help? Maybe, but what are a few more crumbs of bread worth when you need a whole loaf not to be hungry?
Working to Be Poor
So how do you live on $50 a week, or for that matter, $270 a week? Cut back? Recycle cans?
One answer is: You don’t live on those wages alone. You can’t. Luckily I had some savings, no kids left in the house to feed, and my wife was still at her “good” job. Many of my co-workers, however, dealt with the situation by holding down two or three minimum-wage jobs. Six hours on your feet is tough, but what about 12 or 14? And remember, there are no weekends or holidays in most minimum-wage jobs. Bullseye had even begun opening on Thanksgiving and Christmas afternoons.
The smart workers found their other jobs in the same strip mall as our Bullseye, so they could run from one to the next, cram in as many hours as they could, and save the bus fare. It mattered: At seven bucks an hour, that round trip fare meant you worked your first 45 minutes not for Bullseye but for the bus company. (The next 45 minutes you worked to pay taxes.)
Poverty as a Profit Center
Many low-wage workers have to take some form of public assistance. Food stamps — now called the Supplemental Nutrition Assistance Program, or SNAP — were a regular topic of conversation among my colleagues. Despite holding two or three jobs, there were still never enough hours to earn enough to eat enough. SNAP was on a lot of other American’s minds as well — the number of people using food stamps increased by 13 percent a year from 2008 to 2012. About 1 in 7 Americans get some of their food through SNAP. About 45 percent of food stamp benefits go to children.
Enjoying that Big Mac? Here’s one reason it’s pretty cheap and that the junk sold at “Bullseye” and the other big box stores is, too: Those businesses get away with paying below a living wage and instead you, the taxpayer, help subsidize those lousy wages with SNAP. (And of course since minimum-wage workers have taxes deducted, too, they are — imagine the irony — essentially forced to subsidize themselves.)
That subsidy does not come cheap, either. The cost of public assistance to families of workers in the fast-food industry alone is nearly $7 billion per year. McDonald’s workers alone account for $1.2 billion in federal assistance annually.
All that SNAP money is needed to bridge the gap between what the majority of employed people earn through the minimum wage, and what they need to live a minimum life. Nearly three-quarters of enrollments in America’s major public benefits programs involve working families stuck in jobs like I had. There are a lot of those jobs, too. The positions that account for the most workers in the U.S. right now are retail salespeople, cashiers, restaurant workers, and janitors. All of those positions pay minimum wage or nearly so. Employers are actually allowed to pay below minimum wage to food workers who might receive tips.
And by the way, if somehow at this point you’re feeling bad for Walmart, don’t. In addition to having it’s workforce partially paid for by the government, Walmart also makes a significant portion of its profits by selling to people receiving federal food assistance. Though the Walton family is a little too shy to release absolute numbers, a researcher found that in one year, nine Walmart Supercenters in Massachusetts together received more than $33 million in SNAP dollars. One Walmart Supercenter in Tulsa, Oklahoma, received $15.2 million, while another (also in Tulsa) took in close to $9 million in SNAP spending.
You could say that taxpayers are basically moneylenders to a government that is far more interested in subsidizing business than in caring for their workers, but would anyone believe you?
Back in the Crosshairs
Some employees at Bullseye had been yelled at too many times or were too afraid of losing their jobs. They were not only broke, but broken. People — like dogs — don’t get that way quickly, only by a process of erosion eating away at whatever self-esteem they may still possess. Then one day, if a supervisor tells them by mistake to hang a sign upside down, they’ll be too afraid of contradicting the boss not to do it.
I’d see employees rushing in early, terrified, to stand by the time clock so as not to be late. One of my fellow workers broke down in tears when she accidentally dropped something, afraid she’d be fired on the spot. And what a lousy way to live that is, your only incentive for doing good work being the desperate need to hang onto a job guaranteed to make you hate yourself for another day. Nobody cared about the work, only keeping the job. That was how management set things up.
About 30 million Americans work this way, live this way, at McJobs. These situations are not unique to any one place or region. After all, Walmart has more than 2 million employees. If that company were an army, it would be the second largest military on the planet, just behind China. It is, in fact, the largest overall employer in the country and the biggest employer in 25 states. When Walmart won’t pay more than minimum, it hurts. When it rains like that, we all get wet. This is who we are now.
I Was Minimum
It’s time to forget the up-by-the-bootstraps fantasies of conservative economists bleating on Fox. If any of it was ever true, it’s certainly not true anymore. There is no ladder up, no promotion path in the minimum-wage world. You can’t work “harder” because your hours are capped, and all the jobs are broken into little pieces anyone could do anyway. Minimum wage is what you get; there are no real raises. I don’t know where all the assistant managers came from, but not from among us.
I worked in retail for minimum wage at age 16 and again at 53. In that span, the minimum wage itself rose only by a few bucks. What changed, however, is the cast of characters. Once upon a time, minimum-wage jobs were filled with high school kids earning pocket money. In 2014, it’s mainly adults struggling to get by. Something is obviously wrong.
In his State of the Union Address, President Obama urged that the federal minimum wage be raised to $9 an hour. He also said that a person holding down a full-time job should not have to live in poverty in a country like America.
To the president I say, yes, please, do raise the minimum wage. But how far is nine bucks an hour going to go? Are so many of us destined to do five hours of labor for the cell phone bill, another 12 for the groceries each week, and 20 or 30 for a car payment? How many hours are we going to work? How many can we work?
Nobody can make a real living doing these jobs. You can’t raise a family on minimum wage, not in the way Americans once defined raising a family when our country emerged from World War II so fat and happy. And you can’t build a nation on vast armies of working poor with nowhere to go. The president is right that it’s time for a change, but what’s needed is far more than a minimalist nudge to the minimum wage. Maybe what we need is to spend more on education and less on war, even out the tax laws and rules just a bit, require a standard living wage instead of a minimum one. Some sort of rebalancing. Those aren’t answers to everything, but they might be a start.
People who work deserve to be paid, but McDonald’s CEO Donald Thompson last year took home $13.7 million in salary, with perks to go. If one of his fry cooks put in 30 hours a week, she’d take in a bit more than $10,000 a year — before taxes, of course. There is indeed a redistribution of wealth taking place in America, and it’s all moving upstream.
I got lucky. I won my pension fight with my “career” employer, the State Department, and was able to crawl out of the minimum-wage economy after less than a year and properly retire. I quit Bullseye because I could, one gray day when a customer about half my age cursed me out for something unimportant she didn’t like, ending with “I guess there’s a reason why people like you work at places like this.” I agreed with her: There is a reason. We just wouldn’t agree on what it was.
I’m different now for the experience. I think more about where I shop, and try to avoid big places that pay low wages if I can. I treat minimum-wage workers a little better, too. If I have to complain about something in a store, I keep the worker out of it and focus on solving the problem. I take a bit more care in the restroom not to leave a mess. I don’t get angry anymore when a worker says to me, “I really can’t do anything about it.” Now I know from personal experience that, in most cases, they really can’t.
Above all, I carry with me the knowledge that economics isn’t about numbers, it’s about people. I know now that it’s up to us to decide whether the way we pay people, the work we offer them, and how we treat them on the job is just about money or if it’s about society, about how we live, who we are, the nature of America. The real target now should be to look deeply into the apartheid of dollars our country has created and decide it needs to change. We — the 99 percent, anyway — can’t afford not to.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Terrorist Sleeper Cell Crushed by Pay Day Loan Debt (Satire)
Islamic State (IS) announced that its primary terrorist sleeper cell in the United States has been crushed by payday loan debt. Homeland Security and the FBI, actively trying to convince several fourth graders to “make a terror club” so they could be arrested, were unavailable for comment.
“It all began well enough,” said IS spokes-jihadi Abdullah. “We sent five brothers into the decadent hell of the United States with ten thousand dollars and some AK’s and rocket launchers.”
“Sh*t started to go wrong from almost day one. It turns out 99 percent of Americans are much better armed, so right away they had to go to Walmart and pick up some assault rifles. Well, you know, you can’t just go into Walmart for one thing, and next you know, they laid out for Sam’s Club memberships and bought freaking patio furniture. We had them in a $20 a night motel with orders to keep a low profile and they show up with patio furniture.”
“Next thing that happened was after I sent them out to buy some burner cellphones, you know, those cheap ones they could use once and then throw away. I don’t know what kind of salesperson they encountered at Best Buy, but next thing I know IS is on the hook for five iPhone6’s. Plus five year contracts. Plus those idiots bought the full maintenance plans. Oh, and get this — their contracts had limited data, so after a couple of 30 gig HD beheading video downloads, we were racking up overage charges.”
“We had told the brothers to eat most meals at Chik-fil-A. We’d read online that the restaurant hated gays, independent women and most of the other tenets of Sharia, so that seemed safe. But next thing you know, two of the brothers are too fat for their suicide vests, and one now has diabetes. If he loses his foot like the doctor thinks, he can’t drive the suicide bomb van. Please.”
“But the real killer was running out of funds. We lost thousands of dollars to ATM fees we did not anticipate, so we had some of the martyrs seek out part time work. Do you know it’s impossible to live on minimum wage in America? The best those dumbasses could do was work at the Dollar Store and Wendy’s, then their hours got cut. They had no choice but to turn to the payday loan shop in the same strip mall where they pawned the AK’s. It seemed like a good deal — money was deposited overnight to their checking account — but now we’re up to like 234 percent interest, and these two huge guys named Vito and Sal are knocking on the motel room door at 4 am demanding their money back.”
“We just gave up. I have ordered the brothers to dismantle the sleeper cell. Now that we know what a useless, poor, rapacious society America is, thinking we can hasten its demise with a few terror acts is a joke. You people are doing it to yourselves.”
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Poverty is Good Business: The Economics of Food Stamps (SNAP)
The Republican House and Democratic Senate reached a compromise last year that cut Supplemental Nutrition Assistance Program (SNAP; what food stamps are now called.) Republicans initially called for $40 billion in cuts, kicking millions of people out of the program altogether, including 170,000 veterans. The compromise cut $8 billion, which affects 800,000 households, according to estimates by the Congressional Budget Office.
Dollars and Sense
Dollars first. That $9 billion saved on SNAP would have paid for only 12.5 days of the Iraq War. For the Afghan War, $9 billion would pay for about one month (and that war is now in its thirteenth year, do the math.) America’s newest aircraft carrier cost $13 billion, not including development costs.
And now sense, or lack of it. A typical family on SNAP/food stamps gets $133 monthly. For three meals a day, $133 breaks down to $1.47 per meal; it is from that amount that the cuts will be taken. Almost 22 percent of American children under age 18 lived in poverty in 2012. The percentage of children under age five living in poverty is over 25 percent. Almost 1 in 10, or 9.7 percent, live in extreme poverty. Number of Americans on food stamps doubled in the last ten years. 47 million Americans now live in poverty, the highest number in two decades.
Cheaters? A Department of Agriculture report on “trafficking” in the food-stamp program found that only 1.3 percent of benefits were traded for cash.
Your takeaway: We have the money. We just don’t want to spend it on feeding Americans.
Poverty is Good Business
Cops investigating a crime often refer to the Latin term, cui bono, or, “who benefits?” The idea is to find out who has the most to gain from Colonel Mustard’s death in the Drawing Room and start the hunt there.
So if most Republicans, and many Democrats, want to cut food stamps, who does not want to see the cuts?
The food business loves food stamps. Wal-Mart, Target and Kroger have made huge profits of $75.2 billion off of food stamp purchases, setting a new record in 2012. And that’s not counting other purchases recipients may make with their own money.
Never mind how food stamps and other benefits are used by those same retailers to subsidize the low wages they pay their workers. Or how the same bill that would cut food stamps pays out farm subsidies to America’s billionaires, including Microsoft co-founder Paul Allen, Charles Schwab and S. Truett Cathy, founder of Chick-fil-A.
The American Beverage Association, a lobby group that includes Coca-Cola, strongly opposes restricting soda purchases by food stamp recipients. Why? Recipients spend from $1.7 to $2.1 billion annually for sugar-sweetened beverages purchased in grocery stores. Never mind that while alcohol and other unhealthy items are restricted for purchase with stamps, soda stands available.
Pepsi, candy-maker Mars and the Snack Food Association all registered to lobby the House of Representatives on food stamp restrictions.
Your takeaway: Mega-corporations are profiting off poverty, with their profits heavily subsidized by taxpayer dollars.
So who benefits? Not hungry people. Do the math. It’s all about dollars and cents.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Walmart Again Holds Food Drive for Own Underpaid Workers
Happy Thanksgiving!Walmart, who pays its workers so little and/or gives them so few hours, that they cannot feed themselves while the Walton family rakes in billions, does have its sense of humor. Either that or they could just care so little about what anyone thinks that they are just like, whatever, what are you going to do about it anyway except buy more junk you don’t need from us on Black Friday?
As it did to national scorn last Thanksgiving, Walmart raised a smiley-faced middle finger to its own “associates” by asking some of them to dig deep into their low-wage pockets to give to each other. An Oklahoma City Walmart is asking employees to donate food to help their coworkers make ends meet during the holiday season, according to a photo posted by the labor-backed coalition Making Change At Walmart. A sign on the collection bin reads, “Let’s succeed by donating to associates in need!!!” In 2013, the same thing happened at a Walmart store in Canton, Ohio.Technically,the food drives are not Walmart corporate policy, so hey, all is forgiven, amiright? Though hey, a Walmart spokesperson did characterize the Ohio effort as “part of the company’s culture to rally around associates and take care of them when they face extreme hardships.” And Walmart checked, ’cause it cares you know, and the Oklahoma food drive is just for two associates who don’t have health insurance because Walmart doesn’t provide any to its hourly workers, so it is not like the whole freaking store is starving or anything. You can have it both ways apparently at Walmart.
And who wants to subsidize freeloaders with our hard-earned tax dollars anyway? Oh, wait. Actually Walmart hauls in a monster truck load of public assistance for itself. Those low, low daily wages are subsidized by your taxes. The company’s low wages leave huge numbers of its employees on public assistance programs such as food stamps and Medicaid. By one estimate, a single Walmart superstore requires up to $1.7 million in public assistance spending every year. The company eats up a total public assistance cost of $6.2 billion per year. That’s how Walmart can “afford” to pay its associates so little and yet they don’t pass out from hunger in the aisles during your Black Friday orgy of consumerism. Neat!
But Walmart loves its food stamps as more than just fodder to feed the work animals. Walmart loves selling to stuff to the food stamp people of America. A lot of stuff.How much profit does Walmart make from public assistance? In one year, nine Walmart Supercenters in Massachusetts received more than $33 million in SNAP dollars. In two years, Walmart received about half of the one billion dollars in SNAP expenditures in Oklahoma. Overall, 18 percent of all food benefits money is spent at Walmart. That’s about $14 billion.
But maybe all is not lost. Protesters left a huge food bin outside of Walmart heiress Alice Walton’s $25 million Manhattan condo. Alice has a net worth of $35 billion dollars. Alice made $100 million this past year, so at least she is doing OK this Thanksgiving.
It can’t get any plainer than this friends: Walmart’s owners make profits on an amazing scale by giving workers as little as possible while scooping up as much government money as possible.
Do your soul a favor and stay out of Walmart this holiday season.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Walmart (Hearts) Food Stamps
How expensive are those everyday low prices? How much do things really cost on the dollar menu? The answer is more than you think, but maybe not for the reason you think.
Lovin’ It: Food Stamps
The Supplemental Nutritional Assistance Program (SNAP, the current name for food stamps) is often thought of as something for the unemployed, though nothing could be further from the truth. Actually 73 percent of those enrolled in the country’s major public benefits programs are from working families, just stuck in jobs whose paychecks don’t cover life’s basic necessities. The United States now has the highest proportion of low-wage workers in the developed world, most of whom receive only the minimum wage (the federal standard is $7.25 an hour) and typically are capped by their employers well below 40 hours a week so they won’t qualify for benefits. Hard work doesn’t always pay off. The math: even full time at $7.25 is only $290. How do you live on that?
You don’t. You turn to food stamps and other forms of public assistance to make up the gap between minimum wage and a living wage. Which is just what large minimum wage employers count on you doing.
Fast food workers claim public assistance at more than twice the rate of other employed people; McDonald’s workers alone receive $1.2 billion in federal assistance each year. About one out of every three retail workers gets public assistance. After analyzing Medicaid data, the House Committee on Education and the Workforce estimated a single 300-person Walmart in Wisconsin costs taxpayers $5,815 per associate in public assistance paid. Overall, American taxpayers subsidize the minimum wage with $7 billion in public assistance. Those dollar amounts are what low prices actually cost you.
Profits Before Poverty
Why else do many large companies like food stamps? Because poverty is big business.
Public benefits are now a huge part of corporate profits. The CEO of Kraft admitted that the mac n’ cheese maker opposed food stamp cuts because beneficiaries were “a big part of our audience,” as one-sixth of Kraft’s revenues come from food stamp purchases. Pepsi, Coke, and the grocery chain Kroger lobbied against SNAP cuts, an indication of how much they rely on the money.
Products eligible for SNAP purchases are supposed to be limited to “healthy foods.” Yet lobbying by the soda industry keeps sugary drinks on the approved list, allowing companies like Coke and Pepsi to pull in four billion dollars a year in SNAP money revenues. Yum Brands, the operator of KFC, Taco Bell, and Pizza Hut, tried unsuccessfully to convince lawmakers in several states to allow its restaurants to accept food stamps.
In a January 2014 filing with the Securities and Exchange Commission, Walmart was oddly blunt about what SNAP cuts could do to its bottom line. Walmart’s business risks, the filing said, include: “changes in the amount of payments made under the Supplemental Nutrition Assistance Plan and other public assistance plans, [and] changes in the eligibility requirements of public assistance plans.”
How much profit does Walmart make from public assistance? In one year, nine Walmart Supercenters in Massachusetts received more than $33 million in SNAP dollars, more than four times the SNAP money spent at farmers’ markets nationwide. In two years, Walmart received about half of the one billion dollars in SNAP expenditures in Oklahoma. Overall, 18 percent of all food benefits money is spent at Walmart. That’s about $14 billion.
Others also profit well from food stamps. Food stamps are distributed via Electronic Benefits Transfer or EBT (some recipients claim the acronym really means “Eat Better Tonight.”) JPMorgan Chase holds the contracts in half the United States to handle the transactions. In Florida, JPMorgan’s contract is worth $83 million, and in New York, it’s worth more than $112 million. Meanwhile, until recent changes, customer service for the JP Morgan EBT program was done via offshore call centers in India and Mexico who paid far below domestic wages.
Corporate Welfare
So don’t believe anyone who says raising the minimum wage will automatically drive prices up. Whatever you think you are saving at the cash register in Walmart (or at McDonald’s, KFC, Target…), you are paying in taxes to feed the woman ringing you up. If the business paid a living wage, there could a lessening in demand for public assistance. At the same, give some thought to how much tax money is ultimately finding its way into the hands of a few large corporations via SNAP sales, another form of welfare, albeit the corporate kind.
Higher prices? You’re already paying more than you think.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Arguments Against Raising Minimum Wage Don’t Hold Up
The arguments against raising the minimum wage don’t hold up to facts.
Aren’t most people who work for minimum wage teens?
No– 88 percent are adults, with more than a third over age 40. These workers earn half of their families’ incomes. Meanwhile, the federal minimum wage has been stuck at $7.25 an hour since 2009.
C’mon, you don’t get an education, it’s your own fault you work for minimum wage, right?Wrong. The percentage of low-wage workers with at least some college education spiked 71 percent since 1979, to 43.2 percent today. You didn’t ask, but adult (re)training programs don’t seem to help much.
O.K., I feel for those people. But won’t higher wages cause higher prices?The way you functionally subsidize companies paying low-wages to workers– ponying up the difference between what McDonald’s and others pay and what those workers need to live via taxpayer-paid SNAP (food stamps) and other benefits– is a hidden cost in plain sight. You’re already paying higher prices via higher taxes; you just may not know it.
But even if taxes go down, won’t companies pass on their higher labor costs?Maybe, but they are unlikely to be significant. For example, if McDonald’s doubled the salaries of its employees to $14.50 an hour, not only would many of them go off public benefits, but so would the company– and a Big Mac would cost just 68 cents more (another study says only 14 cents.) At Wal-mart, increasing wages to $12 per hour would cost the company only about one percent, so that made-in-China $10 item would run you all of $10.01.
So maybe prices won’t go up so much. But won’t companies, facing higher labor costs, cut back on jobs?Companies hire for business needs, such as surge Christmas help, not out of societal largess. The Los Angeles Economic Round Table concluded raising the minimum to $15 locally, and thus putting more cash into the hands of consumers, would generate an additional $9.2 billion in annual sales and create more than 50,000 jobs. A Paychex/IHS survey, which looks at employment in small businesses, found that the state with the highest percentage of annual job growth was Washington, which also has the highest statewide minimum wage. Nationwide, even a small hike to $10.10 an hour would put some $24 billion a year into workers’ hands to spend and lift 4.6 million Americans out of poverty. Consumer spending drives 70 percent of our economy.
What about small businesses?Two-thirds of all minimum wage workers are not employed by small businesses. Better yet, one survey shows three out of five small business owners favor raising the minimum wage; their profits depend on a strong local economy, which requires more money in local consumers’ hands. Most small businesses cannot off-shore jobs, or export their way to profit, so micro-economics matter. Sad to say, 50-80 percent of most small businesses already fail for various reasons, even with a minimum wage that has not kept up with inflation (wage costs are actually lower now than in the past; in 1968 the federal minimum was $1.60 per hour, approximately $10.70 in 2013 dollars.) Factors other than labor costs seem far more significant.
Don’t these anti-minimum wage arguments sound a lot like the old anti-union arguments?Yep. Many opponents at the height of union employment in the 1970s claimed high wages cost jobs. How could a business survive paying $25 an hour? If wages were cut, they said, and profits went up as costs fell, more jobs would be created. The demise of unions did certainly help raise corporate profits, but it clearly did not create jobs, at least not jobs at a living wage. One in four U.S. employees are low-wage workers. That is 20 percent higher than in the United Kingdom, and the highest percentage among industrialized nations. So how’d that all anti-union stuff work out?
If there are no clear arguments against raising the minimum wage from our perspective, why are companies so opposed?While wages have fallen, from 1978 to 2013, CEO compensation, inflation-adjusted, increased 937 percent. Funny how the two arguments to keep wages low, unions and minimum wage, track one another. It’s almost as if there was a pattern of finding ways to lower wages while keeping CEO compensation high in America, societal costs be damned.
But can’t every statistic can be argued?Sure. However, at some point, assuming one seeks more than simply a hyper-wealthy dominating a working poor, economics is about people. People who can afford to feed themselves in meaningful jobs earn not just money, but self-respect. The connection between working and taking care of yourself and your family has increasingly gone missing in America, creating a society that often no longer believes in itself. Raising the wage so many Americans now depend on for their livelihood benefits us all.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
On The Jim Bohannon Show: Why Walmart (Hearts) Food Stamps
Following my Reuter’s piece on how Walmart, McDonalds and others profit from food stamps, I joined radio host Jim Bohannon to discuss food stamps, the minimum wage, and more.According to Jim:
When you slide into the drive-up lane at your local fast-food place and decide which of the ‘value menu’ items you choose, do you ever think about how the restaurant chain manages to keep those prices down? The fact is, you’re paying a higher price than is on the menu board. While you may get a quick, cheap burger and a dollar soft drink right away, on April 15 your tax dollars are going to pay for assistance programs helping the people who cook and serve your ‘cheap’ lunch.
Employees in the fast-food industry, many of whom work at the minimum wage, are heavy recipients of Federal and state assistance, especially taking advantage of SNAP, the Federal food stamps program. According to our guest tonight, columnist and author Peter Van Buren, fast food workers claim public assistance at more than twice the rate of other employed people. In effect, the corporations running the fast food chains are reaping big profits while the taxpayer foots the bill for the assistance programs allowing those corporations’ employees to survive. ‘Think everything on a dollar menu costs a dollar? Think again.’
Here’s the whole interview. My portion starts at 40:10 in.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Just Raise the Minimum Wage
Raise the minimum wage. The arguments for are strong, and the arguments against don’t hold up to facts.You still think everything on the dollar menu really costs only a dollar? Better read this. One important reason to raise the minimum wage to a living one is that people who can afford to feed themselves will not need food stamps paid for by taxpayers. Companies who profit off their workers’ labor will be forced to pay a fair price for it, and not get by on taxpayer-subsidized low wages. Just as important, people who can afford to feed themselves earn not just money, but self-respect. The connection between working and taking care of yourself and your family has increasingly gone missing in America, creating a society that no longer believes in itself. Rock bottom is a poor foundation for building anything human.
But won’t higher wages cause higher prices? The way taxpayers functionally subsidize companies paying low-wages to workers — essentially ponying up the difference between what McDonald’s and its ilk pay and what those workers need to live via SNAP and other benefits — is a hidden cost squirreled away in plain sight. Sky-high company profits are based on the in-flow of federal tax money to keep low wages manageable. You’re already paying higher prices via higher taxes; you just may not know it.
Even if taxes go down, won’t companies pass on their costs? Maybe, but they are unlikely to be significant. For example, if McDonald’s doubled the salaries of its employees to a semi-livable $14.50 an hour, not only would most of them go off public benefits, but so would the company — and yet a Big Mac would cost just 68 cents more. In general, only about 20% of the money you pay for a Big Mac goes to labor costs. At Walmart, increasing wages to $12 per hour would cost the company only about one percent of its annual sales.
What about job cutbacks? Despite labor costs not being the most significant factor in the way low-wage businesses set their prices, one of the more common objections to raising the minimum wage is that companies, facing higher labor costs, will cut back on jobs. Don’t believe it.
The Los Angeles Economic Round Table concluded that raising the hourly minimum to $15 in that city would generate an additional $9.2 billion in annual sales and create more than 50,000 jobs. A Paychex/IHS survey, which looks at employment in small businesses, found that the state with the highest percentage of annual job growth was Washington, which also has the highest statewide minimum wage in the nation. The area with the highest percentage of annual job growth was San Francisco, the city with the highest minimum wage in the nation. Higher wages do not automatically lead to fewer jobs. Many large grocery chains, including Safeway and Kroger, are unionized and pay well-above-minimum wage. They compete as equals against their non-union rivals, despite the higher wages.
Will employers leave a state if it raises its minimum wage independent of a nationwide hike? Unlikely. Most minimum-wage employers are service businesses that are tied to where their customers are. People are not likely to drive across state lines for a burger. A report on businesses on the Washington-Idaho border at a time when Washington’s minimum wage was nearly three bucks higher than Idaho’s found that the ones in Washington were flourishing.
While some businesses could indeed decide to close or cut back if the minimum wage rose, the net macro gains would be significant. Even a small hike to $10.10 an hour would put some $24 billion a year into workers’ hands to spend and lift 900,000 Americans above the poverty line. Consumer spending drives 70% of our economy. More money in the hands of consumers would likely increase the demand for goods and services, creating jobs.
In many ways, the debate over raising the minimum age mirrors what was said about unions in the 1970s. Many at the time, especially pro-business economists and politicians as they do today, claimed the high wages fought for by unions hurt American competitiveness and cost jobs. How could a business survive paying $25 an hour? If wages were cut, and profits went up as costs fell, more jobs would be created.
So how’d that work out? The demise of unions did certainly help raise corporate profits, but it clearly did not create jobs, at least not good jobs at a living wage. Quite the opposite. Want more minimum wage jobs, maybe? Keep the wage dirt poor low.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Walmart at the Trough: Billions Scammed from Your Tax Money
Walmart, which already is profiting mightily from federal, taxpayer paid corporate welfare in the form of food stamps subsidizing its workers’ low wages, as well as billions in direct profits from buyers shopping with food stamps, also takes advantage of tax laws that help it avoid paying federal tax.
Thanks for Shopping at Walmart, Suckers
American taxpayers subsidize much of the cost of Walmart’s executive pay. Walmart (and other large companies) uses a loophole in a tax law created by Congress in 1993 (Section 162(m) of the tax code) that allows it to deduct unlimited amounts from corporate income taxes. All Walmart has to do is deduct the cost of executive compensation if it is paid in the form of stock options and other so-called “performance pay” instead of straight salaries. Congress wrote the law to apply only to actual salaries.
A new report by Americans for Tax Fairness shows:
— Ka-Ching! $104 MILLION: Walmart reduced its federal tax bills by an estimated $104 million over the past six years by paying its top eight executives $298 million in “performance pay” that was fully tax deductible. The tax revenues lost would have been enough to cover the cost of free school lunches for 33,000 children for those six years.
— Ka-Ching! $40 MILLION: Michael Duke, Walmart’s recently retired President & CEO and currently Chairman of the Executive Committee of the Board of Directors, pocketed nearly $116 million in exercised stock options and other “performance pay” during the period 2009-2014. That translates into a taxpayer subsidy for Walmart of more than $40 million— enough to cover the average cost of food stamps for 4,200 people for those six years. FYI: Duke’s total compensation for 2013 was $27.6 million, all wrung out of those everyday low prices.
— Ka-Ching! $50 BILLION: Taxpayers would save $50 billion over 10 years, according to the Joint Committee on Taxation, if Congress changed this tax law, even if the new law allowed a generous tax deduction of one million dollars for each employee’s total compensation, with no exceptions for performance pay, as originally intended when the law was first created in 1993.
— Ka-Ching! $14 BILLION: And about those tax-payer funded food stamps. Overall, 18 percent of all food benefits money is spent at Wal-Mart. That’s about $14 billion.
— Ka-Ching! $7.8 BILLION: Taxpayers spend $7.8 billion a year subsidizing Walmart through public assistance to the company’s low paid employees.
— Ka-Ching! $3 BILLION: The four members of the Walton family, who control almost all of Walmart, shelter signficant amounts of their money from taxes by placing the cash into trusts, allowed by the tax code. To avoid taxes on the dividends generated out of these trusts, those monies are donated to the Walton Family Foundation, a registered charity. When the trusts expire upon the deaths of the elder Waltons, however, their underlying assets, along with any income earned above the amount required to go to the Foundation, will revert to the trusts’ non-charitable beneficiaries, the second or third tier Walmart heirs-in-waiting. The non-charitable beneficiaries of the trusts will likely receive these trust assets entirely free of estate taxes. Cost to taxpayers is estimated at $3 billion in lost tax revenues.
What it Means
There are some important takeaways, besides the obvious. The first concerns the minimum wage. It is clear that Walmart could easily pare off a sliver of the billions its owners take in to raise wages without raising prices. They just don’t want to. Even if prices went up, savings in food stamps that would not have to be paid to starving workers would be substantial.
The other thing to consider is the conservative argument that business growth is critical to broader economic and societal growth. Maybe in some ways, but as shown with Walmart, certainly it does not lead to larger tax revenues; quite the opposite. Somebody has to pay for all those food stamps and trust fund loopholes. That’s you.
It is important to remember that companies have been enjoying these taxpayer subsidies for their executive compensation since 1993, plus the economic benefits of food stamps to subsidize their profits and low wages. That they exist today, at the phenomenal costs to regular Americans noted above, is no secret.
So draw your own conclusions from that as to how Congress views all this corporate welfare.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Why Don’t the Unemployed Get Off Their Couches?
And Other Critical Questions for AmericansLast year eight Americans — the four Waltons of Walmart fame, the two Koch brothers, Bill Gates, and Warren Buffett — made more money than 3.6 million American minimum-wage workers combined. The median pay for CEOs at America’s large corporations rose to $10 million per year, while a typical chief executive now makes about 257 times the average worker’s salary, up sharply from 181 times in 2009. Overall, 1% of Americans own more than a third of the country’s wealth.
As the United States slips from its status as the globe’s number one economic power, small numbers of Americans continue to amass staggering amounts of wealth, while simultaneously inequality trends toward historic levels. At what appears to be a critical juncture in our history and the history of inequality in this country, here are nine questions we need to ask about who we are and what will become of us. Let’s start with a French economist who has emerged as an important voice on what’s happening in America today.
1) What does Thomas Piketty have to do with the 99%?
French economist Thomas Piketty’s surprise best-seller, Capital in the Twenty-First Century, is an unlikely beach read, though it’s selling like one. A careful parsing of massive amounts of data distilled into “only” 700 pages, it outlines the economic basis for the 1%-99% divide in the United States. (Conservative critics, of course, disagree.)
Just in case you aren’t yet rock-bottom certain about the reality of that divide, here are some stats: the top 1% of Americans hold 35% of the nation’s net worth; the bottom 80%, only 11% percent. The United States has such an unequal distribution of wealth that, in global rankings, it falls among the planet’s kleptocracies, not the developed nations that were once its peers. The mathematical measure of wealth-inequality is called “Gini,” and the higher it is, the more extreme a nation’s wealth-inequality. The Gini for the U.S. is 85; for Germany, 77; Canada, 72; and Bangladesh, 64. Nations more unequal than the U.S. include Kazakhstan at 86 and the Ukraine at 90. The African continent tips in at just under 85. Odd company for the self-proclaimed “indispensable nation.”
Piketty shows that such inequality is driven by two complementary forces. By owning more of everything (capital), rich people have a mechanism for getting ever richer than the rest of us, because the rate of return on investment is higher than the rate of economic growth. In other words, money made from investments grows faster than money made from wages. Piketty claims the wealth of the wealthiest Americans is rising at 6%-7% a year, more than three times as fast as the economy the rest of us live in.
At the same time, wages for middle and lower income Americans are sinking, driven by factors also largely under the control of the wealthy. These include the application of new technology to eliminate human jobs, the crushing of unions, and a decline in the inflation-adjusted minimum wage that more and more Americans depend on for survival.
The short version: A rising tide lifts all yachts.
2) So why don’t the unemployed/underemployed simply find better jobs?
Another way of phrasing this question is: Why don’t we just blame the poor for their plight? Mention unemployment or underemployment and someone will inevitably invoke the old “pull yourself up by your bootstraps” line. If workers don’t like retail or minimum-wage jobs, or if they can’t find good paying jobs in their area, why don’t they just move? Quit retail or quit Pittsburgh (Detroit, Cleveland, St. Louis) and…
Move to where to do what? Our country lost one-third of all decent factory jobs — almost six million of them — between 2000 and 2009, and wherever “there” is supposed to be, piles of people are already in line. In addition, many who lost their jobs don’t have the means to move or a friend with a couch to sleep on when they get to Colorado. Some have lived for generations in the places where the jobs have disappeared. As for the jobs that are left, what do they pay? One out of four working Americans earn less than $10 per hour. At 25%, the U.S. has the highest percentage of low-wage workers in the developed world. (Canada and Great Britain have 20%, Japan under 15%, and France 11%.)
One in six men, 10.4 million Americans aged 25 to 64, the prime working years, don’t have jobs at all, a portion of the male population that has almost tripled in the past four decades. They are neither all lazy nor all unskilled, and at present they await news of the uncharted places in the U.S. where those 10 million unfilled jobs are hidden.
Moving “there” to find better work isn’t an option.
3) But aren’t there small-scale versions of economic “rebirths” occurring all over America?
Travel through some of the old Rust Belt towns of this country and you’ll quickly notice that “economic rebirth” seems to mean repurposing buildings that once housed factories and shipping depots as bars and boutiques. Abandoned warehouses are now trendy restaurants; a former radiator factory is an artisanal coffee shop. In other words, in a place where a manufacturing plant once employed hundreds of skilled workers at union wages, a handful of part-timers are now serving tapas at minimum wage plus tips.
In Maryland, an ice cream plant that once employed 400 people with benefits and salaries pegged at around $40,000 a year closed its doors in 2012. Under a “rebirth” program, a smaller ice cream packer reopened the place with only 16 jobs at low wages and without benefits. The new operation had 1,600 applicants for those 16 jobs. The area around the ice cream plant once produced airplanes, pipe organs, and leather car seats. No more. There were roughly 14,000 factory jobs in the area in 2000; today, there are 8,000.
In Louisville, Kentucky, more than 5,500 people applied for what turned out to be just 50 factory jobs in 2013, some of them temporary, paying $15.78 per hour at Ford Motor Company’s Fern Valley Road plant. State unemployment officials sifted through the thousands of applications and forwarded them to Ford staff, who narrowed the field by lottery (which in itself says something about the skill levels of the jobs offered.) The wage offered to new employees is about half what union workers receive.
In January 2014, Ford announced it would hire another 350 people, to be pulled from an existing pool of 10,000 applicants. State officials in Kentucky approved $290 million in financial incentives, using taxpayer money, to bring those jobs to Louisville. The impact of those jobs is shockingly minimal; unemployment in the area is 8.2 percent, much higher than the U.S. national average. There are some 52,763 people in the Louisville metro area unable to find work, not including those working part-time jobs or who have given up trying to find work at all.
Also in in Louisville, Kentucky, General Electric’s Appliance Park, once employed 23,000 union workers at its peak in 1973. By 2011, the sputtering plant held onto only about 1,800 workers. What was left of the union there agreed to a two-tier wage scale, and today 70% of the jobs are on the lower tier — at $13.50 an hour, almost $8 less than what the starting wage used to be. A full-time worker makes about $28,000 a year before taxes and deductions. The poverty line for a family of four in Kentucky is $23,000. Food stamp benefits are available to people who earn up to 130% of the poverty line, so a full-timer in Kentucky with a family still qualifies. Even if a worker moved to Kentucky and lucked out by landing a job at the plant, standing on your tiptoes with your lips just above sea level is not much of a step up.
People once called Millinocket, Maine the Magic City. The Great Northern Paper mill, which conjured this town out of the backwoods and sustained it for a century, employed 5,000 people and sustained a way of life. At least until it closed for good in 2008, turning the community into a ghost town. 2014 saw a rebirth of sorts, as new owners repurposed the mill into a wood pellet factory. But only 55 jobs were created. The town hopes to attract tourists now, but they have not come.
Only a generation ago, Bethlehem, Pennsylvania had a steel mill that employed 31,500 people. They were not alone; in the final quarter of what was to be the American Century, some 1.5 million steelworkers lost their jobs. Including all benefits, an average union steelworker made $26.12 per hour then, the equivalent of $40.66 today. It was enough to create one of the most powerful economies on earth, supported by a robust middle class driving demand for housing, cars, everything.
It is common in such circumstances to blame greedy workers, and decry how their fate was tied to selfishness and out-of-control unions. But that would be wrong, or at least only part of the story. The ratio of CEO salary-to-average-worker-salary in 1980 was 42:1, climbing to 120:1 in 2000 and stands at 204:1 today. So indeed among the complex factors that changed America’s economic landscape, greed and selfishness did indeed play a part. It is just incorrect to blame it on the workers themselves.
Low paying jobs are not a rebirth.
4) Can’t people just get off their couches and get back to work?
There are 3.8 million Americans who have been out of work for 27 weeks or more. These are the country’s long-term unemployed, as defined by the Department of Labor. Statistically, the longer you are unemployed, the less likely it is that you’ll ever find work again. Between 2008 and 2012, only 11% of those unemployed 15 months or more found a full-time job, and research shows that those who do find a job are less likely to retain it. Think of it as a snowball effect: more unemployment creates more unemployable people.
And how hard is it to land even a minimum-wage job? This year, the Ivy League college admissions acceptance rate was 8.9%. Last year, when Walmart opened its first store in Washington, D.C., there were more than 23,000 applications for 600 jobs, which resulted in an acceptance rate of 2.6%, making the big box store about twice as selective as Harvard and five times as choosy as Cornell.
Telling unemployed people to get off their couches (or out of the cars they live in or the shelters where they sleep) and get a job makes as much sense as telling them to go study at Harvard.
5) Why can’t former factory workers retrain into new jobs?
Janesville, Wisconsin, had the oldest General Motors car factory in America, one that candidate Obama visited in 2007 and insisted would be there for another 100 years. Two days before Christmas that year and just before Obama’s inauguration, the plant closed forever, throwing 5,000 people out of work. This devastated the town, because you either worked in the plant or in a business that depended on people working in the plant. The new president and Congress quickly paid for a two-million-dollar Janesville retraining program, using state community colleges the way the government once used trade schools built to teach new immigrants the skills needed by that Janesville factory a century ago.
This time around, however, those who finished their retraining programs simply became trained unemployables rather than untrained ones. It turned out that having a certificate in “heating and ventilation” did not automatically lead to a job in the field. There were already plenty of people out there with such certificates, never mind actual college degrees. And those who did find work in some field saw their take-home pay drop by 36%. This, it seems, is increasingly typical in twenty-first-century America (though retraining programs have been little studied in recent years).
Manufacturing is dead and the future lies in a high-tech, information-based economy, some say. So why can’t former factory workers be trained to do that? Maybe some percentage could, but the U.S. graduated 1,606,000 students with bachelor’s degrees in 2014, many of whom already have such skills.
Bottom Line: Jobs create the need for training. Training does not create jobs.
6) Shouldn’t we cut public assistance and force people into the job market?
At some point in any discussion of jobs, someone will drop the nuclear option: cut federal and state benefits and do away with most public assistance. That’ll motivate people to find jobs — or starve. Unemployment money and food stamps (now called the Supplemental Nutrition Assistance Program, or SNAP) encourage people to be lazy. Why should tax dollars be used to give food to people who won’t work for it? “If you’re able-bodied, you should be willing to work,” former House Majority Leader Eric Cantor said discussing food stamp cuts.
The problem with such statements is 73% of those enrolled in the country’s major public benefits programs are, in fact, from working families — just in jobs whose paychecks don’t cover life’s basic necessities. McDonald’s workers alone receive $1.2 billion in federal assistance per year.
Why do so many of the employed need food stamps? It’s not complicated. Workers in the minimum-wage economy often need them simply to survive. All in all, 47 million people get SNAP nationwide because without it they would go hungry.
In Ohio, where I did some of the research for my book Ghosts of Tom Joad, the state pays out benefits on the first of each month. Pay Day, Food Day, Mother’s Day, people call it. SNAP is distributed in the form of an Electronic Bank Transfer card, or EBT, which, recipients will tell you, stands for “Eat Better Tonight.” EBT-friendly stores open early and stay open late on the first of the month because most people are pretty hungry come the Day.
A single person with nothing to her name in the lower 48 states would qualify for no more than $189 a month in SNAP. If she works, her net monthly income is multiplied by .3, and the result is subtracted from the maximum allotment. Less than fifty bucks a week for food isn’t exactly luxury fare. Sure, she can skip a meal if she needs to, and she likely does. However, she may have kids; almost two-thirds of SNAP children live in single-parent households. Twenty percent or more of the child population in 37 states lived in “food insecure households” in 2011, with New Mexico (30.6%) and the District of Columbia (30%) topping the list. And it’s not just kids. Households with disabled people account for 16% of SNAP benefits, while 9% go to households with senior citizens.
Almost 22% of American children under age 18 lived in poverty in 2012; for those under age five, it’s more than 25%. Almost 1 in 10 live in extreme poverty.
Our system is trending toward asking kids (and the disabled, and the elderly) to go to hell if they’re hungry. Many are already there.
7) Why are Walmart and other businesses opposed to SNAP cuts?
Public benefits are now a huge part of the profits of certain major corporations. In a filing with the Securities and Exchange Commission, Walmart was oddly blunt about what SNAP cuts could do to its bottom line:
“Our business operations are subject to numerous risks, factors, and uncertainties, domestically and internationally, which are outside our control. These factors include… changes in the amount of payments made under the Supplemental Nutrition Assistance Plan and other public assistance plans, [and] changes in the eligibility requirements of public assistance plans.”
How much profit do such businesses make from public assistance? Short answer: big bucks. In one year, nine Walmart Supercenters in Massachusetts received more than $33 million in SNAP dollars — more than four times the SNAP money spent at farmers’ markets nationwide. In two years, Walmart received about half of the one billion dollars in SNAP expenditures in Oklahoma. Overall, 18% of all food benefits money is spent at Walmart.
Pepsi, Coke, and the grocery chain Kroger lobbied for food stamps, an indication of how much they rely on the money. The CEO of Kraft admitted that the mac n’ cheese maker opposed food stamp cuts because users were “a big part of our audience.” One-sixth of Kraft’s revenues come from food stamp purchases. Yum Brands, the operator of KFC, Taco Bell, and Pizza Hut, tried to convince lawmakers in several states to allow its restaurants to accept food stamps. Products eligible for SNAP purchases are supposed to be limited to “healthy foods.” Yet lobbying by the soda industry keeps sugary drinks on the approved list, while companies like Coke and Pepsi pull in four billion dollars a year in revenues from SNAP money.
There is another side to big retail and fast food’s support for food stamps.
There is much talk about the minimum wage. What was once a way for teenagers and college kids to earn a little pocket money has devolved into the take-home pay for a vast swath of America. Defenders of a low minimum wage insist that most of us benefit from workers being paid very little; lower wages mean lower costs for Walmart and others, and so lower prices for us.
Makes sense, except that it is not true.
The difference between what Walmart pays the majority of its employees and what those employees need is made up by taxpayers in the form of food stamps and other assistance. Walmart is America’s largest private employer, so we’ll use them here for most of the examples, but this applies across the board.
Choose your statistic to understand the problem: about 25% of all employed people in the U.S. receive some form of public assistance; in the fast food industry, it is 53%. About 1 out of every 3 retail workers gets public assistance. In sum, American taxpayers subsidize the minimum wage with $7 billion in public assistance.
Let’s break it into a smaller piece: After analyzing data released by Wisconsin’s Medicaid program, the House Committee on Education and the Workforce estimates that a single 300-person WalMart in Wisconsin costs taxpayers $5,815 per Walmart associate in public assistance paid.
What about higher prices? The quick answer should be obvious by now. Whatever you think you are saving at the cash register in Walmart due to those lower wages, you as a taxpayer are paying anyway in taxes to feed the woman ringing you up. If store paid a living wage, step one would a lessening in demand for public assistance. Ka-ching, lower taxes!
But let’s follow the money. Walmart consistently pays the lowest wages they possibly can, and claims that keeps prices down. Walmart is not alone in this practice; the average family’s income is lower today than at any point in the last ten years, income inequality more extreme than at any point since before the Great Depression. The U.S. now has the highest proportion of low-wage workers in the developed world. The fall in wages parallels another trend line: in January of 2013, the Bureau of Labor Statistics reported that union membership had reached a 97 year low in America.
Poverty is big business.
8 ) Should we raise the minimum wage?
One important reason to raise the minimum wage to a living one is that people who can afford to feed themselves will not need food stamps paid for by taxpayers. Companies who profit off their workers’ labor will be forced to pay a fair price for it, and not get by on taxpayer-subsidized low wages. Just as important, people who can afford to feed themselves earn not just money, but self-respect. The connection between working and taking care of yourself and your family has increasingly gone missing in America, creating a society that no longer believes in itself. Rock bottom is a poor foundation for building anything human.
But won’t higher wages cause higher prices? The way taxpayers functionally subsidize companies paying low-wages to workers — essentially ponying up the difference between what McDonald’s and its ilk pay and what those workers need to live via SNAP and other benefits — is a hidden cost squirreled away in plain sight. You’re already paying higher prices via higher taxes; you just may not know it.
Even if taxes go down, won’t companies pass on their costs? Maybe, but they are unlikely to be significant. For example, if McDonald’s doubled the salaries of its employees to a semi-livable $14.50 an hour, not only would most of them go off public benefits, but so would the company — and yet a Big Mac would cost just 68 cents more. In general, only about 20% of the money you pay for a Big Mac goes to labor costs. At Walmart, increasing wages to $12 per hour would cost the company only about one percent of its annual sales.
Despite labor costs not being the most significant factor in the way low-wage businesses set their prices, one of the more common objections to raising the minimum wage is that companies, facing higher labor costs, will cut back on jobs. Don’t believe it.
The Los Angeles Economic Round Table concluded that raising the hourly minimum to $15 in that city would generate an additional $9.2 billion in annual sales and create more than 50,000 jobs. A Paychex/IHS survey, which looks at employment in small businesses, found that the state with the highest percentage of annual job growth was Washington, which also has the highest statewide minimum wage in the nation. The area with the highest percentage of annual job growth was San Francisco, the city with the highest minimum wage in the nation. Higher wages do not automatically lead to fewer jobs. Many large grocery chains, including Safeway and Kroger, are unionized and pay well-above-minimum wage. They compete as equals against their non-union rivals, despite the higher wages.
Will employers leave a state if it raises its minimum wage independent of a nationwide hike? Unlikely. Most minimum-wage employers are service businesses that are tied to where their customers are. People are not likely to drive across state lines for a burger. A report on businesses on the Washington-Idaho border at a time when Washington’s minimum wage was nearly three bucks higher than Idaho’s found that the ones in Washington were flourishing.
While some businesses could indeed decide to close or cut back if the minimum wage rose, the net macro gains would be significant. Even a small hike to $10.10 an hour would put some $24 billion a year into workers’ hands to spend and lift 900,000 Americans above the poverty line. Consumer spending drives 70% of our economy. More money in the hands of consumers would likely increase the demand for goods and services, creating jobs.
In many ways, the debate over raising the minimum age mirrors what was said about unions in the 1970s. Many at the time, especially pro-business economists and politicians as they do today, claimed the high wages fought for by unions hurt American competitiveness and cost jobs. How could a business survive paying $25 an hour? If wages were cut, and profits went up as costs fell, more jobs would be created. So how’d that work out? The demise of unions did certainly help raise corporate profits, but it clearly did not create jobs, at least not jobs at a living wage. Quite the opposite. Want more minimum wage jobs, maybe? Keep the wage dirt poor low.
9) Profit Before People
Where could the money to pay workers a living wage come from, except of course by raising prices?
The top one percent of income earners garnered 93 percent of income gains in the recent recovery. In the third quarter of 2012, corporate profits reached $1.75 trillion, their greatest share of GDP in history. During that same quarter, workers’ wages fell to their lowest share of GDP on record. The top six members of the Walton family (owners of Walmart) own as much wealth as 48 million other Americans combined. Meanwhile, among 35 economically advanced nations, the U.S. has the second highest rate of child poverty, 23%, just slightly better than Romania.
Yes, raise the minimum wage. Double it or more. We can’t afford not to.
10) Okay, after the minimum wage is raised, what else can we do?
To end such an article, it’s traditional to suggest reforms, changes, solutions. It is, in fact, especially American to assume that every problem has a “solution.” So my instant suggestion: raise the minimum wage. Tomorrow. In a big way. And maybe appoint Thomas Piketty to the board of directors of Walmart.
But while higher wages are good, they are likely only to soften the blows still to come. What if the hyper-rich like being ever more hyper-rich and, with so many new ways to influence and control our political system and the economy, never plan to give up any of their advantages? What if they don’t want to share, not even a little more, not when it comes to the minimum wage or anything else?
The striking trend lines of social and economic disparity that have developed over the last 50 years are clearly no accident; nor have disemboweled unions, a deindustrialized America, wages heading for the basement (with profits still on the rise), and the widest gap between rich and poor since the slavery era been the work of the invisible hand. It seems far more likely that a remarkably small but powerful crew wanted it that way, knowing that a nation of fast food workers isn’t heading for the barricades any time soon. Think of it all as a kind of “Game of Thrones” played out over many years. A super-wealthy few have succeeded in defeating all of their rivals — unions, regulators, the media, honest politicians, environmentalists — and now are free to do as they wish.
What most likely lies ahead is not a series of satisfying American-style solutions to the economic problems of the 99%, but a boiling frog’s journey into a form of twenty-first-century feudalism in which a wealthy and powerful few live well off the labors of a vast mass of the working poor. Once upon a time, the original 99% percent, the serfs, worked for whatever their feudal lords allowed them to have. Now, Walmart “associates” do the same. Then, a few artisans lived slightly better, an economic step or two up the feudal ladder. Now, a technocratic class of programmers, teachers, and engineers with shrinking possibilities for upward mobility function similarly amid the declining middle class. Absent a change in America beyond my ability to imagine, that’s likely to be my future — and yours.
Feudalism
If I had a crayon I’d draw you a picture, but I think you don’t really need that at this point. None of this is accidental, some sort of invisible hand at work.
The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline. For the top 5 percent of Americans, household net worth increased 14 percent over the same 10 years.
Companies will continue to demand Federal, state and local governments keep the minimum wage as low as possible. The same corporate entities will then continue to have those low wages subsidized by the taxpayers. Companies will continue to spew out propaganda to convince those same taxpayers that people on public assistance are lazy cheats, and that low wages mean low prices. Capping wages at 2009 levels assures that any broad rise in societal prosperity will not reach low-wage workers, and there is no broad upward path for retail workers and fry cooks. It’s not about education, either: the percentage of low-wage workers with at least some college education has spiked 71 percent since 1979, to now encompass over 43% of all low-wage workers. Meanwhile more and more money will be hoovered up by an ever-concentrated group of the super wealthy, squeezing their workers tighter and tighter. Hey, how many miles can you drive on a gallon of blood?
In today’s America, even working full-time, at most jobs you can’t earn enough to live with government assistance. More and more of everything is owned by fewer and fewer people. If you look that stuff up in a reference book, it is called feudalism. It is our future, and, of course, thank you for shopping at Walmart!
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
How Many Miles Can You Drive on a Gallon of Blood? Our Future is Feudalism
There is much talk about the minimum wage. What was once a way for teenagers and college kids to earn a little pocket money has devolved into the take-home pay for a vast swath of America. Defenders of a low minimum wage insist that most of us benefit from workers being paid very little; lower wages mean lower costs for Walmart and others, and so lower prices for us. Makes sense, except that it is not true.
The difference between what Walmart pays the majority of its employees and what those employees need is made up by taxpayers in the form of food stamps and other assistance. Walmart is America’s largest private employer, so we’ll use them here for most of the examples, but this applies across the board.
Choose your statistic to understand the problem: about 25% of all employed people in the U.S. receive some form of public assistance; in the fast food industry, it is 53%. About 1 out of every 3 retail workers gets public assistance. In sum, American taxpayers subsidize the minimum wage with $7 billion in public assistance.
Taxpayers Foot the Bill for Low Everyday Prices
Let’s break it into a smaller piece: After analyzing data released by Wisconsin’s Medicaid program, the House Committee on Education and the Workforce estimates that a single 300-person WalMart in Wisconsin costs taxpayers $5,815 per Walmart associate in public assistance paid.
It isn’t about more hours: The families of more than half of the fast-food workers employed 40 or more hours per week are still enrolled in public assistance. More hours at a low wage still does not equal a living wage.
Now, if you’re a certain kind of person, just stop reading here. In a country with such abundance as America, people should not starve to death, being told on the way down to “get a job, loser.” And none of this is about the politics of left and right; it is about the politics of up and down. The answer is not to cut public assistance, the working poor be damned, let them eat cake. If you want that kind of society, go troll some other web site. The answer is for companies to pay a living wage. If they won’t do it voluntarily, then we must raise the minimum wage. It has not gone up since 2009 and it is damn well time for it to do so. In fact, we can’t afford not to.
But Won’t Raising the Minimum Wage Raise Prices? Cost Jobs?
Let’s tackle the easy stuff first. No business offers paying jobs as a public service. They hire people to make money. When they need more workers to make more money, they hire more. When they no longer need those workers, they lay them off. Ever heard of Christmas help? A higher minimum wage will not cause businesses to cut jobs; they can’t do that. Who’d cook the burgers?
What about higher prices? The quick answer should be obvious by now. Whatever you think you are saving at the cash register in Walmart due to those lower wages, you as a taxpayer are paying anyway in taxes to feed the woman ringing you up. If store paid a living wage, step one would a lessening in demand for public assistance. Ka-ching, lower taxes!
But let’s follow the money. Walmart consistently pays the lowest wages they possibly can, and claims that keeps prices down. Walmart is not alone in this practice; the average family’s income is lower today than at any point in the last ten years, income inequality more extreme than at any point since before the Great Depression. The U.S. now has the highest proportion of low-wage workers in the developed world. The fall in wages parallels another trend line: in January of 2013, the Bureau of Labor Statistics reported that union membership had reached a 97 year low in America.
Welcome to Feudalism
Where could the money to pay workers a living wage come from, except of course by raising prices?
The top one percent of income earners garnered 93 percent of income gains in the recent recovery. In the third quarter of 2012, corporate profits reached $1.75 trillion, their greatest share of GDP in history. During that same quarter, workers’ wages fell to their lowest share of GDP on record. The top six members of the Walton family (owners of Walmart) own as much wealth as 48 million other Americans combined. Meanwhile, among 35 economically advanced nations, the U.S. has the second highest rate of child poverty, 23%, just slightly better than Romania.
How Many Miles Can You Drive on a Gallon of Blood?
If I had a crayon I’d draw you a picture, but I think you don’t really need that at this point. None of this is accidental, some sort of invisible hand at work.
Companies will continue to demand Federal, state and local governments keep the minimum wage as low as possible. The same corporate entities will then continue to have those low wages subsidized by the taxpayers. Companies will continue to spew out propaganda to convince those same taxpayers that people on public assistance are lazy cheats, and that low wages mean low prices. Capping wages at 2009 levels assures that any broad rise in societal prosperity will not reach low-wage workers, and there is no broad upward path for retail workers and fry cooks. It’s not about education, either: the percentage of low-wage workers with at least some college education has spiked 71 percent since 1979, to now encompass over 43% of all low-wage workers. Meanwhile more and more money will be hoovered up by an ever-concentrated group of the super wealthy, squeezing their workers tighter and tighter. Hey, how many miles can you drive on a gallon of blood?
In today’s America, even working full-time, at most jobs you can’t earn enough to live with government assistance. More and more of everything is owned by fewer and fewer people. If you look that stuff up in a reference book, it is called feudalism. It is our future, and, of course, thank you for shopping at Walmart!
BONUS: Charles Ferguson, director of the Wall Street documentary “Inside Job” wrote:
Far from being in an era of brutal partisan warfare, as conventional wisdom holds and as watching the nightly television news might suggest, the United States is now in the grip of a political duopoly in which both parties are thoroughly complicit. They play a game: they agree to fight viciously over certain things to retain the allegiance of their respective bases, while agreeing not to fight about anything that seriously endangers the privileges of America’s new financial elites. Whether this duopoly will endure, and what to do about it, are perhaps the most important questions facing Americans. The current arrangement all but guarantees the continuing decline of the United States as a nation, and of the welfare of the bottom 90% of its citizens.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
The Hyper-Wealthy Own Us (Literally)
When people talk about income inequality in the U.S., it often involves big, big numbers.
For example, last year eight Americans — the four Waltons of Walmart fame, the two Koch brothers, Bill Gates, and Warren Buffett — made more money than 3.6 million American minimum wage workers combined. The median CEO pay in America for large corporations is $10 million per year. A chief executive now makes about 257 times the average worker’s salary, up sharply from 181 times in 2009. Overall, a tiny one percent of Americans own over a third of America’s wealth.
Math is Hard
Still, the numbers are hard to grasp, to understand at a ground-truth level. When folks want to talk about how big a place is, the often-used measure is football fields; the crash site covered an area the size of two football fields. That makes it easier to understand.
So, here’s our America measured in sort of the same way, courtesy of the real estate site Redfin. They figured out the value of all the homes in some of America’s better known cities, then compared that number to the known wealth of some of America’s better known one percenters. It turns out people like Bill Gates, the Waltons and the Koch Brothers literally own us. They have enough money to buy whole cities. Here’s a partial list:
Walton Family, owners of Walmart, have $154.8 billion. They could buy all of Seattle, value $111.5 billion.
Koch Brothers, holding $86.0 billion, could buy all of Atlanta, valued at $78.1 billion.
Bill Gates, with his $77.5 billion, could buy Boston, for $76.6 billion.
Warren Buffett, packing $63.5 billion, is able to purchase Charlotte, NC, for $56.1 billion.
Also rans:
Michael Bloomberg, only worth $31.8 billion, could still pick up Anaheim for $31.4 billion.
Larry Page of Google, $30.8 billion, is able to buy Boca Raton for $29.5 billion.
Jeff Bezos, Amazon.com, has $30.5 billion and could own Napa for $29.5 billion.
Mark Zuckerberg, your best Facebook friend, saved up $27.7 billion and could buy Saint Paul, MN, at $26.8 billion.
Phil Knight, who started Nike, has only $18.3 billion, but could still be the owner of Washington DC suburb Falls Church for only $18.0 billion.
Equal Time
Balance is important in these sorts of things, so it is only fair to add that some five million homes were lost to foreclosure between 2008 and 2013. 8.2 million foreclosure starts took place in that same time period. Moody’s Analytics chief economist Mark Zandi estimates foreclosures will strike another three million homes in the next three or four years.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Despite Falling Revenues, Walmart Increases Pay for Top Execs
Sometimes the effects of our social and income inequality are easy to see, but hard to measure.But not in this case: despite falling revenues, and despite only reluctantly paying minimum wage to its workers, Walmart increased the pay for its top executives. The people who do the labor get little. The people who make the decisions that can cause falling revenues get more (and more and…) Could it be any clearer what is going on? A flatulence of money.
This is what Thomas Piketty’s theories look like in practice.
Some Background from a Real Economist
Economist Thomas Piketty’s new bestseller, Capital in the Twenty-First Century
makes clear there has been a significant increase in income inequality in America. Our inequality rate is higher than it ever has been in our own history, is growing, and is higher than in countries in Western Europe and Canada.
In the United States, the top one percent own 35 percent of all capital, and the top ten percent of wealth holders own roughly 70 percent. The bottom 50 percent have roughly five percent. Note also that until slavery was ended in the United States, human beings were also considered capital.
The inequality is driven by two complementary forces.
By owning more and more of every thing (capital), rich people have a mechanism to keep getting richer, because the rate of return on investment is a higher percentage than the rate of economic growth. This is expressed in Piketty’s now-famous equation R > G. The author claims the top of layer of wealth distribution is rising at 6-7 percent a year, more than three times faster than the size of the economy.
At the same time, wages for middle and lower income people are sinking, driven by factors largely in control of the wealthy, such as technology employed to eliminate human jobs, unions being crushed and decline in the inflation-adjusted minimum wage more and more Americans now depend on for their survival.
Back to Walmart
A key question for detectives trying to figure out who may have committed a crime is to ask cui bono, “Who benefits?” Who stands to profit from a murder, from a crime? That’s often your perp.
In Walmart’s case, it is not its stockholders who profited. Indeed, this has not been a money year for Walmart shareholders. Despite an overall good twelve months for the stock market in general, Walmart stock bumbled due to lower sales growth.
No joy for Walmart’s customers, or its own employees. Walmart cited cuts in federal food stamps as one reason for its weak sales increase. Since they are paid only minimum wage (and Walmart fights vigorously against any increases) and only are given 39 hours a week or less so as not to qualify for full-time benefits, a fair number of Walmart’s own workers receive food stamps.
Good news though for Walmart’s top executives. The company employed some accounting tricks to “adjust” on paper actual revenues to make them appear higher than in reality. On the strength of that “adjusted” performance, William Simon, CEO of Walmart’s United States unit, received total compensation of $13 million last year. Of that, $1.5 million was a “performance bonus,” paid out actually for declining revenues. In fact, six of Walmart’s top executives received a total of $8.42 million in cash incentive payments for 2014 even as revenues fell and the company closed stores. The former employees of those stores, needless to say, did not receive any performance pay bonuses as they fell deeper into poverty.
Fair Play?
Walmart’s executives receiving these bonuses are the equivalent of a sports team getting paid extra because they lost. And we know that only happens when a game is rigged, right? How much more clarity into how the New Economy works do you need? More? Well, just wait for Walmart’s next earnings report and you see who is shaving points for their own benefit.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Walmart Supports Raising Public Food Benefits– For Its Own Profit
They say politics makes strange bedfellows. They also say poverty is just another profit opportunity, at least over at Walmart.Walmart supports an increase in the Supplemental Nutrition Assistance Program (SNAP, i.e., food stamps) benefits, to erase the cuts Congress voted into place last fall. Does Walmart really care more about the fate of about hungry children than does Congress? Um, not really. Walmart has instead acknowledged publicly that federal cuts to food stamps are a threat to its bottom line.
Poverty Pays
In its required 10K filing with the Securities and Exchange Commission (SEC) Walmart was oddly blunt about what the SNAP cuts may do to its bottom line:
Our business operations are subject to numerous risks, factors and uncertainties, domestically and internationally, which are outside our control. These factors include… changes in the amount of payments made under the Supplemental Nutrition Assistance Plan and other public assistance plans, [and] changes in the eligibility requirements of public assistance plans.
According to Walmart’s Chief Financial Officer Charles Holley, the company didn’t anticipate how much cuts to such programs would affect it. Reductions to the Supplemental Nutrition Assistance Program that went into effect on November 1, 2013, ironically first day of Walmart’s fourth fiscal quarter, led to a between $1 and $36 reduction in SNAP benefits per household, or up to $460 a year. Walmart knows its customers– poor people with even less money simply can’t buy enough to keep corporate profit high.
Follow the Money
How much profit? While Walmart does not break out sales paid for with SNAP, it looks like big bucks.
In a study entitled “FOOD STAMPS: Follow the Money,” researcher and public health attorney Michele Simon established:
— In one year, nine Walmart Supercenters in Massachusetts together received more than $33 million in SNAP dollars—over four times the SNAP money spent at farmers markets nationwide;
— In two years, Walmart received about half of the one billion dollars in SNAP expenditures in Oklahoma;
— One Walmart Supercenter in Tulsa, Oklahoma received $15.2 million while another (also in Tulsa) took in close to $9 million in SNAP spending.
(Simon’s research also found out that bank JP Morgan Chase is also profiting heavily off the electronic bank transfer-based SNAP program. Morgan has contracts for the SNAP electronic benefits transfer services in 25 states. In Florida, Morgan Chase has a five-year contract worth about $83 million. In New York, a seven-year deal that originally paid Morgan Chase $112 million for services was recently amended to add another $14.3 million, a nice 13 percent increase.)
All this money in play affects a lot of Americans. 2011 saw a new record enrollment in SNAP, 1 of every 7 Americans.
Walmart Want to Keep Selling Sugary Soda as Food
But back to Walmart. Not only does Walmart want SNAP money, it also wants to keep as many of its products SNAP-eligible as possible. The Department of Agriculture must certify an item as available for purchase with food stamps; some long-term no-no’s include alcohol, tobacco and many prepared foods. Yet the top three food vendors in terms of SNAP-money received are Coca-Cola (who makes Coca-Cola), Kraft (of highly processed foods fame), and Mars (the candy and snack food maker.) Walmart has joined those companies to lobby the Department of Agriculture, and Congress, against any measures that would restrict SNAP use to more healthy food choices.
Since Congress has been debating the soda-food stamps question on and off since 1964, it seems unlikely Walmart and the others have much to fear.
SNAP Funds Your Everyday Low Prices at Walmart
As reported previously, one of the main reasons why Walmart can sell things cheap is that it gets away with paying below a living wage because you, the taxpayer, subsidize the employees’ wages. The gap between what the majority of employed people earn through the minimum wage at places like Walmart, and what they need to live a minimum life, is made up by federal and state benefits. Nearly three-quarters of enrollments in America’s major public benefits programs are from working families. They work in jobs that pay wages so low that their paychecks do not generate enough income to provide for life’s basic necessities.
And it is not just Walmart. The cost of public assistance to families of workers in the fast-food industry alone is nearly $7 billion per year. That money, which might rightly be paid by McDonald’s and Burger King and KFC, is instead paid by the taxpayers, money lenders to a government that is far more interested in subsidizing business than in caring for the nation as a whole.
This Land is Your Land
America is indeed the land of opportunity; where else in the world can the collusion of government and corporate interests create both a major lobbying effort to increase food aid to America’s poor, while at the same time fleecing taxpayers so that large corporations can further monetize poverty? Exceptional, indeed.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Subsidizing Poverty in America
Researching my upcoming book, Ghosts of Tom Joad: A Story of the #99Percent (April 2014), I learned these things:
Most Jobs are Minimum Wage Jobs
All those jobs being created we keep hearing about? All those people who say if you don’t like working for minimum wage, go get a better job?
The answer: In order, the jobs that account for the most workers in the U.S. right now are retail salespeople, cashiers and restaurant workers, and janitors. All of those pay minimum wage or nearly so.
Actually, all this talk about minimum wage is missing a big point: more Americans work for sub-minimum wage than for minimum wage. People who get tips only have to be paid $2.13 an hour. And that lousy $2.13 has not changed by law in twenty-two years due to lobbying by the restaurant business. And if a business “requires” its servers to “share” tips with the dishwashers, well, then they only need to pay the dishwashers two bucks thirteen instead of minimum wage. Owners are doing O.K., though, as you may have seen restaurant prices go up a bit in the last twenty-two years. A McDonald’s hamburger cost 15 cents twenty-two years ago.
Cheap Stuff is Expensive
Back to that Big Mac you’re enjoying. One reason that it is pretty cheap (and why Walmart is cheap, et al) is that those businesses get away with paying below a living wage because you, the taxpayer, subsidize the employees’ wages. The gap between what the majority of employed people earn through the minimum wage, and what they need to live a minimum life, is made up by federal and state benefits. Nearly three-quarters (73 percent) of enrollments in America’s major public benefits programs are from working families. They work in jobs that pay wages so low that their paychecks do not generate enough income to provide for life’s basic necessities.
The number of people using food stamps (now called SNAP, or Supplemental Nutrition Assistance Program) increased by 13 percent a year, every year, from 2008 to 2012.
The cost of public assistance to families of workers in the fast-food industry alone is nearly $7 billion per year. That money, which might rightly be paid by McDonald’s and Burger King and KFC, is instead paid by the taxpayers, money lenders to a government that is far more interested in subsidizing business than in caring for the nation as a whole.
McDonald’s workers alone account for $1.2 billion in federal assistance used per year, every year. Just for grins, know that McDonald’s CEO Donald Thompson last year took home $13.7 million in salary, $5.46 billion in personal profits and $5.5 billion in stock. Supersize that sir? No thanks, already there.
So Get a Job, Loser
The rejoinder at this point is that sad as it all is, low wages mean low prices for us all. Who wants to pay more at Walmart? I mean, we work for a living.
Leaving aside the obvious, that via taxes spent on feeding low wage workers we the taxpayers are already paying virtual higher prices, the argument is garbage. If McDonald’s doubled its employees’ salaries, a semi-livable wage of $14.50 an hour, a Big Mac would cost only 68 cents more. No, no, the low wages paid are not part of keeping prices low; they are the key to keeping profits high. Last year the top seven minimum wage employers collectively earned $7.44 billion in profits, paid $52.7 million to their highest-paid executives and distributed $7.7 billion in dividends and buybacks. You want fries with that?
Maybe the solution is for minimum wage workers to, well, work harder, you know, pull themselves up by their bootstraps. Problem is of course that most businesses prefer to keep their lowest paid workers below full-time to avoid the costs of paying benefits; an estimated 87 percent do not receive health care through their employer. But even full-time hours, if they exist, are not enough to compensate for low wages. The families of more than half of the fast-food workers employed forty or more hours per week still need to be enrolled in public assistance programs.
Hungry in America
Here now in America we are reaching for a zero-sum point where wealthy people have come to believe that to gain anything requires them to take it from someone else. WalMart and the fast food giants, already awash in billions in profits, still fight even tiny increases to the minimum wage, even when it hardly would matter.
We have people hungry in America. We have created a system where even working a full time job is not enough to take care of a family. We have created disposable workers, who matter to no one. Sad for sure, but think further, to what it all means to the future of our society. Without commitment and community, things won’t continue to work for long. In the history of the world, no one has ever washed a rented car.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
I am Patient Zero in our New Economy: Raise the Minimum Wage
This piece originally appeared on Huffington Post
In his State of the Union Address, the president said that the federal minimum wage should be raised to nine dollars an hour. He said also that a person holding down a full-time job should not have to live in poverty in a country like America. I could not agree more; for the last few months I’ve lived like the people the president referred to and it is not a pretty picture.
As research for my new book, I have been working in the minimum wage economy and trying to live on the money I make. The situation is much, much worse than the president described in his Address, a tragedy for our society. Here’s what it looks like.
Once Upon A Time
The last time I worked for minimum wage was in a small store in my Ohio hometown, almost a right of passage in high school, pulling in about four bucks an hour stocking shelves alongside my friends. Our girlfriends ran the registers, our moms and dads shopped in the store and a good story about a date could get you a night off from the sympathetic manager. When someone graduated, the manager would hire one of the workers’ friends and the cycle continued.
The New World
At age 53 I expected to be quizzed about why I was looking for minimum wage work in a big box retail store. No one cared; instead, the application process included a background and credit check, along with a drug test. Any of those anonymous agencies could have vetoed my employment and I’d never even know about it. Most places that don’t pay much seem really concerned that their workers are drug-free. I’m not sure why this is, because you can be a banker or lawyer and get through the day higher than angels on a cloud. Regardless, I did what I had to in front of another person, handing him the cup. He gave me one of those universal signs of the underemployed I now recognize, a “we’re all in it, what’re ya gonna do” look, just a little upward flick of his eyes.
After hiring I watched a video on theft. The interesting thing was that in addition to warning us about stealing candy for breaks, we were not to steal time. The store paid us for our time and so even if we snuck out for a breath of air or flipped through a magazine, we were stealing time. Would we have liked someone from the store to come to our home (or, I guess, day-rate motel room, car back seat, shelter bunk or cardboard box under a bridge) and have them do whatever the heck the store would want from us there?
New break policy: zero to five and a half hour shift, no break. New schedule policy: all shifts reduced to five and a half hours or less. Somebody said it was illegal not to give us breaks, but what can you do, call the cops like it was a real crime? It turns out in fact that in my state employers are not required to grant breaks to anyone over age 16; in some places minimum wage workers do eight and nine hours shifts without a meal or a chance to get off their feet for a few minutes. No one gets sick leave, holidays or accrues vacation time. No health benefits.
Eight hours on your feet is tough, but what about sixteen? At age 53 I was the third oldest minimum wage worker at the store. With one or two exceptions, everyone on the schedule worked multiple jobs, often in adjacent stores in the same strip mall. They have to: even if the store gave us 40 hours a week for a year (a big, big if, as most places cap workers at 39 hours to avoid them becoming “full time” and possibly qualifying for benefits. In my case, as work expands and contracts, I’ve been scheduled for as few as seven hours a week at one store, without notice that my hours were going to be cut), your annual income would be only about $15k, before taxes of course. The stores adapted, actually trying pretty hard to create schedules that allowed everyone to hold down their two or three jobs. It was the norm, a fact of life, something for business to adjust to.
Who We Are
Who are the workers? They are adults, many single moms (64% of minimum wage employees are women), a veteran from Iraq (“the Army taught me to drive a Humvee which turns out not to be a marketable skill”), another retired guy, a couple of students who alternate semesters at work with semesters at the local community college and a small handful of recent immigrants. One guy said that because the big boxer drove his small store out of business he had to take a minimum wage job, which only pays him enough so that he sort of has to buy at the big box store. They made him a greeter at the front door and told him to be enthusiastic. He was. That guy was like Patient Zero in our New Economy.
There is no ladder up, no promotion path. Most of us were just trying to make a little money. But some people had been yelled at too many times, or were too afraid of losing their jobs. They were broke. People—and dogs—don’t get like that quickly; it has to build up on them, or tear down on them, like erosion, one thing after another nudging them deeper into it. Then one day, if the supervisor told them by mistake to hang a sign upside down, they’d do it, more afraid of contradicting the boss than making an obvious mistake. You’d see them rushing in early to stand next to the timeclock so they would not be late. One broke down in tears when she accidentally dropped something, afraid she’d get fired on the spot for it. They walk around like the floor was all stray cat tails. It is a lousy way to live as an adult, your only incentive for doing good work being they’d let you keep a job that made you hate yourself for another day.
You had to pay attention, but not too much. It was an acquired skill. Enough time in this retail minimum economy and it was trained into you for life, but for newcomers like me it was a slow process of getting pushed back into the ground every time we had a accidental growth spurt. None of us was trying to be great, just satisfied. This was just grey bread as you felt yourself getting more and more tired each day.
About 30 million Americans work this way, live this way, at McJobs. We pop up like Brigadoon during election cycles, often as caricatures like Joe the Plumber, or as props for an important speech. In between such appearances, about half of all single-parent families live in poverty. These situations are not unique. Wal-Mart has more than two million employees; if Wal-Mart was an army, it would be the largest military on the planet behind China. Wal-Mart is the largest overall employer in the U.S., and the biggest employer in twenty-five states.
More than Minimum
I did work in retail for minimum wage, both at age 16 and again at age 53. While I lived a life from teenager stocking shelves to older adult stocking shelves, the minimum wage only rose by a few bucks. The minimum wage today is $7.25—is a big latte really what an hour of my labor is worth? While the money has not changed, what has changed is who is now working these minimum wage jobs. Once upon a time they were filled with high school kids earning pocket money. In 2013, the jobs are encumbered by adults struggling to get by. Something is wrong.
So to the president I say, yes, please, do raise the minimum wage. But how far is the proposed nine bucks an hour going to go? Are we going to do eight hours of labor for the cell phone bill? Another twelve for the groceries each week? Another twenty or thirty for a car payment? How many hours are we going to work? How many can we work? Nobody can make a real living doing these jobs. You can’t raise a family on minimum wage. And you can’t build a nation on the working poor. Maybe what we need is to spend more on education and less on war, even out the tax laws and rules just a bit, require a standard living wage instead of a minimum one. That’s not all the answer, but it is a start. The president is right that it is time for a change, but what is needed is much more than a nudge up on the minimum wage.
Working for minimum wage, I came to know that these were real problems, with real people behind them, lives. We have to decide if all this is just about money or if it is about more, about society, about how we live, about people, about America.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
4469: 07/04/2011
We learned this week that our wars, our only legacy from the evil of 9/11, signs of a nation gone mad, have cost America over $4 trillion dollars. They have impoverished our country, caused us to mortgage our future to Chinese investors, seen us throw away funding for schools, for police, funding for ourselves, to instead enrich Iraqi and Afghan contractors, fatten Blackwater and stuff the coffers of thugs like KBR.
This is a sad state we find ourselves in on our national day.
Yet while money is one thing to squander, we weep over the unnecessary loss of lives. For every fat drunken slob at Walmart this weekend “supporting the troops” by sticking a magnet (likely made abroad) on his car (likely made abroad), I say, fuck you. If that word is obscene to you, how do you describe these deaths? We have thrown away the best of ourselves.
As for fighting for our freedom, with the arguable exception of the first three months of the now 10 year Afghan war, you have to go back 70 years to find a time when we truly fought to protect America. So stop saying that.
We honor them this July 4 not by sending more of their brothers and sisters to die. Do the dead lack company?
Since the invasion of 2003, 4469 Americans died in Iraq. How many is that? I decided to show myself, typing one X for each of them.
It did not take that long– a soldier hit in a major vessel can bleed out in only a few minutes– one key after another. Joshua, Jacob, Rahim, Carol, Towana, Richard, a couple of Peters, another with the same name as my own military-age child. Too many took their own lives, but just an X below nonetheless because they died of this war same as those who died in it.
Pick one X and think about him. Eleven died in April. Two more in May.
This June alone, 15 soldiers lost their lives in just Iraq. Alone.
For every X is a space, 4469 of them too, moms and dads, brothers, friends, girlfriends, dogs, empty spaces.
X X X X X X X X X X X X X X X
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Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
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