Back to the Dark Satanic Mills

Behind the eye-popping financials, however, is a more Dickensian tale. While Walmart, the single largest private employer in the United States and the country’s top retailer, caters more and more to “upper-income” shoppers, the state is subsidizing its profits. In 2023, the chain increased the minimum wage for roughly 340,000 of its hourly workers in the United States by as much as $2 an hour in some stores, to $17.50 — leaving its rates behind its competitors, including Costco and Target — with its overall range from $14–19 per hour depending on location. That’s a pittance.

The living wage in the United States — the income level at which a family can afford the basics — hit $25.02 an hour in 2024. While the liveable rate varies by location, so does the Walmart minimum wage. In short, there’s a structural gap across the country between what Walmart pays and what a person needs to earn to make a basic living — and we’re talking basic here, just the necessities of shelter, food, bare-bones transit, and core sundries.

The gap between what Walmart pays and what it takes to survive is made up, in part, by state subsidies. In 2020, the Government Accountability Office (GAO), at the behest of Senator Bernie Sanders, studied who was using federal assistance programs and where they worked. The GAO found millions of full-time workers were stuck relying on federal medical and food programs to make ends meet.

Food Stamps for Full-Time Workers

According to the office, 70 percent of Supplemental Nutrition Assistance Program (SNAP) and Medicaid users in their study were full-time workers, with 90 percent of them in the private sector. A significant number of them worked in restaurants and department or grocery stores.

Surprise, surprise — Walmart ranked among the top four employers whose workers relied on Medicaid and SNAP. As Eli Rosenberg broke down in the Washington Post, in nine states alone, Walmart had 14,500 employees on SNAP and 10,350 on Medicaid. Other top offenders included McDonalds, Dollar Tree, Amazon, Burger King, and FedEx.

Last year, the United Nations took aim at Walmart and others for their low wages and anti-union policies and tactics — the latter comprising the sorts of dirty games that help the companies to keep wages low. The organization’s special rapporteur on extreme poverty and human rights, Olivier De Schutter, wrote to the retail giant and the US government, noting he was “extremely disturbed that workers in some of the world’s most profitable companies — in one of the richest countries on earth — are struggling to afford to eat or pay their rent,” and called for remedial action. His suggestions included fixing the misclassification of workers as contractors and higher minimum wage rates. You can imagine what came of the requests.

Walmart is now facing a vote to demand that the company meet its fiduciary duties and pay a living wage. The proposal was filed by The Shareholder Commons (TSC), a shareholder nonprofit that says it exists to address “social and environmental issues from the perspective of shareholders who diversify their investments to optimize risk and return,” and whose advocacy “focuses on the divergence that often emerges between a company’s interest in maximizing its cash flows over the long term and its shareholders’ interests in optimizing overall market returns.”

State-Subsidized Starvation Wages

The TSC is hardly a Maoist insurgency, but even still Walmart is fighting its modest proposal. The company recently failed in its bid to block the proposal outright after the Securities and Exchange Commission said the vote could go ahead. Walmart is still fighting the measure, though, and has recommended a vote against it. The smart, cynical money is on the proposal failing, even as its proponents argue it would raise the company’s profits.

For all their talk of free markets and bootstrap capitalism, the finance class relies on state subsidies to bolster its profits, socializing costs in infrastructure and labor while fighting to retail every last dime of income for shareholders and executives. Walmart’s Dickensian way of operating isn’t new; its executives didn’t invent it, but they are tremendously good at it. And the more powerful the company gets, the more entrenched these practices become. The larger their reach, the more likely they’ll be to keep getting away with it.

You simply can’t “outcompete” or “out-innovate” the country’s largest retailer and employer and deliver higher wages, nor can consumers shame or boycott them into doing the right thing. What we need is a law that requires Walmart — that is, retailers or grocers or food chains of a certain size — to pay a proper living wage or better.

Such a law could capture not only Walmart, but other offenders on the state-subsidized starvation wage list, including McDonalds and Amazon. The companies would surely fight such a bill tooth and nail, but its outcomes would be undeniable, making the battle more than worthwhile.