The statistic has been around for a few months now, but I
just stumbled upon it and was amazed: Wal-Mart workers collectively receive
$2.66 billion a year in food stamps, or $420,000 per Wal-Mart store in food
stamps. Year after year, low Wal-Mart
wages lead to the government providing food stamps and other assistance to
their workers and thus indirectly subsidizing Wal-Mart’s profit.
What would happen if Wal-Mart raised the wages it pays its
workers to a level that prevented them from qualifying for food stamps? In
asking the question, I assume that Wal-Mart, like most companies, does not
carry excess labor and so could not lay off masses of people to keep their
profit margin stable. So the company would be forced to raise prices. But if Wal-Mart raises prices too much,
people will start shopping elsewhere. After all, the main reason people shop at
Wal-Mart is price.
To remain viable as a business, Wal-Mart would eventually have
to take the money to pay workers a decent wage out of profit and executive
salaries.
That means that there would be less money for the
multi-billionaire Walton family and the executives who make millions, starting
with $35 million a year for the chief executive officer. Maybe the CEO would
have to settle for making 42 times what the average worker makes, which is what
the average manufacturing CEO in the United States made in 1960. By the way,
the average U.S. manufacturing CEO now makes 344 times what the average worker
makes, compared to 25 times the average worker for European CEOs. Wal-Mart’s
CEO currently makes more than 2,000 times what an entry-level Wal-Mart employee
does.
It amazes me that Republicans like Mitt Romney, Paul Ryan,
Newt Gingrich, Rick Santorum and the other good old boys and girls don’t
complain about the corporate giveaway that takes place every time someone with
a minimum or low wage job files for food stamps.
During the past 30 years, one way that income has been
transferred from the poor and middle class is through the deterioration of the
purchasing power of the minimum wage. Since the late 1960’s the minimum wage
has lost 40% of its value. Most people who lose 40% of their purchasing power
would be in real trouble—so imagine what it means to those at the lowest end of
the wage spectrum.
It’s been a boon to employers who now can pay a de facto 40%
less to get minimum wage jobs done. Since the minimum wage sets the bar for
wages and salaries at all levels, it’s no wonder that on average, employees
make less than they did 30 years ago, when inflation is figured into the
equation.
My proposal is to set the minimum wage at a level so that 40
hours of it would bring a worker above the maximum level for receiving food
stamps. That would result in an increase in all wages. It would also take money
out of the pockets of the rich folk who save a significant part of their income
and put that money into the hands of the poor, near poor and middle class, who
would spend more of it, thus creating more jobs. Don’t worry, the rich and
upper middle class would still do pretty well.
The fly in the ointment is the possibility that Wal-Mart and
other large companies would offshore even more jobs to Asia than they do now.
Which brings us to the second part of my proposal: that no good or service be
allowed to be imported into the United States unless the producer/seller both
paid its workers the prevailing U.S. wage and provided a similar level of
safety and environmental protections.
My two proposals would lead to a more equitable distribution
of wealth, in the United States and probably worldwide. Studies of 20th century
America, 14th century Europe and 16th century Spain demonstrate that a more
equitable distribution of wealth leads to a stronger economy.
The alternative is to continue on the path we are on and end
up having an economy and society that look like those of a third world nation.
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