As Americans, we all have one thing in common — and no, it is not just a superiority complex, fledgling caffeine addiction, or affinity for bacon. Rather, we all value the importance of giving thanks on one specific day at the end of November. For many of us, this tradition includes family, a large turkey, stuffing, and cranberry sauce. But for those of us who are not as fortunate, food drives are often held. Usually, the recipients of these food drives are thought to be homeless or unemployed. This year, however, recipients in Canton, Ohio will be Walmart employees.
On Monday, the Cleveland Plain Dealer broke the news of a holiday food drive at an Ohio Walmart store — for Walmart employees. The story, which includes a picture of bins labeled, “Please Donate Food Items Here, so Associates Can Enjoy Thanksgiving Dinner,” quickly went viral. The photo and story was courtesy of Organization United for Respect at Walmart, a group of union-backed employees pushing for higher wages and better work environments.
It shouldn’t be a shock that the story spread so fast. It is surprising, however, that Walmart, first on this year’s Fortune 500 company list, pays its workers so poorly that they can’t afford to put a Thanksgiving dinner on the table.
Walmart’s revenue was $443.9 billion in the 2012 fiscal year. And, as Sen. Bernie Sanders of Vermont noted, the net wealth of six members of the Waltons, Walmart’s founding family, is equal to the wealth of more than 40 percent of the American population. Yet Walmart employees earn so little that they need a canned food drive.
What Walmart’s CEO doesn’t seem to understand is the simple truth that a large portion of Walmart’s customers are lower-wage workers who are working at places like — wait for it — Walmart.
Yet the company refuses to raise its average wage — $8.80 an hour, or $15,576 a year at full-time status, which at Walmart is only 34 hours per week, according to marketing research firm IBISWorld. And when Walmart — as the largest employer in America, according to USA Today — determines its wages, other companies must follow suit to stay competitive economically. Thus, as long as Walmart keep its wages at or near the bottom, other low-wage employers are forced to keep their wages down too.
By no means do these low wages affect Walmart employees alone. Many of these underpaid workers are forced to resort to government assistance programs to provide for their families with necessities like food stamps, housing assistance, Medicaid, and the earned income tax credit. Therefore, taxpayers end up subsidizing the poverty-level wages of Walmart. A study released by Congressional Democrats earlier this year showed that just one Walmart in Wisconsin could cost taxpayers up to $900,000 to cover government assistance for underpaid workers.
Conversely, if Walmart increased its wages, other low wage employers would be forced to follow suit. Walmart, as a company, is so influential that a wage increase would not only be a benefit to its employees, but also to the economy and to Walmart’s own sales.
But what Walmart and many similar employers fail to acknowledge is the truth that lies at the core of a modern economy: workers are also consumers. The income of workers is ceaselessly recycled to purchase the goods and services that they and other workers generate. But if their incomes are insufficient, an economy produces more supply than its people are capable of buying. Thus, Walmart’s target consumers are unable to purchase their products.
Despite the apparent need for reform, Walmart’s business model remains static. Instead of choosing to pay its workers more, the company continues to use a strategy in which profits rely chiefly on cheap labor.
This and other harmful strategies are the reason Walmart’s sales are shrinking, along with all other retailers’ who share the spending power of the ordinary American consumer. They’re shrinking because it creates a vicious cycle in which production costs exceed consumption and to make up for that loss, wages are slashed.
Although Thanksgiving is the time of year where we count our blessings, perhaps we should also use it as a time to side with the less fortunate and stand against the inhumane employment practices of some of our most popular Black Friday proprietors.