The 2.6 Billion Dollar Welfare Payment That The U.S. Government Gives To Wal-Mart

Should the federal government be spending billions of dollars to pump up Wal-Mart’s profits? I know that question sounds really bizarre, but unfortunately this is essentially what is happening. Because Wal-Mart does not pay them enough money, hundreds of thousands of Wal-Mart employees enroll in Medicaid, food stamps and other social welfare programs. Even though Wal-Mart makes enormous profits, they refuse to properly take care of their employees so the federal government has to do it.  And of course this is not just a Wal-Mart problem. There are hundreds of other major corporations doing exactly the same thing. And they will keep on doing it as long as they can because relying on the federal government to take care of their employees allows them to make much larger profits. This gives these companies an enormous competitive advantage and it distorts the marketplace. If you love the free enterprise system, you should be aghast at this.  Our big corporations have become the biggest “welfare queens” of all, and Wal-Mart is near the top of that list.


Does your local Wal-Mart store seem like it needs help from the federal government?

Of course not.

Wal-Marts all over the nation were absolutely packed this holiday season, but according to a recent Bloomberg article, the average amount of welfare that Wal-Mart employees receive from the government each year breaks down to about $420,000 per store…

Wal-Mart’s low wages have led to full-time employees seeking public assistance. These are not the 47 percent, lazy, unmotivated bums. Rather, these are people working physical, often difficult jobs. They receive $2.66 billion in government help each year (including $1 billion in healthcare assistance). That works out to about $5,815 per worker. And about $420,000 per store.

Does that make you angry?

It should.

Today, Wal-Mart employs approximately 1.2 million people in the United States, and it makes a yearly profit of about 17 billion dollars.

So why does it need 2.6 billion dollars of help from the U.S. government?

Wal-Mart is a colossal money-making behemoth.  Just consider the following numbers

The size of Wal-Mart is sometimes difficult to visualize. To put it into some context, consider the following: 100 million U.S. shoppers patronize Wal-Mart stores every week. Wal-Mart has twice the number employees of the U.S. Postal Service, a larger global computer network than the Pentagon, and the world’s largest fleet of trucks. Americans spend about $36 million dollars per hour at the stores. Wal-Mart now sells more food than any other company in the world, capturing one of every four dollars spent on food in the U.S. The average American family of four spends over $4,000 a year there. Each week, it has 200 million customers at more than 10,400 stores in 27 countries. If the company were an independent country, it would be the 25th largest economy in the world.

Wal-Mart does well enough to be able to pay their workers a livable wage.

And yet they refuse to do it.

Shame on them.

Meanwhile, the six heirs of Wal-Mart founder Sam Walton have as much wealth as the poorest one-third of all Americans combined.

This reminds me of something that I read in the fifth chapter of James the other day…

Come now, you rich men, weep and howl for your miseries that shall come upon you.  Your riches are corrupted and your garments are moth-eaten.  Your gold and silver are corroded, and their corrosion will be a witness against you and will eat your flesh like fire. You have stored up treasures for the last days.  Indeed the wages that you kept back by fraud from the laborers who harvested your fields are crying, and the cries of those who harvested have entered into the ears of the Lord of Hosts.  You have lived in pleasure on the earth and have been wayward. You have nourished your hearts as in a day of slaughter.

But we continue to reward this behavior, don’t we?

100 million of us continue to visit Wal-Mart every single week, and we continue to fill up our shopping carts with cheap products that are made outside this country.

We refuse to support American workers and American businesses, and this is a recipe for utter disaster.  For much more on this, please see my previous article entitled “National Economic Suicide: The U.S. Trade Deficit With China Just Hit A New Record High“.

The truth is that we cannot consume our way to prosperity.  When we consume far more wealth than we produce, we pile up debt and we become poorer as a nation.

And as a country we have become exceedingly cold-hearted toward our workers.  If you truly love free markets and capitalism, you should be encouraging big companies to pay their workers properly.  Instead, we are moving closer and closer to the slave labor model employed by China and other communist nations with each passing day.  Sadly, I am becoming increasingly convinced that many prominent “pro-business” voices in America today are actually closet communists.  They seem to want everything to be made in China and for American workers to be paid just like Chinese workers.

At this point, the U.S. middle class is well on the way to being destroyed.  As I have written about previously, 40 percent of all American workers now make less than what a minimum wage worker made back in 1968 after you account for inflation.

How is the middle class supposed to survive in such an environment?

And for any “pro-business” people that want to defend Wal-Mart, do you actually like paying suffocating taxes to support all of the people that are being forced on to the safety net?

What is our society going to look like as millions more Americans become dependent on the federal government each year?  Government dependence is already at an all-time record high.  How much worse do things have to get before we admit that we have a real problem?

Unfortunately, it looks like our problems are only going to accelerate in 2015.  Thanks tothe stunning decline in the price of oil, we are starting to lose good paying jobs in the energy industry

One company caught in the industry downturn is Hercules Offshore Inc. The Houston-based firm is laying off 324 employees, roughly 15% of its workforce, because oil companies aren’t renewing contracts for its offshore drilling rigs in the Gulf of Mexico while crude prices are depressed.

“It’s been breathtaking,” said Jim Noe, executive vice president of Hercules, which was founded in 2004. “We’ve never seen this glut of supply and dislocation in oil markets. So we’re not surprised to see a significant decline in demand for our services.”

These are jobs that we cannot afford to lose.

Since the end of the last recession, the energy industry has been the leading creator of good paying jobs in America.

But now as the U.S. energy boom goes bust, it might lead the way in job losses.

In order to have a middle class, we have got to have middle class jobs.

Unfortunately, those kinds of jobs are disappearing and the entire U.S. economy is moving toward the Wal-Mart model.

In the end, we will all pay a great price for such foolishness.

Disclosure: None.

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.
Robert Smith 9 years ago Member's comment

The US government, federal and state, build the roads, the infrastructure, defends the interests of Walmart, local, national and even international, and essentially supplies the education and benefits that provides Walmart with workers. Do you know Germany has no Walmarts, the only country in the Western world without Walmart, and they are serious capitalists. And why no Wlamarts there? For the reasons cited above. It is completely illogical for a government to subsidize a huge profitable corporation by paying for the education, heath and most menial standard of living of the workers of that corporation? At the very minimum a job should give people enough money to live on. Otherwise it is corporate welfare. The American people built the country, the ancestors of average Joes, shouldn't they at least get a menial standard of living and their health looked after?

Danny Straus 9 years ago Member's comment

I'm pretty sure that Germany isn't the only Western country without a Walmart. I've been too quite a few countries with none - South Korea, Israel, etc. Plus German used to have Walmart but they closed because "Germans didn’t like Walmart employees handling their groceries at the check-out line." More on this here:

Harry Sinclair 9 years ago Member's comment

Mr. Snyder, it disgusts me that Walmart does this. But what can I do about it? You imply we shouldn't shop at Walmart to punish them, but then go on to say that they are far from the only company that exhibits this behavior. So where does that leave me to shop?

Perhaps the solution is not for me to stop giving Walmart my business, but for its employees to no longer work for such little pay. When they can't find workers willing to work for such low wages, they'll be forced to offer more.

Logan Conner-Tyson 9 years ago Member's comment

Great in theory, but when your living paycheck to paycheck, quitting your job with the hope that others will follow isn't always realistic. People still have to eat, pay rent etc..

Duke Peters 9 years ago Member's comment

True, though the unemployed get various benefits as well. In fact they can live even better than many who are employed (certainly better than Walmart employees. Bill Boner outlines this quite well in his piece "How To Bend, Stretch, And Break The Law For Fun And Profit":

Marg Car 9 years ago Member's comment

Please do the math if there is only 1.2 million people employed and they receive 2.66 billion it doesn't come to your figure.

Mollysaint Manhera 9 years ago Member's comment

Medicinal math?

Angry Old Lady 9 years ago Member's comment

The fact that Walmart does this is appalling. It's rare that business will solve such problems themselves when it hurts their bottom line. Rather the government should raise the minimum wage as a solution (something which 19 states are set to do in 2015).

Duke Peters 9 years ago Member's comment

Here's what will happen when those 19 states raise the minimum wage:

Marg Car 9 years ago Member's comment

raising the min wage effect those at the bottom line. due to lay off as some companys are now struggling to pay their employers.

listen the figures provided in this article are wrong. do the math

Steve P. Miller 9 years ago Member's comment

raising the minimum wage is not a good solution - that just pushes up inflation and when a company can't maintain the amount of money they are making they increase the price of products to make it up. One thought is that if the gov't stops handing out sooo much money to the poor that don't want to try and work hard to make more, then maybe the people at wallyworld (walmart) and all the other companies that don't pay well may say hey - lets get some education and a better paying job. I always looked at walmart and other stores as a place for college kids to work or people trying to add a little to their income not as a career - if you want a career there then shoot for management - they make decent amount. People need to get out of the mindset that the gov't is supposed to create jobs and help them make money - gov't's job is to govern the country and secure our borders and protect us, not to make sure you make as much as me because you are tooo lazy to work hard and get there, or that a company doesn't fail because they are financially irresponsible (massive bailouts done by Obama), that job goes to the thing called free enterprise and when one company fails another will rise up to take it's place. QUIT LOOKING TO THE GOV'T FOR YOUR FINANCIAL FUTURE - THEY ARE BROKE - WORK HARD AND MAKE YOUR OWN FINANCIAL FUTURE !!

Craig Newman 9 years ago Member's comment

I don't agree that it's we who enable Walmart to do this. Technically, if Walmart paid them more, the company would simply raise the prices of its products. I go to Walmart to get a good deal.

Alexis Renault 9 years ago Member's comment

This is a disgrace and the ugly side of capitalism. But I'd rather have my taxes go to the hard working employees of Walmart than to those who choose not to work.

Trinity Sinclair 9 years ago Member's comment

While I wholeheartedly agree, unfortunately the "hard working" employees of walmart never seem particularly helpful nor hard working at my local store.

Bruce Powers 9 years ago Member's comment

Um, hell yeah that makes me angry!

Joanne Yonsen 9 years ago Member's comment