Wal-Mart leads the way in corporate welfare

By Stephanie Whiteside / current.com / @stephgwhiteside

With Paul Ryan on the Republican ticket, attention has been drawn to his budget, which drastically cuts funding for social programs, including assistance for needy families. What hasn't been mentioned is the fact that many of those who rely on those programs are employed by corporations pulling in sizable profits, corporations that rely on those taxpayer-funded programs to continue to pay workers less than a living wage.

Conservatives may paint a picture of being harsh on those who don't want to work, but the reality is that taxpayer-funded programs are enabling large corporations to cut costs and maximize profits by paying low wages to their employees.

When it comes to the race to the bottom, Wal-Mart leads the the way, costing taxpayers millions to support workers who, despite being employed by the retail giant, qualify for government assistance to survive.

The problem starts with low wages. Wal-Mart pays its associates minimum wage — the current federal minimum wage is $7.25 an hour. Filmmakers on the documentary "Wal-Mart: The High Cost of Low Price" spoke to former managers who claim the store tries to keep as many employees at part-time status as possible, which for the chain means less than 34 hours a week. A full-time associate, then, could make a mere $11,832 a year, well under the current poverty line for a family of four, which is currently set at $23,050. Even at a standard 40-hour week, a salary of $13,920 would still fall well under the poverty line.

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Wal-Mart also prices benefits out of associates' reach, with high-cost, high-deductible health plans, encouraging workers to take advantage of programs like Medicaid to cover health care for themselves and their families. In addition, the below-living-wage salaries ensure that employees are eligible for taxpayer-funded programs.

A report from the Democratic Staff of the Committee on Education and the Workforce estimated that one 200-person Wal-Mart store comes at a cost of $420,750 per year to federal taxpayers. What does that price tag buy? Housing assistance, low-income tax credits and deductions, free or reduced lunches for children of employees, and low-income energy assistance, among other things. Taking into account the number of Wal-Mart stores and the number of employees per store, taxpayers are paying more than $1.5 billion to support Wal-Mart's profits.

The problem isn't limited to Wal-Mart. When a Wal-Mart store is built in an area, smaller retailers who can't compete with the chain's low prices disappear. Those jobs, despite Wal-Mart's promise, aren't replaced at an equal rate or comparable salary. For stores that do manage to stay open, Wal-Mart drives down wages, reducing the take-home pay of retail workers by $4.7 billion a year.

This isn't a case of dedicated, loyal employees taking a hit for a struggling company. In 2011, despite the country's economic woes, Wal-Mart had an estimated revenue of $444.2 billion, an increase of 4.8 percent.

Mitt Romney has said that what the country needs is jobs — but jobs like these aren't the answer. Although they champion job-creating corporations, conservatives have resisted raising the minimum wage and even suggested abolishing it. America doesn't just need jobs, it needs jobs that pay a living wage. A social safety net is important, but it should be there to help people, not subsidize corporations that line their pockets by keeping workers in poverty.

(Photo: Getty Images)