How Walmart uses medicaid and foodstamps to avoid paying its workers a living wage

Discuss

112 Responses to “How Walmart uses medicaid and foodstamps to avoid paying its workers a living wage”

  1. Just_Ok says:

    So, this is bad?

  2. Shinkuhadoken says:

    Just another case of the rich crying “Socialism!” when their taxes are about to be raised to pay for the socialism they rely on to be rich.

    • SomeGuyNamedMark says:

      Using the government to subsidize your personal wealth building while decrying socialism or taxes is a time honored American tradition.  Just look at the defense industry.

      • Shane Simmons says:

        We can’t cut defense; that would eliminate jobs at defense contractors!

        What, you want to give out tax money to green energy companies to spur job growth?  Um, no, the government can’t create jobs.

      • John Maple says:

         This is why Walmart must be changed one way or another.  Why should Americans subsidize this empire!? Perhaps the government should take them over and make this a part of the government, benifits and all since they could put people to work instead of giving out welfare.

        • Jason Capriotti says:

          I’m genuinely curious. These don’t seem like subsidies being given directly to Walmart. Rather, the employees don’t make a lot of money, so the employees use food stamps, Medicaid, etc. The $8.81 avg hourly wage seems on par with similar cashier type positions (grocery store, gas station attendants, etc).

          So while I am not a fan of Walmart… isn’t that $8.81 wage roughly the same as what many other companies pay?  

          • ocker3 says:

             With profits like those, how do they justify paying dirt wages, because they can?

          • hardlystrictlybluestocking says:

            Walmart is the largest private employer in the country: they employ 1% of the American workforce. Just as their market domination gives them the ability to affect the prices in other stores and the terms they demand from suppliers, they consciously and intentionally use their mass to depress wages for workers throughout the retail, grocery, transportation and warehousing sectors.

            Their lobbyists work on every level of government to suppress movements to raise minimum wages and empower workers to negotiate for higher pay. This affects everyone, regardless of employer, position or sector because unemployment and underemployment are too high to provide upward pressure on wages.

            In addition, Walmart caps most associates at 34 hours to prevent them from qualifying for benefits. This means they take home even less, have no health coverage or opportunity for overtime pay (though there are numerous complaints from associates pressured into working off the clock).

            So your argument may be restated as “Walmart is powerful enough to dictate terms that affect entire industries, and other businesses take advantage of their manipulations too, so we should reward Walmart with blindingly huge amounts of money for driving a race to the bottom.”

          • L_Mariachi says:

            Seems to me the problem lies with the laws mandating benefits only after a certain number of hours worked per week. The promise of automation and robots and computers was that they were supposed to relieve humans of some amount of drudgery, not that half the people get laid off and the other half have to keep working just as hard as ever. Personally, I’d prefer everyone having a 25 hour workweek versus the “too much or nothing at all” thing we seem to have going now.

          • Jay Griffiths says:

            Jason, your observation is is an excellent opportunity to point out that this is pretty much how the whole retail industry functions. Target has an undeserved good reputation for being the non-Walmart. The fact that they hired me and only paid $8.00 an hour despite 10 years of retail experience, including managerial experience in that industry, pretty much demonstrates this.
             Even worse than Wal-Mart or Target, Home Depot wanted to hire me to collect carts for a few hours a week at a location 20 miles away, even though I applied for a position at their location that’s 10 minutes walking distance from my house. They were willing to pay me a whole $7.65 an hour, despite 15 years of construction experience subsequent to the 10 years of retail experience. I felt like a bum for not even showing up for the interview, but I couldn’t justify a job that cost me more in gas than I would’ve actually made working. How ridiculous to think in this day and age, one would lose money by going to work and being productive. I left retail in 1996, and was being paid $8.32 an hour. I didn’t think it was unreasonable to think I was worth  $9-$10 an hour at either place with my experience. I operated on the naive belief that as time passed and an industry grew, there was some modest growth in wages to accompany it. Boy, I sure was wrong. I feel something trickling down on my head, and I’m pretty sure it isn’t the excess wealth of industry’s coddled captains working its way into my pockets, even if it has a gold tint. Needless to say, I worked at Target for 3.5 months when I was called for a large scale construction project. I made more money in one week doing that, than my entire stint at Target. So, Wal-Mart isn’t the only outfit doing this, however, they may be responsible for setting the tone that now permeates the whole industry. 

          • wysinwyg says:

            Bottom line: Walmart gets to pay less than a living wage because their employees’ livelihoods are underwritten by taxpayers.  This is true of other employers as well.

            The point is that Walmart (and other employers) are beneficiaries of socialism.  There are other senses in which this is true; Walmart is successful because of the interstate system and other government-provided infrastructure which represents a direct subsidy to Walmart (and other businesses).

            It’s easier to explain and to understand this using a specific example (Walmart) rather than discussing in the abstract.  Doing so does not imply that the same arguments wouldn’t also apply to other businesses.

    • Guest says:

      I call it antisocialism

  3. I find that I object to the term “slave wages.”  They certainly are poverty level wages, but even Walmart peonage is such a vast improvement over chattel slavery that the comparison is disrespectful to the memory of those who suffered through actual slavery.

    • Rachel Zamoria says:

      chattel slavery is the forced labor of a person without payment.
      wage slavery is the force labor of a person with a less than living standard payment. got the difference James. you are forced to work because most people do not own the land they live on. they do not grow the food they put in their bellies, the resources for the clothes they wear belong to a very small percentage of the people so yes whether you are a ditch digger or a college professor if you have to work then you my friend are still a slave a better comforted wage slave but still a slave.

      • millie fink says:

        O RLY?

        http://www.amazon.com/Man-Who-Quit-Money/dp/1594485690

        (I actually read it — good book!)

      • My point is that I think that the very term “wage slavery,” is hyperbole.  More than that, it creates a false equivalence between poverty and chattel slavery.  Historically there have been MANY gradations of unfree labor: serf, peon, bondman etc.  But under most taxonomies, “slave” is the least free, therefore and at some level, the least appropriate term for the working poor.  But that is, of course why Marx chose it.  But even with the hunger and poor housing, the lives of the the 19th century European urban poor would have been a dream for those held as slaves. 

        Now I don’t want to minimize the suffering of the workers of the industrial revolution, or for that matter of Walmart workers.  I think that the U.S. economy functioned better for the preponderant majority  (possibly more like 99.9% than 99%) of workers when incomes were flatter and less tilted toward returns on capital than wages.  I just object to the term “slave” to characterize obscene levels of income inequality, as opposed to staggeringly obscene levels of inequality in basic human rights.

        • lafave says:

           quit trying to derail the conversation. your objection is noted. do you have a substantive reply to the post?

        • Antinous / Moderator says:

          Chattel slavery is only one form of slavery. Just because it’s the one that you grew up knowing about doesn’t make it the only one that’s ever existed.

        • Wreckrob8 says:

          Didn’t Marx make the point somewhere that a slave owner would at least have some incentive to treat and feed their slaves with a modicum of civility so as to maintain their value, whereas a mill owner had no such incentive and could simply acquire new workers when the old ones were used up? And, if not Marx, then others have certainly made the point.

          The dependency which owners of slaves (and even employers of servants) have on their slaves doesn’t deprive them totally of all power to resist and rebel as it is an unequal relationship whereas a legal contract based on exchange of labour for wages can be much more disempowering for the employee as it is founded on a legal fiction of equality.

          Maybe the condition of the early nineteenth century Manchester factory worker was actually worse than but closest to that of our normal conception of slavery which is why Marx chose that word.

        • wysinwyg says:

          But even with the hunger and poor housing, the lives of the the 19th century European urban poor would have been a dream for those held as slaves.

          I’m not actually sure this is true.  It’s a complicated issue and I wouldn’t jump to the conclusion that the opposite is true, but I’d need to see a real argument rather than a naked assertion before I came to any kind of conclusion.

    • hardlystrictlybluestocking says:

       Who used the term “slave wages”? The graphic uses “poverty wages”, which is accurate: the poverty level is $23,050 for a family of four, which comes out to $11.025 per hour – well above the average Walmart wage of $8.81 per hour.

  4. Just_Ok says:

    Roll back the rightses

  5. xunker says:

    I thank you for your kind offer of 7.8 million dollars that you wish to pay to my campaign for wig-lobbying efforts.

    Postal addresses to wich you can remit payment are being sent by avian carrier forthwith.

    Regards and soforth,
    xxx

  6. Ryan Griffin says:

    Our trolls are severely lacking today. Too much turkey?

  7. welcomeabored says:

    They’re ‘externalizing the the costs’ of labor, just like the rest of the corporate welfare queens.  Don’t shop there.  I don’t walk through those doors, unless a) I have to have it now, b) and I can’t get it anywhere else.  Happens once in a blue moon.

    • millie fink says:

      Don’t shop there.

      Easy to say in some places, not so easy in others where Wal-Wart has driven the rest of the competition out of business.

      • welcomeabored says:

        Agreed.  No insensitivity toward the opportunities of others intended.

      • wreckrob8 says:

        Or in places where Walmart trades under another name through a subsidiary, as in the UK where they acquired the ASDA chain. You can shop at Walmart and not even know it.

  8. Wulvik Lastname says:

    And yet places like Costco can afford to get their employees an average wage of $17 – 20 per hour in the US as well as benefits. 

    • millie fink says:

      I’ve seen employee-owned chain grocery stores like that too.

    • millie fink says:

      Dr. Bronner’s soap company is a great model too –

      Total compensation of executives is capped at five times that of our lowest-paid position.

      Employees annually receive 15% of salary paid into a retirement/profit-sharing plan, up to 25% of salary as a bonus, and a no-deductible PPO health insurance plan for themselves and their families.

      The over 30,000 words spread across all the soap labels were Dr. Bronner’s life work of searching every religion and philosophy for “Full Truths” that can be summed up in two beautiful sentences:

      1. CONSTRUCTIVE CAPITALISM IS WHERE YOU SHARE THE PROFIT WITH THE WORKERS AND THE EARTH FROM WHICH YOU MADE IT!

      2. WE ARE ALL BROTHERS AND SISTERS AND WE SHOULD TAKE CARE OF EACH OTHER AND SPACESHIP EARTH!

      http://www.drbronner.com/activism_overview.php

      (but surely that 30,000 should say 3000 . . .)

  9. KWillets says:

    What it comes down to is, would you want your sex change operation to be provided by Wal-Mart?  Not this citizen.

  10. DreadJester says:

    I have to agree, corporate greed is what’s destroying the whole world and if we don’t point it out who will??  I think it’s seriously funny how everyone can go on and on about the price of things and yet not see the true reason why.  Gas prices are through the roof and the gas companies are boasting their biggest profits ever.  Simple logic tells you that’s not a coincience.

    The cycle though is that businesses are cutting wages of the little people that do all the work or outright getting rid of them, making their products cheaper yet selling them for the same or higher price, and the folks at the top of that corporation are still making just as much if not more than they ever did.  The cycle comes into play when the little folks have less jobs and/or less pay to afford to buy the corporate products, which makes the corporations loose more money and have to cut things back more and more on the little guy so the corporate heads can keep making what they belive they should.

    What’s the answer to solve this problem??  Well it’s an easy solution of the corporate heads finally feeling the money cruch too by taking a hit on their wages but they won’t do that so the cycle will continue until we reach critical mass in which corporations file for bankrupt, shut down, and we go into a second great depression because stocks took too big of a hit from all the bankrupt filing.  In the mean time we’ll just keep shifting the blame for everything wrong back down to the little guy at the bottom and the unions they belong to that stood up for decent paying jobs where they could afford to buy things.  Yes boo hoo to the big corporate heads flushing everyone, including themselves, down the craper.

  11. gracchus says:

    Finally, some welfare queens who actually do drive Cadillacs (assuming the Walton heiresses don’t have chauffeurs).

  12. millie fink says:

    Hey first-time poster!

    So working at Wal-Mart is “the best feeling in the world”? For real?

    I guess what I mean is, are YOU for real?

    • gracchus says:

      If that’s what he said and he works in the sex toys department of Wal-Mart, he could be for real.

    • Xploder says:

      I have to admit that I actually know some people that work for WalMart that think the same way…then again, since there are exactly NO other jobs around here (Flint, Michigan) they feel extremely lucky to be working at any wage at the moment so they aren’t exactly picky if ya know what I mean. Granted, they DO think that the wages and benefits, as tiny as they are, suck hairy donkey ass but they’re glad to get them.

  13. paul beard says:

    Looks like Walmart brass paid close attention to the section on “externalities” in B-school. Socialize the costs, privatize the gains.

    Seems like having a lot of employees on gov’t assistance — SNAP, WIC, etc — would show up on some report. Just like means testing benefit recipients, maybe we should look into employers who don’t pay a living wage or play games with hours worked to keep people off their plans and on the public rolls. It’s not fraud but it doesn’t pass the smell test.

    When you consider how Walmart touts jobs as a reason to waive local zoning laws or for sales tax rebates or other goodies, it looks like a bad deal.

    • doggo says:

      You’re right, Paul. It’s inexcusable that Walmart hasn’t been taken to task for these tactics. Federal & state labor laws should be reformed to address these issues. And we should oppose the building and/or opening of Walmart stores in our communities.

      Unfortunately they pull this crap in places where people are desperate for jobs. It’s sickening. It gives false hope to those desperate families, because no one will every get out of poverty working at a Walmart. Probably not even the store managers.

  14. webstu says:

    Perhaps this too obvious while being insubstantive to the conversation, but I have to say:

    My God, how do the Waltons sleep at night, when even a moment’s consideration leads to the incalculable suffering they themselves are, at least partially, responsible for?  And, without noticeable impact, so easily remedy?

    • Sekino says:

      Demonizing the working poor (and the poor in general) as lazy, irresponsible, unambitious bottom feeders who only get the crumbs they deserve is extremely common. Even many people among the lower classes believe other poor people are garbage.

      • Jim_Satterfield says:

        A perfect demonstration of this is Romney’s 47% speech and its companion “Obama bought the election with gifts.” conversation which some in the GOP are running away from and others are defending as fact.

        • Sekino says:

          Precisely. Sadly, WAY too many people hold that kind of belief. If I had a buck every time I hear someone whining that the poor have a huge sense of entitlement and should shut up and work harder because “we’ve made it aaall by ourselves, yes siree”, I’d be wealthy myself.

          There is this open, bitter vindictiveness against the working-class, as if they’ve somehow done something (?) so terrible as to deserve contempt, deserve to lose earning value and quality of life year after year, deserve to be punished, basically, and be locked out of any benefits or profits. It is a caste system.

    • It’s easy.  They simply don’t give shit.

  15. danimagoo says:

    I worked at Walmart for about a year and a half. I was an overnight stocker (my actual job title was Sales Associate, but what I did was stock). It was a crappy job, although I can’t say working conditions were bad, but I can only speak for the Walmart I was at, not all Walmarts. However … the pay was bad. I got an extra buck an hour for working overnight. I got 2 raises while I was there, and at the time I quit I was making about $9 an hour. I quit because, although I’m single and have no dependents, I could not make ends meet at that wage. Well … I could,, but just barely. I had to have nothing go wrong … ever. My car broke down once and it wiped out about 3 months of savings I had managed to accumulate. Also, I was living off of Ramen noodles. This is not the healthiest diet around. I could have qualified for food stamps, but since I had no dependents, I would not have been approved for much, and I was too stubborn (stupid?) to go apply for them. Also, with no dependents, I did not qualify for Medicaid.
    At first, I was going to nursing school at the same time. But the wage I was earning made it difficult, and then impossible, to continue. In order to eat, I had to quit school and just work. It sucked because it cut off the route I was hoping to take to get a better job than Walmart.
    My story is not at all unusual, and I have no idea how single women who work at Walmart, and have young children, get by at all without completely losing hope.

  16. gwailo_joe says:

    Part of me wants to get really furious and spout fire and brimstone upon the Fat Cat/Vampire Squid hybrids that kneel on the necks of working families (and flail at them with their tentacles with retracting claws etc etc)

    But it’s the same sad and unavoidable reality that covers this Nation like a shroud: Capitalism is a game with winners and losers.

    “But what if we legislate to make things more fair?”  Well, then it wouldn’t be Capitalism.  Or at least not the unfettered Winner Take All brand we employ ’round these parts…

    So while I find the pinching greed by Walmart to be despicable; I can’t really maintain the Shock and Outrage.  Because if it makes a profit, even if it is immoral, even if it illegal…someone is going to do it.

    And abusing desperate people to squeeze the last bit of useful labor from them at the lowest possible cost is a heralded global institution since time immemorial!  And all of us, my fellow consumers…making the choice to purchase $15 dollar jeans made in Bangladesh as opposed to a $100 pair made by union labor have made the Waltons rich as Croesus…and American manufacturing a pale shade of what it once was.

    But a deal is a deal…

    Besides, in an economy where millions are out of work; these under-educated peons should be So Grateful that their social and economic betters give them any restitution at all.  

    (was that last part believable?  I want to keep my options open as a lickspittle for the ruling classes should things keep going down this road…)

  17. Shane Simmons says:

    This is the sort of things conservatives needed to see.  Sadly, our polarized, politicized news coverage means that what THEY see is that 20-somethings in California wanted Thursday off.  What my friends on Facebook chose to post were pictures of armed soldiers with the caption “Walmart employees, tell me again how rough it is to work on Thursday.”  What this inspired them to do was go to Walmart in droves, presumably followed up with a trip to Chick-Fil-A.

    The ones who didn’t go this direction chose to demonize the employees attempting to organize.  We can’t have those union thugs chasing jobs out of America, after all.  Somehow this also plays into the Waltons being great supporters of Democrats, though how having the Waltons against unionization and for Democrats together is something that’s never quite reconciled.

    I shouldn’t be surprised, I guess.  The Tea Party people and the Occupy Wall Street people had a lot more in common than either group realized, and yet…there were Tea Party people who held counter protests, to protest against the rapist Communists who just wanted a handout, just wanted to rob the productive members of society, and just flat out didn’t want to work.

    • A Viescas says:

      “Somehow this also plays into the Waltons being great supporters of Democrats, though how having the Waltons against unionization and for Democrats together is something that’s never quite reconciled.”

      Well now we know why they support (certain) Dems, don’t we? 

    • Jardine says:

      What my friends on Facebook chose to post were pictures of armed soldiers with the caption “Walmart employees, tell me again how rough it is to work on Thursday.”

      What a ridiculous comparison. Certain jobs by their very nature requires someone to be there 24/7. The military can’t shut down for holidays because it’s really tough to get everyone to agree not to take advantage of everything being unguarded. Firefighters and police are in the same situation. Retail employees aren’t. Grocery stores I can see an argument for, but I think that 50″ tv or 25 piece socket set can wait a day.

  18. Ian Wood says:

    I was well on the side of WM workers, even though this is an obvious unionizing push by outside organizations. Then I read the following anecdote which made me question my position:

    Most of the articles I’ve seen on this point out how horrifying it is that Wal-Mart employees often start at close to minimum wage, and receive pay raises of only 40 to 60 cents per year after that, with a cap around $15 or so.The union that covers this industry, for the most part, the UFCW, let me tell you about their contracts:Everyone starts at minimum wage. Pay raises are 5c a year for the first 4 years, then 10c a year for several more years. Maximum pay is typically around $12 or so, unless you have 20+ years in, then the maxes go up.At least, this was the agreement that the last grocery store I was in had. It was about as close to slave labor as you can get in this country without actually working at an Amazon warehouse.

    I have no other documentary evidence for this. And in general, I support this sort of thing, while acknowledging that it eventually leads to entrenched power structures that are different, but not necessarily better.

    What I’m saying is that the truth of the matter is far more complex, and not readily available to folks who don’t work at Wal-Mart.

    The Triangle Shirtwaist Factory fire was an incident that allowed Americans to push the problem beyond their borders.

    Eventually, the border will be the atmosphere of the planet.

    What then?

    • Antinous / Moderator says:

      Instead of quoting an anecdote, you might consider looking up UFCW and seeing the real story. Wal-Mart has used every resource at its disposal to make unions untenable.
      http://en.wikipedia.org/wiki/United_Food_and_Commercial_Workers#UFCW_and_Wal-Mart

      • Ian Wood says:

        Right on, I understand that part of it, at least. All the anecdote did (and I don’t think it was turf, either; not really the forum for it…though it’s entirely possible) was make me realize that there was far more going on than I would be able to glean through any pop media–including Wikipedia–without a bit of digging. What’s missing from the grocery store anecdote is any mention of benes, which is probably where an honest and practical apples-to-apples comparison should be made.

        • hardlystrictlybluestocking says:

          Another thing missing from your squib is the context of grocery chain consolidation and labor relations. In the past few years, chains like Safeway and Kroger have demanded two-tier contracts which have made new hires more equivalent to Walmart employees. It was only because the UFCW workers went on strike that they could retain any benefits at all.

          And yes, outsiders from other unions, social service organizations, religious groups and the community supported them. Not quite as nice as being backed by expensive lawyers, lobbyists and pet journalists (and obviously not as effective), but at least they brought coffee to the picket line.

    • danimagoo says:

      Obviously a random comment on fark.com has to be 100% true.

    • hardlystrictlybluestocking says:

       What is wrong with an organizing effort that includes unions, church and community members? I’m sure victims of Sandy and Katrina are thankful for the help given by strangers who saw their need and acted to help them personally, rather than calling everyone but FEMA an interloper only looking after their own interests. This disaster affects a lot more people in every state in the country than either hurricane, and will continue to do so until they are stopped.

      Or are you arguing that only corporate and government are legitimate actors, and that citizens trying to influence their policy is wrong?

  19. Robo Pastierovič says:

    9 dollars an hour, that’s 72 dollars per day (working 8 hours a day), and around 1500 USD per month (working 21 days in a month in average). 1500 USD is pretty high income in comparison to the average monthly salary in my country, which is around 750 EUR (973 USD). And the country I live in (Slovakia) belongs to developed countries, is part of European Union, Eurozone and OECD. Just for comparison. Life in US must be damn expensive.

    • Antinous / Moderator says:

      My health insurance costs me $666 per month out of pocket, plus $25 per office visit, $10 per prescription, $100 for procedures like a colonoscopy or an ER visit, and $200 per day if I’m hospitalized.

      How much do you pay monthly for the privilege of not dying if you get sick?

      • Robo Pastierovič says:

         health insurance is provided by the state and is taken from the salary similarly to tax deduction; approximately half of the salary is deducted as taxes, life insurance etc. So average monthly salary not taken into account all the deductions is around 1500 EUR (1943 USD). But that’s average, median is much lower.

    • ocschwar says:

      Walmart does not assign 40 hours a week. They make you work 30, but stay on call for more work on short notice effectively for 80 hours a week. Keep that in mind when you look at the hourly wage

    • eccles11 says:

      Yeah, you can’t do simple comparisons based on absolute wage in USD. The cost of living is likely to be significantly higher in the USA. Imagine going to Germany and trying to live on 1500 a month, you are going to have a hard time.

  20. anansi133 says:

    Walmart is not preventing its workers from unionizing and getting better wages through collective bargaining. The federal government does that with the Taft-Hartley act, passed decades before Walmart existed.

    You can’t hope to change how things are while ignoring how they came to be.

    • hardlystrictlybluestocking says:

       Walmart uses Taft-Hartley and goes beyond. If they had been satisfied with it, they would not have spent millions each year to weaken work rules further.

  21. Drew Griffith says:

    Slave wages, now US $8.81. 

  22. Cyfir Emmerich says:

    I was paid $8 per hour at Giant Eagle and $8 per hour working for the city. Low paying jobs are everywhere. What is the percentage of other low paying jobs compared to Wal-Mart? Should every retailer raise their employee wages? What about those effect most by the economy and the Internet age? I made $7.50 per hour at Sears because most of their profits come from site-to-store pick-ups and in-store employees are less important in their business model. I have also not found a full-time job in 5 years. Not many employers see value in having to provide benefits for their employees anymore. This is a bigger problem than Wal-Mart ever will be.

    • Antinous / Moderator says:

      But not every crap-pay retailer has engaged in a financial war to drive every other retailer out of business. What part of, “The combined worth of the 6 Walmart heirs and heiresses is greater than that of the bottom 41% of American families (48.8 million households).” isn’t clear?

      • Cyfir Emmerich says:

         I understood that part perfectly, but there are companies that are worth more that don’t produce much jobs and outsource their production. Apple comes to mind. Every company is out for itself and would do what Wal-Mart does if they could. The only difference between a Wal-Mart and a Target is that the Wal-Mart is more successful.

  23. eccles11 says:

    Fun fact, Walmart partners together with state and local governments to abuse ‘eminent domain’ laws to push small business of land and take it for themselves.

    • hardlystrictlybluestocking says:

       Very true. They also demand tax holidays from local, state and federal governments on the premise of bringing jobs and commercial traffic. They still collect sales and payroll taxes, they just keep them for themselves. When the agreed holiday term is up, they close that store and open a new one in the next town – which has made even more concessions.

      • cdh1971 says:

        This is actually what Dell Computers does as well. They did this with successive call centers in the United States until they finally ramped up their offshore call centers and  closed the remaining ones in the U.S. 

        As a newly hired Dell employee, an operations analyst, I was part of the team that opened the now closed call center in Roseburg, OR. I was from far away, and I was surprised about the visible signs of poverty in parts of the town that I had previously associated with Appalachia. 

        Needless to say – the region was desperate for jobs and the officials gave Dell ridiculous concessions because Dell (Mr. Dell himself even via teleconference) assured them that they planned on having the call center there for at least ten or fifteen years. The told this to local, county, state and federal-level officials. 

        However, we knew differently. The Roseburg and Twin Falls Idaho centers were slated by Dell to be open four years, five max, until the the centers in Panama and India were sufficiently ramped up. The HR person in the cube next to me gushed about how great the labour laws in Panama are because they can require pictures with resumes, quiz applicants on marital status or plans to get pregnant, fire people instead of granting various types of leave and similar things. 

        Anyway, I left the company after about a year and was glad I did. The Twin Falls and Roseburg centers shut down after about five years — all according to Dell’s initial plan. 

        (being in the same room with Mr. Dell was a trip. The contempt he had for his employees like a toxic fog of ammonia fumes, and he had a personality cult formed around him, enforced by the giving of beads and baubles, and the Fear of Dell Security)

        • hardlystrictlybluestocking says:

          Wow. Yours is a distressing story. I agree with you about the appalling poverty in Roseburg: the casino outside town was the most bustling business I saw there.

          Using tax holidays is pretty common among corporations, as is promising jobs and then bringing in the majority of the professional-level workforce from outside the community. Both are fundamental to the budget crisis in communities and states around the country. The company pays no taxes. Outside employees keep their ties to their home communities rather than settle, buy houses and invest, depriving the local coffers of property taxes. The unemployed in town are still unemployed, paying no taxes and requiring services. The local competitors are driven out of business or forced to match prices and wages.

          After a few years there is a great sucking sound and the town is left with a crumbling eyesore and nowhere to buy groceries. The few businesses that gained from the traffic – local restaurants frequented by call center employees, for instance, or owners of residential properties rented by them  – have to either go out of business or adapt to a community with little income beyond aid like food stamps and Section 8 that comes from outside.

          If it were a former European colony in Africa being manipulated by Chinese companies we would recognize it as exploitation; instead we elevate it to the ideal American business model when we do it to ourselves.

  24. What if the law was that it is illegal for any company to subsidize health care for their employees?

  25. Itsumishi says:

    I’d like to see corporate laws the world over that make any employee and automatic shareholder in a company. Every time a public listed company releases its profit statements a certain percentage of those profits would need to be distributed amongst employees. Preferably this sharing would be done based on hours worked, but not wages. It’d be like a profit tax on the company, that is paid directly back to the people that work within the company.

  26. RachelK says:

    God forbid anyone suggest that LAW is unjust and lobby for its change! All laws are inscribed by a divine hand and should never ever have any unfairness pointed out.
    Please. Legality is not morality. Slavery was once legal. Marital rape legal. Women voting, illegal. Pointing out when the law is bad is how we get new laws.

  27. Just_Ok says:

    Just because something is legal doesn’t make it right. The LAW ain’t the supreme arbiter.

  28. EH says:

    Driveby handle in polemical shocker!

  29. mindysan33 says:

     Sweet baby jesus in his manger, won’t someone think of the poor put upon mega-corporations, who are only following the law… 

    And what is up with the wig comment?  Jesus, Mary, and Joseph, what a trolling asshole!!!!

  30. xunker says:

    In 2011, Wal-mart spent $7.8 million on lobbyists and lobbying. You know, the kind of behaviour that highly influences those laws you’re talking about.
    Source: http://www.opensecrets.org/lobby/clientsum.php?id=D000000367&year=2011

    edit: eek, this was ment as a reply to the parent, not you RachelK.

  31.  nothing like blowing somebody’s argument out so badly they come back and delete it. well played, madam

  32. Jeez, can you troll /any/ harder?

  33. Just_Ok says:

    Walmart has a sale on wigs.

  34. Scott Frazer says:

    Well, that’s what we’re talking about, really. It’s not just walmart. If the minimum wage is still low enough that people working 40 hours a week at that rate are eligible for medicaid and foodstamps, aren’t we as a nation subsidizing the employment of minimum wage workers? Why are we doing that? for who’s benefit?

  35. Just_Ok says:

    Like that’s an option for everyone.

  36. KWillets says:

    For the workers and their families’ benefit.

  37. Antinous / Moderator says:

    The middle class are subsidizing the rich. That’s the basis of capitalism.

  38. bcsizemo says:

    But it doesn’t work like that.

    If you increase the minimum wage to lets say $20 an hour, or $40k a year (assuming a roughly 40 hour work week), you have now increased the base income everyone receives.  The price of consumed required goods and or staples (like food and gas) would go up accordingly since everyone has more than enough money to pay for it.  That’s the free market in effect.  The price of non-necessity items probably wouldn’t increase as much, but overall the percentages of income vs. spending wouldn’t differ much from what exists today (at least not after the market adjusted).

    The only ways to force the market to reduce/maintain a specific price are though reduced consumption or governmental price controls.

  39. gracchus says:

    Did he run away and sweep his tracks behind him or did the mods clean up what I’m assuming is the usual corporatist/Randian rubbish?

  40. A valid question, but we’ll never know. ‘Twas a curious troll, indeed. Appearing to employ the usual Randian rubbish yet with a twist: When attacked, he claimed to be speaking in supposed cultural references few (if any) could understand. Once rebuffed, he started acting out and suggesting wigs to people. At times even joining a club of wig wearers.

    I like this blog. Even the trolls are of a weird and interesting quality.

  41. Antinous / Moderator says:

    You know that WalMart is one of the earliest and largest users of astroturf campaigns?

  42. gracchus says:

    I do, Antinous. I figured it was either you guys clearing it out or the dope being so embarrassed he wiped his tracks. I am curious about the wigs — maybe a reference to the legal profession?

  43. L_Mariachi says:

    Now I’m intrigued — what was the (now-removed) wig comment?

  44. DrunkenOrangetree says:

     That’s one possible scenario. Another would be that people wouldn’t pay those higher prices, and profit margins would be cut instead.

  45. Robert Drop says:

    “…would go up accordingly since everyone has more than enough money to pay for it. ”
    Since the issue is that minimum wages don’t currently allow people to (entirely) pay for it, it would be possible to increase wages and still be at the point where they can barely pay for it.  Also, given how artificial the food prices are due to government interventions (subsidies, etc)…

  46. paul beard says:

    Bear in mind that there are several states with no minimum wage law and the range within those states that do is close to $4. If the current federal standard was enforced across all states, that would make a difference.

  47. hardlystrictlybluestocking says:

     That isn’t really how a free market works. If it were true, though, it would be a great argument for a maximum wage: One Mitt Romney would skew prices on basic goods enough to make staples unaffordable for a good portion of the population.

    Raising the floor does not result in higher prices because that income is not spent on proportionately larger quantities of the same goods, it is spent on things that were previously not being bought at all. For instance, an individual who gets a raise from $7.25 to $8.70 does not buy 20% more gasoline and 20% more pot noodles, she maintains her car and goes to the doctor – things she could not afford to do at minimum wage. This does not cause relative scarcity, which is the force that causes prices to rise.

    It is irrelevant, though, as we are not in a free market economy. Demand for gasoline is low and domestic production is soaring, yet prices are high. The price does not fall because the highly subsidized oil companies are making record-breaking profits and the trading is bloated with speculators. Housing prices have not fallen, despite the huge number of vacant units, because the banks that hold them would rather wring bailout money from the government than sell them at a true market price. Similarly, grain markets are highly manipulated and affected by demand from the biofuels industry.

  48. Itsumishi says:

    What you’ve said is true to an extent, but only to an extent. Australia’s minimum wage is $15.96 an hour in a dollar that is worth slightly more than the US dollar (but only since the GFC). Cost of living in most of Australia is higher than that of the US, but the cost of living certainly isn’t double, whilst our minimum wage pretty much is double the US minimum.

    In fact, the biggest pressure on Australia’s cost of living hasn’t been as a result of increasing minimum wages, but rather a two speed economy where the mining industry is creating a huge growth in wage for Western Australia, whilst the rest of the country is unable to keep up with that level of growth, i.e. income equality is slipping. 

    The rich getting richer, the poor get the picture, the bombs will never hit ya when you’re down so low.

  49. mindysan33 says:

     The troll kept going on about how the critics just needed to put on wigs…  It did not make much sense.  I am assuming they were saying the commenters were weak-willed women? So, it was also, I guess deeply sexist and classist.

  50. L_Mariachi says:

    The federal minimum wage isn’t enforced in all states?  Please cite, because that sounds illegal.

  51. mindysan33 says:

     Agreed, that does sound weird.  After all, supremacy clause?  But I guess maybe they get away with it if it does not involve interstate commerce?  Isn’t that part of the whole supremacy clause of the constitution? That being said, Wal-Mart would have to comply with federal laws regarding minimum wage since they are by definition engaging in interstate commerce…  I think that makes sense to my brain.

  52. Jim_Satterfield says:

    Nope, any business that does not do interstate business doesn’t have to pay the federal minimum wage.

  53. L_Mariachi says:

    According the the Bureau of Labor, Jim_Satterfield is sort of right, a little:

    The minimum wage law (the FLSA) applies to employees of enterprises that have annual gross volume of sales or business done of at least $500,000. It also applies to employees of smaller firms if the employees are engaged in interstate commerce or in the production of goods for commerce, such as employees who work in transportation or communications or who regularly use the mails or telephones for interstate communications. Other persons, such as guards, janitors, and maintenance employees who perform duties which are closely related and directly essential to such interstate activities are also covered by the FLSA. It also applies to employees of federal, state or local government agencies, hospitals and schools, and it generally applies to domestic workers.

    (There are also some exceptions for tipped workers, underage students, and so on.)

    So in order to pay less than Federal minimum wage, your business must:
    • be in Arkansas, Louisiana, Mississippi, Tennessee, Alabama, Georgia, South Carolina, Minnesota, Wyoming, or Puerto Rico (other states have minimum wages equal to or greater than Federal.)
    • not engage in interstate commerce (including business-related mail and phone calls)
    • be so tiny that it does less than half a million dollars in gross business.

    A roadside farmer’s stand might qualify, but then again there are all sorts of special rules for farms (separate line item on the 1040, red diesel, untagged tractors on public roads, etc.) Other than that and cottage businesses too small to even have employees, the number of employers allowed to pay sub-Federal-minimum has got to be miniscule.

    P.S. What the hell, Minnesota? Sometimes you seem all right, but then you go and do things like have a paltry minimum wage or elect Michele Bachmann.

  54. hardlystrictlybluestocking says:

     The middle classes are terrified of falling through the nonexistent safety net because the examples of miserable poverty are all around. We do still have some social mobility, it is just overwhelmingly downward.

    The biggest subsidy to the “job creators” is the immense drag on middle-class incomes provided by a huge pool of reserve unemployment and chronic poverty.

  55. Eric Rucker says:

    The argument is actually that if you increase minimum wage, you increase the cost of labor necessary for goods and services that the minimum wage buys (or increase the amount of foreign labor used). Of course, what’s not being accounted for is that that doesn’t increase the cost of scarce materials in those goods and services, and you do still need some domestic labor, so you do get a net gain (even if it is a tiny one).

  56. hardlystrictlybluestocking says:

    That is an argument, but it is not the one posted by bcsizemo:

    “The price of consumed required goods and or staples (like food and gas) would go up accordingly since everyone has more than enough money to pay for it.  That’s the free market in effect.”

    The argument that a higher minimum wage increases retail prices is also specious, however. The only reason prices would rise is if Walmart decides to maintain the same business model and profit margin.

    Walmart spends a lot of money suppressing workers. If they want to make up for the additional cost of getting their employees off of welfare, they can just take it out of their present budget for high-priced unionbusting consultants, lawyers and lobbyists. This would not change their profits one bit.

    Walmart’s labor costs are 10% of their expense budget, a tiny proportion of their profits. They could pay staff 30% more (raising average full-time pay to a whopping $1,832.50 per month before taxes) and insure them all without endangering profitability in the least.

    Their margin is a direct consequence of government subsidies, among them food stamps, Medicaid and tax concessions. They are not a retailer, they are a welfare scam that happens to sell laundry soap and televisions on the side. Despite the entitlement exuded by executives, this is not free-market capitalism. Walmart is a failure by the standards of capitalism because they cannot pay their own way.

Leave a Reply