Tag Archives: Walmart

Attacking The Teachers

There are lots of lessons we can learn from the wave of teachers’ strikes that have erupted around the country. To the extent those strikes have been “wildcat” efforts, we can see the extent to which public sector unions have been neutered by anti-union lawmakers. To the extent that we have become aware of the grievances that prompted these actions, we see the effects of the steady erosion of adequate public funding for public education.

Paul Krugman recently reminded us of the connection between that erosion and Republican tax-cut orthodoxy. Education accounts for more than half the state and local work force, and “at the state and local levels, the conservative obsession with tax cuts has forced the G.O.P. into what amounts to a war on education, and in particular a war on schoolteachers.”

The GOP’s fixation on tax cuts, together with its anti-union ideology (and a particular hatred of teachers’ unions) and in some quarters, a desire to divert public funds to religious schools via vouchers, has resulted in an unremitting assault on public education.

Thanks to a recent report in The Guardian, we learn that opponents of public education fully intend to intensify their ideological attack on public education and the teachers who provide it.

A nationwide network of rightwing thinktanks is launching a PR counteroffensive against the teachers’ strikes that are sweeping the country, circulating a “messaging guide” for anti-union activists that portrays the walkouts as harmful to low-income parents and their children.

The new rightwing strategy to discredit the strikes that have erupted in protest against cuts in education funding and poor teacher pay is contained in a three-page document obtained by the Guardian. Titled “How to talk about teacher strikes”, it provides a “dos and don’ts” manual for how to smear the strikers.

Top of the list of talking points is the claim that “teacher strikes hurt kids and low-income families”. It advises anti-union campaigners to argue that “it’s unfortunate that teachers are protesting low wages by punishing other low-wage parents and their children.”

According to the Guardian, the “messaging guide” has been developed by an organization called the State Policy Network (SPN). SPN is an alliance of 66 rightwing “ideas factories,” that evidently includes members from every state in the nation. SPN also has an $80 million-dollar” war chest” – funded (no surprise) by the Koch brothers, the Walton Family Foundation, and the DeVos family. (If there was any doubt that Betsy DeVos is the antithesis of a person rational lawmakers would install as an education secretary…).

SPN’s previous campaigns have included a plan to “defund and defang” public sector unions. Now it is turning its firepower on the striking teachers….The SPN document urges its followers to attack the walkouts stealthily, rather than criticising them directly. A head-on assault on teachers for their long summer vacations would “sound tone-deaf when there are dozens of videos and social media posts going viral from teachers about their second jobs [and] having to rely on food pantries”, it says.

If moral people find meaning by acting in ways that will benefit future generations–if, as the saying goes,“The true meaning of life is to plant trees under whose shade you do not expect to sit”-how immoral is this effort?

It isn’t just that these people are refusing to adequately fund the public schools that educate the overwhelming majority of American children. They are also busily polluting the environment and endangering the planet on which those trees must be planted. They are despoiling public lands originally set aside for the enjoyment of our children and grandchildren. They are presiding over the decay of the nation’s infrastructure, and they are intentionally encouraging the tribalism and bigotry that undermine the social cohesion necessary for communities to thrive.

I assume they derive satisfaction from the extra dollars these measures are intended to bring them.

I wish I believed in the existence of hell.

 

The Walmart Tax

I have written before about the “Walmart tax.”

Walmart generates nearly $500 billion in revenue annually; over the past five years, its yearly profits have averaged $15.5 billion dollars, and the family that owns it has a net worth of $129 billion dollars.

Despite its obvious ability to do so, the company declines to pay its employees a living wage, instead relying upon government programs–taxpayer dollars– to make up the difference between its workers’ paychecks and what they need to make ends meet. In essence, when a Walmart employee must rely on food stamps or other safety-net benefits, taxpayers are paying a portion of that employee’s wages.

Walmart (including its Sam’s Club operation) is currently the largest private employer in the country–and one of the largest recipients of corporate welfare. Walmart employees receive an estimated $6.2 billion dollars in taxpayer-funded subsidies each year. Money not paid out in salary goes directly to the shareholders’ bottom line.

Not only is this greedy and despicable, it is bad business. For one thing, as awareness of this subsidy grows, the numbers of people shopping at Walmart declines. But there are other costs incurred.

One of my graduate students wrote his research paper on corporate philanthropy, and the growth of business practices that recognize a duty to stakeholders other than shareholders: employees, vendors and the general community. As he explained,

The Triple Bottom Line (TBL) is an accounting framework that incorporates three dimensions of performance: social, environmental and financial. This differs from traditional reporting frameworks as it includes ecological (or environmental) and social measures that can be difficult to assign appropriate means of measurement. The TBL dimensions may also be referred to as the three P’s: people, planet and profits (Hall, 2011). The TBL further supports the integration of Corporate Responsibility into the fiber of companies as the bottom line is expanded, to include these additional levels of measurement, suggesting “purpose” shares importance with profit.

One company that has seen the benefits of good corporate responsibility through TBL is Costco, specifically the “people” component. Second to the multi-national titan Walmart, Costco is the largest American membership-only warehouse club. Costco’s average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam’s Club (Greenhouse, 2005). Costco’s practices are clearly more expensive, but they have an offsetting cost-containment effect: Turnover is unusually low, at 17% overall and just 6% after one year’s employment. In contrast, turnover at Wal-Mart is 44% a year, close to the industry average (Cascio, 2006).

In the case of Costco, their corporate responsibility and voluntary decision to invest in their people have been a direct contributor to their profits. In return for its generous wages and benefits, Costco gets one of the most loyal and productive workforces in retail, and, not coincidentally, the lowest shrinkage (employee theft) figures in the industry. As a result, Costco generated $21,805 in U.S. operating profit per hourly employee, compared with $11,615 at Sam’s Club. Costco’s stable, productive workforce more than offsets its higher costs (Cascio, 2006).

It appears that “doing well by doing good” is more than a slogan.

I shop at Costco, and avoid Walmart. So do most of my friends. In virtually all cases, the choice is intentional: we want to demonstrate support for businesses that value and properly compensate their employees (and aren’t sucking at the public tit, if you’ll excuse the vulgarity).

Walmart may get my tax dollars, but I’m damned if they’ll get my discretionary dollars too.

 

Ideology is Expensive

Here’s another entry for my growing pile of public policies that cost more money than they purport to save. (Of course, the more illuminating question is: who bears the costs and who gets the savings. The answer to that question explains a lot.)

According to the Economic Policy Institute,

“.. if the minimum wage were boosted from its current level of $7.25 per hour to $10.10, as proposed by the Fair Minimum Wage Act of 2014, more than 1.7 million Americans would no longer have to rely on public assistance programs. This would produce $7.6 billion per year or more in savings for the federal government, according to the study.”

The report noted that approximately half of all people earning under $10.10 per hour–or some 11.9 million Americans–receive some form of means-tested benefits from the government. That would include benefits like the Earned Income Tax Credit, food stamps and other forms of welfare.

We the People pay for those benefits. Walmart, McDonalds and other major low-wage employers don’t. The money companies save by paying their employees poverty wages goes directly to their bottom lines. The arguments for continuing to have taxpayers subsidize the (very handsome) profits of such employers is that, if the minimum wage were to be raised, these companies would choose to raise prices rather than (horrors!) see any erosion of those huge profit margins.

Maybe.

I don’t know about the rest of you, but I’d prefer paying an extra nickel for a cheeseburger, and putting that 7.6 billion dollars per year toward something that advanced the common good. I’d rather repair our crumbling infrastructure, educate our children, develop a vaccine for Ebola…there are lots of priorities I’d place ahead of subsidizing the continued wealth of the Walton family and McDonald’s shareholders.

I Know I’m a Broken Record…

It really, really gripes me that taxpayers are subsidizing Walmart’s bottom line. I’ve beaten that drum repeatedly, but when I saw this video, the message was presented in so clear and compelling a way, I just had to share.

In fairness, let me point out that this analysis applies equally to the many other greedy recipients of corporate welfare. (McDonalds, I’m looking at you!)

You either believe in markets or you don’t. Walmart and its ilk may beat the drum for capitalism, but they don’t want to abide by its terms, and compete fair and square in the market–without public subsidy.

 

An Interesting–and Damaging–Comparison

Walmart routinely defends its practice of paying poverty-level wages by pointing to its low prices. Sure, taxpayers end up subsidizing Walmart employees who qualify for Medicaid and food stamps, but the company’s low, low prices mean that even Walmart employees can afford those tube socks!

That assertion–that low pay is what allows Walmart to offer goods at low prices–just took a hit.

The most recent issue of Consumer Reports contains a very interesting comparison of grocery prices. Titled “Getting More from Your Store,” the article had the usual number of helpful hints; what really caught my eye, however, was the chart comparing prices for the same brand of purchases like flour, coffee, tall kitchen bags, toilet paper and similar items. The folks from Consumers compared the costs of store brands, Costco, Walmart, various regional chains and Walgreens for each item. Store brands, unsurprisingly, were cheapest overall.

Next was Costco.

Costco pays its employees roughly twice as much per hour, on average, as Walmart, and also provides health insurance. Yet Costco was cheaper than Walmart for eleven of the twelve items sampled. The totals for the “basket” of twelve items were: store brands, 49.59; Costco, 55.49, Walmart 70.52. The regional chains averaged 72.93 and Walgreens came in at a whopping 96.90.

Um…tell me again why taxpayers are subsidizing Walmart employees?