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Current Events & Hot Topics Current Events & Hot Topics

Walmart Admits: 'Our Profits' Depend on 'Their Poverty'

Posted by on Apr. 4, 2014 at 1:04 AM
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1 mom liked this

A Penn State study found that in counties where Wal-Mart opens a store, poverty rates are negatively impacted. (Photo: Ian Turton/ Creative Commons/ Flickr)Although a notorious recipient of "corporate welfare," Walmart has now admitted that their massive profits also depend on the funding of food stamps and other public assistance programs.

In their annual report, filed with the U.S. Securities and Exchange Commission last week, the retail giant lists factors that could potentially harm future profitability. Listed among items such as "economic conditions" and "consumer confidence," the company writes that changes in taxpayer-funded public assistance programs are also a major threat to their bottom line.

The company writes:

Our business operations are subject to numerous risks, factors and uncertainties, domestically and internationally, which are outside our control ... These factors include ... changes in the amount of payments made under the Supplement[al] Nutrition Assistance Plan and other public assistance plans, changes in the eligibility requirements of public assistance plans ...

Walmart, the nation's largest private employer, is notorious for paying poverty wages and coaching employees to take advantage of social programs. In many states, Walmart employees are the largest group of Medicaid recipients.

However, this report is the first public acknowledgement of the chain's reliance on the funding of these programs to sustain a profit.

According to Stacy Mitchell, senior researcher with the Institute for Local Self-Reliance, the irony of their admission is that Walmart "is the company that has done, perhaps, more than any other corporation to push people into poverty."

Citing a Penn State study, Mitchell told Common Dreams that research has proven that "when Walmart opens a store, poverty rates are negatively impacted" and that the more stores that have opened in a particular county, the worse it is. "This is a company that everywhere it goes it creates poverty."

In addition to their own worker's low wages, Mitchell explains that Walmart, because of their enormous size and market power, have "held down wages for the whole sector."

As a retailer that specifically targets a low-income demographic, Mitchell adds that the "insidious genius" of their business model is that "they have so squeezed American workers [...] many feel that their only choice is to shop at Walmart."

The International Business Times reports:

Prior to the earnings report, Walmart Chief Financial Officer Charles Holley said the company didn't anticipate how much the end to such programs as the unemployment benefits extension would affect it. Specifically, reductions to the Supplemental Nutrition Assistance Program that went into effect on Nov. 1, the first day of the company’s fourth quarter, pose a potential concern. The cuts led to a between $1 and $36 reduction in SNAP benefits per household, or up to $460 a year. Congress is debating reinstating the extension to the program and making the benefits retroactive to Nov. 1, something Walmart would clearly consider beneficial to its growth.

Previously, Walmart has joined forces with Big Food labels such as Coca Cola and Kelloggs to lobby the United States Department of Agriculture and Congress against any measures that would restrict SNAP use to healthy food choices. According to an earlier study by Michele Simon at Eat Drink Politics, in just one year, nine Walmart Supercenters in Massachusetts received more than $33 million in SNAP revenues

by on Apr. 4, 2014 at 1:04 AM
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rotPferd
by Silver Member on Apr. 4, 2014 at 10:20 AM

  According to an earlier study by Michele Simon at Eat Drink Politics, in just one year, nine Walmart Supercenters in Massachusetts received more than $33 million in SNAP revenues.

WOW

Karmahappens
by Bronze Member on Apr. 4, 2014 at 10:33 AM
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Of course Walmart needs food stamps-I would bet the majority of grocery stores do. They pretty much ALL accept them don't they?  Of course, everyone wants people on food stamps to use them wisely-and why not-if the purpose of food stamps is to keep families from going hungry, using them wisely is helpful to those families.

For a small example. I could buy 20 ounces of ground turkey this week (93% lean) for $3.49-or .17 an ounce.

OR I could buy ground beef that is 80% lean for  3.49 a POUND or .21 an ounce.

Everyone who is paying attention would do the per ounce price and figure out which is better-but that is assuming that every one has the background to know how tro do the math-or to even notice the size difference.

 

Della529
by Matlock on Apr. 4, 2014 at 10:50 AM

 People are going to pay for it on way or another, whether it be through taxes or higher prices.

lga1965
by on Apr. 4, 2014 at 11:24 AM
I must be missing something here. If people get food stamps, they're going to shop where they choose and why would Walmart think the food stamp people will choose THEIR store ? This is ridiculous.
I don't get food stamps but I occasionally shop at Walmart, especially in the garden area for plants,pots,soil,etc. Their prices are comparable to Target. I prefer Target because the store is cleaner, and they don't sell guns and ammo.
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Sisteract
by Whoopie on Apr. 4, 2014 at 11:35 AM
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For many, many years (decades) WM located their stores in places where they knew they would be able to gobble up other industries and the competition. It was part of their business model and was quite successful. When you're the only grocer within 70 miles and many of the folks in your area also work for you, you know where they'll shop...they have no other option.

WM is 1 tweak away from a monopoly.

Although in recent years, most of their competitions have also initiated value formats and ramped up the competition for those value shoppers.

Quoting lga1965: I must be missing something here. If people get food stamps, they're going to shop where they choose and why would Walmart think the food stamp people will choose THEIR store ? This is ridiculous. I don't get food stamps but I occasionally shop at Walmart, especially in the garden area for plants,pots,soil,etc. Their prices are comparable to Target. I prefer Target because the store is cleaner, and they don't sell guns and ammo.


grandmab125
by Gold Member on Apr. 4, 2014 at 12:08 PM
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 Well, duh, any store that accepts food stamps might see a little bit of a drop in their profits.  Do you think Walmart's the only store that accepts them?  How about Target, K-Mart, mom and pop stores,....any store where a chunk of their business is selling food.

Della529
by Matlock on Apr. 4, 2014 at 12:23 PM
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 Do the others actively promote government assistance programs to their employees?

Quoting grandmab125:

 Well, duh, any store that accepts food stamps might see a little bit of a drop in their profits.  Do you think Walmart's the only store that accepts them?  How about Target, K-Mart, mom and pop stores,....any store where a chunk of their business is selling food.

 

Saphira1207
by Bronze Member on Apr. 4, 2014 at 12:23 PM
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It's sad when a businesses model is built around increasing and then taking advantage of poverty, as wally worlds is.

At least the other stores (target, kmart, Pebbles, etc) are also trying to cater to the middle/upper classes.  They aren't relying on the government to pay them via SNAP or cash assistance to their customers, and that is exactly what wally world is doing.

That company gets corporate welfare, tax evasion abilities and all the money from the government via TANF and SNAP.  I sometimes think they get more govenment money than all the citizens combined.  :/

grandmab125
by Gold Member on Apr. 4, 2014 at 4:59 PM

I wouldn't know.  Why don't you ask them?  But considering they all pay minimum wage to start out with, one could assume Target, K-Mart, etc. have employees who receive food stamps.  In fact, I'll bet all stores, big and small have employees who receive food stamps. Ergo, it's kind of nice of Walmart to have a policy of helping their employees so that they know which programs they can get assistance from. 

I

Quoting Della529:

 Do the others actively promote government assistance programs to their employees?

Quoting grandmab125:

 Well, duh, any store that accepts food stamps might see a little bit of a drop in their profits.  Do you think Walmart's the only store that accepts them?  How about Target, K-Mart, mom and pop stores,....any store where a chunk of their business is selling food.

 

 

Sisteract
by Whoopie on Apr. 4, 2014 at 5:04 PM
1 mom liked this

Actively promote were key words.

Quoting grandmab125:

I wouldn't know.  Why don't you ask them?  But considering they all pay minimum wage to start out with, one could assume Target, K-Mart, etc. have employees who receive food stamps.  In fact, I'll bet all stores, big and small have employees who receive food stamps. Ergo, it's kind of nice of Walmart to have a policy of helping their employees so that they know which programs they can get assistance from. 

I

Quoting Della529:

 Do the others actively promote government assistance programs to their employees?

Quoting grandmab125:

 Well, duh, any store that accepts food stamps might see a little bit of a drop in their profits.  Do you think Walmart's the only store that accepts them?  How about Target, K-Mart, mom and pop stores,....any store where a chunk of their business is selling food.

 

 


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