Dear Editor,
Walmart has been prominently in the news lately but not in a good light. It is probably the largest employer in the world with 2.2 million employees and profits of US $316 billion on revenues of US $425 billion last year, two-thirds of which was in the United States. In 2012 there were nearly 3,900 stores and 1.29 million employees in the U.S.
The thrust of the news stories about Walmart is not about its huge financial successes, but rather the fact that many of their employees on average are paid less than the Federal minimum wage (US $7.25 per hour) with a medium wage of US $8.25 per hour. Most of the employees earn less than what is considered to be poverty level income.
Some Walmart employees sought to unionise so as to obtain improved wages and they set up rallies as part of their efforts. Walmart, however, retaliated by firing those it perceived were the leaders of this campaign. This had the effect, as Walmart expected, of causing most employees to become fearful of losing their jobs, upon which they depended to support their families, and interest in unionising slackened. But the National Labour Relations Board then filed a complaint against Walmart for violating a rule that companies cannot discipline employees for seeking union support, and employees became more willing to demonstrate for better wages while seeking union support.
The recent news reports involve coverage of these demonstrations and rallies by Walmart employees, along with employees from fast food companies who work under similar conditions. People are now beginning to recognise just how these employees are suffering in working for poverty level wages from companies making vast profits.
Let us look at some of those fast food companies. The largest, by far, is McDonalds which has 34,000 restaurants in 119 countries worldwide, most of course in the United States. In 2012, it racked up US $5.5 billion in profits on US $27.5 billion in revenue. The wages for its employees, similar to Walmart, are barely the Federal minimum (US $7.25), namely what is considered to be poverty level income. Indeed, a study conducted in New York City in April 2013 showed that 84 per cent of McDonald employees were actually paid below the minimum wage.
Although these workers work hard and diligently, they still have to rely on public assistance, such as food stamps, to survive because of the low wages the companies pay them. In the period 2007 to 2011, McDonald employees received on average US $1.4 billion in public assistance each year, a total of US $7 billion for the five year period. Tax payers of the United States are in effect subsidising McDonalds for its failure to provide its employees with living wages.
Subsidising figures are not available for Walmart, undoubtedly because this is not information they would want the public to see, but you can bet that the public assistance figures for Walmart, which has far more employees in the United States than McDonalds, is significantly higher than McDonalds’ average annual figure of US $1.4 billion.
Beyond McDonalds, there are other successful fast-food companies which also pay their employees such similarly low wages that those employees also must rely upon public assistance. Burger King employees recently received US $118 million in assistance and Dunkin Donut’s employees US $108 million. Yum Brand Inc., the parent company of Taco Bell, KFC and Pizza Hut has 39,000 restaurants in 120 countries with revenue in 2011 of US $3.8 billion and profits of US $589 million. Its employees in the United States in one recent year received US $1.6 billion in public assistance.
President Obama several years ago, hoping to rejuvenate the economy and help the downtrodden, proposed to Congress that the minimum wage of US $7.25, which had not been increased for many years, be increased to US $10.10 per hour. Naturally, Walmart and the fast food companies strongly opposed this proposal, making the absurd argument that although they consistently enjoy profits in the in the billions, if this small increase was put into operation, they would face insolvency.
The right wing Republicans who control the House of Representatives and always bow to the wishes of their corporate benefactors, opposed this minor increase, and John Boehner, then House Speaker, refused even to bring the bill to a vote as he is doing relative to other bills Obama has submitted.
So here we have a situation in which tax payers are paying subsidies by way of public assistance to hard working Americans to survive because the companies they work for, while making billions in profits, do absolutely nothing to improve the conditions of the workers who help them in attaining those profits. These companies have obligations to provide their workers with living wages, thus assisting them to avoid the need for Government benefits which the tax payers are funding. These corporations should be ashamed that they are ignoring these obligations in their greedy pursuit of even greater profits.
From 2002 to 2007 the income of the wealthy increased on average 10 per cent per year, ending with an average income of US $1.34 million while paying even less in taxes. They have made even more in the years since 2007. The income of the middle and lower classes went down in the same period. Some wealthy persons are genuinely concerned about the struggles of the less fortunate, but most could care less and are more interested in buying a new private jet or another mansion.
In the meantime, the Republicans pursued their agenda of obstructing Obama at every turn, even to the detriment of the ordinary tax payer who is providing subsidies for the rich companies. And they continue to protect the wealthy by opposing any additional tax on this pampered controlling group even though those taxes are the lowest they have ever been.
Stephen A. Hopkins
