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Food Stamps Don't Keep Walmart's Prices Low, They Keep Its Profits High

April 5, 2014 in Blogs

By Amy Traub, The Huffington Post

The same company that brings in the most food stamp dollars in revenue has the most employees using food stamps.

The same company that brings in the most food stamp dollars in revenue – an estimated $13 billion last year — also likely has the most employees using food stamps.”

The name of the mammoth food stamp-reliant company is no secret: Walmart.

As journalist Krissy Clark notes in Marketplace's valuable new series “The Secret Life of the Food Stamp,” Walmart benefits from food stamps in multiple ways, as taxpayers both underwrite the company's food sales and also subsidize its payroll costs.

There is no doubt that food stamps (and a host of other public subsidies from Medicaid to home heating assistance to the Earned Income Tax Credit and beyond) reduce Walmart's employment costs substantially. A study released last year by staff of the U.S. House Committee on Education and the Workforce found that a single 300-employee Walmart Supercenter may cost taxpayers anywhere from $904,542 to nearly $1.75 million per year.

Consider that the working people who turn to food stamps to supplement inadequate wages are demonized as society's lazy “takers” — a young Walmart employee who enrolled in food stamps to help support his pregnant partner told Marketplace that previously “I'd always considered people who use food stamps as just taking advantage of the government.” Yet the company itself continues to be seen as a paragon of free enterprise, notwithstanding the tens of billions of dollars in subsidies through the same program.

Marketplace has done a great service by shining light on a key public misperception, illuminating the low-wage employers who benefit most from programs like food stamps. Yet an important part of the story still gets missed. It's probably intended to be a rhetorical question when part II of the food stamp series asks: “Are Walmart's prices so low because its employees are on food stamps?” But the answer is no.

In reality, it's not Walmart's low prices that taxpayers are subsidizing — it's the company's mammoth profits.

Walmart made $17 billion in profit in 2013, and spent $7.6 billion buying back shares of …read more


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