Despite pay hike, Walmart workers still need help
Walmart's (WMT) highly publicized pay hike is a victory of sorts for its 1.3 million employees, but American taxpayers will foot the bill for the large subsidies that will still be needed to compensate for the discount retailer's low wages.
That's the finding of a report published Wednesday by Americans for Tax Fairness, which calculated that this month's increase to at least $9 an hour for Walmart workers won't be enough to get many of them off public assistance.
"Most people think those abusing the system are the poor, and often the undeserving poor, but this report reveals that workers who are actually working full-time and hard, but just can't cut it on these wages, and the rest of us are helping them along," Frank Clemente, the ATF's executive director told CBS MoneyWatch. "Ideally, you'd want the companies employing these people to pay the full freight."
At $9 an hour and 34 hours a week, which Walmart considers full-time work, an employee would earn $15,912 a year, qualifying a single worker for three out of five public programs that apply to a single worker, the ATF found. An employee with one or more children would qualify for all eight of the programs that would apply to a worker with a child.
The same will hold true when Walmart's minimum pay climbs to $10 an hour next year. Then, a 34-hour work week would net $17,680 a year, leaving a worker with one child or more in their household qualifying for all eight public assistance programs.
In Wisconsin, "it was surprising to me that folks depended more on child-care subsidies than Medicaid," said Frank, referring to the government health care program for those with low incomes.
Walmart dismissed the findings as manipulated, saying it has "hundreds of thousands" of employees earning more than $10 an hour and that it invests in training programs to help its workers advance.
"It's more of the same from this group. They don't say these entry-level people are high school kids earnings $9. They come up with the conclusion they want, and then only come up with information to support that conclusion," Kory Lundberg, a Walmart spokesman told CBS MoneyWatch.
"We haven't manipulated numbers," Frank responded. "Here's what it takes to qualify for these programs, and here's what you make, and you may, or may not, qualify. We don't come at this from the wage angle, but the tax subsidiary angle.
"Walmart is one of the few retailers were the majority of associates are full-time," added Frank, although he could not explain why the company viewed 34 hours as full-time, as opposed to the 40-hour work week at many companies.
Hiking wages to $15 an hour at full-time work of 40 a week, or $31,200 a year, would lift many of Walmart's workers above the income level at which they would be eligible for public assistance programs. With that income, households with up to two people would not be eligible for seven out of eight programs.
The four primary Walton heirs held a fortune that rose by $20.9 billion from March 2014 to March 2015. For roughly half of that amount, or $10.8 billion, the Waltons could give every one of Walmart's 1.3 million U.S. workers a $5 hour raise and still keep the other $10 billion, the ATF research found.
"It gives you some scale," Frank said of the findings.
The study follows a report from the group a year ago that estimated Walmart benefited from $6.2 billion a year in taxpayer subsidies because many of its employees make so little they need food stamps, Medicaid and six other taxpayer-funded programs to get by.
Another report, issued in June by the left-leaning Institute for Policy Studies, found taxpayers subsidized $298 million in "performance pay" over a six-year period for Walmart's top eight executives. The country's largest private employer lowered its federal tax bills by $104 million due to the tax-deductible loophole, the IPS found.