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ibstubro's avatar

Could it be reasonably argued that Walmart is now part of the US welfare system?

Asked by ibstubro (12250 points ) May 8th, 2014

What about the smaller businesses that are siphoning off Walmart’s best and brightest with an offer of $10 – $12 an hour presently? Couldn’t it be argued that Walmart is currently part of the US welfare system, training new-to-market workers and subsidizing vast numbers of others that would otherwise be 100% on public assistance.

If the minimum wage is raised to $10.10 an hour, why semi-challenge yourself for $11 an hour when you can part your brain at the door at Walmart for $10.10?

Sure, Walmart can afford a hike in the minimum wage, but can the smaller businesses now paying $11 an hour afford to pay $16 to lure the top of the Walmart class from the bosom of big business?

Isn’t Walmart currently providing a training program that puts launches people into the job market? A training program that the government has been woefully inadequate at? Considering the best and brightest move on to better paying jobs, and many of the part-time, career employees are either seeking that status or otherwise would be 100% dependent on the government?

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30 Answers

SavoirFaire's avatar

First things first: http://www.bloomberg.com/news/2013-11-13/how-mcdonald-s-and-wal-mart-became-welfare-queens.html

And for the record, I quit an easy tech job that paid $30,000/year in favor of a hard teaching job that pays $10,000/year (though I upped it to $20,000 by taking on extra classes). The difference is that I hated the easy job and love the hard job. Money isn’t everything.

Espiritus_Corvus's avatar

If you mean that working the floor full time at Walmart just about guarantees that you will qualify for some kind of government assistance starting with food stamps, yes. Walmart, almost every fast food establishment and day labor employer in the US count on this. Over 25% of the homeless population in the US work full time. It’s 38% in the Tampa Bay area, Hillsborough & Pinellas counties, Florida, where I hold residency.

It is beyond me why US taxpayers allow their taxes to supplement corporate labor costs when their annual profits show that these same employers can well afford a living wage. Is it reasonable? I’ll leave that up to my fellow taxpayers. But I personally think it is ridiculous, shameful, and is the equivalent of bending over and picking up the soap. But Americans seem to like that sort of thing.

bolwerk's avatar

Even if you accept that argument at face value, there is such a shortage of jobs that I doubt many small businesses would have trouble filling low-skill positions in the $10.10—$20 range themselves. I mean, shit, college grads are willing to work those jobs right now and they are pushing less educated workers away from them.

However, you don’t exactly come out of low-level WalMart jobs with marketable skills you didn’t have when you were hired. Maybe you come out with some work ethic, as in an understanding of what is like to be there on time and stuff, but that’s not anything WalMart can give you that working in a small company can’t. Maybe better-paying companies like to see some experience on a resume, no matter what it is, first, but still: demand for jobs significantly outpaces supply, so that’s a minimally important factor right now.

GloPro's avatar

I just want to make sure we’re all on the same page. Federal minimum wage is increasing through 2016 to $10.10/hr. Not overnight. The minimum wage that IS increasing immediately to $10.10 is for federally contracted jobs.
It doesn’t change this discussion much, but the employers currently paying $11 are going to be ahead of the game for at least another 18 months and through another presidential election.

ragingloli's avatar

Only in terms of being welfare recipients and abusers.

SpatzieLover's avatar

Technically, Walmart is an abuser of the welfare system, not a member of it.

Jaxk's avatar

The median age for minimum wage is 24. minimum wage is primarily for teenagers just entering the work force. The average household income for minimum wage workers is $53,000/yr. The whole argument for increasing the minimum wage sounds better if you don’t look at the details. We are destroying the entry point for young low skilled workers.

josie's avatar

No.
Welfare is the State enforced transfer of wealth from those who produce and/or earn it, to those who do not produce or earn as much as they would wish for.
The minimum wage is Welfare with a more politically palatable label.

Wal-Mart is an opportunity for many to begin learning the process of earning and perhaps creating wealth. Getting a job at Wal-Mart takes nothing by force from anyone, since no one is forced to shop there.

rojo's avatar

@josie last time I was in Walmart it did not appear to me that there were many entry level employees. They were, for the most part, middle aged to close to retirement age. Most of your younger entry level workers go the fast food route although even there you will see about a 50–50 mix between them and older employees that are unable to find other work that would allow them to survive.

Also, I view welfare as means of providing a minimal level of well-being and social support for all citizens when society in general, and the business sector in particular, fails to do so.

Crazydawg's avatar

Walmart is what it is. Entry level opportunities for pretty much anyone and of course with Walmart offering low price guarantees, it is really no surprise they have low pay scales but upon a closer look pay for an entry level jobs are min wage to $18.00 per hour average was $8.86/hr with benefits, 401K bonuses and profit sharing which with the profits they retain profit sharing could be a good deal for them. A look at employee reviews reveal a mix bag of positives and not unexpected cons for working there.

Pros – Pay, health benefits, work hours, vacation time, bonuses and the people work with.
Pros – I get paid well and my management team is like a family. Yearly bonus based on sales and proffit plan.
Pros – Lots of opportunity for promotion
Pros – It gives you a taste of what retail is like and gives you experience.

Cons – Company does not allow enough payroll to keep standards up and customers happy.
Cons – A lot to do most of the time and can become over whelming.
Cons – when it comes to the wages, they’re at the bottom. This wouldn’t be a problem except that walmart is one of the largest retailers in the world. managers are not the friendliest
Cons – Unreachable goals, un reachable tasks.

Despite all the employee complaints many would recommend working at Walmart to their friends.

1TubeGuru's avatar

Walmart is a de facto parasite on the US welfare system.

stanleybmanly's avatar

Walmart is indeed part of the welfare system. It’s a lesson in how to rake in billions in profits by simply pocketing the money which should be paid in salaries. The whole scheme would collapse were it not for the certainty that the taxpayers will take up the slack with food stamps and other government subsidies. The corporation is in effect a government funded octopus which has ruthlessly destroyed all semblance of local retail business in small town and rural America. But the creature’s destruction ranges beyond the desertification of small business districts. It has effectively used it’s huge government subsidized muscle to forcefully push what’s left of the country’s manufacturing base offshore. The lessons to be learned from Walmart are many and glaring. The company’s history is a first class demonstration on the REAL costs of being a “low price leader” in a land where the bulk of the population is on its way to not having the resources to shop anywhere else.

Jaxk's avatar

Wow, for a company so despised it certainly does attract a lot of customers. Maybe they should be frequenting Tiffany’s.

rojo's avatar

@Jaxk

What?
You want me to defend the ignorance and stupidity of the general American Public?

They seem have a knack for going against their own self interest. Which is good for our politicians but bad for our country.

Greed: Its the American Way!

stanleybmanly's avatar

@Jaxk Of course it attracts customers, primarily those customers who would be arrested on the spot for daring to enter Tiffany’s. But seriously, Walmart is an object lesson on the seamy aspects of the so called “free market”. For example, you’re bound to “attract” a lot of customers once you’ve seen to it that you have the only well in the desert. I wonder how many Tiffany outlets you can find across the mall from a Walmart?

bolwerk's avatar

Shopping at WalMart seems perfectly rational to me, at least for the millions of people forced into the car-centric suburban “middle class.” That doesn’t mean continuing to allow WalMart to leech off social services and our (stupid) transportation regime is a good idea.

Jaxk's avatar

@stanleybmanly

I’m not sure you’re giving Walmart their due. There have been many players in that space over the years, Sears, JC Penny, K Mart, Target, Costco, etc. All had their shot. It’s hard for me to see where they are the only well in the desert. They just seem to have a little better well than most.

stanleybmanly's avatar

@Jaxk The question then becomes. “In what way does Walmart differ from all of the above?” And believe me, I’m more than willing to give them their due. What I’m saying is that Walmart’s very success in using the “welfare” route to dominate the market, exerts enormous pressure on its competition to emulate its practices. You would agree that Walmart’s business model differs significantly from the other enterprises?

Crazydawg's avatar

@rojo Greed exists in force at all levels of income. Poor and middle class folks patronize Walmart so they can keep more of their hard earned money. Rich people shop at Walmart to do the same. Why discriminate over who shops at Walmart. Walmart in all it’s unglory offers opportunity for anyone to buy goods at the lowest price possible, provides opportunity for entry level employees with little to no experience to get a job and learn a retail trade and advance or move to another retailer that pays more. Walmart provide opportunity for those who invest in their stock to reap rewards including employees who work their. Walmart allows opportunity for low income wage earners to better their lives and lessen their need for 100% Federal and State assistance and go home with a paycheck in their pocket or purse. What on earth is so diabolical about Walmart? What about all the other companies that hire desperate people for minimum wage? No one I have ever met takes a minimum wage job as a career. Entry level jobs are real jobs that offer real work experience. The cost to train an new employee is high and ask any retailer how many people quit after just a day or two. Stores like Walmart are a veritable revolving door as employees come and go once they learn the ropes. The employees that stay on to be promoted do so because they like working there. I suggest anyone that has issue with Walmart employee policies find something better to do as no one is holding a gun to the employees head to stay there.

bolwerk's avatar

@Jaxk: Sears and K-Mart were driven into the ground by a Randian ideologue. Target seems price-competitive with WalMart, JC Penney broadly seems to cater to different demographics, and Costco probably manages cheaper prices than WalMart while paying its workers significantly more. Costco is a somewhat different animal though.

Dan_Lyons's avatar

Could it be reasonably argued that Walmart is now part of the US welfare system?

No, I would say that Walmart is now part of the Chinese Welfare system, as almost all merchandise for sale in Walmart is made in China.
By purchasing items at Walmart we have enabled their middle class (which never even existed until Walmart went Chinese) and their upper class to compete with the rest of the world for oil, gas, jobs (most of the US manufacturing jobs are outsourced to them) cars, you name it, they are now in competition with us for it.

Ergo, the real question here is, since China is one of our largest global enemies, is it unpatriotic to shop there and is it patriotic to shoplift from Walmart?

rojo's avatar

@Crazydawg I would not, in any way, disagree that greed exists at all levels of income. That is true and is the blight upon our society. However, rich people do not shop at Walmart, Many middle class Americans avoid Walmart. Walmart caters to the lower and underclass of American society. They come in and undercut locally owned business by being able to provide goods at a lower unit price than the local outlets because they buy in bulk. They use their market power to further intimidate suppliers into giving them price breaks which they can then use to undermine local businesses that do not have the scale advantages that they do and then use this advantage to drive even more businesses under thus making themselves a de-facto monopoly in any given market They take advantage of the people who would still be working for the local businesses if the business had not been ruined by Walmart, force them to accept less pay than would be the norm if they were not here because they have no choice if they want to eat. Then, knowing they are not providing a living wage, provide services to get their employees welfare benefits so that they can keep working for less. I am not faulting Walmart for the stupidity of the average lower and lower middle class American in continuing to patronize the store and being too ignorant to understand that they, as taxpayers, are actually making up the difference with increase welfare and food stamp benefits to Walmart employees. I am blaming Walmart for using what I consider an unethical business practice in order to provide greater profits to the owners even if they are “legal”.
I also take issue with your statement that Walmart provides “entry level jobs”. As I stated earlier, the vast majority of workers in a Walmart are middle to advanced age, not wide-eyed high school kids. They are people who have had previous work experience, not newbies fresh from high school. They are there because they have no choice, not because this is the best place to work or provides wonderful work experience that cannot be attained elsewhere. They need to put food on the table and a roof over their families heads. It is not just unfortunate that this is impossible to do at Walmart because of their unethical business practices, it is also morally reprehensible and even Walmart acknowledges that they know they are doing it by providing services that lead their own employees to the public dole.

ibstubro's avatar

There might be some regionality, here, @rojo and others. Where I am Walmart is still the major ‘entry level’ job provider. I’d say that at any given time up to ½ (or more) of the employees are still in school and/or working their first job. To an extent, this slant is figured into my question.

bolwerk's avatar

@ibstubro: I rather doubt WalMart wants to retain employees. Neither do McDonald’s or many other low-level retailers. They want unskilled labor, and they want most of it to move on to another company before they gain raises and seniority.

Even acknowledging that maybe WalMart offers a little experience fodder for resumes, it’s doubtful they are meaningfully training most of these workers who leave after a year.

ibstubro's avatar

I agree, @bolwerk. That’s the reason for the question. In my area Walmart is a if not the major source of entry level jobs. It’s at least putting the kids through an interview process and accustoming them being on time, being presentable and dealing with the public/co-workers. Job, 101. Many of these employees move on to the $10–15 per hour jobs in small business, where they’re preferable to that ‘college degreed’ worker that just wants a pay check until a more suitable job comes along.

And those people with college degrees working at Walmart? What’s the alternative? 100% on the dole, I guess. So, back to my question. It invites knee-jerk response, and I understand that, but I believe it’s worthy of some thought, too.

bolwerk's avatar

@ibstubro: well, in that case, you need to consider whether WalMart experience makes job selectees better candidates when they try to move on to another position. The answer is probably no. People who can learn that stuff about presentation at WalMart can learn it anywhere else, perhaps better.

If WalMart is part of the social services system, it’s because it bolsters its profits by forcing its workers to depend on social services.

ibstubro's avatar

I hardly ever frequent Walmart any more, @bolwerk, but when I was a regular I watched new employees go from awkward, shy employees to fairly confident and personable. From kids that wouldn’t make eye contact, to cashiers I would chat up. There are life skills that can’t be taught in a classroom.

For the Walmart workers that are partially dependent on social services, what is the alternative? Totally dependent on social services?

I don’t underestimate Walmart. I suspect that forcing them to increase wages will result in them figuring out how to make do with fewer employees. Personally, it seems to me that my local Walmarts are overstaffed, anyway. I anticipate seeing fewer people partially dependent on social services (Walmart employed) and more people 100% dependent on social services (unemployed).

bolwerk's avatar

@ibstubro: What rubs people the wrong way about WalMart in this area is more the unfairness that they can exploit government programs in a way small businesses and even many big businesses can’t. That’s not just social services either; transportation is another area where they get big de facto state subsidies. They’ll find ways to make do with fewer employees period, if they can. That’s what they’re famous for: using as little labor a s possible, and paying as little as possible for it.

I might agree about life skills, but I don’t see how WalMart is more special than another entry-level position for that.

ibstubro's avatar

I think Walmart is superior at encouraging life skills than, say, fast food. My first job was buss boy at Ponderosa, and all that was, was a minimum wage, part time paycheck. I was shy around people and I would have been much better served being a cashier at Walmart.

I’m not promoting Walmart, just trying to get people the re-think or examine some of the cliche’s. I shop there as little as possible, but there are 2 sides.

bolwerk's avatar

@ibstubro: well, I don’t really like turning it into an archetype either. I never really thought of WalMart as much more than a symptom of a bigger problem. I’d say it’s less offensive than other big boxes in a lot of ways, but it just happens to be bigger.

That said, it also used to be a lot more generous. It used to reward conscientiousness and hard work, and offered decent salaries to people who stayed a while. That may really have been socially positive, because those people might very well have been hard to employ otherwise. Now it has fallen into the trap of treating workers like fast food employers do.

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