Walmart is known to the general public for its low prices, but those low prices come at a different sort of cost; estimates place the expense of covering Walmart workers’ food-stamp costs at $300 million a year.
A study in the U.S. Committee on Education and the Workforce found that a 300-employee Walmart store can cost taxpayers anywhere from $904,542 to $1.75 million every year.
However, a new analysis runs by American Public Media’s Marketplace shows that there is a very easy – and very affordable – way to get Walmart employees off food-stamps.
The solution lies, of course, in raising employees’ wages.
According to research conducted three years ago by an analyst at IBISWorld, the average wage for Walmart sales associates is $8.81 an hour. This same figure was cited in the congressional report by House Democrats. In 2012, most Walmart workers made less than $25,000.
In order to get workers off of food-stamps, Marketplace estimates that Walmart would have to raise its average wages from $8.81 to $13.83.
As many as 15% of the company’s employees in Ohio stores are on food stamps. If that same rate is applied to the rest of Walmart’s workforce, Marketplace estimates that the company needs $4.8 billion to lift average wages across the U.S. enough to get all workers off food-stamps.
If $4.8 billion seems like a huge number, that’s because it is; but Walmart is a huge company, and Marketplace estimates that it would need to raise prices by only about 1.4 percent to cover that cost.
In other words, increasing the cost of items such as macaroni and cheese by a single cent would make a big enough difference that Walmart workers would no longer need food stamps to survive.
Notably, Walmart spokesman Kory Lundburg maintains that the $8.81 hourly wage is inaccurate. Instead, he stated that workers make $11.83 an hour, and added that 99 percent of the company’s employees make more than minimal wage.
“We don’t know how they arrived at that number,” Lundburg said in a phone interview. “It’s so off it’s laughable that they even try to cite it.”
However, Walmart’s formula for calculating average wages has previously been shown to be “murky”, possibly excluding part-time and temporary workers and including supervisors to drive up the apparent average.
Walmart officials have confirmed that the chain takes in about 18% of the country’s food stamps.