Summary: a bill proposed in the House would levy a fee on Wal-Mart and other employers whose low wages force full-time employees to tap public assistance to make ends meet.
Who pays for Wal-Mart’s corporate decision to systematically underpay its more than 2 million employees? We all do, in the form of public assistance that those underpaid employees rely on to make ends meet.
This isn’t a small sum, either. Wal-Mart is the largest single employer in the U.S., outside of the Federal Government. It is the largest private employer in a number of states including just about the entire southern U.S., as well as Texas, Arizona and (of course) Arkansas. (Partners Healthcare is the largest employer in Massachusetts, in case you were wondering.) As this article points out, the public subsidy paid to Wal-Mart through public assistance to support its employees was estimated at $6.2 billion in 2013. Nationally, taxpayers subsidize businesses like Wal-Mart to the tune of more than $100 billion.
With Wal-Mart, which has a market capitalization of $218 billion, the subsidy is especially vexing, because it essentially “double dips” – offering subsistence wages to its employees, who then tap food stamps to make ends meet, and then profiting from those food stamps, which are redeemed at Wal-Mart stores.
Freshman California Democratic Rep. Ro Khanna and nine House co-sponsors are introducing legislation to put an end to the free ride.The Corporate Responsibility and Taxpayer Protection Act would “levy a fee equivalent to the public assistance that a company’s employees are eligible to receive, with the intent to incentivize businesses to pay their employees enough so they don’t need public assistance.”
“An employee making minimum wage bagging groceries should not have to rely on nutrition assistance to put food on the table for his or her family. And taxpayers should not have to subsidize low-wage workers so wealthy corporations can get richer,” Khanna said in a statement. “Companies are short-changing their employees by not paying a living wage. These companies are creating a drain on the economy by underpaying workers and should be responsible for covering the cost of the programs their employees rely on to make ends meet. It is my hope that this bill will further incentivize these companies to pay their employees a living wage without cutting their hours.”
Khanna, speaking to The Intercept, said he introduced the bill “partly to highlight the cost of low wages to those besides the employees themselves.”
“This also helps people focus attention on the consequences of corporate underpayment,” he said. “The burden is not just on employees, it’s also on the taxpayer.”
Wal-Mart has disclosed in the past that it was the recipient of an estimated 18 percent of total food stamp spending: $14 billion out of $80 billion spent in total in 2012.
Expect this bill to go exactly nowhere in the Republican-led House this year. However, anger at multi billion dollar corporations exploiting workers is hardly a “Democratic” issue. The Fight for 15 movement has garnered support across party lines and is especially potent in the mid west and other areas hit hard by the loss of manufacturing jobs. This year’s ‘doesn’t have a prayer’ bill may come back as a ‘done deal’ post November 2018, when Democrats have a chance to retake the House of Representatives for the first time in a decade.