How Walmart's Bosses Get Rich off Welfare Abuse

By Carl Gibson, Reader Supported News

28 July 14

orget about the guy at the grocery store using food stamps to buy lobster. Walmart, the world’s largest retail company, is even more dependent on government welfare so it can make jaw-droppingly obscene profits. In fact, government handouts are the main reason Walmart is so profitable, and the billion-dollar corporation’s business model is centered around the continued dependence on social safety net programs. Walmart’s welfare abuse is costing taxpayers billions of dollars per year. It’s time to get them off the government teat and make them start paying their own way.

Paying Workers Poverty Wages

When Walmart pays its workers so little that they need food stamps to survive, they’re also investing in a steady profit stream. Even though their prices are roughly the same or even more than their local competition, Walmart’s excessive marketing of “low prices” makes them a first-choice supermarket for people living in poverty, including their employees. Its 1.4 million employees alone account for a huge revenue source for Walmart, as the company is the largest private-sector employer in the US.

Employee wages are so low that during the last holiday season, one Walmart in Ohio held a food drive for its own employees so they could have a decent Thanksgiving dinner. This video of Walmart workers sharing their own stories in time for last year’s Black Friday protests included footage of one worker talking about how other workers often had to loan each other money so they could pay their bills on time.

Walmart’s insistence on paying its workers so little is especially despicable, given that the company could pay workers much more without even changing any of its prices. The think tank Demos crunched the numbers and found out that if Walmart simply stopped spending billions every year on buying back its own stock to drive up the value of stock options owned by executives, it could pay workers an average of $14.89 per hour without increasing prices by a cent.

Excessively Compensating Executives

As the recession wears on for most of America, Walmart’s profits have soared to $16 billion on revenues of over $473 billion. Because of the company’s ousting of local competitor supermarkets in cities and towns across America, the working poor have few options when grocery shopping, often with the help of food stamps. Out of all of its revenues, food stamps accounted for $13.5 billion in sales for Walmart just last year. Walmart is using their soaring profits to give “performance-based” pay raises to executives, and using the performance pay loophole in the US tax code to dodge their federal tax obligations. The Institute for Policy Studies learned that taxpayers have had to pay for $104 million in the last six years (beginning at roughly the same time as the recession) for Walmart’s performance-based pay bonuses that topped out just short of $300 million. This would be enough in tax dollars to pay for 33,000 impoverished children’s free/reduced school lunches over the same time period.

Taxpayers cough up over $6 billion each year to pay for the social safety net programs that Walmart workers depend upon, like food stamps and Medicaid. Walmart’s abuse of the “accelerated depreciation” tax loophole costs US taxpayers another $1 billion per year, meaning the company gets to write off capital investments faster than they’re actually used. The Walton family itself, which makes just as much in 3 minutes of dividends as one of their hourly employees makes in an entire year, lists those dividends as capital gains, paying a preferential tax rate. That alone costs US taxpayers another $607 million.

As Americans for Tax Fairness (ATF) discovered, the annual $7.8 billion that Walmart leeches off of US taxpayers could instead be used to hire 105,131 teachers. In Alice Walton’s home state of Texas, $813 million could fund hiring 12,000 more teachers. Walmart chairman Rob Walton could see to it that the company pays employees fairly, saving taxpayers in his home state of Arizona $176 million. That alone could hire 2,500 more teachers in Arizona’s schools. Page 10 of the ATF report lists how much each state would gain in new tax dollars for public education if Walmart and the Walton family weaned themselves off of government welfare programs.

It’s time we stop demonizing the victims of this recession who use meager amounts of food stamps to stay fed, and focus on the real problem. Corporations who depend on government welfare, like Walmart, along with big defense contractors like Boeing, GE, and Verizon, have no business draining much-needed tax dollars that should be spent on essential programs like public education.

Carl Gibson, 27, is co-founder of US Uncut, a nonviolent grassroots movement that mobilized thousands to protest corporate tax dodging and budget cuts in the months leading up to Occupy Wall Street. Carl and other US Uncut activists are featured in the documentary We're Not Broke, which premiered at the 2012 Sundance Film Festival. Carl is also the author of How to Oust a Congressman, an instructional manual on getting rid of corrupt members of Congress and state legislatures based on his experience in the 2012 elections in New Hampshire. He lives in Sacramento, California.

Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.

Flight MH17: Europeans Play Pig in the Middle

By Steve Weissman, Reader Supported News

28 July 14

s the 28-nation Europe Union (EU) moves to impose new sanctions on Russia over the downing of Malaysian Airlines Flight 17 in Eastern Ukraine, many countries on this side of the Atlantic find themselves caught in the growing crossfire between Washington and Moscow.

They obviously lean much closer to the US than to Russia, and continue to play a vigorous role in backing the Ukrainian nationalists in Kiev. They are also willing, in the words of Germany’s Social Democratic foreign minister Frank-Walter Steinmeier, to “increase the pressure” on Russia. But make no mistake, EU leaders like Germany’s Angela Merkel and her colleagues in France, Spain, and Italy are not signing up for what many in Washington and the mainstream media now celebrate as Cold War II.

The reluctance falls far short of a major rift in the Western alliance or of a significant victory for Russian president Vladimir Putin. But with continuing reverberations from Edward Snowden’s revelations of US spying on its European allies, the strains persist, and they do so even after the anti-Russian media blitz following the shooting down of a civilian aircraft with the loss of as many as 298 lives, most of them European.

In other words, the tragic end of MH17 has not become the game changer that Washington proclaimed it to be. What this might mean for the future remains unclear, but the continuing resistance of many Europeans to join a full-fledged, Washington-led Cold War crusade needs to temper any serious global perspective.

Take a close and nuanced look at the convoluted stance toward Russia that the Europeans are formalizing this week with grudging “attaboys” from Washington. According to Reuters and the Financial Times, the EU will freeze the assets of and ban travel by high-ranking Russians, including the heads of Moscow’s security and foreign intelligence services. The Europeans blame these officials for threatening Ukraine’s sovereignty and national integrity by annexing Crimea and by backing – both openly and covertly – the dwindling pro-Russian die-hards fighting a losing civil war in Eastern Ukraine.

Through NATO, the Europeans have backed the nationalist government in Kiev in overwhelming the insurgents with sustained air and ground attacks that began in April.

The asset freezes and visa bans also target insurgent leaders, whom the Europeans blame for shooting down the Malaysian airliner with Soviet-era Buk or possibly more powerful S-300 surface-to-air missiles. Pro-Russian fighters and the Ukrainian army both had access to such weapons, though both sides appear to have lacked sufficient training to identify targets and fire the missiles properly.

Judging from accounts in well-placed media like The Economist, the European leaders have largely based their accusations against the pro-Russians on unsubstantiated claims from US and Ukrainian intelligence. These include satellite photos that Washington has not made public and audio recordings that the Ukrainian SBU says are between pro-Russian insurgents and Russian intelligence officers.

Moscow disputes all this and its state-owned Voice of Russia has specifically charged that the Ukrainians spliced together the audio from previous recordings. “The audio recording is not an integral file and is made of several fragments,” sound and voice analyst Nickolai Popov told VOR. An independent international investigation could easily confirm or reject Popov’s claim, but while the Europeans seem unlikely to pursue such a course on their own, EU leaders sound less gung-ho about Washington and Kiev’s claims and more open to hearing Russia’s rebuttal than is the Obama administration.

Like Washington, the EU will stop short of directly penalizing Putin, hoping they can entice, cajole, or force him to strike a bargain by turning his wealthy supporters against him. But, far more than Washington, the Europeans appear to believe that some sort of rapprochement is possible. They also see it as in the best interest of the Ukrainian oligarchs, whom they helped bring to power in Kiev with an aggressiveness that most Americans would not expect of the supposedly milquetoast Europeans. The wonderfully acerbic Peter Hitchens, a right-wing curmudgeon and brother of the late Christopher Hitchens, nailed the point in London’s Sunday Mail.

“The aggressor was the European Union, which rivals China as the world’s most expansionist power, swallowing countries the way performing seals swallow fish (16 gulped down since 1995),” he wrote. “Ignoring repeated and increasingly urgent warnings from Moscow, the EU – backed by the USA – sought to bring Ukraine into its orbit. It did so through violence and illegality, an armed mob and the overthrow of an elected president.”

(For supporting evidence, see my “Meet the Americans Who Put Together the Coup in Kiev,” Part I and Part II, and specifically note the key financial contributions from the Dutch and British embassies in Kiev and the Swedish International Development Cooperation Agency.)

Under mounting pressure from Washington that began well before the shoot-down of the Malaysian airliner, the Europeans have agreed to curtail Russian access to arms, high-tech goods, and capital markets on which the former Soviet economy now relies. But these sector-wide sanctions will apply only to future contracts, leaving the French free to complete the sale of two Mistral-class helicopter attack ships to the Russian Navy. Nor will they disturb too much of Germany’s lucrative trade with Russia or Europe’s continuing dependence on Russian natural gas.

If all this seems a classic of diplomatic ingenuity, it is, guaranteeing that Washington will continue to push the Europeans, who will continue to play Pig in the Middle.

A veteran of the Berkeley Free Speech Movement and the New Left monthly Ramparts, Steve Weissman lived for many years in London, working as a magazine writer and television producer. He now lives and works in France, where he is researching a new book, "Big Money and the Corporate State: How Global Banks, Corporations, and Speculators Rule and How to Nonviolently Break Their Hold."

Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.