Updated: Jun 16, 2019
No time to read? Listen to the audio version on the podcast!
Here‘s the problem: Walmart pays enough money to keep its employees off of food stamps.
Let’s go through the numbers.
The starting wage at Walmart is $11 an hour, so we’ll use that entry wage to base the rest of our calculations, even though many at Walmart make much more than that.
The minimum requires for SNAP are in the photo below-
At $11 an hour, a one-person household would need to maintain 30.2 hours a week, or 121 hours a month to stay off of government assistance.
$11 x 121 = $1,331
A two person household has it a bit easier. Each person would only need to maintain 81.5 hours a month to stay above the threshold.
($11 x 81.5)2 = $1,793
You can see the math continue to play out as the household size gets bigger and bigger.
So what’s the catch? Clearly Walmart employees are receiving millions in government benefits, so there must be an issue.
There are two things causing this to play out differently in the real world, giving lawmakers like Bernie Sanders and Alexandria Ocasio-Cortez a reason to tweet.
1- There are households with 4 people and only one person working.
2- Many people are working less than the amount of hours required to stay off of assistance.
We'll start with reason number one. Many people are living in single parent households, or even two-parent households with only one person working. This is where the math shows the side of BS and AOC. A four person household has to hit $2,720 monthly to cross the threshold for most government assistance. If there is only one person working in the household and they work at Walmart, they will have to work 248 hours, or 62 hours a week to stay out of SNAP requirements.
There are numerous ways to approach this situation. On one hand, If this is a single-parent with three kids, it's tough to say that working 62 hours would be a piece of cake, or a matter of sheer will. That would equal roughly 10 hours a day throughout the week, and an additional 12 hours on the weekend. Obvious first question: Who's going to take care of the three kids? Maybe you have family, or maybe you can deliver food for UberEats all night (making $15/hour) while your kids ride along in the car. For right now we'll assume neither of those are options.
What is the duty of an employer, and what is the duty of a parent? My principled stance tells me that if you are going to have kids, you better have your life in order. On the flip side, is it actually the job of an employer to pay it's employees based on the number of (potentially) irresponsible decisions they've made in their lives?
If we go down the path of basing minimum pay on statistically rare situations, we run into a slippery slope. Let's say it's an outrage that a single mother of 2-3 children cannot afford to live on the 25 hours a week she's getting at Walmart. In that case, Walmart needs to pay around $16 an hour to this single mother. Quick question, how will the single mother's net worth compare to a single person living on their own and making the new $16 minimum wage? Seems like something the left will use to scream "inequality!" Presumably the single mother would barely get by, and the single person household would have money saved up at the end of the year.
If Walmart needs to pay a minimum for a single mother of 2-3 to live on, what do you say to the single mother of 4-5 that works at Walmart? Tough? Shouldn't have had so many kids? There's that slippery slope we were talking about. We've now opened it up for a companies minimum pay-scale to be based completely on the living situation of each individual worker. Or- We need to raise the minimum wage to the point that it covers the person with the worse and most unfortunate living situations to live a comfortable life. What if your life schedule dictates that you can only work 15 hours a week? They'll need to pay you $30 an hour to keep you off food stamps.
That brings us to reason number two.
Many people are simply not working enough hours to stay off of government assistance. As I stated above, you need to work 31 hours a week to stay off of SNAP. The implication of statements made by Bernie Sanders and other alt-left leaders is that you should be able to work whatever amount of hours you can work, and not be on food stamps. What if you can only work 10 hours a week? Is it Walmart's job to ensure that a college student working 10 hours a week will make enough money to stay off of government assistance? That would require Walmart to pay a minimum wage of $33 an hour.
Now we run into our slippery slope again. Is it the duty of the employer to guarantee that someone working part-time will make enough money to live on? If you're working 35 hours a week and see that they've made it so a worker clocking 10 hours a week can get by, why would you work 35 hours? The answer, is you wouldn't.
Half of Walmart's employees are "part-time" workers. That number has continued to increase. Maybe the partial culprit is the Affordable Care Act, which defines "full-time" as someone who works more than 30 hours per week, requiring the business to offer health insurance. Even at the current pay-scale, Walmart is only making a net 1.8% profit margin yearly.
I'll leave it at that. Walmart has become an easy company to demonize over the years, but when you step back and dig into the numbers, maybe they aren't really that bad. There's an argument to be made that they can afford to pay $1-2 more per hour, but to me this entire conversation misses the real problem.
What we tax, we get less of, and what we subsidize, we get more of. What are the long-term societal effects of subsidizing bad decisions?