Millions of U.S Workers for Walmart, McDonald’s and Other Corporate Giants Rely on Food Stamps and Medicaid

A new report commissioned by Bernie Sanders shows that corporations are soaking up profits—while paying workers so little they depend on government assistance to survive.

Jeff Schuhrke

(Photo by Joe Amon/The Denver Post via Getty Images)

Mil­lions of full-time, adult work­ers in the Unit­ed States — many of them employed by Wal­mart, McDonald’s and oth­er high­ly prof­itable cor­po­ra­tions — are paid wages so low they’re forced to rely on pub­lic assis­tance to make ends meet. 

That is the key find­ing of a new­ly released report by the non­par­ti­san Gov­ern­ment Account­abil­i­ty Office (GAO). Com­mis­sioned by Sen. Bernie Sanders (I‑Vt.), the report ana­lyzed data from 15 agen­cies admin­is­ter­ing Med­ic­aid and the Sup­ple­men­tal Nutri­tion Assis­tance Pro­gram (SNAP, or food stamps”) across 11 dif­fer­ent states. 

For all 15 agen­cies, Wal­mart was in the top four employ­ers of Med­ic­aid enrollees and SNAP ben­e­fi­cia­ries, while McDonald’s was in the top five for 13 of the 15 agencies.

Oth­er major retail­ers and fast-food com­pa­nies were found to be among the most com­mon employ­ers of work­ers receiv­ing Med­ic­aid and SNAP, includ­ing Dol­lar Tree, Dol­lar Gen­er­al, Tar­get, Ama­zon, Burg­er King, Wendy’s, Taco Bell, Home Depot, Lowe’s, Wal­greens and CVS. Rideshare ser­vice Uber — which recent­ly spent mil­lions of dol­lars suc­cess­ful­ly defeat­ing a Cal­i­for­nia law that would have made its dri­vers eli­gi­ble for basic work­er pro­tec­tions and ben­e­fits — was also ranked among the top 15 employ­ers of work­ers on pub­lic assistance.

At a time when huge cor­po­ra­tions like Wal­mart and McDonald’s are mak­ing bil­lions in prof­its and giv­ing their CEOs tens of mil­lions of dol­lars a year, they’re rely­ing on cor­po­rate wel­fare from the fed­er­al gov­ern­ment by pay­ing their work­ers star­va­tion wages,” Sanders said of the report. That is moral­ly obscene.”

The new GAO report echoes the con­clu­sions of sim­i­lar stud­ies by the Uni­ver­si­ty of Cal­i­for­nia, Berke­ley Labor Cen­ter in 2013 and 2015, which found that U.S. tax­pay­ers are sub­si­diz­ing large cor­po­ra­tions to the tune of $153 bil­lion per year in the form of pub­lic assis­tance pro­grams to sup­port their low-wage employees.

It is time for the own­ers of Wal­mart, McDonald’s and oth­er large cor­po­ra­tions to get off of wel­fare and pay their work­ers a liv­ing wage,” Sanders added.

The fed­er­al min­i­mum wage has been stuck at $7.25 an hour since 2009. While a major­i­ty of states have raised their respec­tive min­i­mum wages above the fed­er­al floor in the past decade, 21 states have not. Thanks to union-dri­ven cam­paigns like the Fight for $15 and Unit­ed for Respect (for­mer­ly OUR Wal­mart), eight states and mul­ti­ple cities have enact­ed grad­ual increas­es to a $15-per-hour min­i­mum wage in recent years. And on Novem­ber 3, vot­ers in Flori­da over­whelm­ing­ly approved a mea­sure to raise their state’s hourly min­i­mum wage to $15 by 2026.

Last July, the Demo­c­ra­t­ic-led House of Rep­re­sen­ta­tives passed a bill to increase the fed­er­al min­i­mum wage to $15 an hour, but the leg­is­la­tion went nowhere in the Repub­li­can-con­trolled Sen­ate. Pres­i­dent-elect Joe Biden sup­ports a fed­er­al increase to $15, but whether or not such a bill can get to his desk in the near future like­ly depends on the out­come of Georgia’s Jan­u­ary 5 runoff elec­tions, which will decide which par­ty gains con­trol of the U.S. Senate.

In Geor­gia — where vot­ers will soon deter­mine the short-term fate of the $15 fed­er­al min­i­mum wage — the offi­cial state min­i­mum wage is a mere $5.15 an hour, with employ­ers only required to pay $7.25 because of the fed­er­al leg­is­la­tion passed over a decade ago. Accord­ing to the new GAO report, over 143,000 work­ing adults in Geor­gia depend on SNAP ben­e­fits and over 208,000 rely on Medicaid. 

Besides rais­ing the nation­al min­i­mum wage, the GAO’s find­ings also indi­cate the need for fed­er­al leg­is­la­tion allow­ing ser­vice sec­tor work­ers the right to union­ize with­out employ­er inter­fer­ence. After all, the ral­ly­ing cry of fast-food and retail work­ers in recent years has been “$15 and a union.” Because they are orga­nized and can bar­gain with their employ­ers, union work­ers on aver­age earn high­er wages and have greater ben­e­fits than their nonunion counterparts. 

In Feb­ru­ary, the House of Rep­re­sen­ta­tives passed the Pro­tect­ing the Right to Orga­nize (PRO) Act, which would allow work­ers to win union recog­ni­tion through card check” and remove var­i­ous cor­po­rate-friend­ly legal bar­ri­ers to union­iza­tion. But as with the $15 min­i­mum wage bill passed last year, the PRO Act died in the GOP-dom­i­nat­ed Senate.

Impor­tant­ly, the data used in the new GAO report was gath­ered in Feb­ru­ary, before the coro­n­avirus pan­dem­ic began. Since then, with tens of mil­lions of jobs lost, the already mea­ger social safe­ty net has been stretched to the break­ing point. The tem­po­rary and lim­it­ed eco­nom­ic relief pro­vid­ed by the fed­er­al CARES Act in late March has long since dried up, with no new relief pack­age in sight. 

Mean­while, food inse­cu­ri­ty has more than dou­bled from 8.5 per­cent of all U.S. house­holds before the pan­dem­ic to 23 per­cent, and at least 8 mil­lion more Amer­i­cans have fall­en into pover­ty since May. More than 12 mil­lion U.S. work­ers and their fam­i­ly mem­bers have lost their employ­er-spon­sored health insur­ance in the midst of the pan­dem­ic, rein­forc­ing wide­spread calls to enact a sin­gle-pay­er, Medicare for All health­care system.

No one in this coun­try should live in pover­ty. No one should go hun­gry. No one should be unable to get the med­ical care they need,” Sanders said. It is long past time to increase the fed­er­al min­i­mum wage from a star­va­tion wage of $7.25 an hour to $15, and guar­an­tee health care to all Amer­i­cans as a human right.”

Jeff Schuhrke has been a Work­ing In These Times con­trib­u­tor since 2013. He has a Ph.D. in His­to­ry from the Uni­ver­si­ty of Illi­nois at Chica­go and a Master’s in Labor Stud­ies from UMass Amherst. Fol­low him on Twit­ter: @JeffSchuhrke

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