We're all footing the bill for bonuses the company's executives pocket and food stamps its underpaid workers obtain for survival.
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By and
Low-income families
weren’t the only ones hurt bycuts to food stamps last fall. Top Walmart executives also
took a hit.
The cutbacks ate into
the discount giant’s sales because so many of its low-income
customers rely on this public assistance program to help pay for their
groceries. And that made it tough for the company’s top brass to meet their
bonus targets.
But that wave of
anxiety didn’t last long. Walmart’s board simply rejiggered bonus criteria so
that executives could still reap “performance” payouts, The New York
Times reported.
Another, lesser-known
reason is that corporations actually have a perverse incentive for overpaying
top-level executives. This is due to a tax loophole that allows corporations to
deduct unlimited amounts from their federal income taxes for the cost of
so-called “performance pay” for executives. The more corporations pay top
officers, the less they pay Uncle Sam.
Guess who makes up the
difference? Taxpayers.
A new report we co-authored for the Institute for Policy Studies
and Americans for Tax Fairness calculates just how much this bonus loophole
benefits Walmart. For example, we found that Mike Duke, the big box retailer’s
recently retired CEO, pocketed nearly $116 million in exercised stock options
and other “performance pay” between 2009 and 2014. That translates into a
taxpayer subsidy for Walmart of more than $40 million.
By lowering the
performance bar for Walmart’s executives, the company’s board has kept the
bosses happy and secured a nice big tax break. Consider the tradeoff here: This
$40 million subsidy could have covered the average cost of food stamps for
4,200 people over that six-year period.
Congress should end
this subsidy for bonuses at the top of Walmart and other publicly held U.S.
corporations, which costs $50 billion over 10 years, by simply eliminating
the “performance pay” loophole.
Meanwhile, the
government is continuing to gut food stamp benefits. As part of a Farm Bill
compromise this year, lawmakers agreed to reduce the program’s benefits by an
average of $90
a month for 850,000
families.
Walmart’s low-wage
workers are likely to be among those affected. Near-poverty wages and part-time
schedules have forced the company’s own employees to rely on $6.2 billionworth of food stamps and other
taxpayer-funded benefits per year, Americans for Tax Fairness estimates.
For a company that
hauled in $16 billion in profits last year, this is shameful.
Walmart’s workers are
speaking out more than ever before. In the past two years, about 1,000 Walmart
stores have faced strikes or rallies for better pay and working conditions. In
January 2014, the National Labor Relations Board charged the corporation with illegally
disciplining and firing workers who participated in these actions.
Barbara Collins, a
single mother from Placerville, California, wrote in Salon about
her decision to join strike actions after struggling for years to make ends
meet while earning $12.05 an hour as a Walmart stocker. For years, she was
never guaranteed a 40-hour workweek. During some weeks she worked as few as
eight hours. Following a confrontation with a Walmart board member about the
company’s poor pay and working conditions, she got fired.
Despite the
intimidation, Walmart workers and their allies are organizing a new round of strikes that began before the corporation’s
June 6 annual shareholder meeting
Taxpayers should
support these workers by demanding an end to subsidies for Walmart’s
inexcusable pay practices — at both the bottom and the top.
Sarah Anderson directs
the Global Economy Project at the Institute for Policy
Studies, and Frank Clemente is the executive director of Americans for Tax Fairness. They wrote Taxpayers Subsidize Walmart Execs, a new
report. Distributed via OtherWords.org
