Are Walmart’s Prices So Low Because Its Employees Are on Food Stamps?

Commentary about business and finance.
April 2 2014 10:02 AM

“Save Money. Live Better.”

As real wages continue to decline, the food stamp economy is booming.

A cashier waits for customers at a Walmart Supercenter in Rogers, Arkansas June 6, 2013.
A cashier waits for customers at a Walmart Supercenter in Arkansas in 2013.

Photo by Rick Wilking/Reuters

This is the second part of the Marketplace series “The Secret Life of a Food Stamp.” You can listen to the series here.

When Stephanie Ballam finishes her shift at a Walmart Supercenter near Columbus, Ohio, she sometimes picks up a few groceries—items she might have put on the shelves herself hours before: a box of oatmeal, a can or two of mini ravioli.

At the checkout, first she swipes her Walmart employee card to get her store discount. Then, because she doesn’t earn enough money at her job to make ends meet, she will often pay for the groceries with food stamps, using her Electronic Benefit Transfer card. Eventually, that money will show up in Walmart’s annual earnings report as sales.

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Ballam, 31, is glad to have her job at Walmart. She currently works there full-time and just recently got a raise to $9.10 an hour; she thinks the raise might be enough to disqualify her from the food stamp program, though the state hasn’t processed the paperwork yet. For now—and for the last three years since she’s worked at Walmart, plus a few months before that when she was unemployed—food stamps have helped her survive. Back when Walmart first hired her and she found out how much she would be making, hearing the number was “like being punched,” Ballam says. Her starting hourly wage was $7.25. As for food stamps, “I knew that I would still need those services,” Ballam says.

So how typical is Stephanie Ballam's situation? The federal government doesn't keep nationwide data on how many workers at Walmart—or any other company—are on food stamps, which are officially known as the Supplemental Nutrition Assistance Program. SNAP is available to people living at or near the poverty line; for a single person like Stephanie Ballam, that means an annual income of less than about $15,000 a year.

Although there are no federal numbers on where employed SNAP participants work, the state of Ohio, where Ballam lives, does keep a list of the top 50 companies with the most workers and their family members on food stamps. Ohio’s list includes lots of fast food chains and discount and big-box stores: McDonald’s, Target, Kroger supermarket, Dollar General. At the very top is Walmart, which had an average of more than 14,500 workers and family members on food stamps last year.* If you take into account the average size of a family on food stamps, as many as 7,000 individual Walmart employees were on food stamps last year—nearly 15 percent of the company’s workforce across Ohio.

That means the same company that brings in the most food stamp dollars in revenue—an estimated $13 billion last year—also likely has the most employees using food stamps.

“I think it's troubling that any American has to turn to a program like that, but the fact is, they do,” says David Tovar, Walmart’s vice president of communications. I met him at the company headquarters in Bentonville, Ark., where the wall behind the front desk has giant painted letters that spell out the company motto: “Save money. Live better.”

“We would love nothing more than a day when we didn't have to have programs like that,” Tovar continues. “But for now, with the economy the way it is, with customers continuing to struggle the way they are, I think it's really important to be able to help people along the way.”

When looking at the number of Walmart employees on food stamps in Ohio and elsewhere, Tovar stresses the importance of perspective: Walmart is the largest employer in Ohio, and the country, he points out, so its workforce is bound to reflect the country’s current economic realities, including growing rates of food stamp use.

Tovar also quotes a line other Walmart executives have used before him: “It’s really not where you start; it's where you end up.”

But there was a time not so long ago when where you started—even in an entry-level job—could afford you a much different life right at the outset. And that brings us to the Hudson family.

Let's start with Adam Hudson, age 21. Last summer he got a job at a Walmart Supercenter in Dayton, Ohio, as a hardware associate—stocking shelves, organizing displays, and helping customers—making $8.25 an hour.

Until then, he had a pretty low opinion of the food stamp program. “I'd always considered people who use food stamps as just taking advantage of the government,” Hudson says, because they “weren't working hard enough to be able to afford for themselves.”

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