Wal-Mart Encourages Poverty Looks to Low-Income Families to Bolster Profit

Wal-Mart, povertyThe Supplemental Nutrition Assistance Program (SNAP), which includes the federal Food Stamp Program and other need-based assistance programs such as WIC (The Special Supplemental Nutrition Program for Women, Infants, and Children) are highly regarded by Wal-Mart. In fact, Wal-Mart encourages poverty because the company looks to low-income families to help bolster their profits.

A 2012 study called Are Corporations Profiting from Hungry Americans conducted by Michele Simon, reviewed nine Wal-Mart supercenters located in Massachusetts. The numbers were staggering and spoke for themselves. In one year alone, those nine stores collected more than $33 million worth of revenue from customers who participated in the Supplemental Nutrition Assistance Program (SNAP).

According to the Food Research and Action Center, as of November 2013, more than 47 million Americans were actively participating in nutrition programs, which is equal to one in every seven Americans. In total, the U.S. Treasury funded $76 billion to the Food Stamp Program in 2013 alone. That money was then dispersed as revenue to more than 240,000 stores nationwide who have been approved to accept EBT cards. Of that $76 billion, sources say, Wal-Mart was able to snag a hefty 18 percent, which amounts to nearly $14 billion in revenue for 2013 from SNAP. And while not everyone shops at Wal-Mart, that does not stop the company from hoping they will or doing everything they can to encourage those low-income, poverty level families to do business with Wal-Mart because they depend on them to help bolster their profit margins.

Stacy Mitchell, a senior researcher at the Institute for Local Self-Reliance referenced a study conducted by Penn State saying that Wal-Mart has single handedly “done, perhaps, more than any other corporation to push people into poverty.” Mitchell went on to say that anytime Wal-Mart opens a store, the poverty rates in that area are adversely affected, and thanks to Wal-Mart’s business model, people feel “squeezed” leaving many to feel that shopping at Wal-Mart is their only option.

All publicly held companies, in adherence to securities regulations, must include a cautionary statement detailing those things that could potentially put their business at risk. Wal-Mart, in their Jan. 31 annual report, noted that their business operations were “subject to numerous risks, factors, and uncertainties.” Among the long laundry list of things that Wal-Mart considered as potential risks to their operation were “changes in the amount of payments made under the Supplemental Nutrition Assistance Plan, other assistance programs, and changes in the eligibility requirements of public assistance plans.”

For the first time, this admission proves that Wal-Mart encourages poverty and looks to low-income families to bolster their profits. In fact, according to sources, Wal-Mart does not just depend on low-income families to bring in profits; they help keep people in those low-income brackets by paying their employees poverty wages and then encouraging them to take advantage of the many assistance programs available to low-income families. In turn, those employees use their assistance dollars to shop at Wal-Mart, and they too help bolster the company’s profits.

While Wal-Mart is not doing anything wrong, from a legal standpoint, by appealing to low-income families, it is sad that the only way America’s largest private employer can pull a profit is to encourage poverty and look to low-income families to bolster their bottom line. It is hard not to frown on their blatant disregard for the hardships of others and the fact that they capitalize on those people’s weaknesses.

Opinion By Donna W. Martin


Common Dreams
International Business Times
Food Research and Action Center

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