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Walmart Supports Raising Public Food Benefits -- For Its Own Profit

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WALMART
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They say politics makes strange bedfellows. They also say poverty is just another profit opportunity, at least over at Walmart.

Walmart supports an increase in the Supplemental Nutrition Assistance Program (SNAP, i.e., food stamps) benefits, to erase the cuts Congress voted into place last fall. Does Walmart really care more about the fate of about hungry children than does Congress? Um, not really. Walmart has instead acknowledged publicly that federal cuts to food stamps are a threat to its bottom line.

Poverty Pays

In its required 10K filing with the Securities and Exchange Commission (SEC) Walmart was oddly blunt about what the SNAP cuts may do to its bottom line:

Our business operations are subject to numerous risks, factors and uncertainties, domestically and internationally, which are outside our control. These factors include... changes in the amount of payments made under the Supplemental Nutrition Assistance Plan and other public assistance plans, [and] changes in the eligibility requirements of public assistance plans.

According to Walmart's Chief Financial Officer Charles Holley, the company didn't anticipate how much cuts to such programs would affect it. Reductions to the Supplemental Nutrition Assistance Program that went into effect on November 1, 2013, ironically first day of Walmart's fourth fiscal quarter, led to a between $1 and $36 reduction in SNAP benefits per household, or up to $460 a year. Walmart knows its customers -- poor people with even less money -- simply can't buy enough to keep corporate profit high.

Follow the Money

How much profit? While Walmart does not break out sales paid for with SNAP, it looks like big bucks.

In a study entitled "FOOD STAMPS: Follow the Money," researcher and public health attorney Michele Simon established:

  • In one year, nine Walmart Supercenters in Massachusetts together received more than $33 million in SNAP dollars--over four times the SNAP money spent at farmers markets nationwide;
  • In two years, Walmart received about half of the one billion dollars in SNAP expenditures in Oklahoma;
  • One Walmart Supercenter in Tulsa, Oklahoma received 15.2 million while another (also in Tulsa) took in close to 9 million in SNAP spending.

Simon's research also found out that bank JP Morgan Chase is also profiting heavily off the electronic bank transfer-based SNAP program. Morgan has contracts for the SNAP electronic benefits transfer services in 25 states. In Florida, Morgan Chase has a five-year contract worth about $83 million. In New York, a seven-year deal that originally paid Morgan Chase $112 million for services was recently amended to add another $14.3 million, a nice 13 percent increase.

All this money in play affects a lot of Americans. 2011 saw a new record enrollment in SNAP, 1 of every 7 Americans.

Walmart Want to Keep Selling Sugary Soda as Food

But back to Walmart. Not only does Walmart want SNAP money, it also wants to keep as many of its products SNAP-eligible as possible. The Department of Agriculture must certify an item as available for purchase with food stamps; some long-term no-no's include alcohol, tobacco and many prepared foods. Yet the top three food vendors in terms of SNAP-money received are Coca-Cola (who makes Coca-Cola), Kraft (of highly processed foods fame), and Mars (the candy and snack food maker.) Walmart has joined those companies to lobby the Department of Agriculture, and Congress, against any measures that would restrict SNAP use to more healthy food choices.

Since Congress has been debating the soda-food stamps question on and off since 1964, it seems unlikely Walmart and the others have much to fear.

SNAP Funds Your Everyday Low Prices at Walmart

As reported previously here, one of the main reasons why Walmart can sell things cheap is that it gets away with paying below a living wage because you, the taxpayer, subsidize the employees' wages. The gap between what the majority of employed people earn through the minimum wage at places like Walmart, and what they need to live a minimum life, is made up by federal and state benefits. A report from UC Berkeley's Center for Labor Research and Education found that, "Nearly three-quarters of enrollments in America's major public benefits programs are from working families." They work in jobs that pay wages so low that their paychecks do not generate enough income to provide for life's basic necessities.

And it is not just Walmart. The same report found: "The cost of public assistance to families of workers in the fast-food industry alone is nearly $7 billion per year." That money, which might rightly be paid by McDonald's and Burger King and KFC, is instead paid by the taxpayers, money lenders to a government that is far more interested in subsidizing business than in caring for the nation as a whole.

This Land is Your Land

America is indeed the land of opportunity; where else in the world can the collusion of government and corporate interests create both a major lobbying effort to increase food aid to America's poor, while at the same time fleecing taxpayers so that large corporations can further monetize poverty? Exceptional, indeed.