Liberals hail big labor unions and the government as the savior to the poor and Walmart as the evil corporation keeping people in poverty. Let’s examine the reality of this flawed hypothesis.
Walmart made 15.7 billion dollars in profit last year (about $7100 per employee). Meanwhile, the federal government is over 16 trillion dollars in debt (about 51 thousand per person). Last year the federal debt was equivalent to 4,000 dollars per person. And this does not include billions in state debt or unfunded liabilities. Remember, the more revenue and profit Walmart collects, the more they pay in taxes, and the more capital and equity they have to expand and hire new employees. Does it make sense to pay higher benefits to Walmart employees, but employ fewer people?
Walmart paid 7.1 billion in taxes last year (about $3,300 per employee). On the other hand, union member dues are tax free and therefore, unions only have to pay taxes on their investments and what they pay employees. Union leaders live lavish lifestyles like corporate CEOs. Many large unions own billions in assets such as owning Lear Jet. Yet, the taxes they pay are far less than 500 dollars per member. In fact, all so called non-profits in the U.S. accounted for 1.7 trillion in revenues last year (about 12% of our national GDP and 3 times the size of Walmart) and pay little in taxes.
Walmart paid nearly 1 billion dollars in charitable contributions in 2011 (nearly $450 dollars per employee). Information is not readily available on union charitable contributions (for good reason, I do not think they give to charities).
Walmart paid about $3.50 per person on lobbying and campaign contributions this year (Romney and Obama nearly split evenly). Most large unions pay anywhere from $50 to $300 dollars per member on lobbying and campaign contributions (favors Democrats by over 20 to 1 margin).
State and federal governments will fund nearly 1 trillion dollars into anti-poverty programs in 2013 (6% of GDP). There are 50 million people living in poverty meaning this is equivalent to paying each person living in poverty $20,000 annually. The poverty rate for a family of 3 is just under 19,000 dollars hence a family of 3 living solely on welfare should receive nearly $60,000 annually – more than the U.S. annual income of $51,000. Therefore, there is ample tax revenue for state and local governments to wipe out poverty. However, since 50 million people still live in poverty we can assume the most a family of 3 living solely on welfare may collect is about 18,000 dollars annually. Therefore, at best, only 30% of government anti-poverty spending makes it to the people who need it. Think about it; if the government employed 100,000 people to administer theses hundreds of anti-poverty programs, and if we assume government overhead is 50%, then these employees would collect $350,000 annually. But we know employees are not earning $350,000 annually, this simply illustrates how inefficient and wasteful the government is. So the question is where does all this money go? This is similar to education conundrum. Each class in a public school receives about $250,000 annually, but less than 40 percent goes to teachers. Where does the remaining 60% go? Administrators, special curriculum, workers, overhead, and upgrades certainly cannot account for 60% of education costs? This is criminal.
Walmart pays the average associate employee about $24,000 annually which includes salary, store discounts, bonuses, profit sharing, 401K contributions, and healthcare premiums. This is more than a family of 3 would receive from anti-poverty programs.