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Walmart Buys Back $20 Billion In Company Stock Instead Of Raising Wages

Walmart announced a $20 Billion stock buyback yesterday.

From Business Insider: Walmart is using the oldest trick in the book to boost its stock price

$20 Billion is a whole lot of money.

  • It’s equal to almost $8,700 per full-time Walmart employee.[i]
  • It’s more than three times what taxpayers spend each year on health care, food stamps and other forms of public assistance for Walmart employees.[ii]
  • It’s 50% more than Walmart’s total profits last year.[iii]
  • It’s equal to about half of the company’s total long-term debt.[iv]

And Walmart directors have decided to spend all that money buying back shares of their own corporation’s stock.  Which doesn’t really do anything other than condense corporate ownership.

2005 photo of the Rev. Billy Talen leading the “Stop Shopping Choir”
by J.L. Sousa/Times-Herald Creative Commons license via Flickr

So rather than paying better wages to employees, or allowing more employees access to the company’s health insurance, or hiring more employees, or even just paying off corporate debt… Walmart directors want to spend $20 billion on reducing the number of shares of stock.

It’s all a question of priorities.  And condensing corporate ownership has been one of Walmart’s priorities for at least a decade.  Walmart has “repurchased” almost 30% of its shares since 2005.[v]

While taxpayers have been paying billions of dollars each year in public assistance to Walmart employees.

While Walmart employees have had to ask for public assistance, just to make ends meet for their families.

As the “Fight for Fifteen” movement[vi] continues, it’s worth asking:

If Walmart can afford $20 billion for more stock buybacks, why isn’t it already paying better wages to employees?

————

[i] https://finance.yahoo.com/quote/WMT/profile?p=WMT
[ii] https://www.forbes.com/sites/clareoconnor/2014/04/15/report-walmart-workers-cost-taxpayers-6-2-billion-in-public-assistance/
[iii] “net income” https://finance.yahoo.com/quote/WMT/financials?p=WMT
[iv] https://finance.yahoo.com/quote/WMT/balance-sheet?p=WMT
[v] http://www.macrotrends.net/stocks/charts/WMT/shares-outstanding/wal-mart-stores-shares-outstanding-history
[vi] http://fortune.com/2016/06/11/walmart-minimum-wage-study/

You Will Not Believe What Wal-Mart is Doing

Image via WikiCommons

Image via WikiCommons

You have got to be kidding me.  

Wal-Mart is rewarding associates who donate money to the Wal-Mart PAC, which works to elect candidates like Speaker John Boehner and Senator Ted Cruz who vehemently oppose raising the minimum wage.

In this excellent article (Wal-Mart’s Unusual Rewards for Employees Who Give to Its PAC) by Josh Eidelson, he reports:

“Liberal groups and a union-backed Walmart worker group are asking the Federal Election Commission to investigate Wal-Mart Stores’ (WMT) policy of rewarding contributions to its political action committee with donations to charity. Under the policy, every $1 an employee donates to Wal-Mart’s PAC, which supports such probusiness candidates as Ohio Republican House Speaker John Boehner, Texas Republican Senator Ted Cruz, and Arkansas Democratic Senator Mark Pryor, triggers a $2 donation to a charity for Wal-Mart employees in need.”

Using charitable contributions to reward PAC donations has become a widespread practice among U.S. corporations, which are restricted by law from donating directly to their PACs. At least seven times over the past two decades, FEC commissioners have been divided over whether to restrict companies from matching the political donations with philanthropic cash.

While such companies as Coca-Cola (KO) and Boeing (BA) also match PAC dollars with charity dollars, Wal-Mart’s policy is unusual. Rather than just a 1-to-1 match, it offers 2 to 1. And instead of giving employees a choice of charities to support, it sends all the matching money to its Associates in Critical Need Trust, which benefit employees facing “extreme economic hardship due to situations outside of their control, including natural disasters.”

That’s right, for every one dollar that workers give to the Wal-Mart PAC, the corporation will donate two dollars to their own charity organization for workers who are suffering financial difficulties.

The Associates in Critical Need Trust is a 501 (c)(3) charity that provides “up to $1,500 to employees facing challenges such as homelessness or illness.”

Here are three suggestions for Walmart. 1) Start by paying your workers a living wage so they aren’t forced into homelessness. 2) Provide workers with paid sick time so they can heal without the fear of losing their job for being sick. 3)  Provide workers with healthcare so they will not be forced into financial ruin when they become sick or injured. (Note: Wal-Mart just cut another 30,000 part time workers out of their employee healthcare, but thanks to the Affordable Care Act they can get coverage through their state exchange.)

I hope the FEC tears Wal-Mart apart for violating the Federal Election Campaign Act.

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