With the Republican-led House and Senate pushing through budget bills, there’s been quite a bit of talk—often perhaps hypocritical—about “healthy” Americans who benefit from Medicaid and food stamps.
Yet, what’s often overlooked is that it’s actually companies, deemed “healthy,” that rely on these programs for years, evading their responsibility to pay workers a living wage. These are what could be considered hidden subsidies.
Some of the major players enjoying this corporate welfare include widely recognized brands like Walmart, McDonald’s, and Amazon. These companies regularly show that a notable percentage of their workforce is dependent on public aid, consistently ranking at the top among large corporations.
It’s almost a contradiction to shout about being against socialism while simultaneously exempting businesses from accountability, leaving individuals vulnerable without a safety net.
Back in 2013, McDonald’s even set up a site aimed at guiding employees on how to access government assistance like Medicaid and food stamps. They ended up shutting it down later that year due to the backlash.
These corporations are certainly making a profit: For instance, Walmart reported a whopping $19.4 billion profit on revenues of $681 billion, while McDonald’s and Amazon earned $8.2 billion and $59 billion, respectively, off revenues of $26 billion and $638 billion.
Meanwhile, millions of workers—many working full-time—still find themselves needing public assistance. In fact, a report from the Government Accountability Office in 2020 highlighted this troubling issue. If the Republican Congress pushes to cut access to these programs even further, many of these individuals might find themselves stuck in a relentless cycle of poverty.
This concern hasn’t received much attention lately, especially since the pandemic caused an expansion of government programs. It’s crucial, however, that these hidden grants are central to the current discussions regarding the GOP budget proposal.
The GOP’s plans indicate drastic reductions to safety nets. Their proposal could cut Medicaid by as much as $863 billion and reduce the federal share of food stamps—or SNAP—by $186 billion. The savings are set to flow predominantly to wealthy individuals and companies that have already reaped enormous benefits from tax cuts granted during Trump’s presidency.
Wall Street is on board with maintaining these tax cuts, which is one reason the stock market is achieving new heights. But it’s worth noting that not everyone in the financial sector agrees.
As Barry Lisortz, a wealth manager, puts it: opposing socialism doesn’t equate to supporting businesses that operate without a social safety net for their workers. If a company relies heavily on public aid for its staff, can it truly claim independence?
Data remains inconsistent regarding the number of workers at large corporations receiving food stamps or Medicaid. But statistics from the Government Accountability Office show that in 2018, around 48% of adult Medicaid participants and 51% of SNAP recipients were working at least 35 hours a week.
The majority of these individuals were employed in the service sector, with a significant portion working for large employers. In some states, workers from a few major companies accounted for nearly 20% of total Medicaid and SNAP enrollments.
Recent findings from Nevada indicate over 380,000 workers registered for Medicaid, reflecting an increase from the previous year, totaling costs of over $1.1 billion for the state.
Amazon, in particular, led the way with over 18,000 of its employees on Medicaid last year, maintaining that top position since 2020. Walmart had previously been at the forefront but slipped to second place.
Amazon claims that public assistance enrollment among its employees isn’t solely about wages, pointing to diverse family situations that can impact eligibility.
Walmart and McDonald’s have asserted that they provide benefits to counterbalance financial pressures on their workforce. McDonald’s offers various perks, including financial counseling and training programs, while Walmart expressed its commitment to supporting associates who receive public assistance.
All three companies have made strides in raising minimum wages over the last few years. Walmart announced an increase to over $17.50 per hour, Amazon initiated a nationwide minimum wage of $15, and McDonald’s raised crew wages up to $17.
Critics of minimum wage hikes often claim that the majority of affected workers are teenagers in their first jobs. However, government statistics show a more complex reality, with many workers being adults across various age groups. With minimum wages as low as $7.25 in some regions and stagnant since 2009, the situation is quite troubling.
The statistics shed light on significant issues within U.S. economic policy, particularly in how Republicans often portray those on Medicaid and food stamps as lazy, even as many are diligently working.
As census data reveals, around 64% of adult Medicaid recipients are employed, and the reasons that others aren’t working vary widely, including caregiving and health issues.
Experts agree that simply cutting Medicaid won’t solve any costs; instead, the GOP budget cuts could leave millions without health insurance while major corporations continue to benefit from public assistance.
This highlights the stark rise in income disparity in the U.S. since the 1970s, with CEO compensation increasingly detached from that of the average worker. Back in 1970, the ratio was about 20:1, peaking at 390:1 in 2000 and currently sitting around 290:1.
At Walmart, McDonald’s, and Amazon, these disparities are even greater. Walmart’s ratio is currently 930:1, while McDonald’s is documented at 1,014:1, reflecting a troubling connection between executive pay and low-wage workers.
Amazon presents an interesting case, as it reported a much lower median employee ratio due to its accounting choices regarding CEO compensation, casting doubt on the transparency of its wage structure.
Are there clearer examples of critique toward American corporate practices than these hidden subsidies that prop up big businesses? In past decades, narratives about welfare queens have obscured the reality of elite corporations benefitting from government support in far more substantial ways.
