Sanders Says Walmart Pays Workers 'Starvation Wages,' Taxpayers Make Up Difference

Senate Budget Committee Chairman Bernie Sanders of Vermont said Walmart pays employees "starvation wages," on the heels of an announcement the company will increase pay to $15 per hour for only some employees.

"Walmart pays wages so low that tens of thousands of their workers are forced to rely on public assistance in order to survive," Sanders said Thursday in a meeting of the Senate Budget Committee. "They are forced to rely on food stamps to feed their families, paid for by the U.S. taxpayer; public housing to put a roof over their heads, paid for by the U.S. taxpayer; and Medicaid to get the health care they need paid for by the U.S. taxpayer."

Sanders opened the committee's meeting by asking why so many low-wage workers in America depend on government benefits when they work for large companies—and why taxpayers are therefore forced to "subsidize" low-wage workers on behalf of corporate employers.

He used Walmart as an example, stating the corporation, which made over $15 billion in profits last year, pays its workers at a rate so low "no one in America can live with dignity," pushing them to rely on federal programs.

Sanders argued a universal lift to the federal minimum wage as a solution. A $15 federal minimum wage would help annual government expenditures fall by as much as $31 billion, according to the Economic Policy Institute. If the federal minimum wage went up to $15 by 2025, reduced annual expenditures on Supplemental Nutrition Assistant Program would range from $3.3 billion to $5.4 billion. Earned income tax credit and children tax credit spending would decline between about $7 billion and $21 billion annually.

The Budget Committee is this morning holding a hearing on a simple question: Why should the taxpayers of this country subsidize starvation wages at some of the largest and most profitable corporations in America? https://t.co/aAiRhaMSQy

— Bernie Sanders (@SenSanders) February 25, 2021

The company Sanders held in question has made initial moves to address low pay. Earlier this month, Walmart announced a wage raise that will affect about 425,000 workers nationwide by March 13. However, many of the company's workers will continue to earn roughly $11 an hour, AS reported.

"We do think the federal minimum wage should go up," Walmart CEO Doug McMillon said in an interview with CNBC on February 18. "$7.25 is too low."

Once the wage change is made, half of Walmart's total hourly workers in the U.S. will be making $15 an hour or above, Bruce Harris, Walmart's vice president for federal government affairs, wrote to Sanders on February 19 in response to the senator's invitation to appear before the committee. A copy of the message was provided to Newsweek.

Walmart announces it will raise pay for workers to an average above $15 an hour, giving a boost to 425,000 employees. And CEO Doug McMillon says the federal minimum wage should go up: "$7.25 is too low." https://t.co/mAC7v3M8Qh pic.twitter.com/F26DkbZPgQ

— CNBC (@CNBC) February 18, 2021

Sanders argued on Thursday that $15 an hour should be put in every worker's pocket, not just a few. He compared Walmart's actions to Costco, Amazon, Target and BestBuy, all large corporations that have shifted their minimum wage to $15 an hour. Meanwhile, he said, 760,000 Walmart workers make less than $15 an hour.

"The simple truth is that no one in America can live with dignity on $11 or $12 an hour," Sanders said. "And I must say that I have talked to too many workers in this country who, with tears in their eyes, tell me the struggles they have to provide for their kids on starvation wages. Today, we are going to ask how Walmart can afford to pay its CEO, who declined my invitation to be with us today, over $22 million in compensation last year, but somehow cannot afford to pay its workers a living wage."

Harris maintained in the email to Sanders that through education, health care and professional training benefits, the company was working to offset employees costs and promote a higher standard of living.

"By removing barriers to entry, Walmart gives individuals the chance to join the workforce, and learn important and transferable job skills while earning a paycheck," Harris said. "A small percentage of our workforce may come to us on public assistance, and we welcome them. We hire them, train them and give them the chance to earn a paycheck—and we are immensely proud of their work and their continued efforts to successfully support themselves and their families."

Sen. Bernie Sanders
Senator Bernie Sanders of Vermont said Walmart pays its workers "starvation wages," amid move by company to raise wages for only some employees to $15 an hour. Sanders speaks during a hearing on Capitol Hill examining wages at large profitable corporations February 25. The committee is looking at why many low-wage workers in America qualify for public benefits even though thousands of them are employees of large corporations Susan Walsh-Pool/Getty Images

Sanders' statement to the committee comes amid the chamber's debate on the Raise the Wage Act, which would legislate the $15 federal minimum wage and, according to the Congressional Budget Office, lift nearly a million Americans out of poverty.

The issue remains a key point of debate in Congress as lawmakers discuss President Joe Biden's $1.9 trillion American Rescue Plan, which Biden has pledged will include the wage hike. The House passed new $15 minimum earlier this month, and now it's up to the Senate.

Progressives like Sanders who support the $15 option are now up against a GOP bill to raise the federal minimum wage to only $10 by 2025. The Higher Wages for American Workers Act is based on data from the Congressional Budget Office that says an increase to $15 an hour would lead to mass unemployment—a statistic Sanders rebuked in his statement Thursday.

"Study after study has shown that a gradual increase in the minimum wage does not lead to increased unemployment," Sanders said. "In fact, a review of 138 minimum wage increases at the federal, state and local level since 1984 published in the Quarterly Journal of Economics found no evidence that these laws reduce employment. Zero."

Sanders also made it clear that a $15 wage rate would help workers at big corporations like Walmart as much as small businesses: "I am also sympathetic to providing small businesses with the tax relief that they need to offset some of the increased labor costs associated with a minimum wage increase—just as Congress has done virtually every time that it has increased the minimum wage."

Newsweek has reached out to Sanders for comment.