Ironic Philanthropy: Walmart Donates $2B to Fight Hunger

You've got to love the irony of Walmart's latest announcement: the mega-corporation, notorious for its meager employee wages, will donate a whopping $2 billion to hunger relief efforts in the United States over the next five years.

According to Walmart vice president Eduardo Castro-Wright, the stated goal of the project, called "Fighting Hunger Together," is to "reach a day where no individual in this country has to go to bed hungry or worry if there will be food to put on the table tomorrow." It's certainly an ambitious vision; every year, more than 37 million low-income individuals rely on Feeding America, Walmart's on-the-ground partner organization, for their next meal.

But if Walmart is truly concerned about ending hunger, shouldn't the company start by re-evaluating its own role in perpetuating poverty throughout America?

Walmart prides itself on offering the lowest prices around to cost-conscious customers, 42 percent of whom earn less than $40,000 a year. The trade-off is low wages for its employees. The average full-time Walmart employee makes $10.86 per hour, which, when adjusted for inflation, is actually less than the company's typical worker earned in 2004. And despite former CEO H. Lee Scott's claim that Walmart is "creating a better workplace with more opportunity and more benefits than have been available in retail," the mega-chain actually pays somewhere around 30 percent less for its most common retail jobs than the national average.

In fact, this tug-of-war between higher employee wages and "always low prices" is a false dichotomy. A study from the Economic Policy Institute has found that Walmart could raise its wages and benefits, keep prices the same, and still earn a hefty profit. "For example," the researchers explain, "while still maintaining a profit margin almost 50 percent greater than Costco, a key competitor, Walmart could have raised the wages and benefits of each of its non-supervisory employees in 2005 by more than $2,000 without raising prices a penny."

Walmart's words may express a desire to fight hunger, but its actions demonstrate a clear refusal to help its one million U.S. employees escape poverty and enjoy the benefits of economic self-sufficiency. Meanwhile, Walmart executives and shareholders are living like kings; from November 2007 to September 2008 alone, the Walton family — owners of 43 percent of Walmart's shares — made $35 billion off increased stock prices. And remember Walmart's old CEO, H. Lee Scott? In 2007, his compensation package was an incredible $31.6 million, plus an extra $30 million in stock holdings (to be fair, the new CEO earned a "mere" $19.2 million in fiscal year 2010).

To put the worker-executive wage gap into comparison, explains Walmart Watch, "an average 'full-time' employee at Walmart would have to work roughly 1,646 years in order to accumulate what the Wal-Mart CEO receives for one year."

Here's my challenge to you, Walmart. If you're really committed to ending hunger, start by slashing executive salaries and diverting a portion of your mammoth profit back to improving the wages and benefits of your hard-working employees, who may be going hungry even though they're employed. You may not spark a media frenzy like the one you created around your $2 billion donation, but you'll dramatically improve the lives of a million workers and their families. And isn't that, after all, what you want?

Photo credit: Kenneth Hynek