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Walmart’s Charity Problem - Nov. 25, 2013

The twittershpere exploded last week over a report that Walmart was holding a charity food drive to help employees feed their families. Comments ranged from incredulous to outraged. The standard narrative went like this: this just proves that Walmart knows it doesn’t pay enough. They’re appealing to the public to feed their employees. - Nov. 25, 2013

Even CNN, when they picked up the story, described it this way: “One Wal-Mart store in Ohio is collecting canned food to help its workers feed their families a Thanksgiving dinner.”

The problem with this narrative was that it was mistaken, both factually and morally.

First, it wasn’t a matter of Walmart appealing to the public (or anyone else) to help feed employees. It was employees helping employees. Anyone bothering to read the story (as originally reported in theCleveland Plain Dealer) would have found that “The food drive tables are tucked away in an employees-only area.”

Second, the food drive wasn’t for the benefit of your average, low-wage-earning Walmart employee. It was for the benefit of employees who were in exceptional need. A Walmart spokesperson was quoted as saying that the charity food drive “…is for associates who have had some hardships come up…Maybe their spouse lost a job.” In fact, the Plain Dealer has since published a follow-up story, which noted that employees at the store in question say they feel hurt by the way their food drive was reported. It clearly stings to have the world hurl shame upon you for trying to help a friend in need.

And note that low wages here are really a red herring. When it comes to workers helping fellow workers in exceptional need, wages aren’t really the issue. If your spouse loses their job, it doesn’t much matter whether you’re making $8 an hour or $12 an hour — you’re going to need short-term help.

Naturally, this won’t satisfy critics. “Still,” they’ll say, Walmart employees are badly paid. And this story is a reminder of that.” And it’s true: wages at Walmart are pretty low. And Walmart is a profitable company. So it could decide simply to give employees more money. Of course, in a market setting, giving people money you don’t owe them as a matter of contract is called “charity.” Now, charity is at least sometimes ethically obligatory. And given the disparity in wealth between Walmart employees (many of whom live below the poverty line) and the Walton family (who control the company, and who are the richest family on earth), this might be a situation where giving beyond what you’re legally required to give might be the right thing to do.

But consider this. The US unemployment rate hovering around 7.5%. That means millions of people unemployed. So ask yourself this question: if Walmart (or the Walton family) decided that it wanted to give, say, an extra hundred million dollars to help alleviate poverty, would it be better, ethically, to use that money to give 2.2 million employees a raise (roughly $50 per year, each) or to give a few thousand additional workers minimum-wage jobs, instead?


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Nov. 25, 2013