Walmart claim doesn’t add up

Fresh off a successful bid to get Amazon to raise its minimum wage to $15 per hour, Sen. Bernie Sanders turned his sights on Walmart this week.

“While Walmart claims it cannot afford to pay its workers $15 an hour, it was able to find enough money to pay its CEO more than $22 million last year,” Sanders tweeted.

Sanders unveiled the Stop WALMART Act on Nov. 15 to “put an end to their outrageous greed.” The bill would bar companies from buying back stock unless they adopt the $15 an hour wage and allow workers to earn seven days of paid sick leave per year. It also would limit executive pay to no more than 150 times median employee pay.

“The Walton family of Walmart is the wealthiest family in America, worth $180 billion,” Sanders said in a series of tweets directed at Walmart. “Middle class taxpayers should not have to subsidize Walmart’s horrendously low wages to the tune of at least $6.2 billion every year.”

There was one stat in particular that caught our attention: Are U.S. taxpayers really subsidizing Walmart’s workforce at a cost of $6.2 billion a year?

Given the total tax revenue collected by Sanders’ home state of Vermont was $5.9 billion last year, this would be a pretty staggering figure. We decided to dig in.

We asked the Sanders camp for leads on where the figure came from and didn’t hear back. But we’re pretty confident we found the source.

The $6.2 billion figure first appeared in a report from the advocacy group Americans for Tax Fairness that came out on tax day in 2014.

“Walmart receives an estimated $6.2 billion annually in mostly federal taxpayer subsidies,” the report said. “The reason: Walmart pays its employees so little that many of them rely on food stamps, health care and other taxpayer-funded programs.”

A Google search indicates that the figure made dozens of headlines when the report was released, and continues to be cited in articles on Walmart — it showed up in a story last year on The Intercept, for example.

So how did Americans for Tax Fairness come up with the figure? The group relied on data from a report released by the Democratic staff of the U.S. House Committee on Education and the Workforce in May 2013.

For that report researchers used Wisconsin Medicaid enrollment data from 2012 “because it appears to be the most recent and comprehensive.” Walmart was found to have more employees on Medicaid — 3,216 — than any other employer in the state.

From there, the Democratic staffers assumed that Walmart employees enrolled in Wisconsin’s BadgerCarePlus Medicaid program were also enrolled in other federal benefits programs, such as subsidized housing, food stamps, home energy assistance and child care subsidies.

Taking all these costs together, the researchers estimate that a single Walmart supercenter with 300 employees costs $904,542 per year — about $3,015 per employee. Then they ran the numbers again factoring in some employees who aren’t enrolled in BadgerCarePlus, but could be, which upped the figure to $1,744,590 per year — about $5,815 per employee.

Americans for Tax Fairness then took the midpoint of these figures, $4,415, and multiplied it by Walmart’s estimated 1.4 million person workforce at the time.

1,400,000 x $4,415 = $6,181,000,000 So there it is. About $6.2 billion (not “at least,” as Sanders tweeted).

But the figure has been controversial since its inception. The House Committee report includes a qualifier about the difficulty of trying to extrapolate the Wisconsin data across the country. Wisconsin has lower poverty levels than many other states, it notes. And, Wisconsin makes it easier than many other states to enroll in Medicaid.

“Because of varying program eligibility requirements across states, extrapolating taxpayer costs for Wal-Mart stores in other states based on the Wisconsin data is difficult,” the report says.

In his tweet, Sanders also referred to “middle class taxpayers” footing the bill. The House Committee and Americans for Tax Fairness reports encompass everyone who helps pay for public benefits programs — not just the middle class.

In 2014, when the numbers were fairly fresh, MSNBC host Ed Schultz got a Mostly False from PolitiFact for citing the $5,800 in assistance per employee figure, which came from the same reports.

Four years later, the figures are even more tenuous.

Walmart’s workforce has increased to about 1.5 million employees and the company has raised wages significantly. The Democratic staffers cited an average $8.81 hourly wage for Walmart sales associates in the 2013 report. Walmart announced in January this year that it would raise its base wage to $11

an hour. And then there’s cost of living increases.

So maybe these forces cancel out. But who knows?

Dennis Bailey, communications director for Americans for Tax Fairness, said the group stands by the accuracy of its research, but hasn’t revisited the figures since Walmart increased wages.

Bailey added that critics of the group’s research hadn’t come forward with any data to refute their figures. “You take a small sample and extrapolate — that’s done all the time in a data world.

There isn’t any reason to think that doing it in a different state would give different results,” he said.

Walmart isn’t much help. Company reps have previously rejected the figures in the Americans for Tax Fairness report, but have not provided alternate data.

Justin Rushing, head of corporate communications for Walmart, said in an email last Friday he had no comment on the veracity of the $6.2 billion figure. He pointed to a 2005 report from Jason Furman, then chairman of the White House Council of Economic Advisors, about Walmart’s low wages and who benefited from America’s expanded social safety net.

“The bulk of the benefits of these expansions go to the workers that receive them, not to the corporations that employ them,” says an abstract of Furman’s report.

Our ruling

Sanders said, “Middle class taxpayers should not have to subsidize Walmart’s horrendously low wages to the tune of at least $6.2 billion every year.”

Sanders is using old numbers that appear to be suspect from the beginning. But there’s no updated research that we could find.

There is an element of truth in that some Walmart employees offset their wages with public assistance programs.

And given the size of Walmart’s workforce it could very well add up to billions of dollars.

Sanders also added a class element that wasn’t in the initial research, claiming that the $6.2 billion in taxes came only from the “middle class,” which seems to be political flourish not grounded in facts.

We rate this claim Mostly False.