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Jeff Bezos on Food Stamps

A new report from the U.S. Government Accountability Office has found that Amazon and Walmart are among the top national employers of people who rely on government food assistance.

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A new report from the U.S. Government Accountability Office has found that Amazon and Walmart are among the top national employers of people who rely on government food assistance.

This news comes just months after the federal government granted the two companies exclusive nationwide rights to accept SNAP benefits for online groceries.

Launched last year, the USDA SNAP Online Pilot created the first contactless grocery option for the current 38 million SNAP reliant workers and an unprecedented $85 billion in total annual SNAP grocery purchases. The pilot now extends to 46 states and the District of Columbia, with Amazon and Walmart as the only USDA-approved national retail partners and the only retailer offering delivery in a vast majority of participating states. An estimated $3.4 billion, or 4 percent, of that $85 billion in food aid spending was spent in the program’s first year.

With even modest assessments, both companies probably raked in over a billion dollars of government subsidized food expenditure during the pandemic. 

The exclusivity guaranteed by the USDA agreement requires other retailers to operate only on a state-by-state basis, but states are finding it hard to locate retailers with delivery capacity. This month for example, Indiana initiated a similar program with Aldi stores, with Instacart providing delivery. Crucially, the pilot prohibits the use of benefits to cover delivery fees. While Instacart’s $5.99 delivery fee is a substantial out-of-pocket expense considering the average weekly SNAP budget of $29.40 it’s also low enough that the driver will likely qualify for and rely on aid.  Instacart has waived the fee for SNAP purchases through March, in a sign of apparent goodwill.

To be clear, Walmart and Amazon should accept SNAP. Every food retailer should. And the government should expand aid in a pandemic economy. Greater access is good for the people who receive aid and, since the SNAP program reimburses grocers at retail price, it’s not bad for business, at least at great scale. ranting new, even temporary monopolies is less clearly in everyone’s favor. Especially when it’s these two companies receiving the grants.

Pandemic business has been starkly advantageous for both Amazon and Walmart. Amazon’s market cap has increased $570 billion; Walmart’s stock price has increased 25 percent. Within Q3 Earnings Releases, Amazon reported a 200 percent increase in year-over-year profit, while Walmart’s year-over-year profit increased 56 percent spurred by a 41 percent uptick in eCommerce, with the solitary notation: “Strong growth in online grocery. After stalling stock buybacks in Q2, Walmart allocated $500 million to buybacks in Q3.  

Despite capital gains, the latest reports show that Amazon and Walmart remain some of the largest employers of SNAP recipients. In Indiana, which just partnered with Aldi, Amazon lags behind only Walmart and McDonald’s in the number of people on foodstamps that it employs.  In Pennsylvania, 10 percent of Amazon warehouse employees were food insecure and reliant on SNAP assistance — this in a state that in 2016 allocated a $22.5 million subsidy to Amazon for warehouse job creation. Since 2015, Amazon has received over $241.3 million in state and local subsidies — almost exclusively for “value jobs.”

Amazon and Walmart have underpaid their workers for quite some time, and now have landed a government-authorized monopoly position to profit (again) from their own employee’s immiseration.  Using baseline grocery profit margins, Amazon and Walmart may be earning $40-$134 million profit on their own employees’ food-stamps, receiving your tax money as payment through their online platforms, which heavily advertise their own brands. And those margins are on the low side, before consideration of the performance of the company’s own brands on their retail portals

Seventy percent of SNAP recipients work full-time, and the remaining recipients are required to work 30 hours per week. In the US, full-time workers earning above minimum wage, and often double it, are still struggling to make ends meet. Within the institutions of Walmart and Amazon, the average full-time wages are $27,000 and $35,096 respectively — roughly $30,000-$40,000 less than the nation’s $68,000 a year median income, and squarely within “Near Poverty” levels according to US Census guidelines. And, to be clear, these numbers include applauded wage hikes by both Walmart and Amazon to a generous respective $11.00 and $15.00 minimum (though these ‘minimum wages’ don’t apply to the entire domestic workforce of either company.)  

Bloomberg analysis of U.S. Bureau of Labor Statistics data last month found that Amazon’s entry into a community often decreases area wages. A study found that 68 counties’ average industry compensation for warehouse employees fell from $24 to $17.50 after Amazon established a warehouse within their borders. This decreases annual full-time wages from $50,008 to $36,522 — crossing a critical threshold into near poverty levels. The cadence for new Amazon warehouses? One a day, increasing the number of working adults in need of food aid, with few options for food delivery beyond the very employer failing to pay them a living wage. 

In 2020, Jeff Bezos donated a tax-deductible $100 million to Feeding America— the largest in the nonprofit’s history.

“Please visit Walmart’s corporate Feed Hunger page to donate to Feeding America. With the help of outside donations, Walmart has raised over $18 million for food insecurity in 2020,” reads the company site. No mention is made of the significantly greater amount of money Walmart is on pace to make from the food insecurity among its own workers.

Feeding hunger, indeed.