Paul Buchheit on Low Wages vs. Corporate Profits

Suicide nets at Apple's contractor FoxConn
(China Photos/Getty Images)
Richard Wolff, Michael Albert and several other left economists have been promoting a model of collective/democratic business governance for quite some time. Only recently, though, have they been receiving significant attention, as the post-2008 economic crisis continues to deepen. 

In light of those alternative models, this AlterNet article from City Colleges of Chicago's Paul Buchheit is quite amazing: according to his research, Apple made $697,000 per employee in 2012, even while paying average yearly incomes of between $25-50,000/yr. So, if Apple were collectively run, every employee would be a near-millionaire: the numbers don't hold up quite so astonishingly across the board, but even in cases such as McDonald's and Walmart, a collective business model would produce incomes of around $40,000/yr, compared to their average incomes now, which are around half that. 


Buchheit emphasizes that in maintaining the existing model, food stamps and other social services end up functioning as corporate subsidies added on to the tax breaks and other benefits they already receive. One question this raises of course, is how long the existing exploitative model can continue, particularly in light of the increasing opposition to state subsidies.

- ESJRR Editor












Paul Buchheit: "Apple, Walmart, McDonald's: Who's the Biggest Wage Stiffer?"


(Reposted from AlterNet)



A study determined that due to low wages and employee's reliance on government subsidies, a typical Walmart store costs taxpayers over $1.7 million per year, or about $5,815 per employee.

Apple, Walmart and McDonald's are among the largest corporate employers and profit-makers in the U.S., with a total of 2.6 million employees worldwide (1.6 million in the U.S.) and combined 2012 pre-tax profits of more than $88 billion. 



All three companies pay the majority of their employees low wages: poverty-level wages. This is borne out by  SEC data and the companies' own press releases. The only question is who gets away with the most profits while their employees are forced to tap into public money -- our tax money -- for food stamps, healthcare and other assistance. 

Walmart: Underpaying the Most People 


Walmart employs about  2.1 million workers, two-thirds of them in the United States. Its 2012 revenue is three times that of Apple, and about 15 times that of McDonald's. The company  claims its average full-time wage is $12.78 per hour. That's just under $26,000 per year. (IBISWorld says Walmart pays associates $8.81 per hour.)


Based solely on its U.S. business, Walmart makes over $13,000 in pre-tax profits per employee (after paying them), which comes to more than 50 percent of the earnings of a 40-hour-per-week wage earner. 


A little-known fact about Walmart that impacts most of us: A study in Wisconsin by the U.S. House Committee on Education and the Workforce determined that a typical Walmart store costs taxpayers over $1.7 million per year, or about $5,815 per employee. 


Not mad enough yet? Four members of the Walmart family made a combined  $20 billion from their investments last year. Less than half of that would have given every U.S. Walmart worker a $3 an hour raise, enough to end the public subsidy. 


McDonald's: Paying the Lowest Wages 


McDonald's employs 440,000 workers worldwide, most of them food servers making the  median hourly wage of $9.10 an hour or less, for a maximum of about $18,200 per year. The company's $8 billion profit, after wages are paid, works out to the same amount: $18,200 per employee. 


PayUpNow.org estimates that U.S. income per employee is approximately the same as the worldwide figure. As for franchises, which make up about 80% of worldwide stores and add well over  a million employees to the global total, their sales totals are "not recorded as revenues by the Company," although franchise fees are included. 


At fast food establishments like McDonald's, not only are workers poorly paid, they also have little hope for advancement. According to the National Employment Law Project, managerial, professional and technical occupations make up 31.1 percent of jobs throughout the U.S. economy, but only 2.2 percent of jobs in the fast food industry. 


In summary, for the U.S. and around the world, McDonald's makes over $18,000 in pre-tax profits per employee (after paying them), almost 100% of the earnings of a full-time food service worker. The company's own employee budget recommends a second job to make ends meet. 


Apple: Making a Half-Million per Employee 


Now for Apple. Like Walmart and McDonald's, the company pays extraordinarily low wages to its store workers, an average of about $12 per hour, or $24,000 per year for a full-time employee. In-store salespeople make up about  half of the total workforce. 


With 80,000 worldwide employees (50,000 in the U.S.) and a 2012 profit of $55 billion ($19 billion declared in the U.S.), Apple made an astonishing $697,000 per employee in 2012 (almost  $400,000 in the U.S.). 


Apple, more than the other two companies discussed here, has numerous high-paying positions in engineering, design, programming, marketing, etc. Reports by two independent salary trackers indicate that the overall average salary at Apple is about $50,000. Even with this much higher figure, Apple pays its U.S. employees only $1 for every $8 in profits. 


So who's the biggest wage stiffer? Apple is by far the worst in rewarding profitability. But Walmart underpays the most people, and McDonald's pays the lowest wages. For those of us who subsidize these companies with tax dollars for their employees' food stamps and Medicaid, it doesn't matter who's worse. We're all getting stiffed. 




Related

oneright 9161666395371471925

Follow Us

Popular

Recent

Updating soon.

Comments

Archive

Support Us

A joint project of:

Attribution

© 2013 Economic & Social Justice Reality Report | Views expressed by contributors do not necessarily reflect the views of the Editor, Editorial Board, ESJRR, WPRR or the GCAS Institute for Policy Studies.
item