Activists accuse richest US family of greed
This week a group of activists has revealed just how little America’s richest family, the Waltons, pay in to their own charitable foundation. Can they be justified in not donating more?
The six heirs to the Walmart fortune – the mega-chain of US supermarkets that sells bargain-price goods – are America’s richest family. Yet they are no strangers to bad publicity: ‘openly, notoriously and extravagantly bad to the bone’ is how one US official described the company recently. This week, Walmart is again back in the spotlight for the wrong reasons.
A report published by the activist group Walmart 1 Percent, has revealed that just 0.04% of the Walmart fortune, or $58.49m of their $140bn (£83bn) fortune, has gone to their charity, the Walton Family Foundation. The sum is less than the estimated value of one of the family’s collection of vintage cars.
The report compares the Waltons’ donations with two of the US’s most celebrated billionaire philanthropists, Bill Gates and Warren Buffett, who have given away 36.2% and 26.9% respectively. Gates and Buffett are well known for their charitable work: in 2010, Buffett, Gates and his wife Melinda, launched the Giving Pledge, an effort to get America’s richest to give away 50% of their wealth during their lifetimes.
Walmart has always divided opinion. What began as a simple discount store set up by Sam Walton in 1951 has since grown into a retail empire with 8,100 stores in 15 countries, including the UK, and generates £248bn annually. Its success lies in its low prices, which, the company claims, allow low-income families to buy products that otherwise might be too expensive, such as an entire Thanksgiving turkey dinner for eight people for just $20, or £8.
But over the years, the company has regularly faced harsh criticism. Walmart is accused of paying its workers too little, putting rival companies out of business by unfairly driving down prices, operating inflexible working hours, and refusing to allow workers to form unions.
Last week, working mothers staged a series of strikes in 20 US cities against Walmart. They earn less than $25,000 (£14,876) a year, a wage which leaves many of them in poverty.
Charity begins at home
The six heirs to the Walmart empire have as much wealth as 42% of the poorest US families combined. Some argue that it is only fair that they give a sizeable amount of this to charity, like Gates and Buffett do. After all, they have the power and opportunity to generate real change in the world and transform the lives of millions.
But others believe the US’s largest private employer contributes to the economy and everyone’s welfare through paying tax and employing millions of Americans. By increasing competition and driving down prices, Walmart actually benefits low-income families. Besides, inequality is a fact of life; the Waltons have earned the money, they should keep it.
- Should the Walmart heirs give more to charity?
- Is it better for the rich to give to charities, or for the government to tax them and decide how best to use the money?
- Discuss in groups what you think is the appropriate amount the Walton heirs should give to charity. What, if anything, should this money be spent on?
- Research three countries where wealth inequality is most severe. Write a short paragraph on each proposing how the problem could be solved.
Some People Say...
“He who dies rich, dies dishonoured.’Andrew Carnegie”
What do you think?
Q & A
- I don’t work for Walmart so how does this affect me?
- This story is important because of what it tells us about wealth inequality. The vast prosperity that some individuals enjoy, such as the Waltons, affords them privileges not available to the poor, such as private education, healthcare, or even the ability to buy their children homes and invest in their businesses. Some people think they deserve what they earn, others say they should give money back to society’s most needy.
- I thought the US was a rich country.
- Compared to developing countries in the world it is certainly very rich, yet not compared to other developed countries. About 50 million Americans live below the poverty line, which was defined in 2013 as an annual income of $23,550 (just over £14,000) for a family of four.
- Six heirs
- Jim Walton made a single contribution of $3m to the foundation more than 15 years ago. His brother and sister, Rob and Alice, have contributed nothing in the 23 years analysed in the report.
- Bill Gates
- Gates co-founded Microsoft and is the richest person in the world, according to the Bloomberg Billionaires List.
- Warren Buffett
- The American businessman and investor announced in 2006 that he would give his entire fortune away to charity, the largest act of charitable giving in US history.
- Walmart bought Asda for £6.7bn in 1999. With 368 Asda outlets, Walmart’s fourth-largest overseas chain is in Britain.
- A new study published this week by the think tank Demos concludes that if the major retailers in the US raised wages to the equivalent of $25,000 for full-time work, it could lift almost half a million women out of poverty or near-poverty.