Low-Wage Workers at Major US Corporations Depend on Public Assistance
A recent study has uncovered that employees at some of America's largest companies are increasingly turning to government aid programs due to insufficient wages. The report, released by the Institute of Policy Studies, focuses on 20 S&P 500 corporations with predominantly US-based workforces and the lowest median pay rates.
Medicaid and Snap Enrollment Among Top Firms
Collectively, these "Low-Wage 20" companies employ 6.7 million people across the United States. Shockingly, the median pay at 75% of these firms falls below the income threshold required for a family of three to qualify for Medicaid in most states. Additionally, at 13 of the companies, median wages are lower than the Supplemental Nutrition Assistance Program (Snap) income limit for a family of three.
In Nevada, which tracks Medicaid enrollment among employees at large corporations, nearly a quarter of Walmart workers (29.3%) and half of Amazon employees (48.4%) were on Medicaid in 2024. Furthermore, in states that disclose Snap data related to major companies—Colorado, Massachusetts, Illinois, and Michigan—10,920 Walmart workers and 9,633 Amazon workers were enrolled in Snap during the same year.
CEO Pay Soars While Worker Wages Stagnate
Despite this reliance on public assistance, CEO compensation at these corporations continues to climb. In 2024, average CEO pay across the 20 companies reached $18.9 million, with an average CEO-to-median-worker pay ratio of $899 to $1. For instance, Starbucks CEO Brian Niccol received $95.8 million in compensation, compared to the median worker pay of $14,674—a staggering ratio of $6,666 to $1.
Meanwhile, average median pay among the "Low-Wage 20" declined by 4.6% from 2019 to 2024 when adjusted for inflation, dropping from $30,474 to $29,087. The report also highlighted that 45% of eligible Starbucks employees had zero balances in their 401K plans in 2024, despite the company offering a matching program, as many workers cannot afford to participate.
Stock Buybacks and Lost Opportunities
These corporations spent a massive $32.5 billion on stock buybacks in 2024, with Lowe's leading at $46.6 billion and Home Depot at $37.9 billion. The report noted that if this money had been redirected to increase worker pay, the wages of a million employees could have risen from $29,087 to $59,600—the income level needed to afford the average rent for a two-bedroom apartment in the US.
Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies and author of the report, stated, "When corporations can get away with shifting their employees' basic living costs onto taxpayers, this is a form of corporate welfare. With the federal government slashing spending on anti-poverty programs, it's even more important that major corporations in the world's richest country pay their employees a living wage."
Corporate Responses and Broader Implications
An Amazon spokesperson defended the company's pay practices, claiming they are among the best in the retail industry and noting that eligibility for Snap and Medicaid is based on total household income, not individual wages. They called for a significant increase in the federal minimum wage to better support American families.
Walmart emphasized its commitment to providing career opportunities, stating that it hires and trains workers, including a small percentage who come to the company on public assistance. Starbucks highlighted benefits like healthcare, equity grants, and tuition coverage, though it did not comment on the 401K findings. Home Depot and Lowe's did not respond to requests for comment.
The report also warned that Donald Trump's "One Big Beautiful Bill" could lead to approximately 7.5 million Americans losing Medicaid and 4 million losing some or all of their Snap benefits due to budget cuts. This potential reduction in public assistance underscores the urgent need for corporations to address wage disparities and ensure their employees can achieve financial stability without relying on government aid.
