Sarah Anderson on the Twenty Largest Low Wage Employers

A new report released by the Institute for Policy Studies (IPS) last week has cast a stark spotlight on the pervasive issue of wage suppression among America’s largest corporations, revealing how the nation’s twenty largest low-wage employers—dubbed the "Low-Wage 20"—are contributing significantly to the ongoing affordability crisis while simultaneously shifting billions in employee living costs onto taxpayers. The comprehensive analysis details how these S&P 500 companies, predominantly employing U.S.-based workforces and characterized by the lowest median wages, enrich their executives and shareholders even as a substantial portion of their employees are forced to rely on public assistance programs like SNAP and Medicaid to meet basic needs.

The report, titled "America’s 20 Largest Low-Wage Employers and the Affordability Crisis," presents a damning indictment of a business model that prioritizes corporate profits and executive compensation over the economic well-being of its workforce. It posits that the reliance of these companies’ employees on public safety nets constitutes a form of "corporate welfare," where taxpayers indirectly subsidize the operational costs of highly profitable enterprises. This phenomenon underscores a critical disconnect in the American economic landscape, where immense corporate wealth coexists with widespread worker precarity.

The Affordability Crisis: A Deeper Dive into Wage Suppression

Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies and the lead author of the report, emphasized that the affordability crisis extends far beyond just rising prices. In an interview with Corporate Crime Reporter, Anderson articulated a fundamental argument often overlooked in public discourse: "There is a big debate about affordability, and much of that debate focuses on how to get prices down. But it’s just as important to look at the other side of the affordability crisis and that is wage suppression."

Anderson elaborated on the historical context, noting that had worker wages kept pace with rising productivity over the past four decades, the nation would likely not be grappling with such a severe affordability crisis. Instead, she explained, companies have aggressively pursued tactics like "busting unions, stripping benefits – all kinds of tactics – to try and claim a larger share of corporate profits for executives at the top and wealthy shareholders." This systemic suppression of wages, coupled with a decline in worker organizing power, has created an environment where even full-time employment at major corporations fails to provide a living wage. "If we had allowed workers to organize more freely and bargain collectively for better wages, we wouldn’t really have an affordability crisis," Anderson asserted, highlighting the report’s mission to "shine a spotlight on these leading low wage employers in America. All twenty of them are household name companies and most of them are very profitable. And they are major contributors to the affordability crisis because they are paying many of their workers poverty wages."

Methodology: Identifying the Low-Wage 20

The IPS methodology for identifying the "Low-Wage 20" was straightforward yet revealing. Each year, publicly traded companies are mandated to disclose the ratio between their CEO’s compensation and the median pay of their workforce. The median pay represents the midpoint of all employee salaries – half of the company’s workers earn more, and half earn less. The IPS team focused on S&P 500 companies, representing the 500 largest publicly traded corporations in the United States. From this vast pool, they identified the twenty companies with the lowest reported median pay, with a crucial additional criterion: the majority of their employees must be based within the United States. This distinction was vital to connect the findings directly to the American affordability crisis, filtering out companies whose low median pay might be skewed by a predominantly international, lower-wage workforce.

The findings painted a grim picture. For instance, the report cited Starbucks as a prominent example, noting that its new CEO, Brian Niccol (who joined from Chipotle, lauded for his anti-unionization efforts), received a staggering pay package of $95.8 million in a recent year. In stark contrast, the median pay for a Starbucks employee was a mere $14,674, meaning the CEO earned over 6,000 times what the typical worker did. The lowest median wage among the "Low-Wage 20" was found at Ross Stores, where the median annual pay plummeted to just $9,600. This abysmal figure is often a direct consequence of heavy reliance on part-time labor, a common strategy employed by these companies to avoid providing benefits and full-time wages. As Anderson explained, "Most of these companies rely heavily on part time labor because they don’t want to have to pay benefits. That’s what you are seeing at companies like Ross. A lot of their frontline employees in their stores are part time and that helps explain why their median pay is $9,600."

Public Assistance as Corporate Welfare: A Systemic Subsidization

A central and arguably the most damning revelation of the report is the extensive reliance of employees from these profitable corporations on public assistance programs. The IPS report found that at fifteen of the "Low-Wage 20" companies, the median pay for workers fell below the income threshold for a family of three to qualify for Medicaid in most states, which stood at $35,631 in 2024. Furthermore, for thirteen of these firms, the median pay was below the $33,576 threshold required for a family of three to be eligible for SNAP food aid benefits.

This means that a significant portion of the workforce at some of America’s most recognizable and profitable corporations are earning so little that they must turn to government-funded programs to put food on the table and access healthcare. Anderson expressed outrage at this situation, stating, "So many workers at these leading U.S. corporations that are highly profitable are getting paid so little that they have to rely on public assistance. People should be outraged about that. That is a form of corporate welfare. We are subsidizing a poverty wage business model." The implications extend further: "When these same companies hand out gargantuan CEO paychecks, it means taxpayers are also subsidizing their huge mansions, their private jets and all of the other trappings that go along with excessive pay for CEOs." This creates a perverse incentive structure where corporations externalize their labor costs onto the public, while executives reap immense rewards.

The Nevada Data: A National Projection of Public Burden

Crucially, the report leveraged unique data from Nevada, the only state that mandates public disclosure of the number of employees at companies receiving Medicaid benefits. This unprecedented transparency offered a tangible, quantifiable measure of corporate reliance on public assistance. By extrapolating the Nevada data, the IPS report provided chilling national estimates for some of the country’s largest employers.

Walmart, the largest private sector employer in the U.S., had 4,574 employees in Nevada enrolled in Medicaid in 2024, representing 29.3 percent of its total Nevada workforce. Using Nevada’s figures as a representative sample of national pay practices, the report estimated that a staggering 468,800 Walmart employees nationwide are likely relying on Medicaid. Amazon, the second-largest U.S. private sector employer, presented an even more concerning picture. In Nevada, 8,951 Amazon employees—a substantial 48.4 percent of its state workforce—were on Medicaid in 2024. This data suggests that roughly 577,000 Amazon employees across the country are likely enrolled in Medicaid.

These figures underscore the scale of the problem, demonstrating how hundreds of thousands of workers at immensely wealthy corporations are unable to afford basic healthcare without government intervention. The irony is particularly sharp when considering the wealth accumulated by the founders and major shareholders of these companies. As Anderson pointed out, "Amazon has not one but two billionaires who made their billions off these low wage workers – Jeff Bezos and his former wife. Walmart has eight billionaires – the descendants of Sam Walton, the founder of Walmart – who made their fortune on this low wage worker model." This stark contrast highlights a fundamental imbalance in wealth distribution and corporate responsibility.

Executive Compensation vs. Worker Wages: A Chasm of Inequality

The disparity between executive compensation and median worker pay at these low-wage firms is one of the most alarming findings of the report. The average CEO pay among the "Low-Wage 20" reached $18.6 million in 2024, a figure remarkably close to the $18.9 million average for all S&P 500 CEOs. However, when examining the CEO-median worker pay ratio, the "Low-Wage 20" stood out dramatically. Their average ratio was a staggering 899 to 1, meaning the typical CEO in these companies earned nearly 900 times more than their median worker. This is in stark contrast to the S&P 500 average ratio of 285 to 1, indicating an even more extreme concentration of wealth at the top within these particular corporations.

The report also highlighted that at least 16 U.S. billionaires owe their immense wealth directly to companies included in the "Low-Wage 20." This data reinforces the argument that the suppression of worker wages is not a sign of financial distress for these corporations but rather a deliberate strategy to maximize profits and shareholder returns, often at the expense of employee well-being and broader societal costs.

Stock Buybacks: Prioritizing Shareholder Enrichment

Further exacerbating the issue of wage suppression, the report meticulously tracked the massive expenditures by the "Low-Wage 20" on stock buybacks. Between 2019 and 2024, these companies collectively spent an astonishing $260 billion on buying back their own stock. In 2024 alone, they allocated $32.5 billion to this practice. Stock buybacks artificially inflate share prices and boost executive bonuses tied to stock performance, primarily benefiting wealthy shareholders and top executives.

The IPS report performed a powerful calculation to illustrate the opportunity cost of these buybacks. It found that the $32.5 billion spent on buybacks in 2024 could have been used to lift over one million workers—those currently making the "Low-Wage 20" average median wage of $29,087—up to an income level of $59,600. This $59,600 figure represents the income needed to afford the U.S. average rent for a two-bedroom apartment, a benchmark for a living wage in many parts of the country. This stark comparison vividly demonstrates how corporate financial strategies actively divert resources that could otherwise be used to ensure a living wage for a substantial portion of their workforce, choosing instead to enrich a select few.

Case Studies: Costco and the Power of Unionization

While the report primarily focuses on the "worst of the worst," it also offered nuanced insights into companies that, while still on the list, present a slightly different picture. Costco, for instance, known for its relatively better employee treatment among big-box retailers, was included in the "Low-Wage 20," though it was not at the very bottom. Its median pay was reported at $47,000, the second highest among the twenty companies (after MGM Resorts), and its minimum wage currently stands at $20 an hour.

Anderson acknowledged Costco’s image as a better employer, noting, "Costco is not the worst of the worst on this list… Costco does have the image of being one of the better employers of the big box stores." However, she also pointed out that its median pay had declined in recent years, partly attributable to the loss of longer-term, higher-paid employees during the COVID-19 pandemic. Even with its higher median pay, Anderson emphasized, "Costco’s median pay is $47,000. That means that half of their employees make less than that. That is way below what you would need in terms of income to afford the average two bedroom rent in this country. Many workers at Costco are still struggling, even if their wages are a bit better than at some of these other firms." The report clarifies that to afford the average two-bedroom rent in America, an individual would need to earn approximately $60,000 a year, a threshold not met by the median wage of any company on the "Low-Wage 20" list, including MGM Resorts, which had the highest median pay at just under $50,000.

The report also drew a crucial link between median wages and unionization. MGM Resorts, with the highest median pay among the "Low-Wage 20," also boasts a significant unionized workforce, with nearly sixty percent of its employees covered by collective bargaining agreements. Costco also has a small percentage of unionized workers, around eight percent. This correlation suggests that union representation plays a vital role in securing better wages and working conditions for employees, acting as a counterbalance to corporate wage suppression tactics.

The Healthcare Loophole: Part-Time Employment and ACA

The issue of employee benefits, particularly healthcare, is another critical component of the affordability crisis. While the Affordable Care Act (ACA) mandates that companies above a certain size provide affordable health insurance to employees working an average of more than thirty hours a week, a significant loophole exists for part-time workers. Many of the "Low-Wage 20" companies heavily rely on part-time labor, often structuring schedules to keep employees below the 30-hour threshold, thereby avoiding the obligation to provide health benefits.

The report highlighted the difficulty in obtaining public data on how many part-time workers are offered affordable health insurance. "That’s the big loophole," Anderson stated. "Most of these companies have a large share of their workforce working part-time. At Walmart, I believe that 32 percent of their frontline workers, their store associates, are part time. How many of those average less than thirty hours a week? We just were not able to determine that."

However, the Nevada data provided indirect yet compelling evidence. If 48 percent of Amazon’s Nevada workforce is on Medicaid, it serves as a "clear sign that they are not being offered insurance for most of their workers," Anderson concluded. This demonstrates how companies exploit regulatory gaps to minimize their own costs, further burdening public health systems and leaving a vast segment of the workforce vulnerable.

Broader Implications and the Path Forward

The IPS report on America’s largest low-wage employers offers a comprehensive and urgent analysis of a systemic issue at the heart of the nation’s economic challenges. It meticulously connects the dots between corporate wage suppression, exorbitant executive compensation, massive stock buybacks, and the increased reliance of working families on public assistance. The findings challenge the narrative that the affordability crisis is solely a matter of market forces or individual choices, instead positioning it as a direct consequence of corporate policies designed to maximize profits for a few at the expense of the many.

The implications are far-reaching, impacting not only the economic stability of millions of workers but also the fiscal health of states and the federal government, which bear the cost of subsidizing these corporate practices. The report implicitly calls for a re-evaluation of corporate responsibility, advocating for policies that promote living wages, strengthen worker bargaining power, and curtail excessive executive enrichment and shareholder payouts that come at the cost of societal well-being. As Sarah Anderson succinctly put it, the core question is, "How do we create the pay structures at these companies so we can assure that everybody who is working at these companies can make a living wage to cover basic necessities instead of having so much of the value that they create for these companies extracted by those at the top of the company?" In a country as wealthy as the United States, the report argues, it is imperative that major corporations contribute to, rather than detract from, the economic security of their employees.