New Report Exposes America’s Largest Low-Wage Employers, Revealing Corporate Reliance on Public Assistance and Exorbitant CEO Pay

A new investigative report from the Institute for Policy Studies (IPS) has cast a stark light on America’s economic landscape, revealing how the nation’s largest low-wage employers significantly contribute to the ongoing affordability crisis. Released last week, the comprehensive study, titled "America’s 20 Largest Low-Wage Employers and the Affordability Crisis," meticulously details how these corporate giants enrich top executives and shareholders while a substantial portion of their workforce relies on public assistance programs like SNAP and Medicaid to meet basic needs. The findings underscore a systemic issue where taxpayer money effectively subsidizes the business models of highly profitable corporations, raising urgent questions about corporate responsibility, wage equity, and the true cost of stagnant wages in the world’s richest country.

Unmasking the ‘Low-Wage 20’: A Deep Dive into Corporate Practices

The IPS report identifies what it terms the "Low-Wage 20"—a cohort of S&P 500 corporations primarily operating with U.S.-based workforces that have reported the lowest median wages in the country. These are not obscure businesses but household names, companies deeply integrated into the daily lives of millions of Americans. By analyzing publicly available data, particularly the mandated disclosure of CEO-to-median worker pay ratios, the report paints a disturbing picture of economic disparity within these firms.

The average median wage across these 20 companies in 2024 stood at a mere $29,087. This figure, representing the midpoint of worker pay, falls significantly below what is considered a living wage in most parts of the United States and often dips below the eligibility thresholds for critical public assistance programs. For context, the federal poverty level for a family of three in 2024 was approximately $24,860, highlighting that many workers at these major corporations hover precariously close to or even below the poverty line. The report argues that this wage suppression is a primary driver of the national affordability crisis, a counterpoint to the common narrative that focuses solely on rising prices.

The Public Subsidy of Private Profit: ‘Corporate Welfare’ in Action

One of the most damning conclusions of the IPS study is that these "Low-Wage 20" companies are effectively using public assistance programs as a form of "corporate welfare." The report found that for fifteen of these twenty firms, the median pay in 2024 was below the $35,631 income threshold for a family of three to qualify for Medicaid in most states. Even more striking, thirteen of the twenty reported median pay below the $33,576 threshold required for a family of three to be eligible for SNAP (Supplemental Nutrition Assistance Program) food aid. This means that taxpayers are footing the bill for the healthcare and nutritional needs of employees whose labor generates substantial profits for their employers.

Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies and author of the report, emphasized this point. "When corporations can get away with shifting their employees’ basic living costs onto taxpayers, this is a form of corporate welfare," Anderson stated in an interview. She added, "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." The implication is clear: the current system allows highly profitable companies to externalize a significant portion of their labor costs onto the public purse, effectively privatizing profits while socializing critical social safety net expenses.

Stark Disparities: CEO Compensation vs. Worker Wages

The contrast between executive compensation and median worker pay at these companies is particularly stark. The average CEO pay at the "Low-Wage 20" firms reached $18.6 million in 2024, a figure remarkably close to the S&P 500 average of $18.9 million for CEOs overall. However, the CEO-median worker pay ratio at these low-wage firms soared to an astonishing 899 to 1, dwarfing the S&P 500 average of 285 to 1. This extreme disparity highlights a fundamental imbalance in how corporate value is distributed. For every dollar earned by a median worker, CEOs at these companies were taking home nearly $900.

This trend of widening CEO-worker pay gaps is not new but has accelerated over the past several decades. In 1965, the average CEO of a major U.S. corporation earned about 20 times the average worker. By 1989, this ratio had climbed to 58 to 1. Today’s figures represent an unprecedented level of wealth concentration at the top, fueled in part by corporate governance structures that prioritize shareholder value and executive bonuses, often at the expense of broad-based wage growth. The report also notes that at least 16 U.S. billionaires owe their immense wealth to companies listed among the "Low-Wage 20," further illustrating how this business model enriches a select few while leaving many workers struggling.

Stock Buybacks: Prioritizing Shareholder Returns Over Worker Wages

Another critical finding of the report concerns the substantial sums these companies allocate to stock buybacks. Between 2019 and 2024, the "Low-Wage 20" collectively spent a staggering $260 billion on stock buybacks. In 2024 alone, these firms poured $32.5 billion into repurchasing their own shares. Stock buybacks are a mechanism companies use to reduce the number of outstanding shares, thereby artificially inflating earnings per share and often boosting executive compensation tied to stock performance.

The IPS report calculates the immense opportunity cost of these buybacks. With the $32.5 billion spent on buybacks in 2024 alone, these corporations could have lifted more than one million workers—earning the "Low-Wage 20’s" average median wage of $29,087—up to an income level of $59,600. This higher income is identified as the amount needed to afford the U.S. average rent for a two-bedroom apartment, a basic necessity that remains out of reach for countless low-wage workers. This demonstrates a clear corporate choice: prioritize short-term shareholder returns and executive enrichment over providing a living wage and economic stability for their workforce.

Nevada’s Data: A Glimpse into National Reliance on Public Aid

The report leverages unique data from Nevada, the only state that publicly mandates and publishes information on how many employees at companies are enrolled in Medicaid. This transparency offers a rare, empirical look at the scale of public assistance reliance among workers at major corporations. The findings from Nevada are particularly alarming and allow for national extrapolation.

Walmart, the country’s largest private sector employer, had 4,574 employees (29.3 percent of its Nevada workforce) enrolled in Medicaid in 2024. Extrapolating this data to the national level suggests that approximately 468,800 Walmart employees nationwide are likely relying on Medicaid for their healthcare. The situation at Amazon, the second-largest U.S. private sector employer, is even more stark: 8,951 Amazon employees in Nevada (48.4 percent of its state workforce) were on Medicaid in 2024. This projection suggests roughly 577,000 Amazon employees across the U.S. are likely dependent on Medicaid.

These figures challenge the notion that those receiving public assistance are primarily unemployed or unwilling to work. Instead, they reveal a vast segment of the working population, employed by some of the most profitable companies in the world, who cannot earn enough to afford basic healthcare without government aid. 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 juxtaposition of immense private wealth accumulation and widespread worker reliance on public safety nets underscores the profound moral and economic questions raised by the report.

Case Studies: Examining Specific Employers

The report provides specific examples of companies within the "Low-Wage 20," offering further insight into their practices:

• Starbucks: Last year, Starbucks drew particular attention due to its new CEO, Brian Niccol (who came from Chipotle), receiving a pay package worth $95.8 million, while the median pay for Starbucks workers was a mere $14,674. This resulted in a staggering CEO-to-median worker pay ratio of over 6,000 to 1, an extreme outlier even among the "Low-Wage 20." This figure emerged amidst ongoing efforts by Starbucks workers to unionize, often met with strong corporate resistance, highlighting the direct conflict between executive compensation and worker demands for better wages and conditions.
• Ross Stores: Holding the unenviable position of having the absolute lowest median pay among the twenty companies, Ross Stores reported a median wage of just $9,600. This exceptionally low figure is attributed largely to the company’s heavy reliance on part-time labor. As Anderson explained, many companies intentionally structure their workforce with a large percentage of part-time employees to avoid paying benefits and higher wages, a tactic that pushes workers onto public assistance.
• Costco and MGM Resorts: The report also offers comparative insights. Costco, often perceived as a better employer among big-box stores, had a median pay of $47,000. While better than many others on the list, it still falls significantly short of the estimated $60,000 needed to afford average two-bedroom rent nationally. Anderson noted that Costco’s median pay has decreased in recent years, partly due to the loss of longer-term, higher-paid employees during the COVID-19 pandemic. However, the report highlights that Costco, with 8% of its workforce unionized, fares better than companies with no union representation. MGM Resorts, with the highest median pay among the "Low-Wage 20" (just under $50,000), stands out with nearly 60% of its employees unionized. This correlation strongly suggests that collective bargaining plays a crucial role in securing better wages and benefits for workers, a point repeatedly emphasized by labor advocates.

The Part-Time Loophole and the ACA

A significant factor contributing to low wages and lack of benefits is the widespread use of part-time labor. While the Affordable Care Act (ACA) mandates that companies above a certain size provide affordable health insurance, this obligation generally applies only to employees averaging more than 30 hours per week. This creates a loophole that many companies exploit by scheduling workers for just under 30 hours, thereby avoiding the cost of providing health benefits.

The exact number of part-time workers at these companies who do not receive employer-sponsored health insurance remains largely opaque, as this information is not publicly available. However, the Nevada data offers a powerful proxy. The fact that nearly half of Amazon’s Nevada workforce is on Medicaid is a clear indicator that a substantial portion of its employees are not being offered adequate, affordable health insurance through their employer. This practice shifts the burden of healthcare onto public programs, further solidifying the "corporate welfare" argument.

Historical Context: Wage Stagnation and Declining Union Power

The current affordability crisis and the prevalence of low-wage employment are not isolated phenomena but are deeply rooted in historical economic trends. For the past four decades, worker wages have largely failed to keep pace with rising productivity. As Sarah Anderson elaborated, "If worker wages had kept pace with rising productivity over the past four decades or so, we wouldn’t have an affordability crisis. But they haven’t because companies have been able to get away with 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."

The decline of union membership and collective bargaining power in the U.S. has been a significant factor in wage stagnation. Unions traditionally served as a counterbalance to corporate power, ensuring that workers shared in the prosperity they helped create. Without strong union representation, individual workers often lack the leverage to negotiate for fair wages and benefits, leaving them vulnerable to wage suppression tactics. The report’s findings on MGM Resorts and Costco, where higher unionization rates correlate with better median wages, reinforce the argument for strengthening labor rights and facilitating union organizing.

Broader Implications and Calls for Policy Change

The IPS report serves as a critical call to action, highlighting the profound societal and economic implications of widespread low-wage employment. Beyond the direct impact on workers and their families, the reliance on public assistance strains government budgets and exacerbates wealth inequality. It also raises fundamental questions about the fairness and sustainability of an economic system that allows some of the most profitable corporations to thrive by externalizing their labor costs onto taxpayers.

Advocates and policymakers are likely to draw on this report to push for a range of policy interventions. These could include:

• Raising the minimum wage: Advocating for a living wage standard that reflects the true cost of living in different regions.
• Strengthening labor laws: Making it easier for workers to organize and bargain collectively without fear of retaliation.
• Closing loopholes: Revisiting the ACA’s part-time worker provisions to ensure more employees receive employer-sponsored health benefits.
• Regulating stock buybacks: Exploring policies that incentivize companies to invest in their workforce and long-term growth rather than solely boosting share prices.
• Corporate tax reform: Ensuring that highly profitable corporations pay their fair share in taxes, reducing the burden on public assistance programs.

The report underscores that the affordability crisis is not merely a matter of individual financial choices or market forces; it is a direct consequence of corporate strategies and policy environments that prioritize profit maximization over worker well-being. By shining a spotlight on the "Low-Wage 20," the Institute for Policy Studies hopes to galvanize public discourse and policy efforts toward creating an economy where all workers can earn a living wage and achieve economic security. The debate about affordability, the report argues, must pivot to include a serious examination of wage suppression and the systemic factors that perpetuate it.