Today, Oxfam, the global organization fighting inequality to end poverty and injustice, published a new analysis on how retail behemoths Amazon and Walmart disproportionately drive economic inequality in the United States. According to Oxfam, Amazon and Walmart perpetuate and further embed systems of working poverty through market concentration, tax avoidance, and a reliance on social safety net programs to subsidize unsustainable business models.
“Amazon and Walmart are the country’s two largest private employers, so their extreme market concentration is hurting us all. Their monopolistic dominance in retail and e-commerce has allowed them to systematically kill off competitors, cannibalize suppliers, and manipulate customers,” said Irit Tamir, Director of Oxfam America's Private Sector Department. “Perhaps most detrimentally, though, the companies’ outsized control empowers them to depress average wages, creating a disastrous reality for the American worker at a time when many already struggle to get by.”
Oxfam’s analysis highlights key ways in which Amazon and Walmart contribute to inequality:
- Low wages: Amazon pays a minimum wage of just $15 an hour, and Walmart only recently increased its base pay to $14 an hour. Given the surging cost-of-living crises in recent years, experts at Living Wage for US estimate the living wage in the US is $22.20 an hour. According to the US Department of the Treasury, lack of labor market competition means that workers generally earn 20 percent less than they otherwise would.
- Workplace discrimination: At Amazon, more than two-thirds of all employees are people of color but senior leadership remains 63.7 percent white, and while Black women make up the largest group of “laborers and helpers,” they represent only 2 percent of executives and senior officials. At Walmart, while white workers account for 42 percent of lower-paying jobs, they account for 73 percent of executives, senior officials, and managers.
- Profit concentration: At the same time, both companies shell out monstrous compensations to their executives. In 2021, Amazon paid its CEO $212.7 million, and, albeit not quite as outrageous, Walmart CEO pay was still high at $25.7 million. In the same year, Walmart saw a CEO-to-worker pay ratio of 1,013 to 1, while Amazon maintained a staggering 6,474 to 1 ratio.
“I think we can all agree that no CEO is 1,000 times more productive than their average employee, let alone 6,000 times more. It’s absurd that they are being compensated as such,” said Tamir. “Walmart and Amazon can both afford to pay their workers fairer wages, yet they choose not to do so.”
Oxfam’s briefing note also outlines how the two companies drive inequality on a broader scale, by eliminating competition and avoiding rightful tax payments:
- Concentrating corporate power: Amazon’s commitment to its predatory pricing scheme—opting to price goods significantly below cost—has yielded such a staggering rate of growth that the company is now estimated to control up to 50 percent of the US e-commerce market. Walmart's decades-long campaign to force out competitors by offering goods at artificially (and unsustainably) low prices has secured the retailer’s brick-and-mortar dominance. In some communities, Walmart controls more than 90 percent of local retail markets.
- Tax avoidance: Amazon enjoyed a federal effective tax rate of just 6.1 percent in 2021, paying only $2.1 billion in federal income taxes on $35.1 billion in US earnings. Walmart may pay a higher effective tax rate than Amazon (22.3 percent in 2022), but the company regularly underpays US taxes on offshore cash, having built an undisclosed network of 78 subsidiaries and branches in 15 overseas tax havens. These practices further concentrate wealth, deprive the federal government of revenues required to fund critical programs, and manipulate profits to artificially depress corporate tax rates.
- Dependence on government programs: Both companies fail to pay their fair share of taxes yet rely on government programs to subsidize an unsustainable business model, as reflected by their workers’ widespread dependence on social safety net programs to supplement insufficient incomes. For example, in its home state of Arkansas, Walmart is the employer of the largest number (over 1,300 workers) and the biggest share (3 percent) of the full-time workers who receive SNAP benefits in the state.
This briefing note signals Oxfam America’s continued engagement with the two companies over their problematic business practices. Last month, Oxfam filed a shareholder resolution asking Walmart to publish human rights impact assessments (HRIAs). We continue our attempts to engage with Amazon on their deeply concerning practices, urging them to transparently communicate the concrete steps they are taking to ensure greater respect for human rights.
Oxfam is calling on Amazon, Walmart, and the US government to take decisive action toward curtailing economic inequality. Amazon and Walmart must pay their fair share of taxes, stop concentrating profits in the hands of executives and shareholders, raise wages for all hourly employees, and respect workers’ rights. The US government must break up private monopolies, raise the minimum wage, enshrine collective bargaining rights, and address the collapse in corporate taxation.
Oxfam is a global organization that fights inequality to end poverty and injustice. We offer lifesaving support in times of crisis and advocate for economic justice, gender equality, and climate action. We demand equal rights and equal treatment so that everyone can thrive, not just survive. The future is equal. Join us at oxfamamerica.org
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Notes to editors:
Download the briefing note, “Business at an Inhuman Scale,” here.
Data on corporate concentration and low wages was sourced from the US Department of the Treasury.
Data on living wage was sourced from Living Wage for US.
CEO-to-worker pay ratios were sourced from the Institute for Policy Studies.
Data on worker demographics was sourced from EEO-1 reports on Amazon and Walmart.
Data on Walmart workers’ reliance on SNAP comes from United States Government Accountability Office reporting.