Frugal Friday: Who’s Worse – Wal-Mart or the Government?

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Happy Friday party people! It’s been a great week and it looks like Spring (errr Summer) is finally upon us. Just two weeks ago we were getting snow and this week I had to break down and turn on the air conditioner as it reached 102 degrees. Anyway, that’s beside the point. Today I want to draw our attention to an article I read on NBC News about the federal government and its basic funding of low wage jobs. I have written before of How to Spend Money Like the Government and What the Government Teaches Us About Living Without a Budget and this article stood out to me right away. The article discusses a study that shows how the government is funding, through various federal programs, nearly two million jobs at an hourly rate of $12.00 or less. That’s more than Wal-Mart and McDonald’s combined, which offer 1.5 million jobs paying the same wage. What the article goes on to point out is that many of these employees are unable to make ends meet at the income level provided by these jobs and subsequently find themselves relying on government assistance programs, like Food Stamps in order to make ends meet. I know that this can bring up the topic of minimum wage and whether or not it should be increased, but that is a different topic for a different time. The thing that stood out to me in this article was how broken this system is and what it means to us as a whole.

The main thrust of the article points to the fact that the companies receiving the benefits from these programs are mandated to “uphold high employment practices including prevailing wages within a particular area of work”. The jobs that have resulted from these programs cross many sectors from retail to manufacturing, but the common thread is that many of them are not looking to provide decent paying jobs, but to cut costs. The study argues that while the firms involved are expected to provide these solid jobs they’re not abiding by what’s expected of them and are just helping contribute further to the wage gap. To be honest, I can see the issue from both sides and believe that it’s not just the government to blame or just corporate America to blame, but both share the blame and likely to an equal extent. On one hand, the government is funding a program that is disastrously broke that is likely only leading to individuals leaning on additional government programs to help put food on the table. However, many of the firms receiving these direct benefits from the government are not abiding by the supposed terms of the agreement and are instead likely cutting costs and one has to question where the extra benefits are going. If you believe what the article has to say then it’s possibly going to the firm itself or the powers that be at those firms. Whatever the distribution of the blame each side shares, the brutal truth is that the program is broken. There is hope that there will be hearings on the issue, but one can only think that will be unlikely to solve the issue.

The larger problem I see, and one that the article touched on is the growing issue of low wage jobs here in the States. The article cited a study which said that three out of five jobs added after the recession have been low-wage jobs while only one in five were of the same variety before the Recession. As we’re typically not a nation of savers there is concern in this and one that is not really new to me. Being in a low-wage job does make saving and investing more difficult, but it’s not impossible. What it requires is creativity and the ability to make difficult choices that are aligned with appropriate liabilities. The challenge of this though is how to do this if you’re on a government program and being in a situation where those programs may not necessarily incent people to save and enable themselves to move out of the situation they may find themselves in.

Ok, enough of my ramblings. It was another great week in the blogosphere and I was able to read some great blog posts. If you have the time this weekend I encourage you to check out some of the blog posts I’ve selected.


Blog Post of the Week

Gee, Can I Please Walk Over a Bed of Hot Burning Coals? on The Frugal Farmer

I love Laurie’s honesty and transparency in this post, probably because I can relate so well to it. Laurie describes the choices she and her husband have made to embrace extreme frugality in order to conquer the mountain of debt they’re facing. As Laurie notes, the easy thing to do would be to throw their hands up and do the minimum or even declare bankruptcy. I’ll admit that was a feeling I dealt with when I was in debt and bankruptcy was something I wanted many days. However, Laurie and her husband have their eyes on what really counts, their future and, more importantly, their children. Children are sponges and I am confident that what their children are seeing AND learning is the importance of integrity and hard work needed to accomplish a goal that feels insurmountable at times. If you’ve not been to Laurie’s site before, I encourage you to do so as she has quickly become one of my must reads.

Other Blog Posts That Ruled

Dear Parents, Charge Your Kids Rent on Broke Millennial

TIME Magazine Millennial Cover: The Millennial Bias on A Young Pro

Your Credit Cards Are Paid Off, Now How Do You Stay Out of Debt on Eyes On The Dollar

Engagement Ring Shopping Tips on Money Smart Guides

What Advice I Would Give to my 23 Year Old Self on Retire By Forty

Should You Lend Money to Family and Friends on My Personal Finance Journey

Guide to Starting a Blog on Modest Money

Investing – What’s the point? on Make Money Your Way

Odd Search Terms

How to get Rick fast…Start running!

Can you walk into Wal-Mart without buying anything? If you’re smart you won’t even walk in!

Do I need life insurance if I am rich in Australia? I don’t know, you may want to ask Glen on that one.

I’m happy…Well good for you!

I don’t trust my stockbroker, should I? Like I would trust an ex-con staying in my house!

What makes me scratch my head so much? Can I suggest an investment in some dandruff shampoo?

Why am I always scratching my head? Looks like you need to make the same investment as the person above!


What are your thoughts? Does it surprise you that the government is funding more low-wage jobs than Wal-Mart and McD’s combined? Do you have anything fun planned for the weekend? I’ll be celebrating our twelfth anniversary by going out on a date night tonight!


Photo courtesy of: Vincent Chen

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I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. I'm also a freelance writer, and regularly contribute to GoBankingRates, Investopedia, Lending Tree and more.

Latest posts by John Schmoll (see all)


  • I can only see wages getting lower unfortunately. Many things come down to simple supply and demand. Currently there are plenty of people looking for work, but not too many jobs, therefore the employer holds all the power and can offer jobs at a lower wage.

    I hope you have a great weekend John 🙂

    • John says:

      That’s a great point Glen. I think we will continue to see lower wages for some time and who knows when it’ll turn around. You have a great weekend as well.

      • Julie says:

        Its a bleak view but sadly I must agree. As long as there are people able to fill the roles at the low wage we won’t be seeing increases coming through. Sadly this requires folks to search for either government assistance or a 2nd job! We are not only depleting pockets books but also energy reserves from those people doing more for less. When will the vicious circle end?

  • I think the government is much “worse” than WalMart, but I really just have a bad view of them financially/economically because they have shown themselves to be so incompetent on these fronts in every which way.

  • Awww, thanks for the link love and the kind words, John. And happy, happy anniversary to you and Mrs. FR!!!! Yea! Regarding the above, the conspiracy theorist in me has a whole other reason why the government is happily funding low wage jobs, but I won’t go there. :-). Rick is off this weekend for the first time in 3 weeks, woohoo! We will be finishing the fire pit Rick started this week, and having some friends over for a bonfire. Can’t wait! Have a great weekend, John. 🙂

    • John says:

      Not a problem Laurie! You may be on to something, but who knows these days. Have fun this weekend, I bet you’re excited to have Rick home on the weekend for a change. 🙂

  • The government is definitely worse. And Glen is right, you’ve got to have a skill or your out of luck in the job search.

  • Wal-Mart is so much worse. At least government does manage to contribute to people’s lives in a variety of ways. Wal-Mart only sucks the life force out of communities and its employees. They suck.

  • This is a tough one, but I would go with the government being worse. They tend to screw up almost everything they touch and that is a lot of stuff. Yes, Walmart is evil, but that is a business that can choose how it wants to do things. Yes, they might do some shady things, but most people are aware of it now.

    I hope you have a great weekend John and congrats on the wedding anniversary.

    • John says:

      It is a tough one Grayson and I think both share blame, but you do have to look at the source which I think would make it lean towards the government.

  • Don’t really know who is worse but I wouldn’t want to have to count on either if you ask me. It sucks to hear the minimum wage but we also have to understand that we live in one of the best countries for opportunities and a lot of people don’t take advantage. Yes the system sucks in many ways but the are far worse systems out there. Nice list really liking the odd search terms.

  • I don’t know all the details on the program, but my thought is that government assistance to companies will likely run out at some point. Just like the tax savings for new hires that started in 2009 or the rebate for providing health insurance to employees, I think those programs will end eventually, and then what happens to those employees when the employer is on the hook for everything? Will they get laid off or have salary or benefits reduced?

    As for low wage jobs in general, I think you have to learn a skill or go into a higher paying career, or be creative. The day when you could go get a factory job for $30 an hour plus benefits and pension is gone, and we need to adjust for that. $12/hr in our area actually is a pretty good job for many. If you have two incomes of that level, you could buy a house and have a decent living. If it was NYC or LA, it would be a different story.

    Happy anniversary. I hope you have a great date night, and thanks for the mention.

    • John says:

      You have a great point Kim and I am not certain when/if it’ll end but I am sure that it probably will at some point. I do know that the article said that there is the potential for Congressional hearings on this matter.

      You also bring up a great point about the changing times. Those days of the goof paying factory job are gone and it’s vital to be able to be able to adapt to that.

  • Greg@Thriftgenuity says:

    Happy anniversary, my first anniversary is on Sunday!

    My initial reaction is that the government is worse for no other reason than we hear politicians say minimum wage should go up, yet they are guilty of the same thing that they demonize businesses for. Definitely is an issue in regards to no incentive to get off of programs because it is better than low wage jobs.

    As the stock market climbs and the low earners have no money to invest, looks like the gap will continue to widen.

    • John says:

      Awesome! Congrats Greg!

      You bring up a great point and there really is a lack of incentive to get off of many of the programs. Why on earth would I want to work if the government will foot the bill for me? 😉

  • Mackenzie says:

    I think they are both bad and guilty of some shadiness. The government never seems to do the right thing, and Walmart, well…we could go on for days about what’s wrong with them.

    Happy Anniversary John! 🙂

  • I am not surprised at all. As far as the weekend, it will be busy and hopefully involve some townhouse chores and blog chores!

    • John says:

      Nor am I Lance. We have a bunch of chores to do around the house as well, if we get half of them done then I’ll be happy.

  • Happy 12th Wedding Anniversary to you and Mrs FR! I’m not American so I’m not sure which is worse in your country but on a totally unrelated topic, why is the food size in American Wal-Mart so big??? It blows my mind lol. Great blog choices for my reading this weekend, thanks John 🙂

    • John says:

      Thanks GMD! That’s a great question and I would bet that it is somehow related to our desire to eat as much as we can and, to some extent, helps lend to our health care issues.

  • They both get a thumbs down in my opinion. Even when the government wants to helps, they are so big that everything gets convoluted and overrun with red tape. Enjoy your date night with Mrs. Frugal Rules and congratulations on 12 years together!

  • anna says:

    I really enjoy these posts from you – I agree both are equally to blame since the government enables a program where people will still rely on public assistance and the corporations for their greed. I’m wondering, though, since some of these are manufacturing, if it “takes away” any outsourcing from other countries. On one hand, that’s great with keeping more jobs in the U.S., but on the other it’s now exploiting Americans with unlivable wages (at least for the ones that still rely on assistance).

    Happy Anniversary to you and Mrs. Frugal Rules! Enjoy date night 🙂

    • John says:

      Thanks Anna, I appreciate it! They get some decent traction, so I think I’ll keep them coming. 🙂 I would agree that they both share in the blame and you bring up a great point about whether some of these jobs would be outsourced or not. Having the jobs is great, but you can’t really support your family very well, generally speaking, on a wage that is $12 or less. You might be able to, but it will require some hard choices.

  • Debt Blag says:

    Tough call. I think Walmart is better at accomplishing their goals, but I’m not sure their goals are always best for the U.S.

    Happy anniversary to the both of you!

  • I would have to say that Walmart is still better hands down. If someone wants to make more money, then they need to work harder so that people will want to compensate them more. Happy Anniversary by the way!

    • John says:

      I see your point Deacon, though I don’t know that it’s always as cut and dry as that. I think many can go out there and find more ways to bring in additional income and don’t for one reason or another. That said, if the only jobs they’re finding are low paying jobs and increased competition then it can be easier said than done.

  • My Financial Independence Journey says:

    The government is worse. Wal-Mart is at least efficient.

    • John says:

      True, but they do still share some of the blame. I would argue that they do not need to cut costs at all expense which is the accusation being made.

  • Happy Anniversary John to the both of you. I hope you enjoy that much awaited evening tonight and forget about blogging and the business. Enjoy my friend! Mr.CBB

  • Thank you so much for including my post John! You are the best.

  • CashRebel says:

    3 in five jobs are now low wage, ugh, that’s not a good sign for lower income Americans. Like you said, it’s still possible to save and invest, just much harder. I’ve got kind of a wacky idea.

    Clearly programs like food stamps and well fare cost the government money. What if there was government sponsored frugality training. I wonder if it’d be a cheaper way to keep keep people off the streets than well fare?

    • John says:

      I know, I got a sick to my stomach feeling when I read that. It’s sad really and shows where we’re at as a society.

      I think frugality training would be great, though I fear it would be too bloated with red tape…just like we are now. 😉

  • I think there does need to be a balance of lower and higher wage jobs. We do need people to do the jobs that are traditionally paid lower. Some jobs are paid a pithy amount but should be paid a lot more.

    • John says:

      I agree Daisy, though too many of the jobs are going towards the lower wage end of the spectrum and thus increasing the divide between the haves and have nots.

  • Interesting! Seems to be a matter of systemic vs. singular issues. Great reads! Hope you have a great weekend.

  • Troy says:

    But then again, in this crappy economy a low paying job is better than no job. In the last year, apparently more people joined the upper class than ever. Just shows you the increasing wealth gap.

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