Case Study: Under Socialism, Walmart Workers Would Get a 20% Raise.

A look at the 2023 Walmart Annual Report and how much value is being extracted from workers at the country's largest employer.

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According to Socialist theory, Capitalism is immoral because it centers on the generation of profit, which is the value of what workers produce minus the cost of their wages and other business expenses. Under a Capitalist framework, owners, not the workers, are entitled to this profit, which is also called surplus value.

For example, if I, a shoe factory owner, hire you to make a pair of shoes that I sell for $100 dollars, but I only pay you $25 dollars to make the shoes and $10 to upkeep the factory, I just stole $65 dollars from you. The value of your labor, as measured by what consumers will pay for the shoes, is $100. But, you only got $25 dollars. It cost $10 to provide the overhead and material expenses for the day, meaning I, the owner who did not contribute labor, took $65 dollars away from you, the worker. Capitalists call this $65 profit. Socialists call it surplus value.

It is the goal of Socialists to do away with the theft of Capitalist profit by moving towards a system in which the workers, not the bosses, own their workplaces, entitling them to control their lives and reap the full value of their labor.

To understand how this works in the real world, we’ll examine the business operations of the country’s largest employer, Walmart, to see just how much surplus value is being extracted from the 2.2 million employees that run the superstore franchise.

If your workers have to beg customers for food, you’re probably not paying them enough.

The 2023 Walmart Annual Report

Note: All figures come from the Walmart 2023 10-K Report. If you’d like a consolidated view, Macrotrends provides a compact breakdown.

Last month, Walmart released its 2023 annual report detailing the company’s financial performance from January 31^st, 2022 to January 31^st, 2023. With over 10,000 stores and almost 150% more employees than Amazon, the chain of superstores is the principal employer and provider for many American municipalities and towns. 

During this time, Walmart generated $611.3 billion in total revenue for a gross profit (revenue — the cost of goods sold) of $147.57 billion, which was a healthy 2.65% increase from the year prior. Unfortunately for our purposes, the report does not provide a line item for “labor costs.” Instead, wages and benefits are lumped in with marketing, rent, electricity, insurance, and other operating expenses, which Walmart labels, “Operating, Selling, General and Administrative Expenses.” These costs amounted to $127.14 billion, yielding the company an operating income of $20.428 billion. After detracting non-operating expenses (restructuring debt, interest payments, etc.), Walmart had a pre-tax income of $17.016 billion. The corporation paid about $5.724 billion in taxes, netting a profit of $11.292 billion (this is labeled “income from continuous operations” on the report).