What You Should Know About Walmart’s Raise

February 25, 2015 | | The Nation |

Remember when Walmart got panned for running a Thanksgiving food drive for its own employees—overlooking the irony of demonstrating noblesse oblige by asking customers to subsidize the workers the company itself impoverished? The retail giant took a more strategic approach last week when rolling out its latest do-gooder scheme: raising its base wage incrementally to $10 an hour. The move was widely praised even by labor groups—for lifting wages slightly closer to... well, what it should have been paying workers all along. [...]

Walmart associates are further devalued by the company’s longstanding pattern of suppressing workplace organizing efforts and imposing unstable schedules, which often interfere with workers' family caregiving or school responsibilities and especially impact working women. In addition, Walmart devalues workers further through its vastly unequal corporate hierarchy: according to Demos, the ratio of CEO-to-worker earnings has more than doubled in recent years, to about $300 in CEO compensation for every meager dollar earned by a wage worker. [...]

What would a fairer raise at Walmart look like? Workers have proposed their own simple—and surprisingly feasible—demand: $15 an hour, and full-time jobs. According to an analysis by the think tank Demos, Walmart could already afford this measure simply by redirecting about $6.6 billion away from its current practice of repurchasing its own shares—a tactic to artificially boost shareholders’ income—and boosting workers' pay instead. This measure “could give its 825,000 low-wage employees a raise of $5.13 per hour, boosting productivity and sales.”

The virtuous circle could be widened by ratcheting up pay scales across the retail workforce. Demos estimates that if retailers with 1,000 or more workers set a basic annual income of $25,000, nearly six million workers, most of them women, would get a major boost—resulting in a 27 percent raise for a typical low-wage woman worker.

So Walmart's raise deserves some praise, but it represents a fraction of what the company could already afford to pay, if it only slightly shifted some investments from the executive suite to the checkout line.

Demos analyst Catherine Ruetschlin tells The Nation via email that Walmart’s chief competitors, ultra-cheap dollar stores, might decide to double down on poverty wages to fill the bottom rung of the market that Walmart previously occupied. So unless economic conditions drastically improve for all workers (and Walmart's new wage hike won't cut it), there will always be impoverished families with householders forced to work for less.