Walmart Calls Worker Concerns “Silly,” But Says It Will Raise Its Lowest Pay
“Silly.”
That’s how Walmart spokesperson Kory Lundberg described the concerns of Walmart workers and their allies who protested the mega-retailers low wages and poor employment policies in New York City last Thursday. “Wal-Mart doesn’t have any locations in New York City,” explained Lundberg, trying to reach those of us still too silly to grasp the fact.
But the protestors (Demos colleagues and I were proudly among them) were making some considerably less silly points. As the nation’s largest private employer, Walmart’s business practices—from its treatment of its own employees, to the pressure it exerts on suppliers and competitors to treat their workforce similarly—has profoundly influenced the entire American economy, particularly in the manufacturing, warehousing, and retail sectors. The economic changes Walmart helped promote, from abusive scheduling practices to low wages to a basic disrespect for the frontline workforce, have impacted workers throughout the country—including in New York City, which has no Walmart stores, despite Walmart’s repeated efforts to expand into the city’s dense and lucrative market.
But New York is also important for another reason. Although the city contains no Walmart stores, it does have Walmart money, including wealth stemming from the billions of dollars in dividends that heirs to founder Sam Walton receive each year in continuing income from the operations of the company. Consider, for example the $25 million invested in a lovely piece of Manhattan real estate by billionaire Walmart heiress, Alice Walton. It was to her imposing Park Avenue building that protestors, including Walmart workers who traveled from other cities and states, tried to deliver a petition calling on the company to publicly commit to raise worker pay to $15 an hour and provide consistent, full-time work. Alas, Ms. Walton was not at home. 26 protestors were arrested for acts of civil disobedience.
But someone at Walmart may have been listening to workers’ “silly” concerns—or trying to preempt them. A day before workers marched, Walmart CEO Doug McMillon told reporters, “it is our intention over time that we will be in a situation where we don't pay minimum wage at all.” In other words, Walmart would consider nudging up pay for the approximately 6,000 workers to whom it currently pays the federal minimum wage of $7.25. The decision to “invest in its associate base” as McMillon described it, is a sound one, as Walmart’s focus on short-term results at the expense of front-line service is hurting the company.
But Walmart can—and should—do so much more. As my colleague Catherine Ruetschlin and I explained in a brief earlier this year, Walmart would benefit from reallocating resources away from short-term earning s and toward its human capital (the “associate base,” also known as its workforce) raising productivity by reducing turnover and improving employee engagement, enhancing customer service, and building long-term value. We find that if Walmart redirected the $6.6 billion it spends annually on share repurchases, it could give its 825,000 low-wage employees a raise of $5.13 per hour, boosting the company’s productivity and sales.
And just as Walmart’s poor labor practices have dragged down the quality of retail jobs nationwide, a boost like this could lift them up—my other recent research focused on the wages of women at all the nation’s large retailers and found that establishing a new wage floor equivalent to $25,000 per year for full-time, year-round work would improve the lives of more than 3.2 million female retail workers and lift 900,000 women and their families directly out of poverty or near poverty. A wage turnaround at Walmart could be the spark that makes that happen.
Unfortunately, an indefinite hope to “over time” raise pay for a small number of employees pales in comparison to other recent Walmart announcements, such as the not-at-all vague declaration that the company would be terminating health coverage for 30,000 part-time associates. Nor does inching compensation up to $7.35 an hour look much like the $15 and a full-time schedule workers are demanding. But from the Walmart corporate office to make the announcement demonstrates the power of Walmart workers' collective voice.
The call for $15 and a full-time schedule is only going to get louder as the all-important Christmas shopping season approaches.
