American workers are working harder for less, with productivity rising but living standards stagnant or declining.1 At the same time, stock market wealth and incomes for the highest-paid Americans have risen.2 Against this backdrop, the pay practices of the nation’s largest private employer have come under increased scrutiny. Walmart, with 1.3 million U.S. employees and $17 billion in annual profits, sets standards for all other retailers and across the supply chain of one of the nation’s fastest growing industries.3 Walmart’s practices impact the public sector and taxpayers as well when employees earn too little to meet their needs and require public assistance.4 Finally, Walmart is a leader in promoting an employment model in which workers earn too little to generate the consumer demand that supports hiring and would lead to economic recovery. In the last year, Walmart employees themselves have been increasingly vocal in protesting their low pay. Since the last holiday season, Walmart employees in stores throughout the country have repeatedly spoken out in pursuit of a modest wage goal: the equivalent of $25,000 a year in wages for a full-time employee.
Now as another holiday season approaches, this research brief considers one way Walmart could meet the wage target its employees are calling for— without raising prices. We find that if Walmart redirected the $7.6 billion it spends annually on repurchases of its own company stock, these funds could be used to give Walmart’s low-paid workers a raise of $5.83 an hour, more than enough to ensure that all Walmart workers are paid a wage equivalent to at least $25,000 a year for full-time work.5 Curtailing share buybacks would not harm the company’s retail competitiveness or raise prices for consumers. In fact, some retail analysts have argued that by providing a substantial investment in the company’s front-line workforce, higher pay could be expected to improve employee productivity and morale while reducing Walmart’s expenses related to employee turnover.6 With more money in their wallets, Walmart employees would likely spend a portion of the cash at Walmart itself, boosting the company’s sales. Sales might also increase as customers benefit from an improved shopping environment.7