Walmart recently headlined the business news by announcing a raise to over 500,000 of their employees, lifting base pay from $7.25 an hour to $10. This is occurring even without government forcing a national minimum wage.
Walmart President and CEO Doug McMillon released a video on Facebook addressing employees (but really, the media). He was excited to be making it in Sam Walton’s office for reasons that likely show Walmart’s blindness to what the company has grown to represent.
McMillon starts by stating that Walmart's people make the difference, and that Walmart leaders wanted to demonstrate this year that they care and appreciate their associates, the title given to their employees for indoctrination purposes.
"We want to create a situation where you get every single one of the benefits that those that came before us received," said McMillon. That is likely the most tone-deaf statement of his entire address to the Walmart Nation. Walmart employees do not need to get the benefits of their predecessors. They need to get wages and benefits afforded by more responsible corporations.
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How does Walmart intend to do right by their employees (associates)? By April of this year Walmart will begin paying its hourly workers at least $9 per hour, $1.75 over the national minimum wage. By February of next year, the company will begin paying a minimum of $10 per hour. Walmart also said it will give employees more predictability in scheduling and presumably more hours. Walmart will provide better onboarding to promotion.
BusinessWire called this path to mediocrity "a bold new initiative on pay and training for U.S. associates." This Walmart action is nothing but a public relation stunt. A few months ago MSNBC’s Krystal Ball put Walmart’s treatment of its employees into perfect perspective.
Walmart’s new PR stunt is not a favor to its employees. This minimal act is likely existential for the company as its meager wages progressively make working there untenable.
This is overdue compensation and just a start. This is something Walmart could have done years ago. A 2011 UC Berkeley study pointed out that if Walmart paid its workers a minimum wage of $12 and passed the entire increase onto customers, it would cost the customer 46 cents more a trip, or about $12.49 per year:
Even if Walmart were to pass 100 percent of the wage increase on to consumers, the average impact on a Walmart shopper would be quite small: 1.1 percent of prices, well below Walmart’s estimated savings to consumers. This works out to $0.46 per shopping trip, or $12.49 per year, for the average consumer who spends approximately $1,187 per year at Walmart. This is the most extreme estimate, as portions of the raise could be absorbed through other mechanisms, including increased productivity or lower profit margins.
The same study showed that little amount has a tremendous impact on the financial well-being of those receiving the increase:
Our data suggests that a $12 per hour minimum wage standard at Walmart would be effective in aiding lower-income families. If Walmart increased its minimum wage to $12 per hour, 41.4 percent of the income gain would accrue to workers with wages below 200 percent FPL. These low-wage workers could expect to earn an additional $1,670 to $6,500 a year in income.
Walmart's meager attempt of a pay increase is yet to provide those employees with a living wage for a dad and one child or a mom and one child, let alone the minimum wage-hating conservative's "perfect nuclear family." Companies like
Gap and
Ikea saw the light. Costco has
always understood that a well-paid worker makes a returning satisfied customer and a reliably solid bottom line. Walmart believes that slightly higher base wages is sufficient to tamp down the activists who forced them to move on the issue of the company's lousy pay scales.
Walmart continues to believe their continual PR campaign—employees called associates, cultish adoration of its founder, and statements of care for its employee are the deeds that will allow them to continue their policies that make their employees analogous to indentured servants. Activists will ensure that PR moves are not allowed to change the true narrative that income inequality is caused by predatory employers like Walmart.