Minimum wages are highly topical today. In an era of growing inequality, business, government, employees and the agencies that advocate on their behalf, seem pitted against each other, with few willing to take a broad, multi-disciplinary, integrated approach to a fair solution. Economic policy positions and business opinions on the whys and why nots are plentiful.
While governments remain stuck in neutral on adopting fair policies, citing a slow-recovering economy post-financial crisis, circa 2008, employees mired in minimum or low wage paying jobs are taking their fight for higher wages through a call for raising the minimum wage to the streets. After a Walmart store in Canton, Ohio started a local food drive, asking for food donations for its own employees, OUR Walmart, an independent non-profit organization advocating on behalf of Walmart associates, increased its protest events against Walmart, particularly around Black Friday, the largest retail-generating sales day of the year.
To provide some background and context, in the latest full year financials, Walmart reported $469.2 billion in sales and $17 billion in profits. And yet, Walmart is cited as the worst paying company in America by Yahoo, in its list of 10 worst paying companies. Yahoo used NELP methodology to capture those employers with the largest number of low and minimum wage workers, and found Walmart as the worst. Abetted by a recent push towards hiring part time staff and seasonal fill-ins in place of full timers, to save the cost of health benefits, the average hourly rate at Walmart is now less than $9.
Think about that for a moment. Nine dollars an hour, 15-25 hours a week, if they’re lucky. To pay for a roof over their head, put groceries on their table, clothes on their back and pay for necessary transportation. At a minimum. Best not have any hungry mouthes to feed, other than their own. Or get sick.
With $17 billion in profits, Walmart can clearly afford to pay its staff. As OUR Walmart’s Facebook page points out, each Walmart store requires $400,000 of social safety net dollars spent by the U.S. government, to supplement its workers wages; of the 1.3 million Walmart employees in the U.S., only 475,000 or 36.5% make more than $25,000. With 4,156 stores in the U.S., in essence, the feseral government is subsidizing the business operations of Walmart to the tune of $1.66 billion. I am unsure whether that even covers shelter or healthcare costs.
As for the other companies found on Yahoo’s list: McDonald’s, Target, Kroeger, YUM Brands round out the top 5. Their profits range from $1.5-5.5 billion. They too have sufficient profits to cover higher employee wages.
One can then empathize with Walmart associates or foodservice and retail workers, another category of wage earners making minimum wages, in their Black Friday protests or protests of any kind.
How can the average shopper show support? Through your purchasing decisions. Every dollar you spend and where you spend it speaks volumes whether you are consciously aware or not. Sure you can complain to Walmart’s head office of their employee practices or “like” the OUR Walmart Facebook page, march alongside their demonstrations outside your local store or bring the protestors a cup of coffee to warm up, but ultimately the only thing Walmart responds to are direct actions affecting it’s bottom line. In other words, your purchases. Shop elsewhere while informing them of your decision and you’re sure to get their attention.
Look, I don’t offer this suggestion lightly. I led the Sunbeam small appliance team that won Walmart’s Vendor of the Year in Canada in 2002. I’ve worked for McCain Foods and had McDonald’s as a client. But I have also worked with Costco, whose CEO Craig Jelinek has been vocal in 2013 in calling for an American minimum wage of $10.10 per hour, and whose average employee earned $45,000 in 2011, vs an average of $17,500 for Walmart. These are the real numbers. Numbers that cannot be ignored by talking heads.
Yes, Walmart has a greater number of sales associates across a greater number of stores versus Costco’s floor staff in fewer stores, which has a disprortionate weighs on the average salary, but it’s the commitment Costco shows its employees through investment in training and development, healthcare benefits and full-time status that further differentiates Costco.
That commitment also shows in the starting hourly wage of its new employee hires at $11.50 an hour. All those companies on yahoo’s 10 worst list were mostly under $9 an hour.
I’m no economist, but when you raise the minimum wage, don’t you increase the earning power of each employee, which translates into greater spending power? Doesn’t greater spending power in the marketplace translate back into a stronger economy, while also reducing the government’s need to spend social safety net dollars?
Could be wrong, but I can personally attest to the fact that investment in your own employees most certainly draws greater loyalty, productivity and efficiency which ultimately improves profitability. It certainly proved so with the team I assembled at Sunbeam, the same one that won that Walmart award, ironically enough.
Take a moment before you shop online or in store, and consider the wages of the person helping you find your size, confirming your ship date or ringing up the sale. Your choices do make a difference. Hold Walmart and every other retailer, restaurateur and product or service provider responsible for the choices they make in the respect they show their employees through their renumeration.
If Walmart was as concerned for its employees as it’s spokesperson claimed, when responding to calls about that food drive in Canton, wouldn’t it make more sense to increase their hourly wage, and hire full time staffers so they could put food on their own table rather than rely on the kindness of the public?