Retail

Wal-Mart's No Good, Very Bad, Pre-Thanksgiving Week


A customer buying meat at a Walmart Supercenter

Photograph by Kevork Djansezian/Getty Images

A customer buying meat at a Walmart Supercenter

This is supposed to be a cheery season for retailers. Not at Wal-Mart (WMT), though, where it’s been a really bad week—and this is only Wednesday.

On Monday, the Cleveland Plain Dealer broke the news of a holiday food drive at an Ohio Walmart store—for its own employees. The newspaper story, including a photo of the bins set out for the donations, quickly made its way pretty much everywhere. And it came from OUR Walmart, a group of union-backed employees pushing for higher wages and better working conditions.

To many, it’s just the latest evidence that Walmart, the biggest private employer in the U.S. with 1.3 million workers, doesn’t pay all of them enough to live on. Walmart said the food drive is proof that employees care about each other and said it is meant for those facing unusual hardships this holiday season. A Walmart representative reminds me that even as critics focused on the food bins Monday, the company had “surprised more than 350 associates with on-the-spot promotions” at several town hall meetings.

Next came Stephen Colbert. “Now some critics out there are saying Walmart isn’t doing enough, but they’re wrong,” he said on his show on Tuesday night, “because Walmart isn’t doing anything.” He continued to twist the comedic knife: “These bins are for Walmart employees to donate to other employees. And where can Walmart’s low-wage workers find cheap food to donate? Walmart. Anyone can afford food there, except people who work at Walmart.”

By Wednesday, the progressive think tank Demos had published a report (PDF) arguing that Walmart could afford to pay its workers an additional $5.83 an hour—to reach the modest goal of the equivalent of $25,000 a year for a full-time employee—by making one change: ending the company’s share-buyback program. According to data compiled by Bloomberg, Walmart has bought back about $36 billion in stock in its four previous fiscal years, and in June the company announced a fresh $15 billion share-repurchasing program at its annual shareholder meeting. One consequence of the buybacks: The Walton family now owns slightly more than 50 percent of the company.

The Demos report,”A Higher Wage is Possible: How Walmart Can Invest in Its Workforce Without Costing Customers a Dime,” says that curtailing the buybacks would not harm the company’s 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,” Catherine Ruetschlin and Amy Traub wrote. (And if Walmart employees were making more, chances are they’d be spending more at Walmart.) The report also notes that other retailers pay less than living wages. Walmart, though, as the biggest retailer, sets the standards and faces the most scrutiny.

When I asked Walmart to respond to the report, a second spokesperson, Kory Lundberg, wrote in an e-mail: “We are proud of the opportunities we provide our associates and their families with good and jobs and benefits and the opportunity to grow a career and go as far as your hard work and talents will take you.” He also pointed out that Demos is funded (PDF), in part, by several unions.

He didn’t challenge Demos’s math.

Susan-berfield-photo-200x200
Berfield is a writer for Bloomberg Businessweek in New York. Follow her on Twitter @susanberfield.

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Companies Mentioned

  • WMT
    (Wal-Mart Stores Inc)
    • $76.14 USD
    • 0.02
    • 0.03%
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