Wal-Mart, the nation’s largest employer, has a new ad campaign promising bold measures to promote good jobs in America. This would be exciting news for all of us – if only there were some substance to it.
Many Americans remember a similar announcement in the 1990s. Then, too, Wal-Mart spent heavily on “Buy American” ads, proclaiming its commitment to U.S. manufacturing. That campaign fizzled after NBC’s "Dateline" showed rack after rack of clothing made in China, Malaysia and Bangladesh on display under Wal-Mart’s “Made in the USA” signs.
Now, Wal-Mart claims that it will spend up to $50 billion per year more on U.S. products by the year 2022. According to an ad featuring TV’s “Dirty Jobs” host Mike Rowe, this supposedly new commitment will help American workers “build families” and “build dreams.”
Faced with a firestorm of skepticism, Rowe said in a CNN interview that viewers need to understand that “this whole thing is about P.R.” How true, unfortunately. At best, the program is a drop in the bucket for a company that is actually the leading obstacle to the American dream for working families.
For years, Wal-Mart has been the dominant driver of corporate outsourcing. A study of the company’s impact over a five-year period found that its imports from China alone led to the elimination of 133,000 American jobs.
Wal-Mart has forced many U.S. firms, from Levi’s jeans to Master Lock, to move manufacturing overseas in order to maintain their status as Wal-Mart suppliers. In the book "The Retail Revolution," a spokesman for the National Knitwear and Sportswear Association explained that Wal-Mart “forces domestic manufacturers to compete, often unrealistically, with foreign suppliers who pay their help pennies an hour.”
Even if Wal-Mart’s new promises turn out to be true, they don’t represent a fundamental shift in the company’s outsourcing model. The “additional” spending may largely be a result of Wal-Mart’s normal projected growth in U.S. purchases over the 10-year period, and at most would represent six percent of its costs.
Meanwhile, if Wal-Mart truly wanted to use its wealth to support good American jobs, it would change the way it treats the employees it already has. In addition to being the leading outsourcer, Wal-Mart is the standard setter in America’s growing service sector when it comes to holding down wages to poverty levels.
Between now and 2022, an estimated 90 percent of the increase in total U.S. employment will come from the service sector, with an addition of more than 14 million jobs. Improving pay and benefits in this rapidly expanding field is essential for American families and our economy.
Yet, Wal-Mart last year admitted that more than half of its workers are paid less than $25,000 a year. That’s up to 825,000 Americans getting those poverty wages, while many other Wal-Mart workers aren’t paid much more.
Those poverty-level wages are a big reason that the company enjoys $17 billion a year in profits. The majority shareholders of the company are members of the Walton family who inherited the stock and have a combined wealth of nearly $145 billion – more than the combined wealth of 42 percent of American families. Four of the Walton heirs are among Forbes magazine’s richest 10 Americans.
Last year, the public policy organization Demos issued a report showing that Wal-Mart could pay every employee at least $14.89 per hour, without raising prices. Fortune magazine weighed in with a separate analysis, “Why Walmart Can Afford to Give Its Workers a 50% Raise.”
If Wal-Mart set an example to be followed by other big retailers of paying at least $25,000 a year, a million and a half workers would be lifted out of poverty. That would mean more money staying in communities to support local businesses, helping to create at least 100,000 new jobs.
Taxpayers would no longer have to subsidize the Waltons by providing many of Wal-Mart’s workers with public assistance such as food stamps and Medicaid just to survive. A congressional report showed that taxpayers provide a $900,000 subsidy each year at just one of the company’s 4,000 stores.
Last fall, brave Wal-Mart workers, joined by thousands of community supporters, held more than 1,500 protests and strikes around the country calling on Wal-Mart to publicly commit to pay workers a minimum of $25,000 a year for full-time work and stop retaliating against those who speak out.
It’s time that the Waltons, Wal-Mart executives, elected officials and even TV personalities start listening. Wal-Mart can do better by raising pay at home and establishing a serious program to buy from U.S. suppliers. The future of good American jobs, and our families and communities, depends on it.