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How Walmart keeps giving its workers the shaft — and fuels America's inequality epidemic

The retail giant's recent moves to increase its minimum pay earned applause, but let's look at the big picture


Gary Legum
September 8, 2015 5:40PM (UTC)

This past February, Walmart (Official motto: The Death Star of retail!) earned itself some positive press for once. The company announced it would raise the base pay of its store employees to $9 an hour by April and $10 an hour by early 2016 as part of an overall plan to spend $1 billion on increased wages and improved worker training. This move was applauded, cautiously, as a necessary first step for a company with a long history of paying its workers as if it’s still 1962, the year founder Sam Walton opened his first store.

Then this week came the news that the company is cutting hours for workers at some stores. Labor advocates cried foul. A spokeswoman for Making Change at Walmart, an advocacy group for improving the lives of the company’s workers, called the move “further evidence that Walmart’s so-called ‘wage-increase’ was nothing more than a cruel PR stunt.” Business analysts countered that since the point of the pay increase and better training was to also increase productivity and reduce employee turnover. It then stands to reason that more productive workers would lead to a decrease in the overall number of labor hours as stores try to find the right balance between productivity and profitability.

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Before any right-wingers accuse me of hating someone else’s success, let me say that no one is trying to tell Walmart it can’t run a profitable business. (Shaming Walmart a little, though? Well …) And I can understand how the six heirs of Sam Walton might feel a little pinched, what with their collective net worth shrinking by $3 billion in 2014, leaving them with a measly $149 billion of value in their collective portfolios. Which would only be good enough to buy approximately 150 NBA franchises in today’s market. How is that even fair?

So it would be a shame if the “Walmart is just trying to keep their business profitable” crowd can use this latest brouhaha to distract from all the ways the company is still terrible for workers. Let’s start with that salary increase. According to the Pew Research Center, when adjusted for inflation, the federal minimum wage in America peaked at $8.54 in 1968. If the federal minimum wage had kept up with increases in worker productivity since then, in 2012 it would have been $21.72 an hour.

Anyway, congratulations to Walmart for bumping up its employee pay to a number that, adjusted for inflation, was last seen somewhere around the time Richard Nixon started bombing Cambodia.

Others have long noted the effects this low wage has on Walmart’s and others’ low-wage employees — the need to work multiple jobs or supplement their meager incomes with welfare and food stamps — and how the Waltons can use loopholes to keep the taxes on their insanely high wealth low while their workers struggle. With America’s vast income inequality an issue in the 2016 election, the Waltons are sure to be held up, again and again and again, as the poster children for finding solutions to lessen it. Municipalities across the country have been passing ordinances raising local minimum wages to $15 an hour, which is another good step for any Walmart employees who work in those cities and towns. Unionization would be another good step, if the company ever stops blocking that as well.

Still, the drive to pry a few more dollars from the tight-fisted grip of Walmart’s owners is sure to be a long and arduous one, replete with setbacks as the company adjusts to a new reality that has not fully arrived. If you’re in one of their stores buying supplies for a barbecue this holiday weekend, know that the employees working instead of hanging out on the beach on Labor Day need it to get here sooner rather than later.

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Gary Legum

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