FacebookTwitterGoogle+RedditEmail

Wal-Mart’s Downward Wage Spiral

by JOHN LOGAN

The retail giant’s low wages and poor working conditions drive down standards throughout a sector that is increasingly important to the entire US economy.

On Black Friday, workers and their community allies protested for “consistent hours, better pay, and simple respect” at Wal-Mart, the country’s largest private-sector employer with 1.4 million employees. Even with $16 billion in profits last year, Walmart pays such low wages that it has the nation’s largest number of employees who are reliant on government assistance. This costs American taxpayers hundreds of millions of dollars per year.

The workers are demanding that Walmart provide a wage of at least $13 per hour, affordable benefits, more full-time positions, and end retaliation against employees who speak up at the workplace. Despite what the company claims about paying competitive wages, the reality is that almost half of Wal-Mart’s associates make less than $10 an hour. According to a Bloomberg study, average employees make just $8.81 per hour. One third of the company’s employees are denied benefits because Wal-Mart scheduling keeps them on fewer than 28 hours per week, even though many of them want full-time positions. Wal-Mart stresses that the majority of its store-level managers start off as hourly employees, but in reality precious few of its 1.4 million associates will ever make it to the ranks of management.

Wal-Mart jobs are now cultural shorthand for low wage, dead end positions with poor benefits and few opportunities for advancement. Jobs at the Inland Empire warehouses and others around the country that are contracted to Wal-Mart are no better.

The plight of Wal-Mart 1.4 million associates directly affects growing numbers of American workers. The retail sector is now more important than ever before to the U.S. economy. Fifteen million Americans work in retail with most workers earning about $21,000 per year. Unionized jobs in the sector enjoy better wages and benefits, but only 5.4% of the sector is now unionized nationwide and the “union wage premium” has fallen significantly in recent years as a result of the pressures of nonunion competition. The “Wal-Mart effect” looms large over the retail sector. The Bentonville-based giant has driven several unionized retailers out of business and forced many others to drive down wages and benefits.

Instead of lowering the bar, Walmart could set a higher standard for the retail industry. According to a recent study by the think-tank Demos, even a modest wage increase for Wal-Mart and other low-wage retail employees would lift more than 700,000 Americans out of poverty and move a further 750,000 further away from the poverty line. By boosting the spending power of low-income Americans, moreover, it would grow the economy and create 100,000 new jobs. And it would not significantly hurt Wal-Mart’s enormous profits nor prevent it offering low prices to consumers. Others retailers, including Costco Wholesale Corp. and Trader Joe’s, already provide workers with decent wages, affordable health and retirement benefits and more full-time jobs, yet are still highly profitable companies. Costco, for example, provides its employees with better training and career opportunities and in return enjoys the benefits of lower turnover and higher productivity per employee.

For decades, Wal-Mart has intimidated employees who try to speak up against low wages and poor conditions. The situation is even worse when it comes to Walmart’s supply chain workers. A 2012 apparel industry survey by the human rights organization Not for Sale ranked it equal last out of 50 major companies when it comes to respect for workers’ rights. This violation of fundamental rights makes more likely incidents like last week’s horrific fire in Bangladesh at a factory that manufactured clothes for Wal-Mart.

If this dire situation is to improve, Wal-Mart workers will need help from the Obama Administration. President Obama cannot force Wal-Mart to respect its workers but he could use his bully pulpit to support their cause. In 2007, then Senator Obama stated: “I don’t mind standing up for workers and letting Walmart know they need to pay a decent wage and let folks organize.” The President should again encourage the nation’s largest employer to raise standards in the retail sector, not lower them, and to respect its workers’ rights.

John Logan is Professor and Director of Labor and Employment Studies at San Francisco State University.

 

 

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

January 23, 2017
John Wight
Trump’s Inauguration: Hail Caesar!
Mark Schuller
So What am I Doing Here? Reflections on the Inauguration Day Protests
Patrick Cockburn
The Rise of Trump and Isis Have More in Common Than You Might Think
Binoy Kampmark
Ignored Ironies: Women, Protest and Donald Trump
Gregory Barrett
Flag, Cap and Screen: Hollywood’s Propaganda Machine
Gareth Porter
US Intervention in Syria? Not Under Trump
L. Ali Khan
Trump’s Holy War against Islam
Gary Leupp
An Al-Qaeda Attack in Mali:  Just Another Ripple of the Endless, Bogus “War on Terror”
Norman Pollack
America: Banana Republic? Far Worse
Bob Fitrakis - Harvey Wasserman
We Mourn, But We March!
Kim Nicolini
Trump Dump: One Woman March and Personal Shit as Political
William Hawes
We Are on Our Own Now
Martin Billheimer
Last Tango in Moscow
Colin Todhunter
Development and India: Why GM Mustard Really Matters
Mel Gurtov
Trump’s America—and Ours
David Mattson
Fog of Science II: Apples, Oranges and Grizzly Bear Numbers
Clancy Sigal
Who’s Up for This Long War?
Weekend Edition
January 20, 2017
Friday - Sunday
Paul Street
Divide and Rule: Class, Hate, and the 2016 Election
Andrew Levine
When Was America Great?
Jeffrey St. Clair
Roaming Charges: This Ain’t a Dream No More, It’s the Real Thing
Yoav Litvin
Making Israel Greater Again: Justice for Palestinians in the Age of Trump
Linda Pentz Gunter
Nuclear Fiddling While the Planet Burns
Ruth Fowler
Standing With Standing Rock: Of Pipelines and Protests
David Green
Why Trump Won: the 50 Percenters Have Spoken
Dave Lindorff
Imagining a Sanders Presidency Beginning on Jan. 20
Pete Dolack
Eight People Own as Much as Half the World
Roger Harris
Too Many People in the World: Names Named
Steve Horn
Under Tillerson, Exxon Maintained Ties with Saudi Arabia, Despite Dismal Human Rights Record
John Berger
The Nature of Mass Demonstrations
Stephen Zielinski
It’s the End of the World as We Know It
David Swanson
Six Things We Should Do Better As Everything Gets Worse
Alci Rengifo
Trump Rex: Ancient Rome’s Shadow Over the Oval Office
Brian Cloughley
What Money Can Buy: the Quiet British-Israeli Scandal
Mel Gurtov
Donald Trump’s Lies And Team Trump’s Headaches
Kent Paterson
Mexico’s Great Winter of Discontent
Norman Solomon
Trump, the Democrats and the Logan Act
David Macaray
Attention, Feminists
Yves Engler
Demanding More From Our Media
James A Haught
Religious Madness in Ulster
Dean Baker
The Economics of the Affordable Care Act
Patrick Bond
Tripping Up Trumpism Through Global Boycott Divestment Sanctions
Robert Fisk
How a Trump Presidency Could Have Been Avoided
Robert Fantina
Trump: What Changes and What Remains the Same
David Rosen
Globalization vs. Empire: Can Trump Contain the Growing Split?
Elliot Sperber
Dystopia
FacebookTwitterGoogle+RedditEmail