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What's Holding Mr. Duke Back?

Walmart Bosses and the Minimum Wage

by RALPH NADER

Last weekend on a bright, sunny day a dozen of us demonstrated at shopping malls where Walmart has three of its giant stores, supplied heavily by products from China and other serf-wage countries. But outsourcing the jobs of its American suppliers to China was not the focus last Saturday. We were drawing attention to the plight of one million Walmart workers who are making far less than what Walmart workers made in 1968 when the minimum wage was the inflation-adjusted equivalent of $10.50 an hour today.

In 1968 Walmart was run by its founder, the legendary Sam Walton, who started with one store in Bentonville, Arkansas. Sam had to pay his workers wages that were worth much more than wages today because the law required him to do so.

The clenched-jawed CEO opposition to catching the minimum wage up with 1968 for their workers continues to manifest itself today. CEOs seem to have little concern for the budget-squeezed daily lives of their employees.

These days, however, Walmart is feeling some heat with the rising demand for increasing the stagnant federal minimum wage finally coming from Washington, backed by over 70 percent of the people in polls. A Walmart rival, the successful Costco, has a CEO who already endorsed a federal minimum wage over $10.00 an hour. Costco starts its entry-level workers at $11.50 per hour plus benefits that Walmart workers do not receive. As blogger Alan DiCara said, “Walmart’s benefits department is the U.S. taxpayer.”

I think Walmart will follow businesses like Costco, the Women’s Chamber of Commerce, and the booming Busboys and Poets restaurants in supporting a higher minimum wage. Remember Walmart executives are all about the numbers and how they can manipulate them to their own benefit. February’s retail sales, writes Rich Karlgaard, publisher of Forbes “was a rotten month for the Bentonville Giants.” Internal emails leaked from Walmart expressed concern about the spending level of the low to middle-income shoppers who are the dollar source for the company.

“Where are all the customers? And where’s their money?” bewailed Cameron Geiger, Walmart senior vice-president. Calmer colleagues attributed the sales slump to the restoration of the social security payroll tax, delayed tax refunds and higher gasoline prices.

What Walmart’s bosses are coming to realize, however, is that a minimum wage above $10 per hour would lift the income of about 30 million workers, including Walmart employees, who would spend some of that extra cash at Walmart stores.

For the overall economy, a $10.50 per hour minimum wage would be a certain stimulus for sales, which would increase jobs and contribute more money to social security and Medicare funds.

The decision facing Walmart is how much of a higher minimum wage will they publically support? The predecessor of today’s Walmart CEO, Mike Duke, took the plunge in 2005. H. Lee Scott, Jr. told company executives that “the U.S. minimum wage of $5.15 an hour has not been raised in nearly a decade, and we believe it is out of date with the times….Our customers simply don’t have the money to buy basic necessities between paychecks.” He then supported a phased-in-increase to $7.25.

What’s holding Mr. Duke back, he who makes $11,000 an hour? In Canada, he pays his workers there the required minimum wage of more than $10 an hour in that country.

A few years ago, feeling the heat from environmentalists, three high-level Walmart managers visited the late Ray Anderson, the pioneering CEO of Interface corporation in Atlanta, the largest carpet tile manufacturer in the country. Mr. Anderson was the corporate leader in taking recycling and reduction in pollution to unsurpassed levels, while regularly cutting costs. Doing well by doing good!

The cutting costs part attracted their attention. These managers are now among the executives running Walmart, and the changes they have made – reducing excessive packaging materials, saving on water and energy and increasing recycling – have brought Walmart lower costs and public praise.

Yet, when it comes to their workers – euphemistically called “associates” – Walmart bosses can’t seem to absorb the evidence that paying all their workers more than $10 an hour reduces its notoriously high worker turnover and improves productivity and morale. The bosses will feel better about it when they overcome their bizarre intransigence bred of a thoroughly regimented company hierarchy.

At the store level all over the U.S., Walmarts are full of surveillance cameras, not just monitoring customers but also their tight-lipped workers, especially when customers start small talk about their low wages. Big Brother is watching them. Walmart security guards are stiffer than Army MPs. They are programmed to be the private police in so-called private shopping malls built with tax preferences and tax abatements.

My advice to Mike Duke is to come out sooner rather than later to support a $10.50 an hour federal minimum wage. Believe it or not, more members of Congress are waiting upon your move. Polls show heavy majorities of liberals and many conservatives support a higher, inflation-adjusted minimum wage.

Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us! He is a contributor to Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. Hopeless is also available in a Kindle edition.