Wal-Mart May Be Cheap, but It Would Rather Give Up Money Than Power
Wal-Mart Stores, the world’s largest private employer, on Wednesday morning announced plans to start paying all U.S. employees at least $9 an hour. Current employees will make $10 an hour by next year, as will new employees who complete a six-month training course. For a company that’s long been praised for low prices and slammed for low wages, that’s a dramatic change.
It didn’t come out of nowhere. Over the past three years, Walmart has faced a wave of union-backed attacks—legal, political, media, and consumer pressure anchored by the first coordinated U.S. store walkouts in the company’s five-decade history.
The campaign, spearheaded by the United Food & Commercial Workers and supported by a bevy of progressive groups, has mobilized only a sliver of the retailer’s roughly 1.3 million U.S. employees. It announced that about 500 employees went on strike during Thanksgiving week 2012 and hasn’t shared a higher figure for any strike since then. But it has outpaced past efforts and foisted unwelcome headlines on the country’s dominant employer.
Expecting that "somebody’s going to get 500,000 Walmart workers to walk off their job, I think that’s unrealistic,” UFCW President Joe Hansen told me in 2013. “But what I think is happening, and I think Walmart hates this as much as anything else, is it’s calling publicity to how they treat workers.”
There have been some self-inflicted injuries, like one store’s food drive for “associates in need” that drew criticism from the likes of Ashton Kutcher. There have also been high-profile strikes in fast-food and other industries that have helped spur both politicians and private companies to make at least modest efforts to boost pay.
How Walmart pays has been a particular bone of contention, with a series of statistics wielded by each side. A Walmart presentation at a 2013 Goldman Sachs conference, touting the more than 475,000 U.S. associates making more than $25,000 a year, offered inadvertent ammunition to critics, who pointed out that it left a majority of U.S. employees below the $25,000 threshold. Even while announcing changes to policies highlighted by the striking workers, the retailer has denied that their protests are having an impact.
Today, employee Emily Wells, in a statement from UFCW-backed OUR Walmart, said: “We know this wouldn’t have happened without our work.” Chief Executive Officer Doug McMillon told employees that the wage increases were about “making sure we’re setting you up for success.”
The new $9 and $10 wage floors offer Walmart a concise defense against critics who charge it pays poverty wages and will provide grist for the company's argument that it is being unfairly targeted. Critics will counter that $10 an hour is no living wage and that heightened scrutiny is a price that must be paid by the world's biggest employer.
This isn’t the first time that the famously thrifty company has responded to challenges to its reputation or authority. In the 1980s, Walmart treated its truck drivers—a slice of its workforce that played a outsize role in the company’s supply chain and was being targeted for organizing by the Teamsters union—as “something resembling a labor aristocracy,” historian Nelson Lichtenstein wrote in his book, The Retail Revolution: How Wal-Mart Created a Brave New World of Business. Along with union-equivalent pay, that meant letting drivers know they no longer had to help load or unload their trucks’ cargos. In the mid-2000's, amid a battery of (comparatively anemic) anti-Walmart campaigning, the retailer made some high-profile efforts to mend fences with environmentalists.
The pattern, according to Lichtenstein, is consistent: Walmart would rather give up money than give up power. When a concession “doesn’t create a permanent oppositional structure within the company,” Lichtenstein told me in 2012, “they’ll entertain the idea of accommodating it.”
