Back on September 11th of this year, the President and CEO of Wal-Mart U.S. made a presentation at the Goldman Sachs Global Retail Conference. His speech, which can be found here, was peppered with the usual information that a company would want investors to hear in order to pump up stock prices. The hidden gem of his speech is found in this passage here:
“Like to swift gears just for a minute and our business is about people, it’s about serving people and it’s about employing people and for us our company and our business model is about associates and opportunities. Wal-Mart is not a complicated business model. It’s actually quite simple but it’s driven by opportunity. On any given day, we have about at least 15,000 openings and sometimes during the year up to 50,000 openings. So it‘s not hard to get into the company. If you want a job at Wal-Mart, you can find a job at Wal-Mart.
Once you’re in and people join at all different points in their lives whether you’re a teenager, you know looking for a part time job or are you finishing school, whether your senior looking to supplement your income, whether you’re joining us looking for a career. People come in at all different live stages and we provide access points to all different live stages.
Once you are in, I say, its not hard to get in. We have — we promote about a 160,000 people a year. We have still today in retail one of the largest full time workforces, we’re still the majority full time workforce with the opportunity for 75,000 people a year to transition from part time, so they choose to into full time.
We’ve got a lot of associates to make good solid, middle class income some and that’s represented by 300,000 associates who have spent more than 10 years working for our company. We’re going to defend our jobs, we’re proud of our jobs because they can lead to long term career opportunities, 75% of our managers started is hourly and our entry level managers make over $50,000 a year and store managers average is $170,000 a year. So the opportunity to enter and to advance and to achieve your dreams exists for our associates. And I just feel compelled to mention not every time I get to.”
Now, pay attention to the emphasised parts of that passage. The CEO states that their business is about employing people and about opportunities. Notice that he doesn’t specify who the opportunities are geared towards. He also makes mention of the good, solid middle-class income that some of the associates earn. According to one of the slides from his presentation, there are far fewer middle-class workers than there are lower class.
Wal-Mart employs over 2 million people, with about 1.3 million workers here in the United States. If they’re bragging about over 475,000 workers earning more than $25,000 a year, that means that there are a little under 825,000 who do not earn $25,000. That means that almost 2/3 of their workforce earns wages that are at or less than the Federal Poverty Level of $23,550 for a family of four. Granted, Wal-Mart has a sizable force of part-time workers, and they have locations in rural areas of the country where the cost of living is low. That doesn’t, however, prevent them from paying wages that would keep their employees from also having to rely on government assistance to make ends meet.
There has been grumbling from their workforce about wages, and the American public has generally dismissed it as nothing more than union griping and such. To prove it’s more than just grumbling, a study was done and a congressional report was released that showed that one Supercenter location in Wisconsin that employed 300 workers ended up running a tab of about $900,000 in public assistance a year.
According to Wal-Mart, their average salary for full-time workers is $12.83 here in the US. I interviewed with a store here in the Metro Atlanta area a little more than 10 years ago, and I was not offered that amount for an entry-level management position. The district manager I interviewed with offered me a management position at $8 per hour, so things must have gotten substantially better based on that $50k number above for entry-level management. At $8 per hour, I would have had to work two jobs to support my wife and myself here in this area as the cost of living requires earning more than that just to subsist.
If we’re ever going to seriously address economic issues in this country to include welfare reform and income inequality, companies like Wal-Mart will have to be put out front and center as an example of how worker’s pay can contribute to the problems we have. I’m not going to suggest that everybody should be making $75,000 a year to run a cash register. We do, however, need to look at how a person’s pay in relation to the cost of living affects everything else around us. I like to compare our economy with the human circulatory system, as long as money and/or blood flows freely, everything is usually okay. When you impede the flow, bad things can sometimes result if you don’t repair whats slowing things down. Not having enough blood/money to circulate is just as bad, if not worse, than having things blocked up. If we don’t speak up for others, we may end up becoming victims of the Walmartization of this country ourselves.
- Wal-Mart Workers Take Message To Congress: Pay a Living Wage (ourfuture.org)
- More Than Half of Wal-Mart’s Hourly Workers Make Less Than $25,000 (www.businessweek.com)
- Wal-Mart Stores’ Management Presents at Goldman Sachs Global Retail Conference – Transcript (finance.yahoo.com)