Why Walmart's bait and switch matters

If the man sitting in the Oval Office honestly admitted he made his fortune from exploiting thousands of people, he'd...

Posted: Jan 14, 2018 10:24 AM
Updated: Jan 14, 2018 10:24 AM

If the man sitting in the Oval Office honestly admitted he made his fortune from exploiting thousands of people, he'd likely be enraged when people pointed out he's small-time compared to the Walton family. Year after year, the Walmart heirs prove no one comes close to their brand of exploitation, which they wrap in public relations fluff and deception.

This week was no exception. With much fanfare, Walmart announced it was raising its minimum starting wage to $11 an hour (from $10) and giving eligible workers a $1,000 bonus, tying its munificence to the recent Republican tax cut. The business media covered the story.

Yet that wasn't the only news Walmart made public.

On the same day, Walmart, with far less fanfare, also announced it would close dozens of Sam's Club wholesale stores, laying off thousands.

But there's a lot more to the story.

A number of companies, principally in the retail sector, are raising wages not because of their corporate generosity but simply because they need to compete for workers. With the unemployment rate relatively low (even as lots of people are still out of the labor force compared to pre-recession), basic economics dictates that workers will usually have more choices to look for higher pay.

Target, for example, announced it was raising its starting wage to $11 per hour in September 2017, and says it will raise it to $15 an hour by end of 2020. That was a move taken long before the tax cut was even in final draft form. So, Walmart's contention that the wage hike move is an outcome of the tax cut doesn't wash.

There is also a heavy dose of self-congratulation here, as if by doling out money, Walmart should earn a medal. But, let's look closely at the reality. If you worked 40 hours a week, 52 weeks a year at $11 per hour, with not a shred of time off, you would earn $22,880. The federal poverty rate for a family of four is $24,600 -- and the formula for the official poverty rate understates the difficulty of surviving at that income level.

And about that $1,000 bonus. Aside from the one-time nature of the payout that does nothing to boost workers' basic pay, a worker only qualifies for the full amount of that bonus after 20 years at the company. Walmart's high turnover rate means a very tiny percentage of its 1.5 million US workers will ever see the money. It's simply an almost cost-free PR stunt.

The Walmart heirs, a handful of people, were collectively worth in November 2017 well over $150 billion. For context, the federal minimum wage should be $19 per hour based on productivity over the last four decades. In fairness, the underpayment of workers compared to how productive they have been, and the shamefully low level of the federal minimum wage at $7.25 per hour, is a scandal engaged in by the government and sustained by thousands of companies, not just Walmart.

But, to top it off, while it trumpeted the piddling wage increase, the company was stabbing its Sam's Club workers in the back.

This entire approach is consistent with a company that is accused of hushing up bribery and is the target of a broad class-action suit on gender discrimination.

It has been the defendant in scores of cases, including class actions, or group suits, accusing the company of wage-law violations. Unlike other retailers, it would not sign on to a safety code in Bangladesh after the horrific 2012 fire at a facility where 55% of the product was destined for Walmart shelves. And, finally, taxpayers effectively underwrite the company through subsidies and Walmart workers' reliance on food stamps, health care and other support because their paychecks don't cover basic needs.

As the country's largest private employer, Walmart is often pointed to as the trendsetter. That is probably true, but perhaps not in the manufactured, rosy image its corporate executives and some in the Republican Party try to project. Walmart makes its profit by exploiting poverty -- the poverty of its workers and the communities where Walmart stores are often the only option. It's a business model that has steadily robbed workers and undermined the country's long-term prosperity.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 343505

Reported Deaths: 7543
CountyCasesDeaths
Hinds23932444
DeSoto23229283
Harrison20527329
Rankin15411291
Jackson15232252
Madison10959227
Lee10719179
Jones9047169
Forrest8723159
Lauderdale7884244
Lowndes7054151
Lamar702989
Lafayette6548124
Washington5595139
Pearl River5196152
Bolivar4954134
Oktibbeha494398
Panola4771112
Warren4728128
Marshall4701106
Pontotoc447773
Union433279
Monroe4330137
Neshoba4281181
Hancock428088
Lincoln4176116
Pike3667113
Leflore3627125
Tate353388
Alcorn350974
Sunflower347694
Scott341176
Adams340988
Yazoo339376
Copiah324968
Simpson322891
Itawamba314680
Coahoma314085
Tippah306568
Prentiss298863
Covington293484
Leake285475
Marion284181
Wayne277543
George272251
Grenada269488
Newton262364
Tishomingo239770
Winston236784
Jasper230648
Stone229637
Attala226373
Chickasaw219060
Holmes200174
Clay197654
Clarke186880
Tallahatchie183742
Calhoun181332
Smith179235
Yalobusha171540
Walthall145748
Lawrence142826
Greene140134
Amite137543
Noxubee135235
Perry133538
Montgomery133044
Carroll126431
Webster121232
Jefferson Davis116734
Tunica114227
Benton106725
Claiborne105331
Kemper102429
Humphreys100133
Franklin87923
Quitman84719
Choctaw82619
Wilkinson78032
Jefferson71328
Sharkey51618
Issaquena1736
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Alabama Coronavirus Cases

Cases: 587405

Reported Deaths: 11536
CountyCasesDeaths
Jefferson853851591
Mobile48932864
Madison37517533
Shelby27280257
Tuscaloosa27171465
Montgomery26172627
Baldwin25399329
Lee17224181
Calhoun15401334
Morgan15170291
Etowah14954370
Marshall13116235
Houston12077293
Elmore10915219
St. Clair10763252
Limestone10725158
Cullman10546205
Lauderdale10255254
DeKalb9508192
Talladega8949188
Walker7793288
Autauga7563114
Jackson7400117
Blount7362139
Colbert6703142
Coffee6365132
Dale5650117
Russell480243
Chilton4771117
Covington4749125
Franklin458181
Tallapoosa4519156
Escambia441383
Chambers3949125
Dallas3743163
Clarke371263
Marion3463107
Pike332579
Lawrence3263100
Winston298773
Bibb290465
Geneva283983
Marengo262467
Barbour250961
Pickens245562
Butler240872
Hale235578
Fayette227065
Henry213945
Monroe202141
Randolph201144
Cherokee199248
Washington185239
Macon170552
Crenshaw168358
Clay166259
Cleburne161345
Lamar151038
Lowndes145455
Wilcox132331
Bullock126542
Conecuh121332
Coosa118329
Perry110528
Sumter110333
Greene99137
Choctaw64425
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