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Would Wal-Mart lose customers if it paid a living wage?

By Laurie Bennett

November 28, 2012 at 1:01pm

A comment last week from a lone striker at the Walmart Supercenter in St. Cloud, FL, stopped me cold.

I should say up front that unlike many journalists writing about the Wal-Mart strikes during this shopping season, I’m not a big fan of organized labor. I crossed the picket line in the ill-advised Detroit newspaper strike of 1995, believing then and now that idiotic union leaders misled and misused their members.

That said, Wal-Mart is far different from a local newspaper or even a national chain.

It is a global enterprise with profits exceeding the gross national income of 69 of the 167 nations monitored by the World Bank.

The bane of union organizers, it is able to search worldwide for cheap labor, weak governments and, sometimes, bribable public officials.

But who would have thought that one of the countries where it could leverage such advantages would be the United States?

This is not to say that our nation lacks wealth. The U.S. ranks first in the World Bank survey we just mentioned.

But in recent years, a growing number of working-class people have been forced to survive on part-time pay without benefits.

Vanessa Ferreira, 59, the striker at the Florida Wal-Mart, would likely be one of those people, if it weren’t for her husband’s higher-paying job. (Perhaps low pay for part-time work is Wal-Mart’s way of promoting traditional family values.)

“They pay low wages, then the taxpayers pick up the tab for food stamps and Medicaid,” Ferreira told the Huffington Post. “They need to take care of their people. They need to be responsible to their workers.”

If our government didn’t provide a safety net, such as it is, would employers like Wal-Mart be forced to pay a living wage?

Their politics would indicate that the majority owners of the company don’t think so.

Alice Walton and her brother Jim Walton, two of the heirs to the Wal-Mart fortune, were contributors to Restore Our Future, the super PAC supporting Mitt Romney.

Their candidate criticized the incumbent as the food stamp president and opposed increases in the minimum wage. Like Romney, the siblings evidently see themselves as “makers” and their employees as “takers.”

Of the company’s 2.2 million workers, 1.4 million are in the U.S.

It’s too bad for the Walton billionaires that they can’t locate American retail jobs overseas, as they do with their suppliers. But stores and warehouses need to be near their markets, and U.S. revenues still account for 60 percent of the company’s business.

The irony, as Harold Meyerson wrote recently in The American Prospect, is that while Ford and General Motors paid factory workers enough to buy the cars they built, Wal-Mart prospered by paying workers “so little they had to shop at discount stores like Wal-Mart.”

Here’s another irony: Wal-Mart takes food stamps.

Company Executive Vice President Leslie Dach spoke last year about the Supplemental Nutrition Assistance Program or SNAP: “A significant percentage of all SNAP dollars are spent in our stores, and they are used to buy items like bananas, whole milk, Ramen noodles, and hot dogs.”

Dach didn’t say what percentage of those customers were Wal-Mart employees.

As the Census Bureau (pdf) reported in September, wealth in America has shifted not to the middle class or to the poor, but to the ultra-rich, who don’t spend much time bargain hunting at Wal-Mart.

The company’s low prices will no doubt continue to attract low-income shoppers, even as they struggle to get by.

Yet with housing, health care and other essentials eating up a growing share of their income, these customers will inevitably have less to spend.

Wal-mart profits rose in the latest quarter, but fell below analysts’ expectations.

In fact, the company is so concerned about rough times ahead that it changed the date for payment of its quarterly dividend, from Jan. 2, 2013, to Dec. 27, 2012.

The move will enable the Walton family and other shareholders to collect more than $1.3 billion in dividends at current tax rates.

That could translate into savings of as much as $180 million for the strapped Walton family.

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2 Comments

  • #1.   Leftcoastrocky 11.30.2012

    Walton heirs are seeking to preserve their collective net worth of $100 Billion.

  • #2.   John Kerr` 12.04.2012

    As a matter of fact, Sam Rawlings Walton, grandson of founder, Sam Walton, donated $300,000 to Priorities USA Action, a super PAC supporting Obama. Granted, he was the only family member to do so but all the same, without all that cheap labor, he would not have been able to be so generous with his support. I do not support Wal Mart simply because they sale mostly junk and garbage built in China. But then again, other contributors to the liberal cause get a pass when they outsource jobs. This is particularly true of Hollywood. Such hypocrisy!

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