Why Walmart's Plan to Pit Low-Wage Workers Against Low-Wage Consumers Is Failing

As Black Friday protests near, a new report reveals Walmart can raise employee wages without costing consumers a dime.

Black Friday is the day when many Americans find refuge in the corporations that squeeze them out of the middle class. Black Friday deals, which offer you that one-day opportunity to get the most bang for your small buck, is good enough to wait in line for at dawn or even leave Thanksgiving dinner early — this year as early as 6pm.
That’s why it’s tricky for corporations’ financially burdened workforce to ask consumers not to shop in the same stores that help keep many of them destitute, which is what Walmart workers at 1,500 stores will be doing this Black Friday. After all, when you’re left fighting over crumbs, it’s difficult to realize that Walmart snuck off with the whole pie.
Walmart and its supporters boast that if the corporation were to pay its workers more, it would have to raise prices for consumers. A few months ago, when Walmart refused to open three stores in Washington, D.C. if proposed living-wage legislation passed, a general manager lamented that paying its workers a living wage “would result in fewer jobs, higher prices and fewer total retail options.”
But a new report by public policy organization Demos reveals that Walmart could raise its workers' wages without costing consumers a dime. The report, titled “A Higher Wage is Possible: How Walmart Can Invest in Its Workforce Without Costing Customers a Dime,” found that Walmart could raise wages by $5.83 per hour without raising prices. The report revealed that Walmart spends $7.6 billion annually buying back shares of its own stock. Amy Traub, co-author of the report, said share buybacks are “Wall Street financial maneuvers” that are unproductive, and often fail, in the long run, its goal of making its shares worth more. The report quotes a Wall Street Journalbusiness analyst, who wrote:

The evidence overwhelmingly shows that heavy buyback companies usually create less value for shareholders over time… Many managements have become so infatuated with how buybacks increase earnings per share that these distributions are crowding out sound business investments that create more value over time.

Traub said that if Walmart reinvested these billions of dollars in its workforce instead, it would be beneficial to its workers as well to as the economy as a whole.
The Walton family, heirs to the Walmart fortune, is the richest family in the world with a net worth of $144.7 billion — equal to the wealth of 42 percent of Americans. Through share buybacks, the heirs continue to consolidate ownership of the corporation, now owning more than 50 percent of its shares. Walmart, the world’s largest retailer, and the largest private employer in the United States, brings in $17 billion annually.
Meanwhile, it’s estimated that Walmart workers make, on average, around $9 per hour. Walmart U.S. CEO Bill Simon boasted at a conference that 475,000 of its 1.3 million workers get paid more than $25,000, which was taken to mean that the other two-thirds of employees make less. Assuming that Walmart workers make $9.06 per hour, the industry median for low-wage employees of large retailers, the Demos report states that the company could hike pay to $14.89 per hour:

At this rate, any worker placed on the schedule for more than 32 hours a week would bring home $25,000 a year — an important accomplishment in an industry where nearly a third of part-time employees say that they would like to work full-time if their employer would allow them. … Walmart’s workers and their families would clearly be the biggest beneficiaries of a wage increase, but greater investment in the workforces would benefit the company as well.

And the company could use some help. Walmart has recently seen decreased sales for its third straight quarter. The report states:

According to media reports, U.S. consumers have avoided Walmart’s stores because they are disorganized and shoppers cannot find the items they seek on Walmart’s shelves. There were too few employees in the stores — or the workers who were present were too inexperienced — to keep items in stock on the shelves. In February, leaked internal emails from Walmart’s corporate offices lamented that ‘sales are a total disaster,’ and wondered, ‘Where are all the customers? And where’s their money?’

The report states that higher wages would encourage Walmart workers to stay with the company, gaining experience to be more helpful to customers. Walmart has high employee turnover, with about 500,000 Walmart employees leaving the company every year. Walmart, however, blames its workers for low sales, in an effort to further normalize their poor working conditions. Evelin Cruz, a member of OUR Walmart, a coalition of former and current Walmart workers standing up for better conditions, went on strike to speak out about her concerns and was arrested for blocking a street in Los Angeles. She said in an interview:

At Walmart on a daily basis they have morning, afternoon and evening meetings and at the meetings they give you those sales reports. They tell us, ‘Our customer counts are down or our sales are bad. Our hours are not going to be the greatest and there’s going to be so many cuts.’ They make sure you know you’re very lucky to get the hours that you get. And then, once in a while they throw in, ‘We have so many people applying for every position out there,’ to make you know that you’re easily replaceable. And they have been holding captive audience meetings, they say, ‘We didn’t ask you to come work for us, you came to us asking for a job.’

Walmart U.S. CEO Bill Simon recently said shrinking sales are due to customers’ declining income while costs of goods are increasing. But he failed to grasp that low-paying companies like Walmart cause this decreased income across the board, as it sets the standard. Walmart workers are paid so low and rely so much on government assistance, a recent report found that one Walmart store costs taxpayers $900,000 in federal subsidies.
Robert Reich, former U.S. labor secretary, has said: “Walmart is so huge that a wage boost at Walmart would ripple through the entire economy, putting more money in the pockets of low-wage workers. This would help boost the entire economy — including Walmart’s own sales.”
The new report now adds to the existing evidence that Walmart’s plan to pit low-wage workers against low-wage consumers falls short. Walmart’s myths and manipulations are starting to unravel as workers continue to expose the truth about Walmart’s working conditions. On Black Friday, these empowered workers will flip the script on Walmart’s motto “Save money. Live better” and show that the only way they can live better is by speaking out, sharing the truth with consumers, and getting them to stand with them in solidarity.