Historic or horsefeathers?

What should we make of Wal-Mart's decision last week to raise its minimum hourly wage for 500,000 employees? Is this a belated decision to improve the lives of low-paid workers? A white flag to the increasing national labor calls to boost low wages in America?

Perhaps it's an inevitable attempt to remain competitive as the economy gathers steam and workers see more options of where to work. Or is this Wal-Mart blowing smoke, announcing what is in effect a cheap public relations ploy that — for a company approaching a half trillion dollars in annual revenues — won't make much difference?

I'm putting a check mark by "all of the above."

Wal-Mart used to be, hands down, the poster child of low-priced goods and poorly paid workers, or "associates" as the company calls them. But even that brand is fading as consumers find the rise of dollar stores, second-hand thrift stores and the Darwinian pricing of online goods make Walmart store prices seem less rock-bottom than they used to be.

Wal-Mart said Thursday it would raise the base pay for all employees to a minimum of $10 per hour, but only after a yearlong apprenticeship at $9 per hour, or $1.75 above the federal minimum wage.

In the same week, a national survey ranked Walmart last among major retailers in customer satisfaction. Walmart's satisfaction among consumers fell to the lowest level since 2007 on the recent American Consumer Satisfaction Index (ACSI).

As Tampa Bay Times retail reporter Sean Daly reported Friday, Wal-Mart workers are certainly celebrating a clearly out-of-the norm decision by Wal-Mart management to up the pay of its least-compensated workers. "Everyone at the store is going to be feeling great," Tampa Walmart worker Angelo Escano told Daly, adding that workers often borrow from one another to make it to the next payday.

This is no worker windfall.

The company's average full-time wage will be $13 an hour, up from $12.85 — a 15-cent-per-hour gain. That translates to a $1.20 gain per day, $6 per week and $312 a year. Part-timers will get $10, up from $9.48, a bigger pay hike but for fewer hours.

Even Walmart department managers will get a bump to at least $13 an hour this summer and at least $15 an hour early next year.

This is good news for many, given how Wal-Mart is (at least) the fourth-biggest private employer in the Tampa Bay region. The bottom line is Wal-Mart is giving raises to a good chunk of 12,000 area employees.

But one thing is certain. Wal-Mart never would have contemplated a wage hike if the U.S. economy had not started gathering strength.

When Tampa Bay's unemployment rate topped 10 percent, folks held on to any job they had and were glad to have it. Now Tampa Bay's jobless rate has dropped to 5.5 percent, a signal that businesses are looking to hire and workers are more motivated to seek better-paying opportunities.

Wal-Mart, notorious for high turnover among its vast base of workers, hopes a wage hike will help keep more employees. In 2014, turnover in retail generally averaged about 66 percent for part-time hourly sales associates and 27 percent for full-time workers with benefits, according to the Hay Group consulting firm.

This is the same Wal-Mart ridiculed after one of its stores in Canton, Ohio, held a food drive that asked employees to donate items to fellow associates.

Retail industry observers say that, given its sheer clout, Wal-Mart's action will ripple across other store chains.

"Target will feel the pressure to respond," Burt Flickinger, managing director at New York's Strategic Resource Group, told Bloomberg News. "It's a competitive market for workers." Target pays its cashiers $7.42 to $10.09.

Struggling retailers like Sears will now feel even more pressure to hire and keep workers. And fast-food chains, recently facing a series of protests seeking $15-an-hour pay, will certainly be rethinking their options.

Some businesses already have opted to raise their wages. Stores like the Gap and Ikea recently chose to set hourly wages at or above $9. On the higher end, Costco's pay scale is known to be close to $20 an hour, no doubt a strong contributor to Costco ranking tops in the ACSI ranking among specialty retail stores.

It's not just retailers. St. Petersburg recently agreed to set a $12.50-per-hour minimum wage for city workers, with an eventual goal of $15 per hour. And financial service giant Aetna last month said it will boost the pay of its lowest-paid workers to $16 an hour.

The investor world treated Wal-Mart's wage move with skepticism.

Barclays analysts on Friday downgraded the company to "equal weight" from "overweight" and lowered its price target to $85 from $90.

"Like many other global companies, we faced significant headwinds from currency exchange rate fluctuations, so I'm pleased that we delivered fiscal year revenue of $486 billion," Wal-Mart CEO Doug McMillon said in reporting earnings.

"But, we're not satisfied," he added.

Wage bump or not, I doubt if Wal-Mart's bottom-rung workers are either.

For a Wal-Mart employee earning $9 per hour, it would take more than 1,360 years to make the $25.6 million in compensation CEO McMillon received in 2014.

Contact Robert Trigaux at rtrigaux@tampabay.com. Follow @venturetampabay.

10 reasons why Wal-Mart still matters

1. The 1.2 million jobs Wal-Mart provides in the United States alone roughly equals the number of employed folks in the entire Tampa Bay metro area. Worldwide, Wal-Mart employs 2.2 million.

2. Its market value of $269 billion dwarfs the combined value of every publicly traded company in the Tampa Bay area.

3. It remains the largest retailer on the planet, the largest private employer in the United States.

4. In the grocery business, it is second only in market share to Publix in the state of Florida.

5. Among the 10 richest U.S. billionaires, four are related to Wal-Mart's founding Walton family.

6. In Hernando County, it's the biggest private employer.

7. In Pasco County, it's the fourth-biggest private employer.

8. In Hillsborough County, it's the fourth-biggest private employer.

9. In Pinellas County, it's the fourth-biggest private employer.

10. In the entire Tampa Bay area, it's the fourth-largest private employer, and probably rising.

Will long awaited wage bump by Walmart really make a difference? 02/20/15 [Last modified: Friday, February 20, 2015 5:12pm] 
Photo reprints | Article reprints 

© 2015 Tampa Bay Times
Daily Kos member
TUE SEP 16, 2014 AT 04:22 PM PDT
The U.S. Census Bureau has announced that the poverty rate declined in 2013, falling from 15% of Americans to 14.5%. This is the first decline since 2006.

Pop the cork on the champagne, boys! This means that only 45.3 million Americans were living at or below the poverty line, which was an annual income of $23,834 last year ($24,375 in 2014 dollars).

So what does it take to live in poverty? A lot of hard work for that four-member family, especially if they're being paid the current minimum wage.

To make $23,834 at $7.25/hour takes about 3,287.5 hours per year. Now, since most minimum-wage jobs don't include things like sick leave, vacations and other things that would only be wasted on the poor, the calculations are easy.

3,287.5 hours per year equals about 63.25 hours per week. Since it's tough enough to get an employer to commit to 40 hours per week for hourly workers, overtime probably isn't a factor.

So either one adult in the family has to work two jobs or there must be two wage-earners. The single-breadwinner approach works out to 8 hours per day, seven days a week, every week and then pick up one more four-hour shift at the second job. Once again, there's no room for time lost due to illness.

The benefit is that one adult is free to take care of the home and children. This is the "Leave It To Beaver" world of the poor. No high heels and no pearls, but someone is there when the kids get out of school, which experts tell us is a good thing.

The more reasonable alternative is both parents work and try to adjust their schedules to maximize their family time.

Don't forget, this is all to make the maximum under the federal poverty guidelines. A lot of those 45 million-plus people don't make that much.

Of course, as we all know from listening to various pundits and politicians, these are the lazy sponges that soak up government assistance in the form of SNAP, WIC, Earned Income Tax Credits and other such examples of federal waste. And they don't even pay income tax.

Sorry, maybe it's just my flawed perceptions, but two people busting their butts just to make enough to be poor don't sound very lazy.

But let's say this is the "Leave It To Beaver" world with one parent employed, one stay-at-home parent and a couple of kids, call them, oh, Theodore and Wallace. Ward or June has one job working 40 hours a week and let's toss in a two-week vacation, while we're at it.

How much does Ward or June need to make enough to live in gentile poverty in modern America? $11.92 an hour.

This is well beyond the proposed $10.10 minimum wage that some have solemnly predicted would cause the collapse of Western civilization and lead to mass joblessness.

But wait! That $11.92/hour would mean that many people could stop having to work two jobs. Those jobs would still need to be done, so other people would be needed to fill them. These new hires would now have money and could become consumers, the real job creators in our economy.

Of course, $15.00/hour sounds good, too. People who work as hard as many minimum wage earners should be able to see something beyond the bare necessities.

And to those who moan about how raising the minimum wage to a livable level would make prices skyrocket, I would point out that the average price of a Big Mac has risen 30% since the last time the minimum wage was raised. The employees didn't get raises but somebody's making more money somewhere up the chain. And they're probably not buying enough Big Macs to cover it. Let's see what happens if we pay the folks that make them enough to buy them (McDonald's employee discounts apply only to food purchased by the employee for their own consumption during breaks).