Walmart Could Raise Worker Pay To $25K Without Hurting Bottom Line, New Study Reveals


One of every 10 retail workers in America is employed by Walmart, making the “big box” store chain the country’s largest private employer. However, with Walmart paying its workers so little that a single Walmart store can cost taxpayers over $1 mllion per year in public benefits needed by employees just to eat and avoid homelessness, the retail giant has become a drain on the U.S. economy.

But it doesn’t have to be that way.

A new study by the think tank Demos says that by making one simple policy change, Walmart could raise employee wages to $25,000 per year without touching the company’s bottom line or affecting prices.

The average Walmart worker takes in just $8.81 per hour, the equivalent of about $18,000 per year. That’s less than a living wage in many states, with “living wage” meaning the amount necessary for a person to meet the most basic expenses of survival.

For example, according to the Living Wage Calculator set up by the Massachusetts Institute of Technology, a living wage in Florida for a single person with no family is $10.12 per hour. In New York, it is $11.50. In North Carolina, $9.12. And so on.

Low wages not only make life miserable for workers and drain the public coffers as employees with full-time jobs must make use of food stamps and other public benefits just to get by, they also drag down the economy as a whole, experts say.

Without money in their pockets, workers cannot become consumers, buying goods from Walmart and other retail outlets, creating the consumer spending that fuels economic growth.

Walmart itself has been suffering from low consumer spending. The most recent quarter, ending Oct. 31, was its third straight with declining sales, and the company is predicting a weak holiday season due to depressed consumer spending.

Walmart’s customer base is largely “low end” consumers, those looking for bargains and inexpensive items. In other words, Walmart’s own employees are typical of the store’s customer base.

"That low-end consumer is just not willing to step out and buy those discretionary items," industry analyst Brian Yarbrough told Reuters news service.

Walmart workers themselves have been protesting low wages, going on strike at three urban locations just this month. Their demand is an average wage of the still-modest $25,000 per year sum that the Demos study says is possible.

All Walmart would have to do, according to the Demos study "A Higher Wage Is Possible," is stop spending billions to buy back its own stock.

Las year, the company poured $7.6 billion into buying its own stock, an expenditure that, the Demos study notes, “did nothing to boost Walmart’s productivity or bottom

If that sum were instead invested in the company’s employees, each one would receive a raise of $5.83 per hour.

Meanwhile, the six Walton family heirs, who inherited the company from founder Sam Walton, rank among the world’s richest individuals. The combined worth of the six Waltons is estimated to top $144 billion.

SOURCES: Demos, ThinkProgress (2) MIT Living Wage Calculator, Reuters


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