by Randolph T. Holhut
American Reporter Correspondent
November 30, 2013
THE HIGH COST OF LOW WAGES: THE BILL IS COMING DUE
DUMMERSTON, Vt. -- The holiday shopping season has begun, and more stores than ever are opening on Thanksgiving to take advantage of the consumer frenzy.
Leading the charge, as expected, is Walmart, the largest and most rapacious retailer on the planet.
Walmart was No.1 on this year's Fortune 500 list. It posted $469.2 billion in revenues, which is more than the gross domestic product of Norway. It made $17 billion in profit.
It is the largest private employer in the world, with more than 2 million workers worldwide. One of every 10 retail workers in the United States is employed by Walmart.
Yet for all that profit, the company has the gall to ask workers at some of its stores to make food donations to their fellow workers - people that, according to independent market research group IBIS World, earn an average hourly wage of $8.81 an hour.
For a full-time schedule of 34 hours, that would be $15,576 or about $4,000 below the federal poverty level for a family of three.
And few Walmart workers work a regular full-time schedule.
Those low wages are subsidized by the taxpayers. A recent congressional report found that the 300 employees at one Walmart Supercenter in Wisconsin required about $900,000 a year in public assistance.
But that's another way Walmart, and too many other U.S. companies, make their profits - by not offering a livable wage and then encouraging their employees to sign up for food stamps, Medicaid, and heating assistance.
Needless to say, Walmart employee turnover is very high compared to other retailers.
And then there is the anti-Walmart, Costco. Their workers start at a salary of $11 an hour, a wage most Walmart workers will never see. The average salary of a Costco worker is about $22 an hour. They work regular hours, get health insurance and paid time off.
Not surprisingly, Costco has less employee turnover. Their workers are happier and more productive, which makes up for the additional wages paid.
A similar story can be found at the grocery store chain Trader Joe's and the convenience store and gas station chain QuikTrip. They also pay their workers higher wages. By following the simple equation that valuing workers equals increased sales and productivity, these three companies are growing.
Walmart could easily afford to pay their workers a living wage. One study by the think tank Demos found that Walmart could easily afford to raise the average worker's pay to $14.89 an hour, or $25,000 a year for full-time work, simply by ending the $7.6 billion a year it spends buying back shares of its own stock.
Stock buy-backs do nothing to benefit productivity or the bottom line. What is does do is boost the wealth of the Walton family, which owns more than 50 percent of Walmart stock and who have a combined net wealth of more than $144 billion - more than the entire bottom 40 percent of the U.S. population.
Raising the minimum wage so it is a living wage - to between $12-$15 per hour, depending on where you live - would not just cut down on the number of people receiving public assistance. It would be a boost to the overall economy, because better-paid workers are not only more productive, but also spend their money locally and keep others working as consumer demand increases.
Public support for a higher minimum wage is broad and deep. A poll conducted by Hart Research Associates in July showed 80 percent of Americans back hiking the federal minimum wage to $10.10 an hour and adjusting it for the cost of living in future years.
Broken down by party affiliation, 92 percent of Democrats, 80 percent of independents, and 62 percent of Republicans voice support for this proposal, as do 75 percent of Southern whites and 79 percent of people with incomes over $100,000.
The cost of paying livable wages to American workers is negligible for most American corporations, and the benefits from doing so would ripple through the economy. It is doable, and it must be done.