By Sarah Nassauer 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (June 6, 2019).

Sen. Bernie Sanders appeared at Walmart Inc.'s annual shareholder meeting on Wednesday to push the retail giant to raise its minimum wage, the latest sign that it can't fully shake a reputation -- in some quarters -- as a bad place to work.

"Walmart pays many of its employees starvation wages," said the Democratic presidential candidate, addressing company executives and a board that includes three members of Walmart founder Sam Walton's family, which he noted is one of the country's wealthiest. "Surely with all of that, Walmart can afford to pay its workers a living wage of $15 an hour."

Walmart CEO Doug McMillon told shareholders in opening remarks that the company has invested heavily to raise wages and benefits at the expense of profits and that Walmart supports Congress raising the federal hourly minimum wage of $7.25. He didn't say what the federal minimum wage should be.

"Any plan should take into account phasing and cost of living differences to avoid unintended consequences," said Mr. McMillon. Over the past four years Walmart has invested $4.5 billion to raise wages beyond its traditional annual increase, he told the crowd.

In the U.S., 21 states follow the federal minimum wage while others have set higher pay floors, including some that will reach $15 an hour in the coming years.

Mr. Sanders also voiced his support for a shareholder proposal that could allow a store worker to be nominated to the board. Since the Walton family owns over 50% of the company's stock, the proposal and others that aren't supported by the board won't pass.

Along with other Democratic presidential candidates, Mr. Sanders has been a vocal proponent of raising the U.S. minimum wage to $15 per hour, as well as narrowing the salary divide between executives and their workers. Many employers have raised wages and added more worker perks in recent years amid a tight labor market driven by the lowest unemployment rate in decades.

Walmart's competitors, including Amazon.com Inc., Costco Wholesale Corp. and Target Corp., have raised minimum wages to $15 or promised to do so. Mr. Sanders made Amazon the target of his ire before the company raised its minimum wage to $15 last year. Amazon also did away with certain incentive pay and stock compensation for hourly warehouse and customer-service employees, potentially helping offset the cost to the company of the wage increase.

Walmart raised its minimum wage to $9 per hour in 2015, moving to $10 the following year and $11 last year. Walmart also has added benefits like longer paid parental leave for all workers. Executives say the changes, touted in multiple ad campaigns, have helped push employee turnover to the lowest level in five years.

Walmart executives don't want the government to force their hand on wages, as they seek to retain control over how the retailer financially manages the process, according to a person familiar with their thinking. Walmart will be thoughtful and strategic about any wage increases for its roughly 1.3 million U.S store workers, said company CFO Brett Biggs last month in an interview to discuss earnings. "We have to pay a fair wage otherwise people won't work for us," said Mr. Biggs.

Walmart has more stores in rural areas and small towns than some competitors. "There are some areas where at $11 we could be $1 or $2 an hour above the market," said a spokesman earlier this week. U.S. full-time hourly workers earn an average of $14.26 an hour and store managers make an average of $175,000 a year, the company said in a social responsibility report last month.

Walmart's reputation with the overall public was at historic lows when Mr. McMillon became CEO in 2014, according to opinion polls, dragged down by an impression that the retailer didn't treat workers well and sold low-quality goods. Early in the CEO's stint, Walmart's board supported raising hourly wages, arguing that stores were in disarray and employee turnover was too high, say people familiar with the discussions. One of Mr. McMillon's first major initiatives as CEO was to raise the company's minimum wage to $9 an hour and clean up stores. Three years ago he added "become the most trusted retailer" to a short list of company goals.

A 2015 video ad said "We're investing $2.7 billion over this year and next in higher wages, education and training." A current Instagram ad says "Walmart is preparing associate for the jobs of tomorrow," with a link to information on how Walmart workers can get college credits or a degree for $1 a day. As Walmart buys up smaller e-commerce players such as men's apparel company Bonobos and shifts its focus to e-commerce, top executives and the Walmart board believe improving the company's reputation will help attract top technology talent and more shoppers outside its core low-income customer base. The company's reputation has improved, but still lags behind Amazon, Target and other retailers.

Write to Sarah Nassauer at sarah.nassauer@wsj.com

 

(END) Dow Jones Newswires

June 06, 2019 02:47 ET (06:47 GMT)

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