Sanders Presses Walmart On Wage Increase -- WSJ
06 June 2019 - 05:02PM
Dow Jones News
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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