In a groundbreaking investigation, The New York Times has discovered that Wal-Mart doesn't pay its workers very much. This morning, it reports that "a number of community groups and lawmakers have recently teamed up with labor unions in mounting an intensive campaign aimed at prodding Wal-Mart into paying its 1.3 million employees higher wages."
The Times' star witness is Jason Mrkwa, a 27-year-old high school grad who stocks frozen food at a Wal-Mart in Independence, Kansas. He makes $8.53 an hour, "even though every one of my evaluations has been above standard." That isn't enough, as he complains, to afford a decent apartment or transportation classier than his '91 Dodge Dakota (though the photo of Mrkwa reveals that he apparently can afford a Dell PC with Internet access).
To me, the article begs several questions. First, to what extent is anyone entitled, per se, to drive something better than a '91 Dakota? As Mrkwa observes, the labor market in Independence doesn't afford him a whole lot of options. So, is Wal-Mart therefore obliged to pay him more--or is it up to him to move someplace where he can find better work?
(A hint as to our inflated expectations in the U.S.: The Times quotes William McDonough of the United Food and Commercial Workers Union observing that "Henry Ford made sure he paid his workers enough so that they could afford to buy his cars. Wal-Mart is doing the polar opposite." Indeed, Ford famously more than doubled his workers pay to $5 a day, in 1914. But in 2005 dollars, that works out to $96.65--not that much more, really, than the $77 that Wal-Mart's $9.68 hourly rate implies. And I'm betting that Henry's employees worked harder than the average Wal-Mart cashier.)
And second, the Times' traditional antipathy to market economics notwithstanding, is Wal-Mart really best served by paying an hourly wage that's 20% less than the national average for retail workers? What's the trade-off--which its execs obviously have considered--between low wages and the high costs of employee turnover and negative publicity?
Related Stories: | Topics:Careers, Human Resources, Wal-Mart Stores Inc., Jason Mrkwa, Dodge Dakota, Labor Unions, Business |
Recent Comments | 18 Total
May 4, 2005 at 11:12am by Cindy Forbis
Americans shop at Wal-Mart due to low prices, as it is certainly not the shopping experience that used to lead me there. If higher wages are paid to stockers such as Jason, price containment will not be possible. We can not have our icing and cake too, even if the employer is Wal-Mart. If Jason wants a higher wage, he should advance his education and accept a position with increased responsibility or dangerous work environent.
May 4, 2005 at 11:18am by Laura
Personally I believe, if you are making huge profits and not sharing them to some basic extent with your employees you are sending a pretty clear message.
Walmart's model in a nutshell - low prices at the expense of everything - except profits. It's worked very well so far. However, their stores are ugly and unkept, their employees are unhappy and many of their vendors feel like hostages.
What goes up - comes down. Some things take longer than others.
In the meantime, if we think the stock clerk should earn a better wage - maybe we should ask if we are willing to pay more for our box of cereal (ie shop somewhere else). Just a thought.
Nevertheless, there are more effective ways than complaining to afford a better car.
May 4, 2005 at 11:24am by Tom Asacker
" . . . is it up to him to move someplace where he can find better work?"
So there you have it. The "haves" would like the "have nots" to either stop whining or move. Stay aware of that sentiment the next time the finacially challenged and stressed out waitress makes your restaurant experience less than optimal.
May 4, 2005 at 11:30am by Adam
Laura:
Actually Wal-Mart DOES sacrifice profits for low prices, to the extent that they can... they have some of the lowest profit margins in the industry, much much lower than Mom & Pop stores. They drive their costs ultra-low, and take a low profit margin, which leads to their famous low prices. Those low prices allow them to have huge sales volumes, so that in the end they still make a lot of money.
But profit margins don't get much smaller than what Wal-Mart already has...
May 4, 2005 at 12:03pm by Rayne
Ditto that, Tom.
Yeesh. Every time I hear these "pull-yourself-up-by-the-bootstraps" types, I want to ask them: Have you any idea how expensive it is to drive a 13-year-old car, let alone a Dodge pickup truck? This vehicle is only worth a couple grand at best, probably soaks him for $500+ a year in repairs (air conditioning and suspension were problematic in this particular model).
He can't make enough money to put a down payment on a more reliable vehicle; he's stuck in an endless cycle of blowing his savings on repairs on this truck -- and the age of vehicle he could probably afford (6 to 7 years old) would require a down payment comparable to the cost of this truck and a year's repairs OR income higher than he's able to report.
Can you imagine what percentage of his earnings he is spending on gas for this vehicle, too? He's also recently cleared the threshhold where auto insurance was more expensive because of his age -- but increasing gas prices have surely exceeded those savings.
This is the trap that low wage earners are stuck in, a unending cycle of mounting expenses that eat any potential savings.
On top of this he's supposed to pay for improvements to his education? with what? a second job that won't allow him the time or energy to go to school?
Let's look at this from another angle. This person, assuming he actually gets 40 hours a week from Walmart, earns under 18K a year before taxes. He'd have to pay rent under $300/month, consume less than $300/month in food, clothing, pay less than $300/in transportation and insurance expenses if he was to have any money left over -- and we're talking $100 roughly, not enough to buy college textbooks and fees for one class, let alone pay for more than 1 or 2 full credit hours at a state college. It's enough to buy that Dell and an ISP that he'd need for school, but not much more. And it's certainly not enough for any extras or even for real emergencies. I hope his health is good.
I think Jason's already got a lot of responsibility and flirting with danger. What he needs is a level playing field, some assistance that he can pay back as he earns more money, and ultimately a better employer -- one that we reward by our buying practices. It's not Walmart.
May 4, 2005 at 12:30pm by bands
Why all this hoopla about what a cashier at wal-mart makes, wouldn't this effort be better served to get teachers, those people who care for and teach our children 8 hours a day?
May 4, 2005 at 12:49pm by Michael Prospero
While I understand Wal-Mart's desire to keep all things low, there's one paragraph from that article that, like its PR blitz a few months ago really demonstrates its corporate arrogance: "[Scott] said that if Wal-Mart were as greedy as its detractors say, it would never have attracted 8,000 job applicants for 525 places at a new store in Glendale, Ariz., or 3,000 applicants for 300 jobs in outlying Los Angeles."
It reminded me of a scene from "The Grapes of Wrath," when a migrant worker (in southern California, no less) hips the Joads onto the reality of their situation: "Now, how many of you all got them handbills?... There you are, same yellow handbill. 800 Pickers Wanted. All right, the man wants 800 men, so he prints 5,000 handbills and maybe 20,000 people see 'em. And maybe two or three thousand people start West on account of that handbill. Two or three thousand people that are crazy with worry headin' out for 800 jobs. Now does that make sense?"
The number of applicants for shelf-stockers isn't a reflection of the attractiveness of the job, but of the desperate circumstances that an unfortunate number of Americans find themselves in.
May 4, 2005 at 1:36pm by Keith Nakoff
Haves and have nots? It has nothing to do with that. I drive a 91 dodge dakota sport and it getsd me to work just fine. In fact It takes very little maintenance and I'm hard on it. I have my graduate degrees, have taught at several universities, designed products for several international companies and this guy is making just about half of what I make. I also have 2 children and a wife of 16 years (who raises my kids, no income) If I were to move to Cali. I could make a great deal more money but I am tied to this area for a number of reasons. If people want to make more money there are as many ways as there are people. Get creative. Get a 2nd or 3rd job. Quicherbichin and work like a dog to get a degree. A 4 year degree is now viewed as the old high school diploma and the current high school diploma is nearly worthless. With in income that is not very high, eligibility for student loans increase. On the other hand, sure, I'm tired of not making a 5th of what I have made in the past but I also know that most of the time, opportunity does not come knocking on your door. You have to turn over rocks looking for it. Also, pay this guy the same wage and put him in a factory at 85+ degrees degreasing widgets and my money (not that I have much) says he runs back to the good old days of airconditioned walmart.
Don't be such a wuss.
May 4, 2005 at 2:26pm by steven
I think someone needs to wakeup...
go to wakeupwalmart.com and learn the facts...
May 4, 2005 at 2:52pm by Rayne
Geez, Keith, why don't you contact that Walmart guy and actually tell him how you managed to get those multiple degrees? One of the problems I see persistently with conservatives is that they throw the bootstrap argument back in people's faces, but never offer substantive solutions.
Is the subject Walmart stocker college material? Is he the first generation in his family to ever consider college? These folks don't necessarily get the guidance they need to pursue secondary education, let alone training for trades.
As for the second or third jobs: what's unemployment like in our Walmart stocker's neighborhood? My home county suffers from double-digit unemployment, has more than two years. Good luck finding the first job let alone jobs 2 and 3.
I might ask what's the return on investment on those degrees...if Keith weren't competing with other designers in India or China for the same product designs that end up in Walmart, maybe he'd be driving something newer, safer and more efficient than a 1991 Dodge Dakota. (It's no wonder why GM is tanking when people cannot afford to buy a car any more frequently than 15 or so years, let alone skyrocketing healthcare expenses for workers and retirees.)
As for more making more money in Cali -- somebody needs to dust off the economics part of their multiple degrees. Median household income in CA was $47.5K in 2002; in 2004, median home prices ranged from $322K in Riverside to $633K in Orange County. It's only an illusion that workers make more money in CA; they spend it on transportation and real estate.
The answers are a lot more challenging than the bootstrap folks would like to think. This country has a systemic problem that needs a systemic fix -- starting with real investment in this country's infrastructure and innovation, rather than allowing our resources to move elsewhere. Shareholders need to demand better long-term performance and real ethics rather than continual short-term double-digit yields, and consumers need to look at purchases as investments in their community rather than a temporary, disposable, cheap fix.
May 4, 2005 at 4:50pm by Keith
Actually Rayne, I wouldn't mind discussing how I managed to get through the educational years with him at all. In this blog style of conversing, it is obviously not possible to go through all of the ins and outs of each issue at hand. As for the "conservitive" issue...Yes I consider myself a conservitive, but...I also am working on establishing an "intermediary home" that helps the homeless get back on thier feet. (lots more detail available if interested) So I wouldn't be to quick to lump groups of people together based simply on assumtion. As for my truck, I've had it since 2 17 year old boys ran away from thier group home and stole my GMC Jimmy, used it to hold up a gas station and then blew it up attempting to out run the cops in 4 wheel drive on the highway. Insurance didn't cover a dime. My wife drives a minivan/troop transport for the kids sake. I honestly don't care what my neighbor drives and have no interest in keeping up with the Joneses who are now attempting to keep up with Hollywood. About the 2nd and 3rd jobs, your right, the surroundings dictate what is available there. Still, even in hard times I have found that for those that truely want to work and will work hard, there are jobs out there. They are most often though, not terribly enviable jobs. As for the degree value. I must say that I wouldn't be where I am today without them. Again, I agree with your mention of overseas competition etc. And at some point I believe that things will turn around and it will again become more reasonable to manufacture in the USA but that is quite a ways off. Still, I can not ask people that are barely making ends meet to purchase thier goods at a more expensive place in hopes of bettering the economy. Some people may feel strongly enough to follow thru but mostly people will opt to satisfy the imediate need through places like walmart/mcdonalds etc. To wrap this up so I can get out of my office and head to my 2nd job (teaching) I have to dissagree with "The answers are a lot more challenging than the bootstrap folks would like to think." I realize that , if there are realy any true answers, they are more that challenging. It would be nice if "share holders" would truely take an interest in the issues that you mention and many others such as a companies true moral stance and it's potential to possitivly affect the local school systems through various methods of giving/volunteering etc. Unfortunately, the all-mighty dollar usually has the last say.
May 4, 2005 at 7:33pm by Shop Right
Average pay figures in retail would seem to ignore the high turnover and therefore short tenure of the average retail employee. The article doesn't specify in its interviews, but this high turnover can provide relatively frequent raises and promotions for those who do commit to retail longer term.
Depending on how long one has worked at Wal-Mart, almost $10 per hour for a high school graduate in a low cost of living area doesn't seem too terribly shabby. If he cannot or will not move to an area with more economic opportunity, then perhaps he should consider minimizing expenses (e.g., roommate(s)) or taking on an additional job, perhaps part-time?
May 5, 2005 at 8:54am by Shena Ni
Why is there talk that this guy needs to get student loans to attend college? He would be working on his first degree, AA or Bachelor's, yes? Supporting himself on $17K a year, he most likely qualifies for a Pell Grant and other free Fed money for school.
Forget the loans, I said G-R-A-N-T-S. He can use his Dell and connection to fill out a free online FAFSA (I think the address is http://www.fafsa.gov/).
The grants won't pay for Ivy League, but they're enough to cover almost all the expenses at a community or small college with in-state/in-county tuition. He may need a small loan to help cover books, or he can just save a little cash for them. Some schools give book grants just for the purpose of helping students who need that "little bit" ($250) for books each semester.
And don't sweet talk about the details of his life and how difficult it is. You're creating the situation you want for him that proves your point. He could just as easily be a lazy cuss who feels entitled to more simply because he wants it, which was briefly discussed in the first post.
As for not being college material, if he can't make the time to attend and get good enough grades to pull in more than $10/hr, then maybe he doesn't have what it takes to get a higher salary. It does take something more than good looks and right-place-right-time to actually ~earn~ our money, yes?
May 5, 2005 at 12:28pm by Jim Durbin
There's also the question of how the 28 year old spends his time and money.
Does he drink? Do drugs? Spend $1,000 on stereo equipment? Eat at fancy restaurants?
Are his parents well-off? Does he have siblings doing better economically?
It's quite a stretch to draw conclusions about one person based on an article that was written to make a political statement on wages.
Walmart also has one of the best promotion from within programs - which suggests that they reward hard workers. How hard does Jason work? We know he says that he gets high ratings, but for how long? The Times doesn't say.
And considering the state of the NYTimes these days - forgive me for thinking there is more to the story than the pull-on-your heartstrings quotes pulled from red-state rubes who repeat slogans about a living wage.
The fact is that raising the wages this year will result in the exact same article next year - "just a dollar more" and we'll stop is a common refrain. It's never enough.
And just once, I'd like to see the killer expose on the minimum wage workers who work at the NY Times.
May 6, 2005 at 1:27am by Retta
You know it seems as though ppl are so willing to bash Wal-Mart over anything. I am a 20 year associate and I make a good living at Wal-Mart.I have'nt always made so good but slowly it has turned into a nice living...We all remember driving older cars...wooooo...I bet this young man has a cell phone , computer ,and other nice things he does'nt need.Stop blaming our companies for our own mistakes.I will retire from Wal-Mart with a good bit of stock and profit sharing.I'm just an hourly associate proud of the company I work for.....
May 9, 2005 at 10:31pm by yall dope
dumb azzez yall. walmart never gonna change cuz they don't have to. dey gotz pleny o peepo buying stuff without a care about da service level of the piss poor paid worker. dey the biggest company in the world. and they got plenty of dumb azz workers willin to take the job that pays piss poor cuz they aint got no other choice. people buy from them cuz tey cheepest p[rice, and people aint got even money to begin with. poeple don't care bout nobody but themselves. forever and eever amen.
April 1, 2007 at 7:23pm by kathy
Walmart does not sacrifice profits, the only thing they sacrifice is ppls prosperity. sacrificing profits is a perception they want us to believe, if they were indeed doing so employees will be paid higher wages, including health benefits,be able to work full time and not outsource jobs