Walmart’s Missed Cue at Retail’s Big Show

Inside of New York’s Javits Convention Center this morning, Walmart US President and CEO Bill Simon took the stage before a crowd of industry leaders to talk about how retail can play a central role in revitalizing the American economy. 

It’s a topic he’s touched on before, stating that “American renewal is all about jobs,” before annotating his position with a political agenda that includes lower corporate tax rates and new trade agreements to free up the movement of capital overseas.  But while Simon made his case for better living through corporate cost cuts to the attendees inside the convention, outside the Javits Center it really was all about jobs. Workers from across the service industry gathered to agitate and spread the word on how companies like Walmart fail workers, families, and the entire economy by keeping their employees below the poverty line with low wages and part-time hours. 

The National Retail Federation’s (NRF) four-day Annual Convention and Expo is sometimes referred to as the “BIG Show,” making Walmart—the largest retailer in the world—akin to its Oscar-nominated leading actor.  But while Simon strikes the pose of corporate responsibility, the company fumbles its lines, using its dominant position in the retail market to depress wages, deny benefits, and deteriorate job quality.  And since Walmart sets the standard for employment across the industry, its labor practices ripple out to affect the ability of millions of workers and their families to live with dignity and meet their needs. 

At the podium this morning, Walmart announced plans to expand those poor working conditions to up to 100,000 recently discharged veterans over the next 5 years.  With unemployment rates well above the national average, our returning soldiers need a comprehensive plan to reintegrate into the workforce.  But Walmart is not offering them the kind of job security their service deserves.  Instead, these veterans can look forward to holding part-time jobs with no benefits, erratic scheduling, and supplementing their low incomes with public assistance programs just to make ends meet.  Underemploying veterans in bad jobs is not the answer to their unemployment problem, and it is the wrong example when it comes to putting our work force back on track.  

Workers picketing outside of the convention pointed to their inability to get by on low-wages and the practice of last minute “just-in-time” scheduling that constrains their ability to take other jobs, schedule child care, or go to school to acquire new skills. 

Carrie Gleason, the Executive Director of the Retail Action Project, explained in a statement:

‘Walmartization’ of retail has turned this expo into a convention on how to just-in-time the retail workforce. The NRF says ‘Retail Means Jobs,’ but these aren’t the kind of jobs Americans need to boost our economy. Rather, the industry is fueling a crisis of underemployment as workers continue to be part-timed.

Demos has examined this issue before, finding that retailers could choose a business model that invests in their workforces and makes a big difference to the American economy without compromising profitability, and still keep prices low.  The study, Retail’s Hidden Potential: How Raising Wages Would Benefit Workers, the Industry, and the Overall Economy, shows that paying just $25,000 a year for full-time work would lift 1.5 million employees and their family members out of in- or near-poverty, increase consumer spending, and generate as much as $15 billion in new GDP, along with more than 100,000 new jobs. 

Retail could facilitate an "American renewal" by moving to an operational strategy that offers fair wages and respect to its workers, reducing turnover, increasing productivity, and generating returns for the industry and the economy.  But that is not what Simon proposes.  Walmart’s core business model is organized around a fundamentally false tradeoff between wages and prices; its claims of helping people “live better” draw from keeping prices low through minimizing its labor expenses.  But as numerous examples—Costco, ShopRite, QuickTrip, etc—and our report demonstrate, it doesn’t have to be this way. Walmart could be a leader in retail job quality and make a real difference to veterans, families, and our economic recovery. 

As billed by the NRF, retail does have a central role to play in the success of the American economy.  And as the country’s largest employer, Walmart can make a big difference in the labor force.  Maintaining a productive workforce, a strong middle class, and a high standard of living has always been a partnership that depends on businesses that are devoted to our nation’s long-term economic health.  But in the BIG show, low-wage employers like Walmart who want to contribute to American prosperity have missed their cue, instead shifting greater costs onto American households and holding back economic growth.

Simon should simplify the script and return to the premise that it is “all about jobs” by making those jobs sustainable for families and the economy. 

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