Colbert Calls Out Wal-Mart Wages, Here's a Fix

As usual, comedian Stephen Colbert hit the nail on the head. “Wal-Mart is taking care of its employees... Not living wage care, but can of peas care.” The late-night satirist was responding to a Cleveland Plain Dealer article finding that Wal-Mart set up a Thanksgiving food drive to benefit its own needy employees. “Critics say Wal-Mart isn't doing enough,” Colbert continued, “but they are wrong… because Wal-Mart isn't doing anything.” In fact, the company was not providing food, but requesting that cash-strapped employees help each other out.

Satire is one thing, but it’s worth asking what Wal-Mart could do to improve wages for the estimated 825,000 employees that the company’s CEO recently suggested are currently paid less than $25,000 a year. In a research brief released this week, my colleague Catherine Ruetschlin and I explore one way that Wal-Mart could provide its low-wage workforce with a substantial raise without having to raise prices to consumers at all.

We find that Wal-Mart spent $7.6 billion last year to repurchase shares of its own stock. This followed on $36 billion in similar stock buybacks over the previous four fiscal years. The buybacks did nothing to boost Wal-Mart’s productivity or bottom line. They didn’t enhance services or lower prices for consumers, and financial experts argue buybacks like this often don’t even end up benefitting investors over the longer term. Yet we find that if that $7.6 billion were redirected to Wal-Mart’s low-wage workers, employees would each see a raise of $5.83 an hour—quite a substantial pay increase.

If Wal-Mart redirected its current spending to invest in its workforce, the benefits would extend to all stake-holders in the company—customers, stockholders, taxpayers, employees and their families—and the economy as a whole.

Wal-Mart customers would benefit from better staffed and more organized stores, rather than the long lines and empty shelves which had been discouraging shoppers. Shareholders would see a stronger company, potentially able to improve on several months ofdisappointing sales numbers as Wal-Mart’s leadership on better employee pay contributed to a broader economic recovery and increased spending.  U.S. taxpayers would no longer have to subsidize a company that pays its workers less than they need to survive, as a recent study by staff from the U.S. House of Representatives found that low wages at a single Wal-Mart store cost taxpayers in between $900,000 and $1.74 million every year.

Last night, when Demos hosted a powerful event on low-wage work, I was asked whether Wal-Mart was likely to heed our research. In fact, the company’s public relations person has already dismissed our findings as “propaganda.” But the people Wal-Mart should be listening to are the company’s own employees—the Wal-Mart workers taking a stand for respect and improved wages and hours despite Wal-Mart’s harassment, intimidation, and illegal firings, which the National Labor Relations Board has recently decided to prosecute the company for. Demos can work to shine a light on the consequences of low wages and how the company could redirect funds to raise pay, but it is employees themselves—planning to walk out on strike again this Black Friday with growing community support—to whom Wal-Mart is ultimately accountable.