Don’t Be Fooled By Walmart’s Promotional Stunt About Increasing Wages

Matt Murray Editor/Founder, NH Labor News

This week the nations largest employer made national news by announcing they would raise their minimum wage to $11 an hour and provide a $1,000 bonus to 1.5 million American employees. They say that this move to increase wages and provide employee bonuses is all thanks to the Republican Tax Plan that President Trump signed into law this month.

However a closer review of this new announcement shows that it is all a publicity stunt.  They are also using the publicity stunt to cover up the news that they are closing 60 Sam’s Club stores across the country.

Making Change at Walmart director Randy Parraz explains what is happening in his statement: 

“While pay raises are usually a good thing, this is nothing but another public relations stunt from Walmart to distract from the reality that they are laying off thousands of workers and the ones who remain will continue to receive low wages. The fact is that Walmart is not permanently investing the estimated $2 billion it will receive annually from Trump’s tax giveaway to its workers – it is keeping almost all of it. This announcement is attempt to repair a crumbling image, while ignoring thousands of its workers who struggle year after year to pay their bills or depend on government assistance.

Once you crack the veneer, you see that Walmart’s wage increases does not raise hourly wages for many of its workers. Hourly wages for those workers making above $11 dollars will essentially stay the same. Workers will get a one-time bonus or raise, but not both.

Instead of taking Walmart at its word, we would hope that the Members of Congress, civic and state leaders, and the media, ask Walmart for actual facts about what this means for workers. Empty words will not lift Walmart workers out of poverty, an actual living wage will.”

Looking deeper into Walmart’s own statement you can clearly see that this is nothing more that publicity stunt to continue the myth that tax cuts somehow help corporations fuel wage increases.

The Wage Increase

Walmart’s press release further explains how this pay increase will into effect.

An increase in Walmart’s starting wage rate to $11 an hour, effective in the Feb. 17, 2018, pay cycle. The change is in addition to wage increases already planned for many U.S. markets in the coming fiscal year. The increase applies to all hourly associates in the U.S., including stores, Sam’s Clubs, eCommerce, logistics and Home Office.

Facing backlash over low-wages and protests from OUR-Walmart, Walmart announced they would raise wages from $7.25 to $9 in 2015 and raise them again to $10 in Feb of 2016.  Logic would dictate that a pay raise to $11 was overdue at this point.  Not to mention that Target, one of Walmart’s biggest rivals, announced last September that they would be raising their wages to $11 in January of 2018 and would continue to push wages up to $15 by 2020.

The Bonuses

Praising the newly passed tax cuts, Walmart said they would be giving out $1,000 bonuses to their “associates.”  As Parraz already explained, those bonuses are along going to the people who will not be getting a wage increase.  The devil is in the details.

“A one-time bonus benefiting all eligible full and part-time hourly associates in the U.S. The amount of the bonus will be based on length of service, with associates with at least 20 years qualifying for $1,000.”

So to qualify for one of Walmart’s generous bonuses, you would have to be a full-time employee, making more than $11 already and have at least 20 years with the company.  Since less than 50% of Walmart’s employees are full-time, combined with the high turnover of the retail industry, it really makes you wonder how many of Walmart’s 1.5 million employees will even see that bonus.

The Cost

There is no denying that raising wages and giving away bonuses is going to hit Walmart’s bottom line. But when you put it into perspective, it will not hurt them as much as you might think.

“This increase in wages to associates will take effect in February and will be approximately $300 million incremental to what was already included in next fiscal year’s plan. The one-time bonus represents an additional payment to associates of approximately $400 million,” said Doug McMillon, Walmart president and CEO.

That is $900 million dollars in payouts. Yes, that is a lot of money.  It looks like a ton of money.  However when you take into account that Walmart did $482 billion dollars in revenue last year and collected $13.6 billion in profits. $900 million is less than 10% of their profits. The wage increase would only be about 3% of their profits.

Maybe we should also take into account that in October of 2017, Walmart used $20 billion of its own profits to “buy back” their own stocks to artificially increase their stock prices.

Joe Ciolli from Business Insider wrote:

“Walmart is sweetening the pot for shareholders before its annual meeting, using the oldest trick in the book.

The retailer on Tuesday morning announced that it had authorized up to $20 billion in stock buybacks over the next two years. That’s a massive amount of capital to be allocated for repurchases, which are frequently used by companies to boost shares during times devoid of other positive catalysts.”

According to our research, that $20 billion dollars would do a lot for Walmart workers.

Layoffs

On January 12, the day after Walmart announced they would be increasing wages, they announced that they would be closing 63 (or 10%) of their Sam’s Club stores across the country.

“We know this is difficult news for our associates and we are working to place as many of them as possible at nearby locations,” said John Furner, president and CEO of Sam’s Club.

So far this year, Sam’s Club has closed two stores in my area and kicked 250 people out of a job.  Given both of the stores had about 125 employees, it would be safe to assume that nearly 8,000 workers are going to lose their jobs with the closing of these 63 stores.

The Tax Cuts

Walmart is praising the new Republican Tax Cuts for their ability to raise wages. Of course they neglect to mention that they spent millions lobbying Congress to oppose a minimum wage increase and to lower their corporate taxes.

The corporation will shed an estimated $2.2 billion dollars from their annual tax bill next year thanks to Republicans.  That cuts their tax bill by nearly 40%.  I won’t even go into how much the Walton Family is worth and how this tax bill will greatly benefit them. I will say that the Walton Family saved an estimated $670 million just because their income comes from dividends paid out from their Walmart stock holdings which are taxed at a drastically reduced rate compared to “regular income.”

So you see, Walmart the corporation is going to pocket $1.8 billion dollars this year in tax savings even after they spend $300 million to raise wages in their promotional stunt.

Do not be fooled by Walmart’s newly found generosity. They were going to raise wages anyway but now they can use this tax cut as a promotional stunt at the same time.  The Walmart executives are going to use this Tax Scam to line their pockets and continue to pay their low wages. Everyday.


After this post was first published, Walmart announced that they would be laying off an additional 3,500 “Co-Managers” and replacing them with lower paid “assistant manager” position.  Those who are being laid off are encouraged to apply for the new position.

Talk about a slap in the face.

***

Reposted from NH Labor News

Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

More ...

There is Dignity in All Work

There is Dignity in All Work