Demos, a think tank based in New York City, this week released an updated version of its 2013 report on the feasibility of raising the wages of Walmart employees to at least $25,000 a year. A $25K annual wage has been a commonly-quoted figure when discussing the wages of Walmart employees, 825,000 of whom earn wages below that. It is also one of the immediate goals of OUR Walmart. OUR Walmart stands for Organization United for Respect at Walmart. It’s a nationwide group of current and former Walmart Associates working together to change the company for the better.
Demos’ report describes the flagging performance at Walmart, citing its lack of investment in human capital as one of the primary reasons for Walmart’s trend of declining sales. Underpaid associates and understaffed stores result in reduced performance, which causes Walmart to lose money. Additionally, the pay practices of Walmart have a negative influence on the local economy, with reduced spending and quality of health care common among those Walmart employs.
The solution for Walmart, Demos explains, is better human capital management. Last year, Walmart’s repurchasing of its own stock resulted in spending in excess of $6.6 billion – a practice with the goal of reducing the amount of publicly traded shares, increasing earnings per share. But if Walmart chose to invest that money into creating pay raises for its associates, Demos reports, it would likely benefit Walmart as a business as well as its associates and the economy, boosting production, performance, and sales.