Wal-Martization of Workers' Wages and Overtime Pay
Wal-Mart Wages
- Wal-Mart pays an average hourly wage of $8.23 an hour, according to independent expert statistical analysis, which falls below basic living wage standards and even below poverty lines.
- Wal-Mart claims an hourly wage of $9.68 an hour is its national average, though that still equals poverty levels for workers. Since “full time” at Wal-Mart is 34 hours a week according to company policy, full-time workers make a mere $17,114.24 a year—below the federal poverty level for a family of four.
- The most common Wal-Mart jobs earn less.
- A sales associate--the most common job classification--earns on average $8.23 per hour ($13,861 annually)
- A cashier—the second most common job—earns about $7.92 per hour ($11,948 annually)
- Sales associates and cashiers combined account for more than a third of all Wal-Mart jobs.
- The world’s largest and richest retailer—with more than $250 billion in annual revenue--can afford wage increases. Wal-Mart could pay each employee a dollar more per hour if the company increased its prices by a half-penny per dollar. For example, a $2.00 pair of socks would then cost $2.01. This minimal increase would annually add up to $1,800 for each employee.
- A Wal-Mart spokesperson told USA Today on 1/29/03 that their pay is close to or equal to union wages.
Union Wages
- Grocery workers are paid an average of $10.61/hour based on Bureau of Labor Statistics data.
- The Institute for Women’s Policy Research (IWPR) reported in 2002 that United Food and Commercial Workers (UFCW) Union-represented workers in the supermarket industry earned 31% more than their non-union counterparts. Women have a 33% advantage with UFCW representation.
- IWPR research showed that UFCW-represented supermarket workers are two-and-a half times as likely to have pension coverage than non-union workers and twice as likely to have health insurance coverage than retail food workers without union representation.
The excerpt below is from the June 11, 2003 Wall Street Journal--New Recipe for Cost Savings: Replace Highly Paid Workers; In a Tight Market, Employers Are Finding Job Seekers Willing to Take Lower Salaries
At Wal-Mart Stores Inc., managers are judged in part on their ability to keep payroll costs at a strict percentage of sales, according to former managers. Some say that puts extra pressure on higher-paid workers to be more productive. "You keep people making $10 an hour to a high standard," putting more pressure on them for small mistakes, says Lyndol Jackson, a Wal-Mart manager until he left for another job in 1998. Often, those workers quit and can be replaced less expensively, adds Mr. Jackson, who lives in Memphis, Tenn.
Former Wal-Mart cashier Dana Mailloux, 33, worked for eight years at a store in Fort Myers, Fla., moving up to $9.15 an hour. Last fall (2002), her manager called her and more than a dozen other longtime employees into his office and told them he had to lay them off because of lack of work. That same day, Ms. Mailloux says, she passed a room with six new hires, red vests in hand, filling out paperwork. Returning to the store that weekend, she says, she saw newly advertised positions listed on a bulletin board. "Basically, I was thrown out like a piece of trash," says Ms. Mailloux.
Once a worker gets pushed out of a job, chances are his or her next position won't pay as much. A 1992 study for the W.E. Upjohn Institute for Employment Research found displaced workers earned an average of about $1,200 a year less than they would have earned if they had stayed in their previous job, even after five years.
Overtime
- Wal-Mart faces 38 state and federal lawsuits filed by hourly workers in 30 states, accusing the company of systematically forcing them to work long hours off the clock. A July 2000 internal audit of 128 Wal-Mart stores found 127 were "not in compliance" with company policies concerning workers not taking breaks. The audit found workers nationwide didn’t take breaks 76,472 times in a one-week period.
- On December 19, 2002, a Portland jury issued its unanimous verdict that Wal-Mart violated federal and state wage-and-hour laws by forcing employees at 18 Oregon stores to work overtime without pay from 1994 to 1999.
- In a class-action suit in Texas, on behalf of more than 200,000 current and former Wal-Mart workers, statisticians estimate that the company underpaid its Texas workers by $150 million over four years by not paying them for the many times they worked during their daily 15-minute breaks. (NYT, 6/02)
- Wal-Mart settled a suit in Colorado in 2000, reportedly for $50 million to 69,000 current and former Wal-Mart hourly workers. The terms of the settlement were confidential, and the company will say only that the actual amount is far less than has been reported.
More than 8,000 pharmacists filed a class-action lawsuit in August 2002, charging that Wal-Mart owes them $200 million in pay for "off the clock" work. - On May 31, 2003, a "tentative agreement" was reached between Wal-Mart and hundreds of pharmacists suing the discount retailer for nearly $45 million in damages. A judge had already ruled in favor of the plaintiffs, in a 1999 summary judgment, that Wal-Mart Stores, Inc. had violated labor laws by not paying its pharmacists overtime and shorting their paychecks for two years. The agreement overrides a trial that was set to decide the dollar amount of damages for the underpaid pharmacists. The case was filed in 1995 on behalf of four Colorado pharmacists and grew to 596, who alleged they had routinely worked "off the clock" for Wal-Mart doing paperwork and other chores. Typically, their work lasted 60 hours, not the 40 hours indicated on Wal-Mart's records, according to the complaint. They allege Wal-Mart's failure to pay them overtime compensation--by improperly classifying them as salaried workers--was willful and that the retailer intentionally shortchanged its employees.
- Indiana is one of the first states to allow a class-action lawsuit against Wal-Mart Stores over its labor practices. Any hourly employee who worked at an Indiana Wal-Mart or Sam's Club from Aug. 1, 1998, to the present can join the suit. Wal-Mart is the largest nongovernmental employer in Indiana. For the three Indiana stores reviewed in the internal audit, workers skipped breaks 1,699 times, according to the court record.
Store Managers
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Store managers earn bonuses based on earnings. Since the corporation dictates the inventory and operating expenses, managers’ only recourse to stimulate profits is essentially by putting a tight lid on wages.
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Wal-Mart expects its managers to increase sales each year, yet decrease labor costs by two tenths of a percent from the prior year's figures.
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Joyce Moody, a former manager in Alabama and Mississippi, told the New York Times that Wal-Mart "threatend to write up managers if they didn't bring the payroll in low enough." Depositions in wage and hour lawsuits reveal that company headquarters leaned on management to keep their labor costs at 8 percent of sales or less, and managers in turn leaned on assistant managers to work their employees off-the-clock or simply delete time from employee time sheets.
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