This is an updated and expanded version of an article that first
appeared on Alternet
, June 10, 2003
For data and sources, click
here
A Wal-Mart wage doesn’t go very far -- even at Wal-Mart
Stan Cox
Wal-Mart’s shareholders converged on Fayetteville, Arkansas
on June 6 for their annual meeting. According to Arkansas Business Online,
"The famously colorful event often takes on the feeling of a high school
pep rally, as shareholders and company executives perform the ‘Wal-Mart
cheer.’" And why shouldn’t they cheer? Their company chalked up a record
$56.7 billion worth of sales in the first quarter of 2003.
Wal-Mart is the nation’s biggest employer, the low-price
champion, and a seller of just about everything. A healthy family with
a roof over its head could supply virtually all of its other basic monthly
needs with one stop at a Wal-Mart Supercenter like the one here in Salina,
Kansas. To me, that raised a question: Can a family whose breadwinner
works at Wal-Mart afford to supply its minimum needs by shopping there?
Last Sunday, my adult son and daughter joined me for
a visit to the Wal-Mart Supercenter in Salina. We spent an hour and a
half wandering among the hundreds of red, blue, and yellow "Always Low
Prices" signs. We checked many of those prices and then went home to do
some calculating.
Our conclusion: A single parent employed full-time at
Salina’s Wal-Mart and raising children aged 4 and 12 does not earn enough
money to supply the family’s basic needs by shopping at that same Wal-Mart.
According to the personnel manager at Salina’s Supercenter,
a cashier earns a starting hourly wage of $6.25. After Social Security
and Medicare taxes, the paychecks for a month would total $1016 for a full-time
176 hours. (That’s 40 hours a week, which would put this cashier in a better
financial position than the many employees who work 32 or fewer hours
a week. Of course, hourly pay rises eventually, but the 2001 PBS report
"Store Wars" found that most employees have left by the end of their first
year.)
We calculated the amount that our hypothetical three-member
family would spend each month if as many of its essential needs as possible
were supplied by our local Supercenter. The bottom line: They would need
an absolute minimum of $1162 per month to cover housing, food, transportation,
health care, and miscellaneous expenses. Despite our best efforts, we
exceeded our cashier’s monthly income by $146. We couldn’t have come even
that close had our cashier’s family not been eligible for a State of Kansas
child-care allowance that covers all but $22 per month in child-care costs
for such a family living on so low a wage.
To determine needs, we used published studies on an "adequate
but austere" budget for a family with one adult, one preschooler, and
one school-age child living in Salina. But we slashed some of the published
budget items by as much as 38%, based on the "Always Low Prices" we found
at the Supercenter. And we completely eliminated anything we could
do without.
Look up the details of our budget at
www.members.cox.net/t.s/data.html
and try to decide if you could find a way to cut it and
make ends meet.
"Living wage" campaigns across the country have attempted
to determine and advocate for a wage level that can provide a decent life
for working families. Living wages are designed to sustain a family over
time. Our goal was much more modest. All we asked of our Wal-Mart wage
was to get our cashier’s family to the end of the month in a central Kansas
city of 50,000, assuming they were already settled in a rented apartment
or mobile home and had a paid-for car, furniture, and appliances. The Wal-Mart
wage failed -- even at Wal-Mart prices, even with the 10% employee discount
(not applicable to food), and even with employer-assisted health insurance.
Our monthly budget allowed for a USDA-recommended "low
cost food plan" on which we economized further by selecting the cheapest
foods in each category. It made for an unappealing and not especially
healthful diet. Gas, oil, and repairs for the car -which was used for
little more than getting the cashier to work and home - all came from Wal-Mart.
Our cost-cutting left no room for "luxuries": no travel
outside Saline County, no cable TV, no home telephone service, no movies,
no newspaper or magazine subscriptions, no fees for community sports or
classes, no saving at Wal-Mart’s in-store bank in case the car had to
be replaced, no eating out (except for one meal a month at the McDonald’s
located in the Supercenter). Most of what’s available at the Supercenter
was off-limits to us: videos, haircuts, Christmas presents, eye care, tanning
sessions, family portraits, bats and balls, small appliances, furniture,
bicycles, film and developing, . . .
There is a fundamental and inevitable conflict between
the interests of corporations, to whom wages are a cost, and most human
beings, to whom wages are a means of survival. Nowhere in this society
is that conflict better illustrated than at your local Wal-Mart. Most
of its employees and most of its customers depend on their paychecks to
pay the bills. But to keep its shareholders in the money, the company
depends on hyper-consumption.
Wal-Mart could not survive in a town with good public
transportation, where families all grow their own vegetables, cut one
another’s hair, sew their own clothes, and borrow and lend tools.
Like all retailers, it has to move vast quantities of merchandise at an
ever-increasing pace. It does it, as the sign in the store says, by "Daring
to Save You Even More." And to drive prices to rock-bottom, they have to
drive down the wages they pay.
And, of course, the wages Wal-Mart pays in Kansas seem
princely when compared with those paid by many of its suppliers around
the world. Try going to your local Supercenter with the monthly paycheck
of a Bangladeshi factory worker who makes shirts for Wal-Mart. You won’t
make it to the end of Aisle 1.
Back here in America, the government implicitly recognizes
the insufficiency of Wal-Mart wages. Our cashier’s family would be eligible
for an Earned Income Tax Credit (EITC) of $4140 in 2002. That would close
the gap between the cashier’s wage and bare survival, and provide enough
additional income to lift the family just above the poverty line.
EITC, food stamps, Medicaid, and state programs like
Kansas’ childcare allowance are needed because corporations like Wal-Mart
refuse to pay their employees a sufficient wage for the work they do.
Seen from that angle, those programs are simply corporate welfare.
Make no mistake: Wal-Mart could afford to pay its workers more. Wal-Mart's
$240 billion in sales last year make it bigger, economically speaking,
than Indonesia, the world's fourth most populous nation. Look at
Forbe's list of the world's top ten billionaires and you'll see
that four of them are members of Wal-Mart's Walton family. And just
half of the $7 billion in profit the company made last year would have been
enough to give every employee a raise of at least $1.50 per hour.
In February, Fortune Magazine emphasized the unchallenged dominance
of the world’s largest corporation: "Wal-Mart in 2003 is, in short, a lot
like America in 2003: a sole superpower with a down-home twang." Well,
if Wal-Mart represents both the future of employment and the future of
marketing in America, a lot more down-home folks are going to be tumbling
into that gap between Always Low Prices and Always Low Wages.
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