The President Should Make Walmart Part of the Minimum Wage Debate

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Policy Shop / Demos Blog

The President Should Make Walmart Part of the Minimum Wage Debate

(Photo: Reuters)

“No family should work full time and live in poverty.”

That’s been President Obama’s rallying cry on the stump, persuasively arguing for an increase in the federal (and state) minimum wage. Yet on Friday, President Obama plans to visit a Walmart in Mountain View to celebrate their efforts to become more energy efficient. That’s a mistake. Walmart, the country’s largest private employer, pays (at the highest estimate) 825,000 workers less than $25,000 a year, the line at which a family with two children working full-time falls into poverty.

And that is a choice the company is making. Walmart could give all of those workers a raise now. Last year, Demos found that for what it spent buying back its own stock Walmart could pay all of its workers over $25,000 a year. Walmart spent $7.6 billion on stock repurchases in 2013, which do nothing to boost the company’s productivity or profits. The Walton heirs alone, already some of the wealthiest people in the country, made $2.6 billion from that round of share buybacks. Buybacks aren’t of long-term use to the company, even for its shareholders. On the other hand, a raise across the retail sector would boost growth, and create over 100,000 new jobs.

Earlier this week, Pam Ramos, a Walmart worker in Mountain View, wrote a must-read piece for Salon on the implications. Key quote:

“I want the president to help us and tell Walmart to pay us enough to cover the bills and take care of our families. That doesn’t seem like too much to ask from such a profitable company, a company that sets the standard for jobs in this country. And I hope it’s not too much to ask from a president who believes that income inequality is the defining challenge of our time.”

It isn’t too much to ask. The country has a clear vested interest in lifting those families out of poverty and boosting the economy as a result. The president should echo the language he’s used to lift up high-road employers like Costco and (more recently) the Gap, and encourage Walmart to pay its low-wage workforce more, like he did during the State of the Union:

"Profitable companies like Costco see higher wages as a smart way to boost productivity and to reduce turnover," the president said. "But there are a lot of Americans who don't work somewhere like Costco, and they're working for wages that don't go as far as they once did."

A lot of those workers who aren’t working for decent wages are working for Walmart. The president is talking the talk on the minimum wage and it’s having an impact. He should hold the country’s largest employer to the same standard.

Joseph Hines

Joseph Hines is a communications associate at Demos.

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