On a talk show this past Sunday, Walmart worker Greg Fletcher spoke about the realities of struggling to provide for his family on the company's infamous low wages. David Frum, a conservative columnist at Newsweek, pointedly asked Greg whether he got the Earned Income Tax Credit, a tax refund meant to supplement the earnings of low-wage workers.
Greg said he did, and then added with a smile, "... although if I made enough to not receive it, that'd be okay too."
And that's the crux of the debate about Walmart's low-wage business model. Is America in the 21st century going to be defined by living wages and respect on the job, or will it continue down its current path, where firms shed all responsibility for their workers and the rest of us are left to figure out how to support our families, our friends and our neighbors?
It's the question being posed today, when thousands of Walmart workers have planned to protest at 1,000 stores across the country. They are talking about the company's poverty wages ($8.81 on average) that force many workers to rely on public assistance. They are talking about lean part-time hours and chaotic schedules that leave families in shambles. They are talking about unbearably hot conditions in warehouses with no drinking water and insufficient safety equipment. They are talking about having to rely on emergency rooms and public healthcare because Walmart made the company plan too expensive. And they are talking about lack of respect and dignity on the job, which over and over again comes up more than any other issue. (See this video for Walmart workers talking about why they're striking).
Add to this list a final indignity: Walmart recently announced that its workers will not be celebrating Thanksgiving with their families, because the company was starting Black Friday at 8 pm the night before.
The good news is that it doesn't have to be this way. There is nothing inevitable about Walmart's low wages, because plenty of retailers, including Costco, are profitable while paying a decent wage. In fact, a new report by Demos asked what would happen if all large retailers in the U.S. raised their starting wage to $25,000 a year (a quite modest benchmark). The researchers found that 1.5 million workers and their families would be lifted out of poverty. The cost would equal just 1 percent of total annual sales, presumably something these companies can absorb, given that many have been making record profits during the recovery (Walmart alone made more than $15 billion in profits last year). Moreover, study after study shows that when workers are paid more, they are more productive and stay on the job longer, cutting retraining and turnover costs. Still, let's say retailers passed on half the cost to consumers; Demos estimates we'd pay a mere 15 cents more in each shopping trip, or $17.73 a year.
Most compelling, the wage boost would generate $4 to $5 billion in additional annual sales for retailers -- bringing us back full circle to Henry Ford's simple yet profound recognition that his workers were also his customers. At a time when our country is struggling with unprecedented levels of inequality and an economy that can't seem to get out of first gear, we desperately need this extra buying power.
Unfortunately, Walmart doesn't get it. Over the past two months, it has responded to protests at its stores and warehouses by retaliating against workers, cutting their hours, changing their schedules without notice, and even firing them. Late last week, the company took an even more aggressive stance, filing an unprecedented complaint with the National Labor Relations Board that asks the government to stop the planned Friday protests. It's a cynical move, and it has no legal grounding because our labor laws protect the right to speak up about bad working conditions.
Instead of playing the Grinch, we need a Walmart that respects its workers. We need a Walmart that is willing to share the profits that its employees help to produce. And above all, we need a Walmart that embraces its role as America's largest employer -- and that will help build the living wage economy that working families need and deserve.