Charge 1: Wal-Mart Pays Low wages
Fact: Wal-Mart’s U.S. average annual wage of $21,029 is competitive in the retail trade industry..
Regionally, the evidence suggests that Wal-Mart puts moderate upward pressure on retail trade wages in rural (low cost/low wage) regions of the country (i.e. raises retail trade wages). The more urban, higher cost, and unionized the region the more likely Wal-Mart puts moderate downward pressure on retail trade wages. Nationwide, Wal-Mart likely has little overall effect on retail trade wages.
Fact: The supermarket myth
Contrary to popular belief, nation-wide Wal-Mart ($21,029) pays above average U.S. supermarket salaries ($18,432). Locally the Moscow Wal-Mart average wage ($22,006) is above the local average supermarket wage ($19,040).
Wal-Mart is above the U.S. average wage for general merchandise/ discount stores of $18,455; and is below (but relatively close) to the overall mean retail wage of $22,495.
Note: the primary wage data in this report was obtained from 2004 County Business Pattern data adjusted for inflation to 2005 dollars.
Fact: Above local retail wages
Fact: Dual income family
Fact: Most workers are full time
Wal-Mart Job Applicants
Most retail trade jobs are transitory
Retail trade employment is a training and transition wage for a substantial number of retail trade workers on their way to other careers. These workers are not the primary “breadwinners”. The presence of these types of employees is either ignored or understated in many anti-Wal-Mart studies.
So…where did all them “low wage” studies come from?
[Peterson refers to the infamous 2004 UC Berkeley study by Dube and Jacobs. PARD/UFCW tried to have Dube flown up from Berkeley to testify at the appeal hearings in Pullman back in January, but it didn't work out.]
Fact: Unionized workers represent only 12.5% of the U.S. workforce
Costco—a different market model: Costco’s 2005 total sales were only 16.4% of Wal-Mart. Costco employs 120,500 employees (world-wide) versus 1.8 million for Wal-Mart (7% of Wal-Mart’s total). Costco has a different customer base than Wal-Mart, serving higher end products to wealthier families. The average household income of Wal-Mart customers is $35,000 versus $85,000 for Costco. Forty-two percent of Costco customers earn over $100,000.
Government imposed wages would likely bankrupt Wal-Mart: Suppose that Wal-Mart decided to raise its average wage to the equivalent of Costco $21,029 to $33,280 (i.e. raise its wage from $10.11 an hour to $16) for its 1.3 million U.S. employees, an increase per employee of $12,251. This would wipe out Wal-Mart’s entire 2005 $11.2 billion net income and create a ($4.73 billion) net loss, in effect bankrupting Wal-Mart.
The CEO Salary Myth: Contrary to popular opinion, the Wal-Mart’s CEO H. Lee Scott, Jr. $10.465 million salary package was modest by industry standards, ranking 136th place in the U.S by Forbes Magazine. The top salary was Richard D Fairbank, CEO of Capital One Financial at $249.42 million. Scores of actors, actresses, talk-show radio hosts, and professional athletics make more money that the CEO of the world’s largest corporation, who ranked 100th place out of 100 top celebrities.
The evidence suggests that Wal-Mart does not increase poverty: Since Wal-Mart’s pay and benefits is comparable to the average salary package in the U.S. retail trade market, it is possible but unlikely that Wal-Mart’s entry into a county or regional market either increases poverty or decreases average retail wages.
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