The majority of Walmart’s workers make less than $25,000 a year, something that some have gone on strike to protest. But the company could raise all workers’ wages to that level without having to also raise its low prices, according to a new report by the think tank Demos.
Rather than putting the $7.6 billion it spent last year on buying back shares of its own stock to use on something that serves to enrich a small group of investors but doesn’t bring it any other returns, it could use the money to give its low-paid workers a $5.83 raise, “more than enough to ensure that all Walmart workers are paid a wage equivalent to at least $25,000 a year for full-time work,” the report notes.
Share buybacks serve to decrease the number of stock shares and inflate the value of each share without the company increasing its performance. The report notes that “buybacks did nothing to boost Walmart’s productivity or bottom line and had no direct benefit for Walmart’s customers or frontline employees” while typically creating less value for shareholders over time.
But paying workers more would benefit Walmart directly in a few ways. First, it would likely boost employee productivity and reduce turnover. The report notes that almost 500,000 workers leave the company each year, which means extra costs to hire and train replacement employees. Meanwhile, its sales have been suffering from, in part, an inability to keep shelves stocked and poor customer experience, something that could improve with better worker productivity. And if its workers have more money to spend, they may buy more items at Walmart itself, also helping to boost its sales.
It would also help the economy, pumping more money into consumer spending and reducing workers’ need to rely on public benefits.
Instead of considering a raise for its workers, however, the company has fought living wage bills in a number of cities, most recently defeating a bill in Washington, DC by threatening to pull out of plans to open new stores if it passed. And instead of listening to workers’ demands for higher wages, on Monday it was accused by the National Labor Relations Board of illegally firing, disciplining, and threatening workers who went on strike.