A group of Walmart workers that organized a series of strikes and other protests against the company have been calling for their wages to be raised to a minimum of $15 an hour for four years. Their voices have been joined by the larger Fight for 15 movement, which has notched victories in California and New York, states that have both raised their minimum wages to that level.
But while Walmart has since raised its base pay, it hasn’t brought hourly wages up to $15. According to a new study from the UC Berkeley Center for Labor Research, doing so would cost the company an additional $4.95 billion. It estimated that 979,000 of Walmart’s 1.5 million U.S. employees would get a raise if wages went up to that level.
Nearly $5 billion may sound like a huge amount of money for Walmart to have to come up with. But there are plenty of ways it could get there with little financial pain.
One easy way would be to simply reduce how much it’s spending on buying shares of its own stock to help inflate the price and enrich its shareholders. At the end of last year, the company announced plans to spend $20 billion over the next two years on stock buybacks. These share purchases don’t bring Walmart much benefit. As a report by the think tank Demos found in 2013, buybacks haven’t increased the company’s productivity or bottom line, and they typically have ended up creating less value for shareholders over the long run.
There are other pots of money Walmart could tap, of course. The company posted net income of nearly $15 billion at the end of the last fiscal year. It also paid its CEO $19.4 million last year, or, as calculated by Christine Owens at the National Employment Law Project, more than $9,000 an hour.
Increasing wages is also often not all about cost, but comes with its own rewards that help make up for the extra expenditure. Walmart itself already knows this. Just months after it announced the increase in its base pay, it said it had benefitted from reduced employee turnover and increased sales. Economists have consistently found that increased wages translates into lower turnover, something that can cost the equivalent of a fifth of a worker’s salary, as well as other benefits like better recruitment and employee performance.