Rick Wartzman is a journalist, editor and director of the KH Moon Center for a Functioning Society at the Drucker Institute, part of Claremont Graduate University.he writes about the world of work luck Worked as a reporter and editor for an online magazine wall street journal and the los angeles times 20 years.as business editor Timeswhich won the 2004 Pulitzer Prize for National Reporting for contributing to the creation of a three-part series on Walmart’s impact on the economy and society.
Below, Rick shares five key insights from his new book. Still Broken: Walmart’s Amazing Transformation and the Limits of Socially Conscious CapitalismListen to the audio version read by Rick himself in the Next Big Idea app.
1. Walmart is no longer an evil empire.
For about 15 years, starting in 2000, Walmart was routinely portrayed as greedy, if not malicious. “If you really—I mean TRUE—If you want to scare the locals next Halloween, here are some early costume ideas for you or your kids.Dress up like Walmart.Two Federal Reserve officials provided the service.
Walmart was accused of all sorts of ailments, including killing family-run businesses on Main Street, driving US manufacturing overseas, and most of all, abusing frontline workers. I never set foot in a Walmart.
But over the years, Walmart has taken a number of steps to help reinvent its image.The company has become a greener company and is now considered a leader in environmental and sustainability companies. increase. Donated billions of pounds of food to food banks. It also lowered prescription drug prices, making essential medicines more accessible to millions of Americans.
Walmart is also investing in hourly workers more than ever before. From 2015 to his 2021, the company spent $5 billion to his $6 billion on raising salaries, improving benefits, training, and educating frontline employees. Starting salaries dropped from an average of $7.65 an hour to a minimum of $12 an hour. The company’s average hourly wage is now over $17 an hour.
“It has become a paragon of socially conscious capitalism for many.”
Walmart “went from being seen as a problem to being a critical part of the solution,” said John Strohl, CEO of socially responsible investment firm Calvert Research and Management. rice field”. He’s not the only one to lavish such praise.When Walmart started raising his starting salary, the company luck Magazine’s “Change the World” list. In the eyes of many, it is a model of socially conscious capitalism.
2. Despite the progress so far, Walmart could do more.
Walmart has made progress on many fronts, including how it treats its frontline workers. But even with all the positive steps he took, here are his conclusions: The average Walmart employee still earns less than $29,000 a year. Too many workers still have Food Stamps and Medicaid. This is not to disparage the steps taken by Walmart. In its own history, the company has evolved far more than many others. The change is real.
However, this is also a reality. If you work at Walmart, there’s a good chance you’ll still be poor after doing everything to improve your job. Just because something is good doesn’t mean it’s good. In my view, Walmart, with average free cash flow of about $17.5 billion over the last five years, can and should do more. much more.
3. Walmart is both the source and symbol of America’s low wage crisis.
For those wondering why Walmart isn’t paying more, the answer is always “our wages reflect the local market average for that type of job.” This lacks recognition that market averages have been sluggish for decades and that Walmart, the nation’s largest employer, has helped set the standard. Alison Omens, Chief Strategy Officer at Measure and Rank JUST Capital, said: Functionally, they are markets. ”
“Walmart is also a symbol of something bigger: a country plagued by a terrible wage crisis.”
Walmart is not only a source of low-paying jobs, it is also a symbol of something bigger. It is a country plagued by a terrible wage crisis. His 2017 survey of thousands of frontline workers at Disneyland, which describes itself as “the happiest place on earth,” found that more than 10% of them had become homeless in the past two years. I understand that there is something. Two-thirds of the time he couldn’t afford three meals a day.
Two-thirds of the nearly 10,000 Kroger supermarket employees surveyed in 2021 say they don’t earn enough to cover basic monthly expenses, 44% are unable to pay their rent, and 39% % report that they cannot afford to buy groceries. So about 25% to 40% of the U.S. workforce (40 to 65 million workers) struggle to make ends meet, depending on how you measure it exactly.
4. Walmart (and companies like it) cannot do enough on their own.
Both governments and businesses play a key role in ensuring that American workers have a decent life. Previously, in my opinion, governments exist primarily to set up guardrails, to provide a safety net when someone really needs help, and, as in the 30 years after World War II, the pie It was up to the business to divide it broadly and equitably. .
“Washington’s products alone cannot turn things around,” I wrote before. “Business executives have to step up….it’s their companies that have to reset a stronger social contract with their workers.” became. Businesses can and should do more.
What I’ve come to believe now is Walmart and almost every other company in America will never move fast enough to give people a true living wage unless there’s a government mandate. Of course, there are exceptions to famous examples like Costco, Bank of America, and PayPal. But for the vast majority of American companies, Washington’s prod is the only way to get there.
5. You need a government-mandated living wage of $20 an hour.
There is no mystery as to the policies we need to help workers regain their rightful share of our nation’s prosperity. We need bold government action, including devising affordable healthcare systems.
“80% of Americans live in counties where they need to earn at least $20 an hour to support a typical working family.”
But above all, we need to require companies to pay their workers adequately for their living expenses. It’s no mystery what this looks like either. A federally mandated living wage of $20 or more an hour should be our reality. why? According to Living Wage for US, 80% of Americans live in counties where they need to earn at least $20 an hour to support a typical working family.
Note that this “family living wage” idea is based on widely accepted methodologies used around the world. Many people dismiss $20 an hour as “radical.”
But what’s truly radical is the following.
- In the wealthiest country on earth, 1 in 6 working people cannot afford to buy prescription drugs.
- Even before COVID-19, about 30% of households with two working adults were experiencing material hardships such as nonpayment of mortgages, rent or medical bills.
- A third of people who go to food banks are from households with at least one working member.
- Nearly half of Americans have the least financial cushion, and if they lose their jobs, they won’t be able to cover their expenses for more than two months.
- Homelessness is not only a manifestation of mental health problems and addictions, but also a sign of underpaid work, with more than half of those in shelters that year living on the streets. Over 40% had some kind of formal job. They lived under these conditions.
Princeton University sociologist Matthew Desmond explains, “When it comes to poverty, the willingness to work is no longer the problem, and the work itself is no longer the solution.” It’s time to change this paradigm.
To hear the audio version read by author Rick Wartzman, download the Next Big Idea app today.
