Walmart still isn't paying workers enough, says one author calling for a $20 national minimum wage
The Fight for $15, a national political movement calling for the minimum wage to be raised, began a decade ago with fast food workers walking off the job in New York City demanding $15 an hour. Starting this month, a handful of states actually hit that goal of a $15 minimum wage.
Many major companies have also voluntarily raised pay to $15 or more in recent years — a multi-billion-dollar boost for hourly workers.
But in a new book, author Rick Wartzman uses the story of Walmart to argue that corporate America – for all this change — is still paying workers less than it should.
The solution, he says, is something almost no one is talking about: a federal intervention with a new, national minimum wage set at $20 an hour – almost triple the current level.
"You can say $20 an hour is radical," Wartzman said. "What's radical to me is to be in the richest country on Earth and have people who get up and work hard every day struggle to the degree they are."
"We've let things go for so long and haven't dealt with the problem that now our backs are against the wall," he said. "We don't have time for incrementalism anymore."
Walmart, America's largest private employer, was once the poster company not only for low prices but also low pay. For years, unions targeted Walmart with protests and pointed to worker testimonials. Some said paychecks weren't covering their rent, bills and groceries.
"I was literally starving to death," said Martha Sellers, identified as a Walmart employee in a video released years ago by United For Respect, an advocacy group launched by a labor union.
Wartzman said people were ending up on food stamps and Medicaid, and "really struggling."
The author was part of a team behind a 2003 Pulitzer-prize-winning L.A. Times investigation of Walmart that detailed alleged "penny pinching" with its own employees. In more recent years, though, he and many others noticed a shift.
"I thought, boy, there is something interesting going on," he said." You know, something's changed."
The company gave him inside access for his new book about that change, which included a company investment of $5-6 billion in higher pay, increased benefits, training and education from 2015-2021, he said.
Yet, the book was not what Walmart had hoped he'd write. "Still Broke" is the title.
"I think the company is still broke after all the change that it has made on this front," he said. "It hasn't fixed things yet."
To make the case, Wartzman uses the very same numbers Walmart cites with pride, including an average wage that's now more than $17 dollars an hour — higher than the minimums in every state in America.
"The problem is … we've kind of forgotten what people actually need to live on," he said.
Seventeen dollars an hour works out to an average annual income of just under $29,000 a year, Wartzman says, when calculating the hours worked by Walmart employees.
"At the end of the day, after all this change, after all the pushing … and internal conversations and internal soul searching … That's not a living wage," he said.
The problem, he said, is far bigger than Walmart.
"What this has shown me … just by looking at Walmart, is that Corporate America overall will never go far enough, fast enough on its own," he said.
Walmart's CEO agrees that at least some increase is required.
"The federal minimum wage is lagging behind. $7.25 is too low," Doug McMillon, Walmart CEO, said at a 2019 Annual Shareholders' Meeting.
But $20 – or even $15 – is so high, according to some economists, it could backfire.
Last year, for example, the nonpartisan Congressional Budget Office
concluded that raising the minimum to $15 an hour by 2025 would lift some 900,000 people out of poverty, but would also result in higher prices — leading to fewer sales and companies reducing their employment. In the end, it estimated 1.4 million Americans would lose their jobs.
Wartzman said he doesn't buy the idea that a bunch of people would be out of jobs because minimum wage workers are making more.
"There are always going to be tradeoffs. There is no perfect solution to this. We've dug ourselves a hole over 50 years. But, again, we've got to do something," he said.
Walmart argues it's already done quite a lot in recent years.
"The bottom line is, if Walmart were not in operation in this country, there would be more people on public assistance, not less," said Dan Bartlett, Walmart Executive Vice President of Corporate Affairs.
Bartlett took CBS News inside one of several training facilities it has established in recent years, where workers can pick up skills to help them at Walmart and beyond. The facility is called Walmart Academy.
"What we're providing to them is an enormous amount of opportunity for them to grow with the company, to make more money. And, to them, they have to decide [cut "is"] … what is the wage they need to provide for themselves or a family? We're going to give them an opportunity to grow," Bartlett said.
But while Walmart pledges to "keep raising pay," according to its website, Wartzman said it already has the money to do it, pointing to the tens of billions of dollars spent in recent years buying back its own stock, a move that typically drives up share prices.
So, why not take a fraction of that stock buyback money and give people a better living?
"When we look at our shareholders who, by the way, we have tens of thousands of employees who are invested in our own stock in 401(k) and those things. So they benefit from those share repurchases as well, Bartlett said. "The simplistic answer for Rick is that increasing dramatically the minimum wage to $20 will solve all these problems I think is misguided. And the ramifications of— there'll be job destruction. I could tell you today that if we took overnight all of our stores in Walmart to $20, there would be… hundreds of stores that would no longer be profitable. No longer profitable."
Prices would then presumably rise, he warns or people would be laid off while entire stores could close.
"And so when you start raising prices, you're hurting communities that are the very ones you — that Rick says he cares most about," said Bartlett.
