Two years ago, when she started working at the deli counter
of a Walmart in Illinois, Lisa hoped that her job would amount to the
beginning of a career, one that would pay enough to cover her bills and
enable her to stay current on her student loan debt.
But despite one raise since, Lisa, who asked that only her first name
be used, now earns just $9.10 an hour, or about $13,000 a year on
part-time hours. Seven months pregnant, she recently filed for
bankruptcy. With no alternatives at hand, Walmart now seems like a
dead-end to poverty, she says.
"I don’t have underwear without holes in them," she said. "Everyone
at work wears T-shirts that are threadbare. I have just enough to eat
and get gas to make it to work for the next two weeks."
Lisa's experience sheds light on why a group claiming to represent
tens of thousands of Walmart workers nationwide is planning strikes and
other labor actions at as many as 1,000 stores next week on Black Friday, the biggest shopping day of the year. The actions are intended to protest what the group says are meager wages.
The company website declares that "a job at Walmart opens the door to a better life"
and "the chance to grow and build a career." But interviews with 31
hourly workers and one former store manager reveal lives beset by
paychecks too small to handle the bills, difficult to manage part-time
schedules with hours subject to constant change, and little reason to
hope for career advancement. Citing fear of losing their jobs, most
spoke on the condition of anonymity.
The testimonials of these workers are confirmed by Walmart’s official
compensation policy, an internal company document obtained by The
Huffington Post, titled the "Field Non-Exempt Associate Pay Plan Fiscal
Year 2013." The plan details a rigid pay structure for hourly employees
that makes it difficult for most to rise much beyond poverty-level
wages.
Low-level workers typically start near minimum wage, and have the
potential to earn raises of 20 to 40 cents an hour through incremental
promotions. Flawless performance merits a 60 cent raise per year under
the policy, regardless of how much time an employee has worked for the
company. [Click here to read the full pay policy]
As a result, a "solid performer" who starts at Walmart as a cart pusher
making $8 an hour and receives one promotion, about the average rate,
can expect to make $10.60 after working at the company for 6 years.
A
Walmart corporate spokesman confirmed the existence of the compensation
document. He said the company pays fair wages while providing
substantial opportunities for motivated, hard-working people to work
their way up to higher-paying jobs.
"In order for Walmart to attract good people we need to offer
competitive wages and benefits, and we do," said Kory Lundberg,
Walmart’s director of National Media Relations. "We offer pay and
benefits that meet or exceed the majority of our competition in every
location we operate, and that includes unionized competitors. We're
clearly offering jobs that people want, because last year Walmart
received more than 5 million applications to come work in our stores."
Most major retail chains that compete for customers with low prices
pay relatively low wages to hourly workers. But as the largest private
employer in the world, with 1.4 million workers in the United States
alone, Walmart bears outsized influence on American working
opportunities: It has largely set the standards for similar companies.
"In order to deal with competition from Walmart, other retail outlets
have been forced into a reduction in wages and benefits across the
board," said Ken Jacobs, chairman of the Center for Labor Research and
Education at the University of California at Berkeley.
The 33-page compensation plan is written as an advisory document for
company managers. Though it is addressed to Sam's Clubs -- a retail
division of Walmart Stores Inc., that tends to attract slightly
higher-income customers -- multiple Walmart employees confirmed that the
plan applies to Walmart stores as well.
Have you worked at Walmart? The Huffington Post wants to know about your experience. Email us
Initially devised to help standardize labor policies in response to
costly lawsuits, Walmart’s pay plan has helped the company keep costs
down by capping raises and regimenting employee movement within the
company.
This formula has benefited company shareholders: Walmart’s profits
rose 9 percent in the third quarter of 2012, to $3.64 billion, the
company reported Thursday. Earlier this fall, the company’s stock hit a record high.
But the compensation structure for hourly workers helps explain why
many rank-and-file workers carry a sense of grievance that they have
been denied a share of the spoils.
"How could a multi-billiionaire company such as this only afford to
hand out one 40-cent raise per year to employees while the ones in the
top portion of the hierarchy are riding high starting with the
six-figure store managers?" said Joe Lyon, a former sales associate at a
Walmart in Sterling Heights, Mich.
The Walmart pay plan is organized around seven levels of job
difficulty for hourly workers, called Position Pay Grades (PPGs),
ranging from cart-pushers (Level 1) and cashiers (Level 3), to cake
decorators (Level 4) and customer service managers (Level 6). Each
subsequent pay grade offers 20 to 40 cents more than the previous level,
according to the document. This means that the base rate of pay for a
top hourly position at Walmart, like a check-out supervisor, is $1.70
more than that of the lowest paying job.
Employees can receive annual raises for good performance, capped at
60 cents. Salaries can also go up when management decides to adjust a
store’s base pay to meet market demands.
The plan applies only to the 200 to 300 hourly workers in a Sam’s
Club or Walmart -- and not the handful of managers who are on salary.
A retired store manager at a Walmart in the Midwest said he made an
annual salary of roughly $130,000 before retiring in the late 2000s,
making him the store’s highest paid employee. But those those he hired
at the lowest pay grade started just above minimum wage, he said.
"People don’t line up for those jobs," the former manager said. "You
can make the same thing at a 7-Eleven or flipping burgers but you don’t
have to work nearly as hard."
Promotions for hourly employees -- defined in the plan as moving up a
pay grade - happen infrequently. Last year, 180,000 hourly associates
were promoted, according to the company’s website, or 18 percent of Walmart’s total number of U.S. hourly store associates.
Half of Walmart's one million hourly associates in the United States
make less than $10 an hour, a spokesman told HuffPost in October. Many
of those who make more than $10 an hour likely belong in another
category offered by Walmart as an example of employee satisfaction:
300,000 employees have worked for the company for more than 10 years.
Walmart points to this contingent of workers as proof of its positive
impact on the communities in which it operates -- not just by offering
low prices, but also by providing steady jobs.
But some workers in this group describe their experiences in starkly
different terms -- as a dispiriting slog through lean times, with little
prospect for better.
"Most of our employees have been at our store a great many years,
mostly older women who are fearful," said one associate. "They'll
complain among themselves, but when it comes down to it, they would
never do anything to jeopardize their jobs. They don't know anything
else and need the pay."
Longtime workers are especially hard hit by another aspect of the
hourly wage structure -- pay caps. Wages are capped at a certain level
by grade, regardless of good performance.
A 40-year-old associate who has worked at Walmart almost half her
life now earns $19.53 an hour -- a relatively hefty wage for an hourly
employee, but also the most she can ever hope for, given that she has
already hit the cap.
"After 19 years in retail, I guess what I make is ok," she said. "But
if I stay with this company until I retire I could be making the same
wage for the next 25 years."
Hourly employees are eligible for quarterly bonuses if their store
exceeds profitability expectations. Eighty three percent of stores
achieved that distinction in the spring of 2012, according to Walmart
press releases, prompting the company to pay out $200 million in
bonuses. Since the beginning of the year, in-store associates have
received more than $550 million in quarterly incentive payouts, said
Lundberg, the corporate spokesman.
But those interviewed said these bonuses -- between $100 and $500
every three months -- were so small that they made little difference in
their lives.
Far more important, they said, was Walmart's insistence on keeping
most hourly workers part-time, so as to avoid having to provide a
variety of benefits available to full-time employees.
The retired store manager said that 70 percent of the workers at his
outlet were part-time, meaning they worked no more than 32 hours a week.
That ratio was imposed by his bosses at Walmart’s Bentonville, Ark.,
headquarters, he said, as a means of saving costs on benefits such as
medical insurance, which are more easily accessible to full-time
workers.
In many ways, the rigid pay model fits into a larger strategy
pioneered by Walmart over the past decade to limit costs by streamlining
store operations using technology and sophisticated data analytics. But
the pay grades were also developed as a response to a landmark class
action lawsuit, Dukes v. Walmart Stores Inc., which accused the company
of discriminating against women in pay and promotion, according to Brad
Seligman, a lead plaintiff's attorney in the suit.
That case was thrown out by the Supreme Court in 2011, after Walmart
successfully argued that any discrimination that may have occurred was
the fault of individual managers, not company policy.
"Before [Dukes], there were no objective standards for making pay
decisions," said Seligman. The pay grades were first implemented in
2004, according to Seligman, the same year the women were granted status as a class. In 2006, Walmart established the pay caps. Both policies "may have reduced the use of subjective decision- making of individual managers," Seligman said.
The retired store manager, who was working when the new policies went
into effect, said pay grades and caps made the compensation system more
transparent and fair for all employees by denying store managers of the
opportunity to reward their favorites with higher wages while
shortchanging those meriting more. But the new system also produced
another effect, according to some Walmart workers: Those who previously
made higher wages quickly became targets for elimination and replacement
by lower-wage workers.
"In my store, all of those people making more money got transferred
to overnight shifts," said the retired store manager. "They found ways
to get rid of them. So they thinned out pretty quick."
Overall, he added, "people make less money now."
Walmart often points to managers as examples of what can be attained
within the vast company, highlighting how minimum wage-earning
associates can reasonably aspire to six-figure careers.
"Nearly three-quarters of our store management teams started out in
hourly positions," a spokesman told The Huffington Post in October.
But the ratio of salaried positions to hourly ones is small. At the
retired manager’s store, about 200 hourly associates reported to a
handful of salaried managers. Few can reasonably expect to secure middle
class salaries, according to the workers, making prospects more like a
lottery than a reliable career path.
Walmart’s hourly workers are far more likely to wind up like the
30-year-old sales associate in Mississippi who told HuffPost he makes
just $8.65 an hour after three years with the company.
The sole breadwinner for his family of five, the worker, who
requested anonymity, said he relies on food stamps, "not by choice and
not without personal resistance."
Nevertheless, he loves his job. "I believe in the Sam Walton's
mission of service to the customer and that's why I continue to work."
The associate said he is scheduled to work a five and a half hour
shift Thanksgiving morning, with another that evening, "just under the
six [hours] that require a meal break."
Credit : Huffington Post
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