How Wal-Mart Could Easily Pull Thousands of Its Employees Out of Poverty

Posted by Cord Jefferson

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Last year, despite raking in more than $16 billion in profit, Wal-Mart still had employees who lived below the poverty line. The big-box giant currently employs about 1.5 million Americans, more than any other company in America, and yet it pays much of its workforce peanuts. Two-thirds of Wal-Mart staffers make less than $12 an hour, while one-fifth makes less than $9 an hour. On average, Wal-Mart employees make about 12 percent less than other retail workers.

Most frustrating about Wal-Mart's paltry wages is that it doesn't have to be that way, according to a new study from the Berkeley Center for Labor Research and Education. With a couple simple adjustments, Wal-Mart could be paying its workers not just a living wage, but a good wage, and pulling families out of poverty along the way.

By paying all of its hourly employees at least $12 an hour, the study found, Wal-Mart would immediately boost the annual salary of any worker who'd been earning less than that by $1,670 to $6,500 (depending on whether they are full- or part-time). The study also found that more than 40 percent of this new income would go to households at or below 200 percent of the federal poverty line.

At $3.2 billion in additional payroll costs, Wal-Mart could easily afford to increase wages starting immediately. But assuming the chain would want to pass off the extra costs onto customers, well, that could be arranged rather quickly as well.

If Wal-Mart wanted customers to pay for the inflated wages, the store would only have to increase overall prices by 1.1 percent on its cut-rate goods. A lot of Wal-Mart customers don't have money to burn, of course, but the average cost to consumer would only be an additional $12.49 a year.

For context, four members of the Walton clan, the family behind Wal-Mart, were included in Forbes' list of the top 10 richest Americans last year. If Christy Walton alone gave up just one-eighth of her wealth, she could fund the wage increase by herself.

photo via Flickr user sashafatcat