The Walton family, the owners of Walmart, happen to be the richest family in the United States. They currently possess an estimated net worth of $149 billion. There is no denying that they have built Walmart into a signpost of capitalism and successful business.
After all, Walmart serves to be the dominating market force for the average American and controls almost 10% of US retail sales. In 2017, Walmart made almost 14 billion dollars in profit, and today continues to be the world’s largest private sector employer. Walmart’s achievements in the market hence are without a doubt admirable.
Yet, what is interesting to note is the discrepancy between the success of the business and the standard of living of Walmart’s employees. One would assume that a company that is generating such massive profits would have reasonable if not competitive salaries for their employees.
However, currently, workers at Walmart are forced to rely on public assistance for basic sustenance. Whilst in 2012, the Walton Family possessed more wealth than the entire cumulative wealth owned by the bottom 42% of Americans, Walmart’s workers are living on food stamps and qualify for Medicaid.
The public assistance that Walmart’s workers rely on is generated from the tax payer’s money. Essentially, the American population is subsidizing the profits of a large enterprise that doesn’t currently pay its workers fair wages. According to Bernie Sanders, a basic minimum wage of $15/hour, which he refers to as a living wage, is essential to keep hard-working Americans out of poverty.
Walmart currently claims that it cannot afford to raise the wages of its workers to the aforementioned amount. Yet, statistics show in 2016 for instance, that if Walmart paid its workers a minimum of $15/hour, it would have still have made a profit of around 10 billion dollars. Welfare can no longer be allowed to excuse businesses from paying their workers living wages.
Economically speaking, a large proportion of a nation’s GDP is dependent on the purchasing power of its consumers. If Americans are underpaid, living in poverty and reliant on public assistance, the economy naturally falters and turn-over rates remain rampant.
Contrary to popular belief, demanding fair pay for workers is not about waging a class war or curtailing the progress of business and the market. It is both an ethical and economic necessity to ensure that those spend 40+ hours working in a week are met with the requirements of living wages and kept above the poverty line.
With companies such as Disney finally taking active initiatives to meet such basic requirements, (As of August 25th, 2018, Disney reached a deal with workers to increase the minimum wage of workers to $15/hour by 2021) it is now time for other enterprises to follow suit and regard the wages of workers with greater gravity. Walmart has claimed it will take initiatives to raise the wage rate of employees to $11/hour, which is a step in the right direction but not nearly enough. It is time for Walmart, a domineering and eminent market force, to serve as an example for ethical business.