Wal-Mart worker advocates express skepticism over raises

FAYETTEVILLE, Ark. - This week, as part of the festivities that surround Wal-Mart’s annual shareholder meeting, “Eye of the Tiger” blasted through loudspeakers as employees entered an arena at the University of Arkansas. Hand-picked by their managers out of Wal-Mart’s workforce of more than 1 million, the employees arrived ready to cheer.

“I think we can sell another 3 million this year,” Steve Bratspies, Wal-Mart’s chief marketing officer, said as he held up a round pillow with a yellow smiley face, a symbol Wal-Mart has used to signal low prices and one of many emoji pillows it wants to sell. “Can you help me do that?”

Workers certainly have something to cheer about. Average hourly pay has gone up since Wal-Mart announced early last year that it would increase wages to at least $10 an hour for its army of part-time and full-time workers.

But not all employees were as enthusiastic as those in the arena.

The employees more critical of the company say Wal-Mart - the biggest private employer in the United States - has found more subtle ways to keep the reins on its workers’ paychecks. The retailer has cut merit raises, for example, and has introduced a new training program that can keep employees at $9 an hour for as long as 18 months.

The moves have concerned worker advocates, who say the changes have chipped away at the earnings gains employees appeared to make last year.

“I fear that Wal-Mart’s plan is more about delaying an actual wage increase than providing real training,” said Stephanie Luce, a professor of labor studies at the City University of New York. “We’ve found other major retailers using probationary periods and other strategies as a way to avoid committing to set work schedules and higher wages.”

Wal-Mart, naturally, tried to keep the focus on its biggest initiatives this week. The company said, for example, that it would test a new grocery delivery service with the ride-sharing companies Uber and Lyft, as a way to help grow its e-commerce business, which lags behind its online rival, Amazon.

Its grocery business, which has helped to drive much of its online growth, has been undergoing a transformation, with a broad range of initiatives aimed at things like making fruit look more fresh and appetizing and improving grocery pickup options.

Still, a group of workers also made their grievances known.

On Tuesday, a van of OUR Wal-Mart members, a union-backed group of employees, drove around the retailer’s hometown of Bentonville, 30 miles north of here, to tape petitions calling for higher wages and other concessions onto the mailboxes of executives and several members of the Walton family, who collectively control more than 50 percent of the company’s outstanding shares.

“Does everybody want to talk to us? No, there’s a lot of fear,” said Dan Schlademan, a co-director of OUR Wal-Mart.

One point of contention is raises. In February, Wal-Mart said it was “enabling hourly workers to earn their annual pay increase months earlier than expected.”

But many workers ended up getting smaller raises than they would have under the old system. Workers used to get an annual raise of 40 to 60 cents per hour, based on merit. This year, workers got a percentage-based raise: The highest-earning hourly employees got 2 percent, which translated to less than 40 cents for most of them. Other employees got a raise of 2.75 percent, which, for many, still equaled less than 40 cents.

“They cut the yearly raises in half, basically,” said Barbara Gertz, who worked at a Wal-Mart in Denver for seven years before quitting this year. She said she believed her last raise was about 23 cents.

Wal-Mart is “still evaluating” how it will do raises next year, according to a spokesman for the company, Kory Lundberg.

Wal-Mart has said that all employees hired after Jan. 1 of this year would start at $9 an hour, and be moved up to $10 after completing Pathways, the training program.

The company’s efforts in the last year have made a difference. The average part-time worker now makes $10.58 an hour, for example, compared with $9.48 in February of last year, when the company made its announcement on wage increases.

But because of the training program, hundreds of thousands of employees are still earning $9, executives explained during a meeting with reporters Wednesday. Nearly half a million of Wal-Mart’s workers leave the company each year. Most exits occur within the first two years of employment. Wal-Mart said it expects close to 450,000 people to go through Pathways this year, and that it hopes the program will substantially improve retention rates.

“Wal-Mart has almost a 50 percent turnover, and it is likely many of the new hires will quit long before they are eligible for the $10 per hour,” said Luce, the labor expert from CUNY.

Wal-Mart executives denied that the program was a way to intentionally keep wages below $10, and emphasized that a trained workforce meant better customer service and more opportunities for workers. The retailer has pledged $2.7 billion to lift wages and improve technology, among other initiatives.

The company wants “as many people as possible” to advance to $10 through the program, said Kathleen McLaughlin, the company’s chief sustainability officer.

Opportunities for personal growth, good communication with a supervisor and a chance to advance in one’s career were among the most important reasons for training, she said.

“The research actually shows that wage is not a big driver of motivation,” she said.