by: Jeffrey Dorfman – Contributor
originally posted on Forbes
December 11, 2014
Walmart is the employer that unions and many workers-rights advocates love to hate. Yet, when Walmart opens up new stores, they typically receive thousands of applicants competing for the few hundred jobs available. If Walmart is as horrible employer as often claimed, why do so many people want to work there? The answer is that the thousands who want to work at Walmart know more about working at Walmart than those continually protesting against it.
Many misconceptions about Walmart’s pay and benefits are based on data that people have inferred from partial information that is available publicly, not from a full and complete picture of their compensation package. (Full disclosure: I received funding from the National Retail Federation Foundation to study wages in the retail industry. As part of that study, I received data from Walmart on their pay practices. However, Walmart had no role in the writing of this column.)
Here are the facts about working at Walmart. The average hourly associate has a total compensation package of $14.50 per hour. Full-time hourly associates make an average of $12.94 per hour in wages. On top of the pay, hourly associates receive quarterly bonuses based on store performance that average $580 per year. Employees are eligible for health insurance and, if they choose to sign up for it, Walmart pays 75 percent of the premium cost.
Hourly associates all can contribute to a 401(k) retirement plan and Walmart matches employee contributions for the first 6 percent of each employee’s pay. Employees can also buy company stock and Walmart will match those purchases with shares equal to 15 percent of those purchased by the employees. Finally, employees all receive an employee discount of 10 percent off on purchases at Walmart.
All of these benefits together can add up to the equivalent of $4.50 per hour, meaning that an average full-time hourly associate could have total compensation of about $17.40 per hour or about $35,000 per year.
In addition to these figures, it is worth noting that annual raises for hourly associates have averaged more than 3 percent per year over the past eight years which includes the recent recession when raises for most workers have been few and far between. About 160,000 associates get promoted each year with 7,000 hourly associates entering management ranks annually. More than three-quarters of all Walmart store managers started as hourly associates.
Does all this make Walmart a worker’s paradise? That depends on how much you are making in your current job (if you have one) and what benefits come with that current job position. A significant number of workers make less than $15 per hour in total compensation, so there are lots of people who would see Walmart’s pay package as a step up. The enormous number of applications Walmart receives for each new store opening seems to indicate that is true: lots of people want to work at Walmart.
Given all this, why are so many people so deeply invested in fighting Walmart store openings and complaining about their pay policies? Several reasons seem to be in play. First, much of the protesting is organized by unions who are actually much more interested in gaining the opportunity to collect union dues from Walmart’s workers than they are in raising the wages of the people working at Walmart. Second, many people honestly complain about pay at Walmart because they have been misled about what Walmart really pays. They assume almost all the associates are making minimum wage or slightly above it. Hopefully, these people will read this column and adjust their behavior to reflect the truth about what Walmart pays.
In an economy where millions of people are still unemployed or underemployed, demonizing any employer is probably a bad idea. It gets much worse when the demonizing is based on lies and distortions. The data show that Walmart offers attractive pay and benefits to its employees. People who find those offers unsatisfactory should find another place to work rather than spending their energy complaining about jobs that hundreds of thousands of people find rewarding.