Why Do 1.4 Million Americans Work At Walmart, With Many More Trying To?
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Why Do 1.4 Million Americans Work At Walmart, With Many More Trying To?

by Doug Altner | November 27, 2013 | Forbes.com

Observe any hiring center for a new Walmart and you will see thousands of individuals eager to become a Walmart associate. Many already have jobs at fast food restaurants, supermarkets, or other retail stores. LaShawn Ross, 29, worked for McDonald’s and Winn-Dixie before taking a job at a brand new Walmart in Pinellas Park, Florida. Ross aptly summarizes the sentiments of many applicants: “They are huge, so I know there is a huge amount of opportunity.”

Yet, a few pundits, policymakers, and activists insinuate that these people should not be excited, but outraged at the company for its wages—and some groups are even calling for protests on Black Friday.

Walmart “can easily afford to pay $15 an hour,” says Robert Reich, Chancellor’s Professor of Public Policy at U.C. Berkeley, who is also urging shoppers to “[B]oycott Walmart on the most important sales day of the year, November 29.” “Their net income was $17 billion,” says Vincent Orange, a D.C. city councilman who voted to force Walmart to pay a minimum wage of $12.50 per hour in the nation’s capital, adding, “You don’t want to share a little bit with the citizens? Come on.” OUR Walmart—a union-backed activist group—accuses the company of showing disrespect to its employees because it doesn’t pay so-called living wages.

Well, nobody has to work at Walmart if he feels underpaid or underappreciated. He can always seek another job. So why do 1.4 million Americans choose to work at Walmart, many for well under $12 per hour?

Many entry-level Walmart jobs consist of comparatively safe and non-strenuous work such as stocking shelves, working cash registers, and changing price labels. Walmart also pays competitive wages, which, for these jobs, are generally under $12 per hour, because these positions require little or no work experience or technical skills. For anyone with modest credentials, these jobs provide good work experience—experience which they can use to eventually land a higher paying job.

Listen to the critics, though, and you’ll hear Walmart portrayed as if it is holding its employees down. But in fact the company offers incredible opportunities for any hard-working, ambitious person who wants to work his way up in retail. Three out of four Walmart store managers started out as hourly associates, and those managers can earn up to $170,000 per year. Some former hourly associates, such as Patricia Curran, have worked their way up to top executive positions. Curran was named by Fortune magazine as one of the 50 most powerful women of 2006. Walmart even encourages associates to complete training courses during fully paid work time and offers raises to associates who complete these courses.

Little wonder that when Walmart opens a new store, it’s not uncommon for as many as 10,000 people to apply for just 300 jobs.

For Walmart, the pay, opportunities, and perks it offers must serve its goals for long-term growth and profitability. It offers training and development because it judges this to be good business. Such programs reward talent, motivate employees and recruit managers with extensive firsthand knowledge of store operations. With regards to wages, the company pays what it needs to in order to recruit an enormous number of competent and content associates. And it recognizes that it does not make business sense to pay more than it needs to.

This is what many Walmart critics detest: the company will not offer higher wages and benefits when it calculates that it will not be good business. According to these critics, every Walmart employee should be paid at least $12 – $15 per hour, regardless of the role he fills, regardless of whether he has the skills or experience to justify such a wage, regardless of whether he is a model employee or a slouch, regardless of how many other individuals are willing and able to do his job for less, regardless of whether raising wages will be good for the company’s bottom line. In effect, their premise is that $12+ per hour wages shouldn’t have to be earned or justified; they should be dispensed like handouts.

Walmart’s relationship with its employees is win-win. Every wage that it pays is one that the employee accepts and a large number of individuals have successfully worked their way up the retail giant. So, let’s stop attacking Walmart for paying market wages.

About The Author

Doug Altner

Doug Altner was an analyst and instructor at the Ayn Rand Institute between 2011 and 2014.