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Wal-Mart, Target, Kohl’s and what constitutes a living wage

November 27, 2012

Besides the mayhem at some Wal-Mart stores on Black Friday, there was also a bit of drama surrounding strikes and protests in Wal-Mart parking lots over how much (or little) that company pays its store employees.

I think it's worth our taking a look at the question of what constitutes a living wage in 21st century America and whether retailers are paying adequate salaries. Why, because all of us in consumer products are dependent upon these frontline employees for our livelihoods. Without them, nothing gets to the floor and if nothing gets to the floor nothing is sold. And if we really want to be self-serving, we may want to consider whether retail employees are making enough money to go out and purchase the products we make?

In order to get a better grasp of the situation, I turned to an interesting piece by Jordan Weissmann in this month's Atlantic entitled" Who's Really to Blame for the Wal-Mart Strikes? The American Consumer." It's an extensive article but what I found of particular interest was that Wal-Mart is not the lowest paying retailer. Here is how the retailers, according to market research company, Ibis World, stack up in terms of the full time employee hourly wage paid (lowest to highest):

Retailer Hourly Wage

Kohl's $8.02

Target $8.13

Wal-Mart $8.81

Bed Bath and Beyond $9.55

Best Buy $9.67

Sam's Club $10.30

Lowes $11.16

Home Depot $11.77

This list raises a number of thoughts and questions:

  • Who knew that Kohl's and Target paid less than Wal-Mart? In fact, Kohl's pays 9% less than Wal-Mart.
  • Why does there not seem to be a connection between what a company pays and how
  • successful it is? After all, Home Depot and Lowes are highly successful chains not to mention Costco which is purported to be the highest paying retailer.
  • Why does Wal-Mart pay its Wal-Mart employees 15% less than its Sam's workers?
  • According to these figures, Kohl's pays its employees 32% less than Home Depot? Why is that the case? Are they less efficient, care less, more profitable, use lower quality workers or is there some other reason?
  • What about ecommerce providers like supermarket company Fresh Direct or Amazon? How much do their lowest paid workers make?

In case you're wondering what would happen if retailers increased these wages, Weissmann states that "A study from UC-Berkeley's Center for Labor Research and Education suggested it would cost the average shopper an extra $12.49 a year if Wal-Mart paid its workers a full $12 an hour and passed most of the cost to consumers. That works out to about $0.46 per trip to the store."

Being a retail worker in America is a tough job with low pay and long hours that many times include working on holidays. Should Wal-Mart, Kohl's and Target lead the way by increasing salaries? What do you think?