By trumpeting its plan to raise pay for 500,000 workers, Walmart clearly hopes to end once and for all its reputation as a bottom-of-the-barrel employer. Mind you, this is the company that has been hounded for years by protesters shouting about rock-bottom wages, off-the-clock work, sexual discrimination, union busting and the use of unsafe factories in Bangladesh.



Burt P Flickinger III, a retail industry analyst who is a frequent critic of Walmart, lauded last Thursday’s announcement that the company would raise its minimum pay to $9 an hour.

“Walmart is going from being an unsatisfactory employer to a satisfactory one,” he said. He stopped short, however, of saying that Walmart has climbed into the ranks of good employers, noting that it pays its workers $10 less an hour on average than Costco.

Lisa Pietro, a 57-year-old produce worker at a Walmart in Winter Haven, Florida, also applauded the announcement. “I’m excited about it,” she said. “It pleased us, but they haven’t pacified us.”

“This is just the beginning,” added Pietro, a member of Our Walmart, a union-backed group of Walmart employees pushing the company to pay a minimum of $15 an hour. “There’s no way we’re going to sit back. We’re going to continue pushing for more.”

A part-time employee earning $8.95 an hour, Pietro said the raise to $9 an hour wouldn’t do much for her, although she will be helped by Walmart’s promise to raise the wages of all current workers to at least $10 next year.

Years of low pay, Pietro said, have hurt morale among Walmart’s workers. The day before Walmart announced the pay increases, however, a little-noticed report was released containing some bad news for the world’s largest retailer. The American Consumer Satisfaction Index ranked Walmart dead last among major department and discount chains, its consumer ratings falling sharply from the year before. And that came after Consumer Reports ranked Walmart 55th out of 55 supermarket chains last year, based on a customer satisfaction survey of 27,200 subscribers.

Some observers say that Walmart – with nearly $486bn in revenue last year – announced the pay increases simply because the labor market was tightening and it wanted to ensure it would be able to attract good employees. But Flickinger said the reasons for the raises went well beyond that, and were a response to both lagging business performance and a wave of bothersome nationwide protests.

Low wages often mean high employee turnover and unenthusiastic workers, Flickinger said, and that can translate into poor customer service and low customer satisfaction. Retail industry analysts often note that Costco and Trader Joe’s get higher marks for both customer satisfaction and how they pay and treat their employees.

In announcing the raises on Thursday, Walmart’s chief executive, Doug McMillon, seemed to recognize a link between pay and customer satisfaction – or the lack thereof.

“As we take a step back and think about our future, it’s clear to me that one of our highest priorities must be to invest more in our people this year,” he said. “We want to reward associates for their service to our customers and improve the customer experience in our stores.”

Flickinger said the raises were also a response to years of labor protests backed by the United Food and Commercial Workers International Union. He said Walmart no doubt hoped that the raises would help persuade union-friendly cities that have kept out or largely kept out Walmart stores – including New York, Los Angeles and Boston – to relent. As Walmart faces intense pressure from Amazon and various dollar-store chains, it sees significant opportunities for expansion in those cities and hopes labor advocates will rethink their opposition.

‘A good thing’ but no breakthrough

Dan Schlademan, director of Making Change at Walmart, a union-backed campaign to improve wages and conditions for Walmart’s 1.3 million US workers, voiced frustration at those who say Walmart’s round of raises was in no way a response to the labor protests that culminate each year at hundreds of stores on Black Friday. In its half-century of existence, he said, Walmart has experienced many periods of tight labor markets but has never, until last week, announced such a major round of pay increases.

“It’s never done anything like this,” he said. “It comes at a time of unprecedented worker unrest and community unrest for Walmart.”

He acknowledged that Walmart has improved in numerous ways: for instance, largely eliminating off-the-clock work and doing far more to ensure safety at apparel factories in Bangladesh.

“What history has shown about Walmart is that only when there is scrutiny of what this company is doing, do they move in the right direction,” Schlademan said.

Nelson Lichtenstein, the author of two books on Walmart and a labor historian at the University of California, Santa Barbara, welcomed the announcement on raises, saying “better late than never”.

“This is a good thing, but I don’t see it as a breakthrough,” he said.

He said the promised raise to $10 next year would have the biggest effect where Walmart first got started: in the rural south, where wages are lowest. He predicted the pay raises would have a major ripple effect – at dollar stores, at Target and Kmart, even at McDonald’s and other fast-food restaurants. Walmart’s move places public relations pressure on those companies to follow suit, as well as economic pressure. If those companies want to attract good workers – and not lose employees to Walmart – they, too, may need to pay at least $10 an hour.

Lichtenstein said Walmart didn’t go far enough to raise pay, and that its move would still leave many part-time workers in poverty. For an $8.50-an-hour employee working 25 hours a week, a raise to $10 will mean earnings of $250 a week or $13,000 a year, up from the current $212.50 a week or $11,050 a year. At that level, many workers will continue turning to food stamps and Medicaid.

“Increasing hours is what’s really needed to increase take-home pay,” Lichtenstein said. “If they moved a substantially higher percentage of workers to 40 hours a week at a starting wage of $10, that would make a difference.”

Many Walmart stores used to run 70% full-time employees and 30% part-time, but now at many stores, less than 50% of the employees are full-time. Lichtenstein called on Walmart to return to 70% full-time.

Protesters demonstrate outside a Walmart store in Chicago on Black Friday, traditionally the busiest shopping day in the US. Photograph: John Gress/Reuters

Lisa Pietro, the Florida worker, said it would be a godsend if Walmart promised her 40 hours every week. And she of course hopes Walmart will agree to the demand to pay everyone at least $15 an hour. She would also like Walmart to adopt friendlier, less volatile work schedules – McMillon promised the company would make some improvements in scheduling, without giving details

Pietro said she recently worked until 10 one night and then had to return at 5am the next day. She said she got just four hours of sleep that night. “They’re not getting my 110% when I walk through the door,” she said.

She didn’t doubt that the pressures and protests would continue. “This is the first step of a long journey and I look forward to being there for the rest of this journey,” she said.

Thomas Kochan, a professor of industrial relations at the Massachusetts Institute of Technology’s Sloan School of Management, agreed.

“What Walmart did is a big deal, but it’s only a first step,” he said. “There’s going to be more. They’ve now acknowledged that they’re a low-paying company, and once you start raising wages a bit, you’re going to face a lot of pressure to do more.”