Wal-Mart, Target, Kohl’s and What Constitutes a Living Wage

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? 






5 thoughts

  1. Companies offer a job at a certain pay level. If the employee doesn’t like it, they look elsewhere. If too many don’t like it, then the company has to pay more. Basic supply and demand
    Problem with overriding this is that if we arbitrarily mandate over market wages, then prices just go up in tandem with wage increases, and down the road, todays living wage becomes inadequate, and the cycle starts all over again

  2. Richard, you are not telling the whole story. You need to include the average number of hours these lower paid employees work a week plus any benefits they receive. Most do not get more than about 30 hours a week. Many have to work 2 jobs to get by. How many of them qualify for food stamps etc? The simple solution is to mandate that all employees must pay a sum, such as a $1 or $2 an hour per employee into a government run medical fund that these employees will receive medical from. Most of these employees already receive free medical since there is no way in hell to afford it on even $12 an hour. This requirement would be a big incentive to these corporations to hire their “temporary” employees full time as they would require far fewer staff. Until people, even unskilled are paid a living wage that can support a person, let alone a family you cannot expect the dependance on government support to change. We the tax payers and employers are subsidizing all these big companies.
    Don Green, Dream Green

  3. Walmart is famous for trying to keep employees’ hours at the part-time level to avoid paying benefits. And what is most disturbing to me about the low wages at Walmart is that four Walton family members are in the top ten wealthiest Americans list.

  4. Best Buy is the one I don’t get. Why are they paying less than Home Depot. They are selling expensive items that require technical expertise. And onsite expertise is the only thing they have to offer to distinguish themselves from Target, Walmart, or Amazon. I no longer shop there, ever, after one too many unpleasant experience. I buy my TV’s from Belmont TV – small local chain. Staff is courteous and knowledgeable. If I have a question about my TV, they have my information in their file. I don’t need to find my receipt. I buy my little stuff, like a new DVD/BlueRay player, or new game, from Target or Walmart. Or I order it online from Amazon.

  5. Lowes and Home Depot have to pay more because their employees are much more likely to have to provide technical information to the customer, along with the product.
    I shopped at Target and Home Depot this week-end. At Target I was able to find what I needed — including food, a new Skylander’s Giant, and three pairs of pants for an 8 year old boy, without any assistance from staff beyond the check out. At Home Depot I needed a drain cover for my bathtub. This required discussion with two employees, one to help me find it and one (the department specialist) to acquaint me with my options and help me select a product. That is why Home Depot has to pay more.

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