Wal-Mart’s Promotion Spree: Good Policy or Just Good Press?
Wal-Mart (NYSE:WMT), the world’s largest private employer with about 2.1 million employees, announced on October 29 that it’s “kicking off its holiday season with a special focus on more career opportunities for associates.” Festivities include, but are not limited to, 25,000 promotions during the fourth quarter, which will put total promotions at the retailer over 160,000 for the year. Top Wal-Mart executives spent the day traveling to various Wal-Mart locations to personally congratulate some of those who received promotions.
Perhaps unsurprisingly, Wal-Mart’s announcement of the promotion spree came pre-packaged with a rebuttal for those who would interpret the announcement as a public relations stunt. It’s no secret that Wal-Mart employees and advocacy groups across the nation have ramped up efforts to unionize, increase the minimum wage, and improve working conditions. Such demonstrations have targeted other large employers like McDonald’s (NYSE:MCD), which, like Wal-Mart, has been accused of paying workers a wage that is too low to live on.
“Like most Americans, our associates want good jobs and access to a better life,” commented Wal-Mart U.S. President Bill Simon in the announcement. “Whether you are a cashier in Charlotte, or a stocker in Dallas, or an assistant manager in Los Angeles, Walmart wants to see you succeed.”
Groups like OUR Wal-Mart and the Fight for 15 have organized to fight for higher wages, increased benefits, and improved workplace conditions at Wal-Mart and McDonald’s. To date, it’s unclear that their efforts have produced any material change on the part of the companies in question, but Wal-Mart’s promotion spree could cover sound ground in the right direction.
Wal-Mart reports that the 25,000 new promotions announced for the fourth quarter are in addition to a round of 35,000 promotions announced in September. The retailer included optimistic factoids in its press release, saying that, “There are, on average, more than 400 promotions a day at Walmart,” and “75 percent of Walmart’s store management teams started as hourly associates.”
Wal-Mart and McDonald’s have taken center stage in an increasingly national debate over the minimum wage and the cost of living in the United States. President Barack Obama breached the subject in his 2013 State of the Union Address, in which he advocated for a $9 minimum wage that was indexed to inflation.
“This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets,” the president said.
Speaking to CNNMoney, Wal-Mart U.S. CEO Simon agreed that there needs to be a conversation about the minimum wage, but argued that the real issue is not the starting wage of an employee, but the mobility they have access to once they start — hence, the promotions.