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article imageWalmart CEO defends paying employees poverty wages

By Brett Wilkins     Dec 13, 2012 in Business
New York - Walmart CEO Mike Duke has defended paying poverty wages to company employees, claiming that associate compensation is "competitive."
Duke was attending a New York City event sponsored by the Council on Foreign Relations when Bloomberg LP President Dan Doctoroff asked him about Walmart employee pay.
"New York is claiming that wages, you know, aren't adequate for [the] middle class or emerging middle class," Doctoroff said, pointing to the fact that many of the company's employees don't earn enough to make ends meet and even rely upon food stamps to survive.
"Retailing is the most competitive industry out there, and we do pay competitive wages," Duke replied, pointing to the fact that the company promoted 165,000 employees from entry-level to managerial positions.
Duke claimed that the average Walmart associate earns $12.57 per hour, but market research firm Ibis World places that figure at a much lower $8.81 per hour.
One Illinois Walmart associate who gave only her first name, Lisa, told the Huffington Post that she's been working for the company for two years and only makes $9.10 an hour.
"I don't have underwear without holes in them," Lisa said. "Everyone at work wears T-shirts that are threadbare. I have just enough to eat and get gas to make it to work," she added.
Even associates who perform flawlessly at work are limited to a 60-cent per hour raise each year, according to Walmart's internal associate pay plan. An associate who starts work at the company for $8 an hour and performs well can reasonably only expect to earn around $10.60 per hour after six years at Walmart.
Kory Lundberg, Walmart's director of national media relations, reiterated the company line that associate wages are "competitive."
"In order for Walmart to attract good people we need to offer competitive pay and benefits, and we do," Lundberg told the Huffington Post. "We offer pay and benefits that meet or exceed the majority of our competition in every location we operate, and that includes unionized competitors. We're clearly offering jobs that people want, because last year Walmart received more than 5 million applications to come work in our stores."
That same argument, however, is often heard by corporate executives who defend paying a pittance to workers in the developing world. And many Walmart associates are clearly not satisfied with the way the company compensates them, as evidenced by the thousands of employees who took to the streets of more than 100 cities on Black Friday to protest poverty wages and poor benefits offered by the retail giant.
In contrast to the low wages paid to Walmart associates, CEO Duke received a pay package totaling $18.7 million in 2010. The Huffington Post points out that the Walmart CEO-to-worker pay ratio is a staggering 717-1, one of the most yawning gaps of any corporation.
According to Forbes, four Walmart heirs are among the 10 richest people in America. Christy, Jim, Alice and S. Robson Walton have an estimated combined net worth of 107.1 billion, equivalent to the gross domestic product of Bangladesh, a country of 150 million people. In fact, the six Walmart heirs are worth as much as the 45 million lowest-earning US workers combined.
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