Walmart’s recent decision to raise the pay of almost half its US employees should be lauded on many fronts. As my colleague Karen Dolan pointed out in her column this week, it’s important to acknowledge when corporations do something right—not just when they screw up.
In a letter to associates, CEO Doug McMillon announced that Walmart would increase starting wages to $9 an hour by April and to at least $10 an hour by early next year.
Other changes included the launching of new employee retention and promotion programs and providing more fixed schedules for some of its employees.
But the pay raise is the most immediate and sweeping of the changes.
After years of protests and strikes from Walmart employees, the company is responding with concrete improvements that should be applauded.
But there are also some serious limitations. McMillon’s announcement was embarrassingly tone deaf in relation to inequality. After saying that one of Walmart’s “highest priorities” will be “investing in our people this year,” McMillon says to his associates: “Let’s take care of one another.”
Is McMillon including himself in this communal portrait of Walmart? I sure hope not. As CEO of the company, McMillon’s compensation rose a whopping 168 percent to $25.6 million in 2014 alone.
Even with the recent raise for workers, Walmart still has the highest CEO-to-worker pay ratio (more than 1,000 to 1) among Fortune 500 companies, as Jobs with Justice recently pointed out.
And the Walton family—owners of Walmart—hold the same wealth as the bottom 42 percent of Americans combined.
In other words, Walmart raised wages so as not to be downright embarrassing for the mega-wealthy corporation, but it still outpaces the pack when it comes to inequality within their own company.
As other companies such as Costco have helped reveal, low wages are connected to excessive pay at the top. Bringing down the top is just as important—and just as necessary—as pulling up the bottom.
If Walmart is serious about creating a communal environment in which all employees care for one another, its next announcement ought to be a maximum wage for executives.
Until that day, Walmart hasn’t changed all that much: Always low prices. Occasionally a little bit higher wages. Always the highest inequality.
Dr. Marjorie Wood is the managing editor of Inequality.org and a senior staff member of the Global Economy Project at the Institute for Policy Studies.