By Ed Smith's math, the CEO of Walmart earns more in
an hour than his employees will earn in a year.
Smith, an alderman in Chicago, presented posters at a
city council meeting showing that Walmart CEO
Michael Duke's $35 million salary, when converted to
an hourly wage, worked out to $16,826.92. By
comparison, at a Walmart store planned for the Windy
City's Pullman neighborhood, new employees to be
paid $8.75 an hour would gross $13,650 a year.
Smith's numbers could be a bit off. Equilar, an
executive compensation research firm, calculates that
Duke earned just south of $20 million in 2009 and
$28 million in 2008, not counting millions of dollars
in potential performance awards. But the alderman
argued that there's still a "sad" contrast between
Duke's compensation and the wages of his
employees.
"How can you go to bed at night and sleep knowing
you make this kind of money and the people working f
or you can hardly buy a package of beans and rice?"
he asked in an interview with ABCNews.com.
Walmart, meanwhile, said that its wages across the
country are competitive in local markets and that on
average, hourly employee pay -- which includes more
experienced workers but not managers -- ranges
from $10 to more than $12.
The retail giant made no apologies for Duke's salary.
"I don't think Mike Duke needs, as the CEO of a
Fortune 1 company, needs me to defend his
compensation package," said Walmart director of
community affairs Steven Restivo, referring to
Walmart's status as the largest company on the planet.
The debate over Walmart wages has been a thorny
local issue in Chicago, where city aldermen on
Wednesday reluctantly approved plans for a new
Walmart store. It also speaks to continued concerns
nationwide over the pay gap between top executives
and their rank-and-file employees.
A study last fall by the Institute for Policy Studies, a
liberal Washington D.C. research group, found that
CEOs in the country's S&P 500 companies make, on
average, 319 times more than the average American
worker.
IPS associate fellow Sam Pizzigati said that in the
1970s, that ratio was 30 to 1.
"We've seen, over the past three decades, a tenfold-
plus increase in the gap between top executives and
average American workers," Pizzigati said. "That
Chicago alderman is putting his finger on a very real
problem in American economic life."
Why the Pay Gap Has Grown
Pizzigati said the reasons for the yawning gap are
two-fold. Declining top-bracket tax rates over the last
half-century, he said, took away a strong disincentive
for company boards to keep a lid on CEO pay.
The top marginal tax rate, he said, dropped from 91
percent in the 1960s to 28 percent in 1980s. It
stands at 35 percent today.
"If you look at historical record, executive pay really
started exploding in early 1980s," he said. "That's
when the top rate started precipitously falling."
On the worker side, Pizzigati said, wages have been
advertisement
Walmart CEO Pay: More in an Hour Than Workers Get All Year?
hurt by the declining power of U.S. organized labor.
When it represented more than one-third of the
American workforce, unions could influence wages --
and force them higher -- throughout the labor
market. With just seven percent of Americans
represented by unions today, Pizzigati said, that's no
longer the case.
Paul Hodgson, a senior research associate at the
executive compensation watchdog group The
Corporate Library, attributed the gap to another
factor: the use of stock awards in CEO pay.
Notwithstanding the recent financial crisis, stocks
have seen tremendous gains since the 1980s and
that, he said, has been reflected in CEO
compensation.
As a result, he said, "CEO pay has been growing
exponentially while everyone else's wages have been
growing arithmetically."
Companies that shell out blockbuster salaries and
benefits maintain that high compensation is
necessary to attract the best talent to top positions.
In Chicago, in recent years the compensation issue
has centered largely on so-called big box stores like
Walmart. In 2006, the city's mayor vetoed a resolution
by the city council to raise minimum hourly pay by
giant retailers in the city to $10 plus $3 worth of
benefits.
Chicago Labor Leaders Wanted
Higher Pay at Walmart
This week's approval of the new Walmart store came
despite demands by labor organizers that Walmart, a
non-union company, should pay at least $11 an hour
to new employees. Walmart countered that the $8.75 i
t plans to pay -- which is 50 cents above Chicago's
minimum wage -- is more than the starting hourly
wages of unionized grocery store workers in the area.
An organizer for Local 881 United Food and
Commercial Workers declined to comment on wages
for union members, citing ongoing contract
negotiations, but said that, overall, members receive
better health insurance and retirement benefits than
Walmart employees. (In its defense, Walmart said its
health insurance plans offer "a wide range of options"
and trumpeted its 401k and profit sharing plans.)
Smith said he ultimately decided to join his fellow
aldermen in unanimously voting to allow the Pullman
store because of the jobs the store is expected to
create and its addition to the city's tax base.
He, too, would have liked to see the retailer pay at
least $11 an hour to new employees, but added that
he's glad Walmart's $8.75 starting pay is above
minimum wage.
"As Kenny Rogers says, 'You gotta know when to hold
them and know when to fold 'em,'" Smith said. "So
that's what we did."
I've never been to wal-mart, costco, ran out of bj's, did buy lots of pillows in target a few years back and stll have guilt when I use them, ran out of ikea.
I like Wal-Mart. I shop there often. I buy electronics, clothes, groceries, sporting goods and lawn and garden stuff. It's convenient, cheap and they will AlWAYS take something back if you have a receipt.
I also don't understand only buying goods made in America. I think there are a lot of countries and people around the world who likely NEED money worse than America does. I think people are people....who cares where they are located?
Ever hear the saying, "be careful what you buy, the next job you save might be your own"?
I like Wal-Mart. I shop there often. I buy electronics, clothes, groceries, sporting goods and lawn and garden stuff. It's convenient, cheap and they will AlWAYS take something back if you have a receipt.
I also don't understand only buying goods made in America. I think there are a lot of countries and people around the world who likely NEED money worse than America does. I think people are people....who cares where they are located?
Ever hear the saying, "be careful what you buy, the next job you save might be your own"?
i have heard that, but i don't see how that applies, especially in this day and age because we do not actually manufacture much of anything in this country anymore. the manufacturing base has been exported to where labor is actually cheeper than it is here.
"You can tell the greatness of a man by what makes him angry." - Lincoln
I like Wal-Mart. I shop there often. I buy electronics, clothes, groceries, sporting goods and lawn and garden stuff. It's convenient, cheap and they will AlWAYS take something back if you have a receipt.
I also don't understand only buying goods made in America. I think there are a lot of countries and people around the world who likely NEED money worse than America does. I think people are people....who cares where they are located?
Ever hear the saying, "be careful what you buy, the next job you save might be your own"?
I'm not going to shop or make purchase decisions based upon fear.
I buy what I want to buy and pay what I'm willing to pay....which is usually on the cheaper end of the scale.
The only people we should try to get even with...
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
Does WalMart not pay minimum wage or what they legally have to pay? Is WalMart worse than say, McDonalds or any other supermarket? I don't live in the US so I don't know. If they do pay what they legally need to pay, is this not an issue with the Government to raise this minimum wage?
I'm just trying to see where WalMart fits amongst other similar employers.
Yes, they must pay at least minimum wage. The biggest issue (aside from the CEO vs. employee salary discussion) is benefits. They have also had a few "mis-steps" in the way they've handled some employment issues.
As for raising the minimum wage - that actually might prove to be detrimental. If companies are forced to pay higher wages, they will scale back benefits and/or just simply higher fewer people. Or, worse yet, what someone else already mentioned - move all the jobs over seas (and simply eliminate everyone).
Sorry. The world doesn't work the way you tell it to.
Yes, they must pay at least minimum wage. The biggest issue (aside from the CEO vs. employee salary discussion) is benefits. They have also had a few "mis-steps" in the way they've handled some employment issues.
Thanks. As far as I'm concerned, benefits and working conditions were never a forte of the US (compared to most European countries, for example). I worked in the US many years ago after working in Belgium & France and I thought to myself 'never again'! Seems to me things have not changed that much.
Vicious circle though... low pay, little spending power, less profit for companies and less profit = less investment or cutbacks and we are back to low pay......
I don't have problems buying stuff at walmart. Most of the stuff I buy there is the same stuff I would buy if I bought it at the grocery store or somewhere else. I mean the Wii games they sell are the same Wii games. The greeting cards are the same, the Special K is the same, the Purex is the same and the Armor All is the same. Do people think there is someone in the back of a Walmart store watering down bottles of Windex so that they can sell it for cheaper?
By Ed Smith's math, the CEO of Walmart earns more in
an hour than his employees will earn in a year.
I don't really have a problem with this, for a few reasons. First off how many hours a week does the average Walmart employee work per week? I would bet it would be less than 20. I have seen a few news specials and documentaries on CEO and I wouldn't be surprised if the CEO of walmart was working 60 hours a week, and pretty much had to be on call 24 hours a day if company business needed him. Plus what are the qualifications for being an average walmart employee? Do you even need to have finished highschool? I bet a CEO has considerably higher education than the average walmart employee. And how long does the average employee stay at walmart? I wouldn't be surprised if it was around a year or two, I doubt many people stay at walmart as a long term employment kind of thing. But when you hire a CEO I think they expect him to be around for awhile. Lastly and probably the most important issue is replaceability. How easy is it to replace the average walmart worker if they quit or get fired. Pretty easily I would say. But there is probably only a very small pool of people out there that could replace the CEO of Walmart.
I did. I just didn't know what you meant by that quote.
That is 1 line out of a much longer description. All that line is referencing is that by basic economic theory, employees should actually be paid less. Minimum wage (Gov't intervention) and the desire to hire "more" (relative term here) competent help (company "benevolence") create the higher wage. I think I even used (not that I'm advocating that) in the commentary. It is theory vs. reality that the statement is grounded in.
Like I said, please re-read in its ENTIRETY and I think it was fairly clear what the context of that (half of a) sentence is.
Sorry. The world doesn't work the way you tell it to.
I did. I just didn't know what you meant by that quote.
That is 1 line out of a much longer description. All that line is referencing is that by basic economic theory, employees should actually be paid less. Minimum wage (Gov't intervention) and the desire to hire "more" (relative term here) competent help (company "benevolence") create the higher wage. I think I even used (not that I'm advocating that) in the commentary. It is theory vs. reality that the statement is grounded in.
Like I said, please re-read in its ENTIRETY and I think it was fairly clear what the context of that (half of a) sentence is.
I did read the whole thing, and I just did not understand that statement in comparison to the rest of what you said. I understood the rest of it. What I highlighted above pretty much explains it more clearly to me. Thank you. (I'm not a business-minded person, if you couldn't tell. Smart in alot of other ways, but business is not one of them).
How can we reasonably expect people to just get jobs elsewhere or shop elsewhere if they live in a small town where Wal-Mart drove out the other businesses? And why should we assume that treating employees like shit is good for business? Take Costco vs. Sam's (a Wal-Mart company), for instance. They are both very successful businesses, but Costco treats its employees WAY better.
Comments
By Ed Smith's math, the CEO of Walmart earns more in
an hour than his employees will earn in a year.
Smith, an alderman in Chicago, presented posters at a
city council meeting showing that Walmart CEO
Michael Duke's $35 million salary, when converted to
an hourly wage, worked out to $16,826.92. By
comparison, at a Walmart store planned for the Windy
City's Pullman neighborhood, new employees to be
paid $8.75 an hour would gross $13,650 a year.
Smith's numbers could be a bit off. Equilar, an
executive compensation research firm, calculates that
Duke earned just south of $20 million in 2009 and
$28 million in 2008, not counting millions of dollars
in potential performance awards. But the alderman
argued that there's still a "sad" contrast between
Duke's compensation and the wages of his
employees.
"How can you go to bed at night and sleep knowing
you make this kind of money and the people working f
or you can hardly buy a package of beans and rice?"
he asked in an interview with ABCNews.com.
Walmart, meanwhile, said that its wages across the
country are competitive in local markets and that on
average, hourly employee pay -- which includes more
experienced workers but not managers -- ranges
from $10 to more than $12.
The retail giant made no apologies for Duke's salary.
"I don't think Mike Duke needs, as the CEO of a
Fortune 1 company, needs me to defend his
compensation package," said Walmart director of
community affairs Steven Restivo, referring to
Walmart's status as the largest company on the planet.
The debate over Walmart wages has been a thorny
local issue in Chicago, where city aldermen on
Wednesday reluctantly approved plans for a new
Walmart store. It also speaks to continued concerns
nationwide over the pay gap between top executives
and their rank-and-file employees.
A study last fall by the Institute for Policy Studies, a
liberal Washington D.C. research group, found that
CEOs in the country's S&P 500 companies make, on
average, 319 times more than the average American
worker.
IPS associate fellow Sam Pizzigati said that in the
1970s, that ratio was 30 to 1.
"We've seen, over the past three decades, a tenfold-
plus increase in the gap between top executives and
average American workers," Pizzigati said. "That
Chicago alderman is putting his finger on a very real
problem in American economic life."
Why the Pay Gap Has Grown
Pizzigati said the reasons for the yawning gap are
two-fold. Declining top-bracket tax rates over the last
half-century, he said, took away a strong disincentive
for company boards to keep a lid on CEO pay.
The top marginal tax rate, he said, dropped from 91
percent in the 1960s to 28 percent in 1980s. It
stands at 35 percent today.
"If you look at historical record, executive pay really
started exploding in early 1980s," he said. "That's
when the top rate started precipitously falling."
On the worker side, Pizzigati said, wages have been
advertisement
Walmart CEO Pay: More in an Hour Than Workers Get All Year?
hurt by the declining power of U.S. organized labor.
When it represented more than one-third of the
American workforce, unions could influence wages --
and force them higher -- throughout the labor
market. With just seven percent of Americans
represented by unions today, Pizzigati said, that's no
longer the case.
Paul Hodgson, a senior research associate at the
executive compensation watchdog group The
Corporate Library, attributed the gap to another
factor: the use of stock awards in CEO pay.
Notwithstanding the recent financial crisis, stocks
have seen tremendous gains since the 1980s and
that, he said, has been reflected in CEO
compensation.
As a result, he said, "CEO pay has been growing
exponentially while everyone else's wages have been
growing arithmetically."
Companies that shell out blockbuster salaries and
benefits maintain that high compensation is
necessary to attract the best talent to top positions.
In Chicago, in recent years the compensation issue
has centered largely on so-called big box stores like
Walmart. In 2006, the city's mayor vetoed a resolution
by the city council to raise minimum hourly pay by
giant retailers in the city to $10 plus $3 worth of
benefits.
Chicago Labor Leaders Wanted
Higher Pay at Walmart
This week's approval of the new Walmart store came
despite demands by labor organizers that Walmart, a
non-union company, should pay at least $11 an hour
to new employees. Walmart countered that the $8.75 i
t plans to pay -- which is 50 cents above Chicago's
minimum wage -- is more than the starting hourly
wages of unionized grocery store workers in the area.
An organizer for Local 881 United Food and
Commercial Workers declined to comment on wages
for union members, citing ongoing contract
negotiations, but said that, overall, members receive
better health insurance and retirement benefits than
Walmart employees. (In its defense, Walmart said its
health insurance plans offer "a wide range of options"
and trumpeted its 401k and profit sharing plans.)
Smith said he ultimately decided to join his fellow
aldermen in unanimously voting to allow the Pullman
store because of the jobs the store is expected to
create and its addition to the city's tax base.
He, too, would have liked to see the retailer pay at
least $11 an hour to new employees, but added that
he's glad Walmart's $8.75 starting pay is above
minimum wage.
"As Kenny Rogers says, 'You gotta know when to hold
them and know when to fold 'em,'" Smith said. "So
that's what we did."
advertisement
Ever hear the saying, "be careful what you buy, the next job you save might be your own"?
"Well, you tell him that I don't talk to suckas."
I'm not going to shop or make purchase decisions based upon fear.
I buy what I want to buy and pay what I'm willing to pay....which is usually on the cheaper end of the scale.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
No. Please read the thread. Thank you.
Yes, they must pay at least minimum wage. The biggest issue (aside from the CEO vs. employee salary discussion) is benefits. They have also had a few "mis-steps" in the way they've handled some employment issues.
As for raising the minimum wage - that actually might prove to be detrimental. If companies are forced to pay higher wages, they will scale back benefits and/or just simply higher fewer people. Or, worse yet, what someone else already mentioned - move all the jobs over seas (and simply eliminate everyone).
Thanks. As far as I'm concerned, benefits and working conditions were never a forte of the US (compared to most European countries, for example). I worked in the US many years ago after working in Belgium & France and I thought to myself 'never again'! Seems to me things have not changed that much.
Vicious circle though... low pay, little spending power, less profit for companies and less profit = less investment or cutbacks and we are back to low pay......
CEO vs. employee salary is everywhere....
I don't really have a problem with this, for a few reasons. First off how many hours a week does the average Walmart employee work per week? I would bet it would be less than 20. I have seen a few news specials and documentaries on CEO and I wouldn't be surprised if the CEO of walmart was working 60 hours a week, and pretty much had to be on call 24 hours a day if company business needed him. Plus what are the qualifications for being an average walmart employee? Do you even need to have finished highschool? I bet a CEO has considerably higher education than the average walmart employee. And how long does the average employee stay at walmart? I wouldn't be surprised if it was around a year or two, I doubt many people stay at walmart as a long term employment kind of thing. But when you hire a CEO I think they expect him to be around for awhile. Lastly and probably the most important issue is replaceability. How easy is it to replace the average walmart worker if they quit or get fired. Pretty easily I would say. But there is probably only a very small pool of people out there that could replace the CEO of Walmart.
That is 1 line out of a much longer description. All that line is referencing is that by basic economic theory, employees should actually be paid less. Minimum wage (Gov't intervention) and the desire to hire "more" (relative term here) competent help (company "benevolence") create the higher wage. I think I even used (not that I'm advocating that) in the commentary. It is theory vs. reality that the statement is grounded in.
Like I said, please re-read in its ENTIRETY and I think it was fairly clear what the context of that (half of a) sentence is.