Pay stagnant for experienced workers
Not all U.S. retail workers see effects of wage increases
James Collins has been working at Walmart for six years. His pay: $11 an hour, the same as what a new hire would make on their first day of work.
Collins, a 65-year-old maintenance worker at a Dallas store, joined the company when the starting hourly wage was $8.
Over the years, Walmart has steadily raised that rate, in part to attract workers in a tightening labor market.
But data show that pay for longer-term workers like Collins has remained stubbornly stagnant.
“There’s no appreciation for experience anymore,” Collins said. “Someone could walk off the street today and get paid the same as me.”
Retailers have made headlines for raising their minimum hourly wages in quick succession — CVS to $11, Costco to $13, Target to $15 by 2020 — while 29 states and the District of Columbia now require that employers pay more than the federal minimum wage of $7.25 per hour.
But economists say those gains have not translated to higher wages among midlevel workers.
The average hourly wage paid to retail workers dropped to $18.58 in June, from $18.65 a month earlier, according to data from the U.S. Bureau of Labor Statistics.
Year over year, the average hourly retail wage has risen 2 percent, from $18.15.
“Poor wage growth has persisted even as we’ve hit 4 percent unemployment, and that’s particularly true for workers in the middle,” said Josh Bivens, director of research at the Economic Policy Institute, a progressive think tank.
Economists cite a number of factors, including a decline in union jobs and fewer opportunities to move up within the industry. Add to that high turnover rates and a trend toward part-time work, and the result has been a growing group of retail workers who may be making higher minimum wages but continue to feel stuck in lowpaying positions.
Wages for the country’s lowest-paid workers have increased 0.7 percent per year since 2007, while those in the middle — the 50th percentile — have gained 0.3 percent annually, according to an analysis of Bureau of Labor Statistics data by the Economic Policy Institute. (Also worth noting: The country’s highest-paid workers, those in the top 5 percentile, received wage increases of 1.3 percent per year during that period.)
At Walmart, the world’s largest private employer, Collins says wages have remained flat — “$11, across the board” — for those around him since the company raised its starting wage in February. Managers, he says, have made it clear that pay increases are unlikely in his current position, where his responsibilities include cleaning up spills, emptying trash cans and maintaining bathrooms.
“A lot of people think it doesn’t take any skill to sweep a floor,” he said. “But after a while, you get fast at it, you develop a system for doing things well.”
Walmart spokesman Justin Rushing said the “vast majority” of the company’s U.S. employees make more than $11 an hour. “In general, every Walmart associate receives a raise each year,” he said in an email.
Half of Walmart’s 2.3 million workers worldwide made less than $19,177 last year, according to an analysis by the Wall Street Journal. That translates to roughly $10.85 an hour for full-time workers. (Walmart, which had a starting wage of $9 an hour last year, considers 34 hours a week to be full time.)
Chief Executive Doug McMillon, meanwhile, received $22.8 million in compensation last year, up 2 percent from the year before, according to company filings.
A decade ago, Collins was making nearly double what he does now, loading and unloading trucks for a trucking company that paid him $19 an hour. But then the recession hit, and he was laid off. Collins continued to pick up shifts at the company until 2012, when he decided a part-time job at Walmart would offer more stability.
“The crash of ’08 crashed a lot of things,” he said. “I don’t think I’ll ever make $19 an hour again.”
At his current job, he says there are few opportunities to move into higher-paying work. Earlier this year, Walmart cut 3,500 store comanager jobs and replaced them with 1,700 lower-paying assistant manager positions, according to Making Change at Walmart, a campaign run by the United Food and Commercial Workers International Union. (Rushing, the Walmart spokesman, confirmed those changes.)
“Managers are being squeezed out,” said Diane Swonk, chief economist at professional-services firm Grant Thornton. “Companies are taking what used to be high-skilled, high-paid jobs and turning them into lower-skilled, lower-paying jobs.”
That shift, she said, has been particularly pronounced in retail, where companies are making do with fewer workers to offset narrowing profit margins. The rise of sites like Amazon.com have meant traditional retailers have had to slash prices — and costs — to keep up. (Jeff Bezos, the founder and chief executive of Amazon, owns The Washington Post.)
At the same time, economists say dwindling unionization rates mean fewer workers are getting routine pay increases. Last year, 6.5 percent of private-sector workers belonged to a union, down from 13.4 percent in 1987.
“The downward trend in unionization has affected pay across the board,” said Steven Kyle, an economics professor at Cornell University. “A lot of wage scales keyed off of unionized sectors, so the effects have been far more pervasive than just impacting who’s in the union.”
Until earlier this year, Lorene Berry made $11.85 an hour working at a Chicago Walmart as a price verifier responsible for updating price tags throughout the store. But in February, she was told the store was doing away with the position. She was reassigned to the shoe department, where her pay was cut by 5 percent to $11.26 an hour.
“They told me they need to do this to better compete with Amazon,” said Berry, 42, who has been at the company since 2014. “To be here for four years and still be in this position, it’s a struggle.”