Wal-Mart pays $200M in Q2 bonuses for hourly workers

Dive Brief:

Over 900,000 Wal-Mart Stores Inc. U.S. hourly store workers received more than $200 million in performance-based cash bonuses in the second quarter, the retailer said Wednesday.
The bonuses are on top of hourly pay increases for more than 1.2 million Wal-Mart U.S. and Sam’s Club associates received earlier this year, part of a $2.7 billion investment toward increased pay and training for workers, the company said.
Yet these numbers pale in comparison to the windfall doled out to investors, including to the founding Walton family, the Dallas Morning News noted Wednesday. The family, which owns 51.35% of the company, receives a quarterly dividend of $720 million, or 50 cents per each of the family’s 1.44 billion shares — nearly $3 billion annually.

Dive Insight:

Wal-Mart is the nation’s largest corporate employer, with 1.5 million employees across the U.S. In an effort to drive efficiencies, improve logistics and boost customer service, the retailer last year raised starting wages for full-time store employees to $9, or about $18,700 a year, and new hires can climb to $10 an hour after completing a six-month training program. Wal-Mart has also moved some 1,500 workers in 500 stores dedicated to accounting and invoicing tasks in back rooms into customer-facing positions like online pickup associates and pharmacy technicians.

Wal-Mart in June said those investments are paying off. “We believe a contributing factor to [Wal-Mart's recent Q2 earnings of $3.77 billion] is our consistent improvement in customer experience,” Wal-Mart CFO Brett Biggs said on a conference call following the earnings report. “Customer surveys indicate that we’re making good progress in providing a better shopping experience with cleaner stores, faster checkout and friendlier service… While there is still a lot of work to do in executing our multi-year plan, we’re encouraged by the results we’re seeing.”

But some Wal-Mart worker advocates say the wage increases and bonuses are still not enough. Stephanie Luce, a professor of labor studies at the City University of New York, told the New York Times in June that Wal-Mart is finding ways to limit its starting pay below $10 per hour by scaling back merit pay and keeping wages lower during training periods that last longer than a year.

“I fear that Wal-Mart’s plan is more about delaying an actual wage increase than providing real training,” Luce said. “We’ve found other major retailers using probationary periods and other strategies as a way to avoid committing to set work schedules and higher wages.”