Seven things to know about Walmart and wages

Tune in at 9 p.m. ET for Sarah Hoye’s report on the battle to raise the minimum wage.

Walmart opened its first two stores in the nation’s capital today. Most of the lucky 600 new Walmart employees – selected from a staggering 23,000 applicants – will earn close to the city’s $8.25 hourly minimum wage.

The retail giant’s entrance into Washington, D.C., hasn’t been a smooth one. In September, the city almost passed a bill that would have raised the minimum wage of big-box retail workers. Under pressure from Walmart and other retailers, D.C. Mayor Vincent Gray stepped in to veto it. It appeared as though Walmart had won the fight.

But yesterday, one day before the new stores were slated to open, the city council unanimously voted to increase the minimum wage to $11.50 an hour. That’s higher than the minimum wage of any state in the nation, and in jarring contrast to the federal minimum wage of $7.25. When it goes to a vote again next year, the bill will likely have enough support to override a veto. It appears, for now, that a worker-friendly city council won the fight.

Yet, the battle over Walmart and wages continues around the country. Since the recession five years ago, the U.S. has recovered only a slice of its middle-income jobs, but the low-wage employment sector has exploded. As the largest low-wage employer, Walmart has become a prize for cities hoping to attract jobs, and a target for labor activists who want better ones.

Here’s a deeper look at why the retail giant has become the locus of today’s labor movement, and why it won’t be so easy to resolve.

Walmart doesn’t employ as many people as the U.S. Department of Defense or the China’s People Liberation Army (at 3.2 million and 2.3 million, respectively), but its 2.1 million workers make it the globe’s largest private employer. Walmart boasts 1.4 million workers in the U.S. alone, more than the population of Maine, and almost four times the workforce of Kelly Services, a temporary staffing agency, and Target, the next two largest private employers in the country. Walmart Stores earned $443.9 billion worldwide last year, more than the GDP of Austria. 

Walmart is so efficient that it doesn't actually create jobs overall, most studies have found. For example, a 2008 study published in the Journal of Economics looked at 3,000 Walmart store openings nationally. The study found, on average, that a store opening resulted in a county-level net decline of 150 jobs, as it forced other businesses to downsize or shutter.

Walmart isn’t just big; it’s influential. Five of Walmart’s 74 lobbyists have been elected representatives on Capitol Hill: Blanche Lincoln, the former U.S. senator for Arkansas; former Louisiana Congressman Jim McCrery; Ron Dellums, former California Congressman and mayor of Oakland; ex-Oklahoma Congressman J. C. Watts, Jr.; and Don Nickles, the former senator from Oklahoma. Last year, Walmart reported $6.1 million in lobbying expenses.

Because Walmart is so efficient, whittling down its cost to the bone, it’s able to pass an enormous amount of savings onto the consumer. In fact, its prices are so low that it’s had a depressive effect on prices across the world of retail. The average American saves $957 a year, and the average household $2,500, because of Walmart, according to a 2005 study commissioned by Walmart and conducted by the economic research firm Global Insight. The retail chain spotlighted this factoid in a 2008 ad campaign, but was criticized for implying that shopping at Walmart led to those savings. In reality, every American gets them, whether they shop at Walmart or not.  

The average Walmart associate earns $8.87 an hour, according to the employment survey site Glassdoor, while the average hourly wage for a retail sales worker in the U.S. in 2010 was $10.09, reports the Bureau of Labor Statistics. It is difficult to determine how much a full-time Walmart worker makes a year, because their hours vary. But in a 2005 internal memo Walmart said it allows its full-time associates to works 34 hours a week. At that schedule for 52 weeks a year, the average Walmart sales associate takes home $15,700.

A large number of Walmart workers receive government assistance, like Medicaid and food stamps. A May report from the staff of congressional Democrats found that a single 300-person Walmart store in Wisconsin likely costs taxpayers more than $900,000 a year, or more than $3,000 per employee, and could cost up to $1.7 million a year. Last month, Walmart sparked criticism – and incredulous chuckles – when one of its Ohio stores set up a Thanksgiving food drive for its own workers. 

A union-backed campaign for higher wages and more full-time jobs at Walmart has mounted over the last two years. In November, the National Labor Relations Board found that Walmart had unlawfully threatened or punished workers at stores in 13 states for their association with the labor protest. This includes the comment made by Walmart spokesman David Tovar on CBS Evening News before Black Friday last year that “there would be consequences” for workers who skipped scheduled shifts to protest. Dan Schlademan, director of the Making Change at Walmart campaign, said Walmart took illegal actions taken against 117 people. The NLRB has issued dozens of similar complaints against Walmart over the last two decades.

The protests this Black Friday were the largest to date, with labor actions at a planned 1,500 stores, according to organizers, although there was some skepticism about this number. But the growing movement against Walmart didn't deter shoppers; the retailer claimed record-breaking Black Friday sales. And it hasn't deterred job applicants either.