Wal-Mart CAPS Worker Wages. Media Swallows Cover Story.

This certainly sounds good at first:
Wal-Mart announced today that it has raised the starting rate in more than 1,200 Wal-Mart stores and SAM’S CLUBS throughout the country.
But wait, won't this mean that Wal-Mart have to raise prices? After all, isn't that what Wal-Mart defenders have been arguing for years? Well, it turns out there's one great, big huge catch:
The company is also implementing new pay ranges, which are wider than many other retailers, with the maximum being near the top of the market in many regions. Pay ranges are used by many other retailers, and are already used for management and hourly positions at Wal-Mart and SAM’S CLUB home offices.
A new pay range means that the company is implementing wage ceilings at the same time it's raising the floor. As the AP report on this press release explains, Wal-Mart is:
introducing wage caps for the first time on each type of job in all stores
That's how, to quote Wal-Mart spokesman John Simley, the cost of these changes can be ""not material'' to earnings." They're robbing Peter to pay Paul. Here's how the company spins the caps:
Associates wanting to move beyond their pay maximum may apply for a number of career opportunities in the company. No associate’s salary will be reduced as long as the associate remains in his or her current job.
Of course they can apply for other opportunities withe company, but that doesn't mean they're going to get them. Besides, many Wal-Mart workers don't have the time to be managers. They count on pay raises to cover the cost of inflation. Wal-Mart just gave them all the middle finger. So much for job opportunities at Wal-Mart. There are only so many management positions any company has. Perhaps what's most frustrating about this story is that you can already see the Wal-Mart spin machine working on the zombified media. Kudos to Marcus Kabel of the AP for at least mentioning the pay caps, but the headline in the Houston Chronicle (where I read the story linked above) is, "Wal-Mart raises starting pay." Reuters doesn't mention the caps at all. Neither does Bloomberg. In the Bloomberg story, a retail analyst named Burt Flickinger says, "The changes should help with staffing on nights and weekends and reduce turnover." The whole point of this exercise is to promote turnover! Remember the infamous secret Wal-Mart health care memo? VP Susan Chambers said then (in so many words) that the company wanted to get rid of its longtime, unhealthy workers in order to cut benefit costs. Well, it looks like Phase One has begun. But is the media going to miss the real story here? UPDATE: Adirondack Wal-Mart provides the perfect article to help us remember how the Susan Chambers memo fits into today's announcement:
The memo, written by Susan Chambers, the executive vice president for benefits, outlines ways Wal-Mart can reduce employee benefits expenses, which cost the company $4.2 billion between 2002 and 2005 and are growing at 15 percent a year. The problem, it seems, is that the employees are sticking around too long. Tenure drives costs. The more years workers have with the company, the more paid time off, the bigger the 401(k) contributions and profit-sharing.
Shifting employees to part-time was their first strategy to do this. Capping wages is obviously their second.

21 Responses to “Wal-Mart CAPS Worker Wages. Media Swallows Cover Story.”

  1. Peggy Fivenson says:

    In your comment you forgot to mention the $400.00 they are offering associates that have reached the “cap” on their wages. Also, how can they not even give “cost of living’ increases?? Even Americans that are on social security get a cost of living increase every year!! I am sure Sam Walton is ready to come up out of his grave–if he is not haunting Bentonville already!!

  2. Sue says:

    Make sure you have your facts in order-
    Most employers (including union) have salary ranges or paybands. This is not a unique concept or a new idea. Also WalMart is going to review the start rate of EVERY facility every year to make sure that they are keeping pace with the other employers in the area. Don’t know of any union grocers that do that!

  3. […] Swallows Cover Story). Comments: Technorati tags: retail, wal-mart, pay, wage Permalink & Trackback Popularity: Popularity:1% […]

  4. […] The pay caps work the same way. Last week, Wal-Mart raised pay for starting workers and capped the salary of at least 30,000 longtime employees. The media plays up the first part and mostly plays down the second. I’m glad Wal-Mart raised starting pay, but pointing to the other part is essential to telling the whole story. That’s why I’m so glad the pay caps story is starting to get coverage. […]

  5. carol says:

    the caps suck .long term associates drive the buissness. new hires leave when they find better jobs. assistints leave at a rcord high. only the long term associates keep the bussiness running.this will not recrute associates to go into the management program.this company should pay a living wage. their profits are scandalous, on the backs of the associates.

  6. Debi says:

    Our incentive to go the extra mile on a daily basis has been taken away. Was capping associate wages the way to go or the right thing to do? This change was implimentated in the middle of August instead of at the end of the physical year. Some associates who had already met their cap for their positions have already received their annual reviews/increases, while others whose evaluations will occur after the August 5th date lose out. The company tosses a one time $400.00 bonus buy out to all capped associates, but fails to take into consideration that an outstanding review could result in a $.60 an hour increase which would compute to around $1240.00 annually. How can a one time $400.00 check be a fair deal? If you think about it, it’s like being on a fixed income for the rest of our lives, without a mere cost of living increase. Sure, they tell us that they will review the pay scale next year, but as a long time associate, I know that the outcome will not be in favor of those associates who have already reached their cap. Maybe a different alternative for our great company could have been to “grandfather” existing associates and implement the capping of levels to incoming associates. That way incoming associates, who don’t already have years invested with the company, are aware of the cap. Not suddenly told that you have no chance in hell in making any more money. What happen to Sam Walton’s belief “Respect for the Individual”?The companies view is that the hourly associate can move up into managment. But we know that all people aren’t management material. And those unfortuate people who move up now have basically been set up for failure. Many people may need to get a part-time job to supplement their income to keep up with the cost of living. Sam Walton’s belief was family first, but if you’re having to supplement your income with a second job, families lose. Further more, our company has opened the door for the unions to step in and actively begin organizing our associates. First corporate implements levels for the different job classifications, now they have capped those levels. Sounds just like a union to me. One thing that a union would prohibit though, is management asking their associates to help save payroll and cut hours, followed by the management team stepping into the hourly position doing the hourly job. What direction is this fabulous company going? It’s difficult to remain a devoted, loyal associate when these types of decisions are being made.

  7. […] From our comments, excerpted in full: Our incentive to go the extra mile on a daily basis has been taken away. Was capping associate wages the way to go or the right thing to do? This change was implimentated in the middle of August instead of at the end of the physical year. Some associates who had already met their cap for their positions have already received their annual reviews/increases, while others whose evaluations will occur after the August 5th date lose out. The company tosses a one time $400.00 bonus buy out to all capped associates, but fails to take into consideration that an outstanding review could result in a $.60 an hour increase which would compute to around $1240.00 annually. How can a one time $400.00 check be a fair deal? If you think about it, it’s like being on a fixed income for the rest of our lives, without a mere cost of living increase. Sure, they tell us that they will review the pay scale next year, but as a long time associate, I know that the outcome will not be in favor of those associates who have already reached their cap. Maybe a different alternative for our great company could have been to “grandfather” existing associates and implement the capping of levels to incoming associates. That way incoming associates, who don’t already have years invested with the company, are aware of the cap. Not suddenly told that you have no chance in hell in making any more money. What happen to Sam Walton’s belief “Respect for the Individual”?The companies view is that the hourly associate can move up into managment. But we know that all people aren’t management material. And those unfortuate people who move up now have basically been set up for failure. Many people may need to get a part-time job to supplement their income to keep up with the cost of living. Sam Walton’s belief was family first, but if you’re having to supplement your income with a second job, families lose. Further more, our company has opened the door for the unions to step in and actively begin organizing our associates. First corporate implements levels for the different job classifications, now they have capped those levels. Sounds just like a union to me. One thing that a union would prohibit though, is management asking their associates to help save payroll and cut hours, followed by the management team stepping into the hourly position doing the hourly job. What direction is this fabulous company going? It’s difficult to remain a devoted, loyal associate when these types of decisions are being made. […]

  8. WC says:

    This is a message I would like to get to all 30,000 or so capped out associates whom I like to call the “400 Club”. I am calling myself President & CEO of the 400 Club. $400 = 400 Club, because that is the bonus we are getting, and then to never get a raise again, and likely a paycut someday, if not just losing our jobs. Anyway, back to the message I was speaking of. I would like to encourage all 400 Club members to never spend another cent at Wal-Mart. My stance is if they can’t give us a raise ever again, why should we give them any of our money that we have earned. This can easily be done if you make up your mind. Shop anywhere else first. Clip coupons, look for sales, and you can easily make up the discount card we get. Then even when you are at work, don’t give in. bring snacks and lunch from home. Bring sodas even, so you don’t have to use the beverage machines in the back of the store. You see the trend here.

    If you are a longterm associate at Wal-Mart, and you have been recently been told you will never recieve a raise again, then again, lets make a stand, and not give them back any of the money we have earned. thanks for your time.

    “LONG LIVE THE 400 CLUB!”

  9. […] So they’re showing happy workers when they’re really talking about consumers. That’s kind of sick because Wal-Mart is implying that their workers are getting a pay raise too when management just capped the salary of their own longtime workers. In fact, even Wal-Mart workers aren’t happy spending their “pay raise” at Wal-Mart or else turnover at Wal-Mart wouldn’t be at least 45% (and inevitably headed higher thanks to said pay caps). […]

  10. Sharon says:

    I had been with walmart 6+ years. Never written up nothing. I was the invoicing clerk, up until a month ago, when the upc clerks job was gone, the mgt wanted the upc clerk to stay and me to go. He set me up to fail…Had all my write ups in less than 3 weeks. the upc clerk is back in the office, with 4 people to help. she has not learned the job, and never will. I have always told people how good walmart was, and that there were always disgruntled employees, it took this turn of events in my life to understand that they are not the family oriented company they once were, they are all about greed. I will never recommend that anyone work for walmart, I watched as they hired people in nov only to terminate them on christmas eve….Merry Christmas….I can now sit home and look at wal mart for what it is. Nothing in my book. I also say what comes around goes around. who thought kmart whould be what it is today……When you get to the top of the ladder, you must be careful, you to can fall, and yes wal mart, so can you.

  11. Greg Brooks says:

    I don’t think the caps are a bad thing. The poorer half of society always complains the rich make too much. It only makes sense that not only CEO’s have caps but also each level below them so that the poorer half of society isn’t in as much disparity to the upper half. Caps reduce disparity in wages, and those people at higher levels even with caps can make a decent living. I say cap the upper half even if it means upper middle class people and middle class people as long as the top gets caps as well and the lower part of society can make more because of it.

  12. deej says:

    I have worked for Walmart for 25 years and I am ashamed at the turn of the events that are taking place in our store.The people that are being hired on are not interested in making sales for our store.Having a good P&L they just want a paycheck every 2 weeks.The long term associates are the ones that have made this company what it is today.Lee Scott receivng 1 million dollar bonuses in the same year that we all lost money in our profit sharing accounts make me choke.Sounds a little like our banking industry that we have all heard in the news.While he was enjoying his multitude of bonuses we all worrying about when we will be replaced by your part time people that will never feel about this company like we do.The ethics are a joke, the respect that Sam built this company on are no where in site at our store.I can’t wait to leave this company before all the good people are gone and the ridiculous employees(not worthy to be called associates)take over like a swarm of bees waiting to make the kill.

    • Mary says:

      Very well said deej.

    • Kevin says:

      Well I have worked at Evil-Mart for four years at a sorry store in Tennessee that is running on a smaller than skeleton crew. it is the long term associates at my store that do nothing but collect a pay check every two weeks. They just roam around the store from 7 to 4 Monday through Friday and do nothing. We (the few sales associates and ICS) do the work including price changes, need to counts, negative on hands ect. plus our jobs. I do agree with you that Sam Walton would have a fit if he could see what his family has done with his dream. Our store manager is only concerned with his bonus’s. We never have the tools we need to do our job correctly. It takes an act of congress just to get 99 supplies because it cuts into his bonus.

  13. Daniel says:

    While it is all well and good to be outraged at a salary cap, I wonder if anyone has actually got any figures on what the cap is set at in their area. I live in Fairbanks, Alaska, and the cap here is set at over $28 an hour. If someone can’t live on $28 an hour in this day and age when single mothers are raising children on $7.15, I question not only their financial literacy but their intelligence as well.

    The issue of pay caps is relegated in my mind to a non-issue.

    • Mary says:

      It would be a non-issue for most of us too if our cap was
      $28 an hour.

      • Aaron says:

        the cap for the highest paid hourly associate in the southeast is $18.18 not $28, and it’s not that you can live off $7.15 an hour, but only receiving 16 hours a week is what kills you.

  14. Mary says:

    I’d like to share my story. I have worked for WM for 21 years,
    14 of those years as an overnight support manager. When our
    store became a supercenter in July 0f 2009 they changed the
    hours for my position. Because I care for my elderly mother the
    overnight shift worked for me,and I was unable to change to
    their new 10 hour shifts. So I not only lost my position but they took $4.68 an hour away from me. I have been capped
    since 2006 so along with this money they took,it has been a
    real hardship. The strange thing is when they posted my position I checked into it just to see how much money I would
    be given. I would have been given $1.30 an hour. They took
    $4.68 an hour away from me but would give me $1.30 if I took
    the position again. Does this make sense to anyone? I wrote to
    all 15 members of the WM board and got back one letter that in essense told me they didn’t want to be bothered and that the issue was closed. I think this is deceitful and unethical.
    Concerning the wage cap. Yes,I understand that other companies have a cap but I’m pretty sure those employees know about it when they are hired. I had worked for WM for
    19 years when the cap came into effect. I think it should start with new hires,but I know that will never happen. I’ve always
    been a champion of WM,now I am just bitter and angry. Giving
    21 years of your life deserves more respect and consideration.

  15. […] And more from the mentionted WakeUpWalmart (see: No Careers Here) and The Writing on the Wal (see: Wal-Mart CAPS Worker Wages. Media Swallows Cover Story). […]

  16. ronda says:

    So, here I am going into my 18th year and was capped last year.  Well why is it fair that I have to stay at a certain wage and wait for well less experienced associates catch up to my wages. I have been at my profession for 27`years.  Yes they say you should move up to higher positions, but that job is not for everyone.  And we don’t even get a cost of living raise, something is wrong with this picture.

     
     

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