Local 898-- serving the Ford Rawsonville Plant

Oh, Hooray? Wal-Mart Pays Ten An Hour

You gotta love Wal-Mart. The U.A.W. and other activist groups did a fine job fighting to increase the wages for new hires. Their protests and demonstrations combined with a strong campaign on Facebook, Twitter and other social media platforms had a tremendous impact on the conversation. In the end, America’s largest employer was forced to raise the pay rate for new hires from $7.50 to $10.00 per hour.


So the good guys won, right? Well, sort of. Wal-Mart gave in to the letter of what they were being pressured for, but they never really addressed the issue of income inequality. The real impact of the change would have been different if there was a union negotiated contract. The impact in terms of public relations was great. The effect on the real wage structure? Not so much.


Before the hire in rate was raised to $10.00 an hour, an employee started at $7.50 an hour and received annual adjustments that averaged forty cent per hour. Many people had worked for the company for four, five or even six years before their annual increases brought them up to the $10.00 an hour level. Employees already making $10.00 an hour received nothing for their years of service. In addition, the annual increase for all employees has been reduced to an average of twenty cents per hour. All current employees got was a cut in their annual increase.


Wages are based on employee evaluations. Such a “merit pay” system might sound fine to some people, but I have been on both ends of such evaluations, and it is inherently unfair. The most obvious problem is the impossibility of maintaining impartiality. Even a computer based system is biased by the information that goes into the system, and therein lies the rub for employees and supervisors alike. Pay increases follow a bell curve. For example, if there is a group of ten employees, one must be rated excellent, one poor, two above average, two below average and the other four average. That is an example of such a system, not an exact reflection of the numbers in use. At Wal-Mart, there is one more level, “role model.” None of the employees I talked to for this article had any idea what that means or how to earn it. To them it is more or less a joke.


Several things would have been different with a union negotiated contract. The most obvious change is that their “merit based” pay system would have been replaced by the much more objective criteria of seniority. Those employees making $10.00 an hour or less would have received pay levels reflecting their seniority. In addition, the annual increases would have remained at least the same as they were before the new minimum wage went into effect, and that is just the hourly rate issue. The bottom line has to be, “Don’t fantasize, organize.”

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