Wal-Mart Doesn't Just Employ Poor People, It Makes Fun of Them

There's an old joke about a husband who comes home early one day from work to find his wife in bed with his best friend. "What are you doing home so early?" the best friend asks. "What are you doing in bed with my wife?!" the man furiously retorts. The best friend wryly responds: "Don't wriggle out of this, I asked you first." Although the joke may be a bit antiquated, Wal-Mart apparently still finds it pretty funny.

A program was set up in Canton, Ohio that asks low-paid Wal-Mart workers to donate to other lower-paid Wal-Mart workers who can't afford food leading up to Thanksgiving. According to Business Insider, Wal-Mart turned a profit of $17 billion last year. If Wal-Mart were a country, it would be the 26th largest economy in the world. It pays its employees below market wages. How far below is hard to tell, but far enough, at least, that some cannot buy food for the holidays.

A Twitter war erupted between Ashton Kutcher and Wal-Mart over the food drive program.




If only there was a better way for a massively successful company to help feed some of its starving employees over the holidays, without relying on its other almost-starving employees... Oh wait, there is: pay them more. "Yeah, but maybe we could just -- " No, pay them more. "Well, in the realities of the current economic climate -- " Wrong, pay them more. Given the chance to ask Wal-Mart one question about whether it's concern for its employees is genuine, mine would be: "What's wrong with you?" (You thought I was gonna say, "Why not pay them more?" didn't you?)

Some prefer more words (and maybe a bit more casuistry): "That Wal-Mart would have the audacity to ask low-wage workers to donate food to other low-wage workers -- to me, it is a moral outrage," Norma Mills, a customer at the store, told the Plain Dealer.

Either way, when confronted with the irony of what it was doing, Wal-Mart's response -- to neither Norma's nor my surprise -- was evasive and oddly laden with blame for its underpaid employees who wouldn't seek to help their needy colleagues without its prompting. Finding solace in the reflective silver-lining, Wal-Mart claimed that the food drive fostered charity among its employees and evidenced how much they cared about each other. To be fair to Wal-Mart, they've good cause to care about each other when their compensation is so low that they risk starvation over the holidays.

Wal-Mart's PR doesn't seem to see what the big deal is. If something is so terrible, it can't happen for a long time, right? "This store has been doing this for several years and is for associates that have faced an extreme hardship recently," spokesman Kory Lundberg told the Plain Dealer.

Lundberg offers a recent layoff in the family or some other financial hardship by way of example. By that standard, the food drive program should be massively popular -- just about anyone working at Wal-Mart, without supplemental income, is in financial hardship.

So why not pay them more?

The obvious answer is that allocating resources toward higher wages will require cutbacks elsewhere. Some econ major may comment under this article about how it's not Pareto efficient to pay workers more without corresponding job-cuts, even though corporate profit margins for large companies are at an all-time high and wages as a percentage of the economy are at an all-time low. She might recite stale profitability mantras about how a company should never pay employees more than they are willing to work for. She'll ask why pay someone $11 an hour when they are willing to fold clothes for $9? Normative concerns for human dignity and food security aside, breaching the labor demand curve can be offset by increased desire to work and shop at places that pay fairer wages. However, as Adam Ozinek at Forbes points out, "Walmart giving raises because this is the profit maximizing labor market outcome is different than Walmart giving raises because of a bad PR campaign." When wages are not driven up by increased productivity or sales, they may not forecast increased profitability and could result in job loss.

The point is persuasive. A reactionary shift in corporate policy due to bad press doesn't make for good press and rally investment or sales the way it would if it was caused by Wal-Mart's board of directors collectively and spontaneously waking up one morning on the progressive-corporate-governance-side-of-the-bed. But it's a start. And even if the tail is wagging the dog, the reality is that Wal-Mart would be giving more money to the very people who shop at its stores (hopefully with generous employee discounts).

According to Henry Blodget at Business Insider, paying Wal-Mart employees more would not only be good for the employees, it would be good for the economy. "Average Americans account for most of the spending in the country. And thanks to the refusal of rich companies like Wal-Mart to share more of their wealth with the people who create it, average Americans are broke. When people are broke, they can't buy things. When people can't buy things, companies can't grow. And when companies can't grow, they cut costs (fire more people). And, in so doing, they make more people broke."

So yes, striving for better corporate citizenship only when you're under scrutiny is less than ideal. But when your best friend comes home early to find you in bed with his wife (or husband), it's always better to get up and apologize than to accuse him for ducking out of work early. Don't blame the economy, or laud the charitable bonds that obtain between your employees. Pay them more. Even just a little more than way-too-little. It's a risk worth taking and the joke's not funny anymore.

Let me know what you find funny/terrible on Twitter, @lewarnedya.