For Immediate Release
Emma Stieglitz, emmaS@berlinrosen.com, (646) 200-5307
New Demos Report: Walmart's $6.6 Billion Outlay for Share Buybacks in 2013 Better Spent on Workers
NEW YORK, NY - In anticipation of the annual Walmart shareholders’ meeting this week, national public policy organization Demos has released a 2014 update of previous research detailing how Walmart can afford to give its workers a raise by redirecting the funds spent annually on buying back shares of Walmart’s own company stock.
A Higher Wage is Possible at Walmart argues the nation’s largest retailer could use the $6.6 billion spent on repurchasing stock to instead invest in its 825,000 workers making less than $25,000 per year. This would put an extra $5.13 an hour into the pockets of its lowest-paid employees and better align the interests of workers, managers and shareholders.
“Share repurchases consolidate ownership by reducing the number of shares traded on the market,” said Amy Traub, Senior Policy Analyst and co-author of the brief. “What Walmart is doing is using its profits to buy back their public stock to boost earnings per share. This most benefits a small group of people, including the Walton heirs who not only control more wealth than 40 percent of Americans, but pocketed $3 billion in dividend payments from this process.”
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The brief also notes the cost Walmart’s current pay practices inflict on performance measures. The company pointed to weakened consumer demand, led by cuts in the Supplemental Nutrition and Assistance Plan (SNAP), and persistent operational problems as the source of their falling profits. While the major retailer depends heavily on the over $13 billion in SNAP benefits spent annually at the store, millions of dollars in public assistance is collected by its workforce – a population included in Walmart’s customer base.
“This dependence on public subsidies transfers the cost of maintaining the labor force to the taxpayer,” said Catherine Ruetschlin, Policy Analyst and co-author of the brief. “Lack of investment in human capital forces taxpayers to compensate for insufficient wages and hampers employee performance, resulting in a dissatisfied customer base that will take its business elsewhere.”
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A multi-issue national organization, Demos combines research, policy development, and advocacy to influence public debates and catalyze change. We publish books, reports, and briefing papers that illuminate critical problems and advance innovative solutions; work at both the national and state level with advocates and policymakers to promote reforms; help to build the capacity and skills of key progressive constituencies; project our values into the media by promoting Demos Fellows and staff in print, broadcast, and Internet venues; and host public events that showcase new ideas and leading progressive voices.