Franciscan Sisters Take Walmart to Task Over Associates' Wages

Saying Walmart Inc. has failed to address investor questions about whether its pay practices line up with the company's racial-justice goals, a La Crosse, Wis.-based congregation of Roman Catholic Sisters is calling on Walmart shareholders to back a proposal calling for greater pay accountability from the retailer.

The Franciscan Sisters of Perpetual Adoration are urging Walmart shareholders to vote at the company's annual meeting on June 1 for a proposal that asks Walmart to prepare a report on alignment of the company's starting pay with its stated racial-equity commitments.

In an SEC filing posted on Walmart's website April 25, the Sisters note that a 2021 proposal seeking this reporting from Walmart received "approximately 32% of the independent (non-Walton family) vote"—12.7% overall—last year. And although Walmart raised its absolute minimum pay for store associates to $12 an hour in 2021 ($15 at Sam's Club), that entry point is failing to keep up with Walmart peers that have raised their starting pay to at least $15 an hour and may be a missed opportunity for Walmart to make more meaningful progress against its racial-justice goals, the Sisters assert.

See also: Walmart on Its Workforce Goals: Good Progress, But "We've Got a Ways to Go"

"Given the concentration of people of color in low-paying jobs, boosting starting wages would advance Walmart’s stated commitment to help replace the structures of systemic racism," the Sisters state in their filing. Walmart itself funded a report from McKinsey & Co., Race in the Workplace: The Black Experience, released in February 2021, that found that 45% of Black private-sector workers in the United States work in one of three industries with a large front-line presence: retail, healthcare, or accommodations and foodservice. In addition, according to the report, nearly three-quarters (73%) of Black retail workers make less than $30,000 a year.

Bentonville, Ark.-based Walmart has cited geographical cost-of-living differences and local labor-market dynamics as reasons it has opted not to set a uniform, nationwide $15 starting wage for associates, as many labor advocates have called for and as rival Amazon did in 2018 and Target did in 2020. Walmart, the largest private-sector employer in the U.S., employs nearly 1.6 million people across the country, according to the company's website.

However, wages below or even at $15 an hour may not be livable even in less-expensive locales, the Sisters write. "According to MIT’s Living Wage calculator, a single parent making $15 an hour working 40 hours a week even in a low-cost location like Oklahoma City makes only 75% of the amount necessary to support a family," they write.

Walmart is urging shareholders to vote against the proposal asking for the self-analysis. In its 2022 proxy statement, the retailer states: "We agree with the proponents that starting wages are important, and we believe ours are competitive and equitable. We disagree with the implication in the proposal that simply raising starting wages is the most meaningful measure the company can take to promote equity." Citing grant programs supported through its Center for Racial Equity, founded in 2021, as well as initiatives such as fee-free college tuition, the retailer continued, "We believe truly advancing equity in our business and in society involves taking deliberate action to address underlying causes of inequity and distinguishing ourselves with a comprehensive associate value proposition that enables the potential for upward mobility for our associates."

The Sisters challenge Walmart's current self-reporting in their concluding statements. "Walmart’s CDEI Report provides significant detail about the gender and racial makeup of Walmart’s workforce, but it does not contain any information about how those demographics correlate with starting wages," they write. "Analyzing and articulating how these realities align with Walmart’s basic beliefs and racial justice goals would enable the company to benchmark its own performance and identify opportunities to meet those commitments."