By John Logan, professor and director of Labor and Employment Studies, San Francisco State University
Wal-Mart also provides a startling example of the enormous gap between the pay of executives and ordinary workers in the United States. Last year, Wal-Mart CEO Michael Duke earned a staggering $20.7 million. Wal-Mart claims that its full-time hourly employees make an average of $12.67 per hour, but according to a Bloomberg study, employees make on average just $8.81 per hour. Even at $12.67 per hour, a Wal-Mart employee would need to work for approximately 785 years to earn Duke’s annual salary for 2012.
The ratio of CEO-to-worker pay in the United States has increased by dramatically since the 1950s. The ratio of CEO-to-worker pay was 20-1 in 1950s, while today, even by conservative estimates, is between 200 and 300-to-1. Three years ago, Congress ordered public companies to disclose CEO-to-worker pay ratios under the Dodd Frank Act. Corporations’ lobbyists are working all-out to block disclosure of the CEO pay ratio and it is not hard to figure out why they are so resistant. The pay of Wal-Mart CEO Michael Duke versus that of the average Wal-Mart worker illustrates just how out-of-whack that pay gap has become in the United States.
In the United States, Wal-Mart provides low paying jobs and substandard working conditions. But labor conditions are much worse for workers in Wal-Mart’s supplier factories in Bangladesh and elsewhere. The company has been linked to two recent tragedies at Bangladesh garment factories. In November 2012, a fire at the Tazreen Fashions Factory in Dhaka killed at least 112 workers and injured hundreds more. Wal-Mart claimed that it had severed all ties with the factory months before the fire. However, documents found at the scene showed that several apparel makers were using the factory to supply Wal-Mart and its Sam’s Clubs subsidiary. And the New York Times disclosed that in 2011 Wal-Mart had played a “leading role” in blocking an effort to have global brands pay for improved safety at Bangladesh’s garment factories. For the past few weeks, one of the survivors of the fire, Sumi Abedin, a twenty-four year old seamstress, has toured the country in an effort to put pressure on Wal-Mart and other firms to pay compensation to the victims’ families.
Last week saw an even worse tragedy in Savar, Bangladesh, where a building containing several garment factories collapsed, killing at least 400 workers and injuring hundreds more. Once again, it appears that Wal-Mart had sub-contracted employees, although it denies it had any “authorized” production in the facility.
Following the Savar tragedy, George Miller (D-Cali) wrote to Wal-Mart CEO Michael Duke calling for the company to join the Bangladesh Fire and Building Safety Agreement, an independent safety program that carries out factory inspections, promotes transparent public reporting, and involves workers in identifying safety risks. Several high-profile brands have signed the agreement, but so far Wal-Mart has resisted. Miller wrote that as one of America’s largest and wealthiest corporations, Wal-Mart “has a unique role and responsibility to do the right thing and set the best standard not just here in America, but in the rest of the world.”
Wal-Mart workers will be hoping that by next May Day, the company has changed track and decided to “do the right thing” by improving the conditions of its workers at home and protecting the lives of its sub-contracted workers abroad.
Logan is professor and director of Labor and Employment Studies at San Francisco State University.