The Value Gap: Boosting Walmart base pay by $5 wouldn’t just mean livable wages — it could help workers live longer, new report says

The Value Gap is a MarketWatch Q&A series with business leaders, academics, policymakers and activists on reducing racial and social inequalities.

Walmart, the employer of more than 1.6 million workers in the nation, has long been urged to improve conditions and pay for the many hourly workers at its stores. The latest call comes from a California nonprofit that’s asking the world’s largest retailer to raise base pay for its hourly U.S. workers by $5 an hour in the name of improving public health.

Human Impact Partners, a national nonprofit made up of public-health practitioners and researchers, wrote a letter this week to Walmart

executives and board members, enclosing its new research that shows how boosting pay could result in specific improvements in its workers’ health and therefore benefit their communities. Those include prolonging their lives by two years, preventing low birth-weight rates and more.

“All people deserve the right to economic security — and as public health experts, we know how critical livable wages are to health and wellbeing,” the letter says. “Walmart has the opportunity to set a precedent of how essential workers are valued in our society.”

According to HIP’s research brief — which is based on other studies, epidemiological datasets and information from the company itself — Walmart is the largest employer of women and people of color in the U.S. Although the company last month raised its base wage for hourly workers from $11 an hour to $12 an hour, that is “still wholly inadequate for working families,” the group says.

A Walmart spokesman pointed to previous statements by the company about the recent wage increases, which it said bumped up the average wage of 1.2 million hourly workers to $16.40 an hour. Starting wages range from $12 to $17 an hour, according to Walmart. In a written response to HIP, the company’s chief sustainability officer, Kathleen McLaughlin, said the company’s “wages are competitive with others’ role-for-role and location-for-location.” She also said the company aims to “achieve 2/3 full-time for hourly store associates this year,” which should help boost pay and predictability.

The research brief is an example of how the Oakland, Calif.-based organization tries to help spark policy change that centers health and equity. MarketWatch spoke with HIP co-director Lili Farhang, who has extensive experience in governmental public health and research, about the nonprofit’s work and approach, as well as why the nonprofit is targeting Walmart.

“Walmart is not alone in how they treat their workers,” Farhang said. “The U.S. is unique in how much it relies on a person’s place of employment to provide them with what they need to live a healthy life. … We need to fight on the policy front to make sure our government institutions also do their part. And we need to continue to put pressure on these companies.”

The interview has been edited for length and clarity:

MarketWatch: If you were at a dinner party, how would you describe HIP’s mission and work?

Farhang: Most of us think about health and how it happens as a product of our individual choices. About going to the doctor and listening to what the doctor says. If you look at the universe of research that’s out there, the truth is what drives a person’s health is their social, economic and environmental conditions.

What we do is bring together expertise and make it useful to social movements trying to improve people’s lives and conditions. A lot of times, people don’t know there’s evidence base that connects it all to health. We’re trying to make it useful and actionable.

I think COVID-19 has opened people’s eyes to public health. We need to act as a community. My health is bound up in your health. My well-being is bound up in your well-being.

“‘Not having a stable income, not knowing whether you can pay your bills, not knowing your schedule ahead of time — all of that translates into stress.’”

MarketWatch: You’re asking Walmart to raise its hourly workers’ wages by $5 by centering health. Can you explain? 

Farhang: The genesis of this work is how economic security affects health and well-being. Having a job and income are the most consequential drivers of health. We have also looked at paid sick leave at Walmart and other corporations.

We focus on Walmart and how a raise would lead to very tangible improvements in its workers’ lives. Our study shows that it would help an increase in life span, in prevention of low birth weight, [and] bring improvement in self-reported health status and a reduction in mental health problems related to anxiety and depression.

This would primarily accrue to women and people of color, because that’s who makes up the company’s [hourly wage] workforce.

MarketWatch: How important is a living wage to mental health specifically?

Farhang: All of these external factors — things like having a living wage or affordable housing, or any of these social and economic determinants — get under your skin directly and indirectly.

Not having a stable income, not knowing whether you can pay your bills, not knowing your schedule ahead of time — all of that translates into stress. Some stress manifests as worry and anxiety, depression, or as anger and frustration. For some people, it’s across all of these.

Those mental health effects are important independently and can directly affect physical health. You can develop [physical] health problems. They’re all bound up in each other.

MarketWatch: How would raising Walmart hourly associates’ wages affect the rest of the nation economically? Data shows that many Walmart associates receive public assistance.

Farhang: We focus on $5 as opposed to $1, $2 or $3 because we know Walmart is paying well below a living wage, according to MIT’s and other calculations. Many associates make about $19,000 annually, lower than the federal poverty level. No one can reasonably live on that anywhere.

We wanted to focus on Walmart because of their scale, scope and their ability to set a standard. What they do really matters. Their compensation practices really matter. Hundreds of thousands of their employees are still earning below $15 an hour [according to our research], while a lot of other major retailers have raised their wages to a base of $15.

Related: A $15 wage is becoming the norm as employers struggle to fill jobs

Why not see what would happen if they could lead? We know they can afford this. Their profits have soared during the pandemic. There’s so much research that Walmart associates have to rely on public benefits to fill the gaps, or rely on public healthcare. Raising wages would decrease reliance on those benefits.

MarketWatch: How would Walmart heeding your call align with its stated commitment to racial equity?

Farhang: If you look at their workforce, and who they’re asking to subsist on those wages, their commitment to racial and gender equity are not borne out in their commitment to their workers. On top of not making things better, they’re actually making it worse.

When you think about their public commitments, sure, I’m glad they made a $100 million commitment [last year] to support philanthropy on equity. But their commitment can best be seen in how they treat their own family and community. And right now they’re making choices around wages and benefits that don’t demonstrate their stated commitment.

“‘The more you can widen the circle of concern and bring other sectors along, and advocate with organizers, the more you can create change.’”

MarketWatch: Does anything Walmart has done recently suggest it will seriously consider your call? The company this year urged shareholders to vote against a call for a report on alignment of racial justice goals with starting wages. Do you have other actions planned to try to put pressure on the company?

Farhang: We have a responsibility as researchers and public health experts to continue to look at these issues and to bring them to institutions and corporations responsible. We’re part of a larger ecosystem that’s committed to holding corporations accountable. This is about keeping up the drumbeat.

As an example, HIP is supportive of United for Respect’s work, including worker-driven campaigns like Walmart associates’ push for an additional $5 [an] hour during the pandemic.

HIP’s outreach to Walmart with our analysis and findings is in the same spirit of associates’ efforts to push Walmart to make concrete policy changes. We hope our research underscores and helps make the case for what associates have been calling for for nearly a decade: a raise in base pay to at least $15 an hour, if not more.

The more you can widen the circle of concern and bring other sectors along, and advocate with organizers, the more you can create change.

MarketWatch: Can you talk a little bit more about HIP’s approach to equity? How has HIP has made a difference in other cases?

Farhang: One of the very first projects I worked on when I first came to HIP in 2008 focused on paid sick days. There was no law in California requiring employers to provide employees with paid sick days. We got involved with gender-equity and other groups.

What would it mean to bring a public health perspective to advocate for paid sick days? Literally, people shouldn’t go to work sick and make other people sick. We put out reports in California, New Jersey, New Hampshire and other places.

It took six years for California to require employers to provide paid sick leave. These things take time. You have to be in it for the long haul. And it’s still not done because there’s no national paid sick leave law, though it’s being considered by Congress.

We keep chipping away, keep using our voice as public health professionals. We very explicitly talk about structural racism and other forms of power. One of the key ways we work is to support people who are working on issues including housing affordability, economic security, policing, bail reform and immigration.

This story has been updated with Walmart’s response to HIP.

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