‘Stop Walmart Act’ for $15 minimum wage slammed by US business community

‘Stop Walmart Act’ for $15 minimum wage slammed by US business community
30 Nov 2018

Proposed new US legislation to prevent companies with more than 500 employees from engaging in stock buybacks unless they pay workers a minimum wage of at least US$15 an hour has been slammed by the business community. 

The proposed Bill, Stop Welfare for Any Large Monopoly Amassing Revenue from Taxpayers Act (aka the Stop Walmart Act), which was put forward by US Senator Bernie Sanders and Representative Ro Khanna, would also cap chief executive’s compensation at no more than 150 times the median pay of their entire workforce. A mechanism would likewise be introduced for employees to earn up to seven days paid sick leave.

But according to Forbes, the Bill has proved controversial, with some critics claiming the suggested move amounts to government overreach.

HeadCount Corporation’s chief executive Mark Ryski said: "It’s not the government’s place to legislate how companies invest their profits. While the drive to improve benefits and wages for hourly workers is laudable, ultimately labour market competition is the biggest driver of wages and benefits.”

He added that with unemployment rates at historic lows, “Walmart and other major retailers will need to (and many have) increase wages and benefits to retain and attract employees".

Neil Saunders, managing partner of research firm GlobalData also believed that the move represented “an unwarranted level of interference in corporate America. It is not the place of government to dictate to firms how they use their profits".

But the Stop Walmart Act takes direct aim at the retailer's US$20 billion plan to reacquire company stock over the next two years. A study by the Roosevelt Institute, a liberal think tank, concluded that Walmart could comfortably increase the pay of its lowest paid workers by US$5.66 an hour by using half of the funds assigned to its proposed buyback.

Khanna said in a statement: “Walmart has refused to pay its workers a living wage, resulting in costs for taxpayers of US$6.2 billion for basic necessities for survival, food stamps and housing assistance. If Walmart can find US$20 billion for stock buybacks to further enrich the Waltons, it can find the money to raise the pay of its workers to a living wage.”

Following the 2017 passage of the Tax Cuts and Jobs Act, Walmart announced in January that it was increasing its minimum wage from US$9 an hour to US$11 while providing workers with one-off bonuses of up to US$1,000.

Paula Rosenblum, managing partner at RSR Research, said: "If a corporation gets a windfall in the form of a tax break, yes I do think the government has a say in what they do with that windfall. Frankly, the U.S. taxpayer has been subsidising Walmart through paying for things like SNAP [Supplemental Nutrition Assistance Program] for underpaid workers."

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

OTHER ARTICLES THAT MAY INTEREST YOU

Disney workers win $15 minimum wage

Alabama minimum wage discrimination case revived by US Appeals Court

US employer pilot launched to self-report minimum wage violations

 

Proposed new US legislation to prevent companies with more than 500 employees from engaging in stock buybacks unless they pay workers a minimum wage of at least US$15 an hour has been slammed by the business community. 

The proposed Bill, Stop Welfare for Any Large Monopoly Amassing Revenue from Taxpayers Act (aka the Stop Walmart Act), which was put forward by US Senator Bernie Sanders and Representative Ro Khanna, would also cap chief executive’s compensation at no more than 150 times the median pay of their entire workforce. A mechanism would likewise be introduced for employees to earn up to seven days paid sick leave.

But according to Forbes, the Bill has proved controversial, with some critics claiming the suggested move amounts to government overreach.

HeadCount Corporation’s chief executive Mark Ryski said: "It’s not the government’s place to legislate how companies invest their profits. While the drive to improve benefits and wages for hourly workers is laudable, ultimately labour market competition is the biggest driver of wages and benefits.”

He added that with unemployment rates at historic lows, “Walmart and other major retailers will need to (and many have) increase wages and benefits to retain and attract employees".

Neil Saunders, managing partner of research firm GlobalData also believed that the move represented “an unwarranted level of interference in corporate America. It is not the place of government to dictate to firms how they use their profits".

But the Stop Walmart Act takes direct aim at the retailer's US$20 billion plan to reacquire company stock over the next two years. A study by the Roosevelt Institute, a liberal think tank, concluded that Walmart could comfortably increase the pay of its lowest paid workers by US$5.66 an hour by using half of the funds assigned to its proposed buyback.

Khanna said in a statement: “Walmart has refused to pay its workers a living wage, resulting in costs for taxpayers of US$6.2 billion for basic necessities for survival, food stamps and housing assistance. If Walmart can find US$20 billion for stock buybacks to further enrich the Waltons, it can find the money to raise the pay of its workers to a living wage.”

Following the 2017 passage of the Tax Cuts and Jobs Act, Walmart announced in January that it was increasing its minimum wage from US$9 an hour to US$11 while providing workers with one-off bonuses of up to US$1,000.

Paula Rosenblum, managing partner at RSR Research, said: "If a corporation gets a windfall in the form of a tax break, yes I do think the government has a say in what they do with that windfall. Frankly, the U.S. taxpayer has been subsidising Walmart through paying for things like SNAP [Supplemental Nutrition Assistance Program] for underpaid workers."

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

OTHER ARTICLES THAT MAY INTEREST YOU

Disney workers win $15 minimum wage

Alabama minimum wage discrimination case revived by US Appeals Court

US employer pilot launched to self-report minimum wage violations

 

Leave a Reply

All blog comments are checked prior to publishing