Low-pay policy backfires on Walmart.

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Low-pay policy backfires on Walmart.

It turns out that low-pay and low-benefits doesn't mean high profits for corporations. Walmart's fixation on lowering costs has led to shrinking sales, a declining public image, and a downgrade of their stock rating. The equities research firm Wolfe Research has downgraded Walmart's stock from a “market perform” rating to a “underperform” rating, and two out of three reasons stemmed from how the mega retailer treats their workers.

Those reasons included Walmart's understaffing, costs associated with pressure from workers trying to organize, and an erosion of the company's price advantage over other retailers. Because of these issues, the retailer has started adding more full-time employees, and running marketing campaigns about the benefits of working for Walmart. Those minimal efforts may help them regain their previous stock rating, but Walmart will have to do much more to make up for lost ground with their customers and their employees.

Thom Hartmann Administrator's picture
Thom Hartmann A...
Dec. 29, 2009 10:59 am

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