Walmart CEO Calls for Raising the Federal Minimum Wage

05.06.2019 22:40

Fortune.com

As Sen. Bernie Sanders took his presidential campaign to the discount giant's annual meeting.

Walmart Inc.’s CEO wants Congress to boost the federal minimum wage, a rare instance of the nation's biggest private employer demanding change on a contentious issue, about which it has long been pilloried for its resistance.

The current $7.25 minimum wage is "too low," Walmart Chief Executive Officer Doug McMillon said Wednesday at the company’s annual meeting. It's "time for Congress to put a thoughtful plan in place" to boost it, McMillon said.

Previously, McMillon expressed support for increasing the national minimum wage, but this is the first time in more than a decade a Walmart CEO has specifically demanded new legislation on the matter. In considering a change, McMillion said federal lawmakers should take into account cost-of-living increases "to avoid unintended consequences."

Walmart has raised its starting wage several times in recent years to the current $11 an hour, but that's still below rivals like Target Corp. and Costco Wholesale Corp. Amazon</a> said last year its lobbyists would start advocating for an increase in the federal minimum wage, which hasn’t changed since 2009

"It's clear by our actions and those of other companies that the federal minimum wage is lagging behind," McMillon said before Walmart shareholders and employees annual meeting in Rogers, Ark.

With 1.5 million employees in the U.S., Walmart's stance on labor issues can often influence broader American workforce trends. It's unusual for Walmart, which has weathered criticism for years over its treatment of workers, to wade into the broader national debate on wages. But it has precedent: Former CEO Lee Scott said in a 2005 speech the minimum wage then was "out of date with the times," and said "it is time for Congress to take a responsible look at the minimum wage."

Bernie Sanders Campaigns at Annual Meeting

As McMillon championed a higher minimum wage, longtime Walmart critic, U.S. Sen. Bernie Sanders, took his 2020 presidential campaign to the meeting. A longtime Walmart critic, Sanders introduced a shareholder proposal to add representatives from Walmart's rank-and-file to the company's board. With no chance of the motion passing, Sanders' presence, nonetheless, has cast a public spotlight on Walmart worker rights.

While campaigning for the Democratic nomination to run for president, Vermont's Sanders has frequently criticized Walmart’s CEO's pay and the company’s labor practices, demanding it boost starting wages to $15 an hour. Walmart gave McMillon a pay package worth almost $24 million last fiscal year.

"All we are saying to Walmart and the Walton family is to pay your workers a living wage," he said, "and that living wage is $15 an hour." Target has said it will reach that threshold by the end of 2020, while Amazon boosted starting pay for its warehouse workers to $15 an hour last year.