Is Wal-Mart serious about boosting the minimum wage? Don't bet on it.February 21, 2014: 5:00 AM ET
The world's largest retailer is disavowing a report that it's "looking" at supporting a Democratic push. But the company has a history of playing word games on the wage issue anyway.
By Tory Newmyer, writer
FORTUNE -- You may be experiencing neck strain if you've been trying to track Wal-Mart's position on a federal minimum wage increase over the last couple of days. Bloomberg made waves on Wednesday when it reported that the mega-retailer was looking at backing a federal wage hike. Considering the company's size -- it employs 1.3 million people in the U.S. alone, roughly 1% of the entire private-sector workforce -- such a pronouncement could have a seismic impact on the living-wage debate heating up in the capital.
Except that the company isn't considering throwing its support behind the Democratic push. Wal-Mart (WMT) spokesman David Tovar, who gave the interview to Bloomberg that set off the frenzy, made that much clear on Thursday in follow-up interviews with other outlets, including Fortune.
The company, Tovar says, is simply monitoring the debate to assess what impact any new policy could have on its business. That said, Wal-Mart will remain neutral unless it decides a proposed minimum wage increase either unfairly targets the company while exempting other retailers, as it did in Washington, or doesn't allow employers to phase the higher wage in over time. "If a proposal meets those conditions, we'll stay out of it," Tovar says. "If they don't, we'll strongly consider opposing it."
But if history is any guide, it seems the company is at least partially responsible for the confusion over its position. Most of the reports this week stated that Wal-Mart lent crucial support to a higher federal pay standard when the issue was last before Congress, in 2007 (and the rate rose from $5.15 to $7.25 per hour). But the evidence of that support is limited to a speech then-CEO Lee Scott delivered in 2005. In that address, to company directors and executives, Scott gave what appeared to be a stirring exhortation in support of raising the wage. "We can see first-hand at Wal-Mart how many of our customers are struggling to get by. Our customers simply don't have the money to buy basic necessities between paychecks," Scott said. "While it is unusual for us to take a public position on a public policy issue of this kind, we simply believe it is time for Congress to take a responsible look at the minimum wage and other legislation that may help working families."
A year later, with both chambers of Congress considering legislation to accomplish just that, Wal-Mart went missing. The company's then-top lobbyist, Lee Culpepper, told me at the time that Scott's comments had been misinterpreted. The chief executive wasn't calling on Congress explicitly to raise the minimum wage; he was just asking lawmakers to consider it. "We haven't said anything more or less," he said. Last year, after President Obama used his State of the Union address to call for raising the rate to $9.00 an hour, Wal-Mart was similarly circumspect, saying only that it was "reviewing" the proposal.
The fence-straddling makes sense from a strategic perspective. The company has worked in recent years to sand the harder edges off of its anti-labor rep -- a mission that has taken on some urgency as the store expands its footprint into urban areas heavily represented by Democrats in Congress.
The shift in approach is evident in Wal-Mart's political giving. The company directed just 21% of its contributions to Democrats back in the 2002 election cycle. A decade later, it more than doubled Democrats' share to 48%, according to figures from the Center for Responsive Politics.
Besides, if the company was inclined to oppose the federal wage hike but nervous about public blowback, it could always lean on heavy-hitting trade associations to make the case for it. Both the National Retail Federation and the U.S. Chamber of Commerce strenuously oppose the raise. Says Tovar, "Anybody involved in trade associations will tell you not every member agrees with every trade association position." Get that? And for the record, Tovar says the company told its trade associations the same thing it's telling us: They're conditionally neutral.