TIME Business

Walmart’s One-Time Claim to Fame: Employee Morale

Andy Wilson
Alan Levenson—;The LIFE Images Collection/Getty Wal-Mart regional VP Andy Wilson (L) giving a pep talk on corporate values at a Wal-Mart store, in 1992

On Thursday, the company announced a plan to increase wages for some employees

These days, Walmart is such a powerful company that this week’s news that it will give employees a raise could potentially change the minimum-wage landscape nationwide.

In 1983, when TIME first profiled the company, many readers might not have even heard of it. Though Wal-Mart was already the ninth-largest retailer in the nation and had raked in $3.4 billion the previous year, it had locations in only 15 states.

And the size of the operation — it now operates in 27 countries — isn’t the only thing that has changed. The news about the Walmart minimum-wage hike has been tied to an ongoing campaign for the rights of workers; like the fast-food industry, the company has acquired a reputation as a place where low-level employees aren’t paid enough. In 1983, however, employee happiness was said to be one of the company’s strengths:

Wal-Mart’s 50,000 employees, called “associates,” share in the company’s profits, earn bonuses for reducing shoplifting or suggesting merchandising ideas. “Their morale is fantastic,” says one Wall Street admirer. Each Saturday morning at 7:30 in the headquarters auditorium packed with new merchandise samples, “Mr. Sam” holds meetings with buyers and managers. Walton plans to continue expanding rapidly. The company will open more than 100 stores next year. At that sizzling pace, sales by 1987 would hit $10 billion. That would put Wal-Mart in a position to challenge K mart as the king of the discounters.

Read the 1983 story, here in the TIME Vault: Small-Town Hit

TIME Executives

Starbucks CEO: Giuliani’s Obama Remarks ‘Vicious’

Howard Schultz
Chip Somodevilla—Getty Images Starbucks Chairman and CEO Howard Schultz participates in a forum in Washington on Nov. 10, 2014.

The outspoken chief executive responded forcefully to the former New York mayor's comments

Though he recently told TIME he has no personal political ambitions, Starbucks CEO Howard Schultz hasn’t stopped stepping into the political fray.

On Friday, Schultz issued a statement lambasting former New York Mayor Rudy Giuliani for Giuliani’s recent declaration that President Obama doesn’t love America. The comments were “vicious” and “profoundly offensive,” Schultz said.

Politico reported that on Wednesday, Giuliani was speaking at a private dinner for Wisconsin Gov. Scott Walker when he said: “I do not believe, and I know this is a horrible thing to say, but I do not believe that the president loves America. He doesn’t love you. And he doesn’t love me. He wasn’t brought up the way you were brought up and I was brought up through love of this country.”

Schultz issued the following statement: “As an American, I find Rudy Giuliani’s vicious comments about President Obama ‘not loving America’ to be profoundly offensive to both the President and the Office.”

A Starbucks spokesperson on Friday morning said: “We are not providing any additional commentary around it.”

Schultz doesn’t hesitate to weigh in on political issues. In December, he raised some eyebrows when he addressed the shootings of black suspects by police offers. During an Open Forum at the Starbucks Support center in Seattle, he encouraged employees to talk about their own experiences with racism He released a video of that event, and, in a letter sent exclusively to TIME, he expressed his dismay over the situation. “I’m deeply saddened by what I have seen, and all too aware of the ripple effect,” he wrote.

Schultz has often decried the political gridlock in Washington. He has also addressed the federal minimum wage, now at $7.25 an hour. On that issue, he tends to be circumspect. Starbucks pays more than the minimum wage and offers healthy benefits packages. Schultz supports raising the federal minimum, but he has said that raising it by too much—say, to $15 an hour, as some activists have demanded—would put a crimp on businesses, and lead to lower benefits and layoffs.

 

TIME Retail

Wal-Mart’s Problems Go Beyond Underpaid Workers

An employee pulls a forklift with display units for DVD movies at a Wal-Mart Stores Inc. location ahead of Black Friday in Los Angeles, Calif. on Nov. 24, 2014.
Bloomberg—Getty Images An employee pulls a forklift with display units for DVD movies at a Wal-Mart Stores Inc. location ahead of Black Friday in Los Angeles, Calif. on Nov. 24, 2014.

The retail giant's customers are less and less satisfied with its services

Wal-Mart’s announcement on Thursday that it would start paying its employees more and training them better, and would invest more heavily in online operations, almost seems like it could have been a reaction to a survey released a day before, ranking the company as “the most hated retailer in America,” as several news outlets have put it.

It wasn’t, of course. Wal-Mart’s plans had clearly been in the works for quite a while. But those plans, announced as the retail giant issued fairly weak quarterly results, address some of the biggest reasons for Wal-Mart’s ranking at the very bottom of the American Customer Satisfaction Index for 2014: poor service; messy or understocked shelves; and higher prices than many consumers expect.

The survey polled 8,700 consumers. It found overall satisfaction with retailers down by 1.4% over last year, mainly due to higher prices—a sudden reversal after three straight years of rising satisfaction. Wal-Mart’s score of 68 (on a scale of 100) was its worst since 2007, and continues a trend. In four of the past five years, it has scored the lowest of all department and discount stores. This year, it scored the lowest among all retailers. Just a decade or so ago, it regularly scored near the top.

On Thursday, Wal-Mart announced it would boost employee pay to a minimum of $9 an hour, which will put Wal-Mart’s lowest salaries 24% above than the $7.25 federal minimum wage. Some 500,000 workers, or about a third of Wal-Mart’s U.S. work force (including at the Sam’s Club warehouse-store chain) will be affected. It will, of course, eat into profits. Wal-Mart said the short-term hit would yield longer-term benefits down the road, as happier, better-trained, longer-tenured employees will translate into more customer traffic. The wage hikes and improved training will cost Wal-Mart about $1 billion this year.

The action will result in average hourly full-time wages at Wal-Mart rising to $13 an hour from below $12 an hour. That’s still below the $15 per hour demanded by pressure groups, some including Wal-Mart workers, that have been seeking pay hikes from big retailers and fast-food chains.

Wal-Mart also pledged to invest more in its e-commerce operations. The ACSI report noted that even as overall satisfaction with retailers fell by 1.7%, satisfaction with online retailers rose by 5.1%, to 82 out of 100.

That was due in part to a dip in satisfaction the previous year due to a spate of delivery problems, particularly during the holiday season. Still, it points to a big problem brick-and-mortar retailers — even those, like Wal-Mart, with substantial investments in e-commerce: the convenience of online shopping is tough to beat. There’s no such thing as a surly employee or a messy shelf. And what you’re looking for is generally in stock.

Hence Amazon’s place at the top of the list, with a score of 86. In the discount and department store category that Wal-Mart belongs to, Nordstrom was tops, also with an 86. Target tied with Kohl’s at No. 3, each scoring an 80.

 

TIME 2016 Election

Hillary’s 140-Character Campaign Strategy

Hillary Rodham Clinton
Carolyn Kaster—AP Former Secretary of State Hillary Clinton speaks at Georgetown University in Washington on Dec. 3, 2014.

She's pioneered a new way to use Twitter

Hillary Clinton isn’t officially running for president and she isn’t exactly campaigning yet either.

Since last year’s book tour, her public appearances have been limited to speeches, both paid and unpaid, and even campaign events where she isn’t appearing are tightly controlled. That creates a supply-and-demand problem, though, when news breaks and the public wants to know where she stands on an issue.

Enter Twitter. Though Clinton didn’t join the social media platform until mid 2013, she’s pioneered a new way of using it to flesh out her campaign platform 140 characters at a time.

It’s a great political strategy for her, though it leaves a bit to be desired among the public and the press. Clinton’s tweets come late in the news cycle, allowing her to score a quick point off Republican in-fighting after much of the debate has played out.

They’re also tightly scripted, which means there’s no problem of going off-message or losing control of the story, like she did during what should have been a softball interview with NPR that touched on her changing views on gay marriage.

The 140-character limit on Twitter also means that Clinton’s pronouncements aren’t as substantive as they often seem at first. Without reporters asking follow-up questions, Clinton can make a rather general statement about, say, being in favor of vaccination, without explaining her past doubts.

Or she can criticize an attempt to roll back the Dodd-Frank bank reforms without specifying exactly which changes to the law she would support or oppose.

Judge for yourself. Below are some of the major policy positions Clinton has taken on Twitter.

Against the Supreme Court’s decision in the Hobby Lobby case:

In favor of raising the minimum wage:

In favor of childcare legislation:

In favor of President Obama’s immigration actions:

Against rolling back part of Dodd-Frank:

In favor of some of Obama’s economic ideas in the State of the Union:

In favor of vaccination:

TIME Economy

Minimum-Wage Increases Go Into Effect Across the Country

The wage hikes in several states and D.C. are expected to affect 3.1 million people

Roughly 3.1 million workers across the United States woke up to a little New Year’s Day present on Thursday, January 1, when increases in the minimum wage took effect in 20 states and the District of Columbia.

The recent bumps brought the total number of states with a minimum wage above the federal wage floor to 29, the New York Times reports. The federal minimum wage is $7.25 an hour.

Some of the increases are relatively tiny—a few cents—while some, of a dollar or more, could have a more significant impact on the economy. Minimum wage hikes in more states are set to take effect later in the year, according to the NYT.

The minimum wage hike is expected to impact 3.1 million of the 3.3 million Americans who earn the minimum wage.

[NYT]

TIME 2016 Election

The 9 Times Hillary Clinton Has Taken a Stand Since 2013

USA - Hillary Clinton speaks at Iowa Senator Tom Harken'a annual Steak Fry
Brooks Kraft—Corbis for TIME Hillary Clinton Hillary Clinton gazes pensively into the distance at Iowa Senator Tom Harken'a annual Steak Fry in Indianola, Iowa on September 14, 2014.

Like other presidential candidates, Hillary Clinton had an opinion on just about everything in 2008. How to reform the U.S. health care system? Check. What to do about climate change? Check. Even minor issues like how to lower the price of gas required her to come up with a plan.

But when she became Secretary of State, Clinton followed tradition and kept her opinions to herself, especially on domestic policy. And since leaving Foggy Bottom in 2013, she’s mostly avoided specifics.

She says she’s in favor of protecting the environment, for example, but has yet to stake out her position on fracking or the Keystone XL pipeline. She says she’s against eliminating net neutrality, but has yet to say what, exactly, the government ought to do to protect it. And while she’s talked a big game about U.S. military engagement abroad, it’s unclear how her positions on, say, Ukraine or Iraq would differ from those of President Obama.

That ambiguity is understandable. She doesn’t hold public office. She’s not officially on the ballot. And committing to a position publicly limits her future options, politically. But given how many times she hasn’t taken a position on the issue of the day, it’s worth noting the handful of times she has.

Here’s a look at the nine most substantive policy positions Clinton has staked out since stepping down as Secretary of State.

1) The U.S. needs serious immigration reform. When President Obama announced his controversial executive order in November shielding up to five million undocumented immigrants, Clinton tweeted her approval within minutes, and then followed up with a statement calling for immediate, bipartisan and comprehensive immigration that would “focus finite resources on deporting felons rather than families.”

2) The U.S. should have armed the rebels in Syria. In an interview with the Atlantic’s Jeffrey Goldberg in August, Clinton blamed the rise of the so-called Islamic State, or ISIS, on the U.S. not doing enough to support moderate rebels when the Syrian civil war first broke out. “The failure to help build up a credible fighting force of the people who were the originators of the protests against Assad — there were Islamists, there were secularists, there was everything in the middle — the failure to do that left a big vacuum, which the jihadists have now filled,” she said. That said, Clinton’s ideas on how to rout ISIS now appear to be more or less the same as Obama’s.

3) Gay people should be allowed to marry. In March 2013, Clinton formally announced in her support for gay marriage, marking a major reversal of the position she’d held for decades. Her rivals criticized her for jumping on the bandwagon only after the issue of gay marriage had become widely acceptable, but she defended herself as a “thinking human” who is allowed to “evolve” on issues.

4) Americans shouldn’t torture people. At a human rights awards dinner in December, Clinton made her first public comments about torture since the Senate released its controversial report on the issue earlier this month. She said unequivocally that she is against illegal renditions and brutal interrogation methods. “The U.S. should never condone or practice torture anywhere in the world,” she said.

5) The federal government should raise the minimum wage. In a speech at a campaign event for Massachusetts gubernatorial candidate Martha Coakley in October, Clinton told the crowd not to “let anyone tell you that raising the minimum wage will kill jobs – they always say that.” She then went on to defend raising the federal minimum wage. As a senator, Clinton repeatedly proposed legislation that would automatically increase the federal minimum wage anytime members of Congress saw their own pay increase.

6) Negotiating with Iran is a good idea, so long as the U.S. gets a good deal. Much to the chagrin of many in the pro-Israel crowd, Clinton has not only expressed support for the administration’s negotiations with Tehran over its nuclear program, she has taken credit for initiating the secret talks back in 2012. In the past year, she has lightly tempered that unequivocal support by cautioning that the U.S. should be careful about what it concedes to, repeating that “no deal is better than a bad deal.”

7) The U.S. shouldn’t trust Putin. At a speaking event this year, Clinton called the Russian President an arrogant bully. As Secretary of State, she said she was in favor of the Obama administration’s “reset” policy with Russia, but her opinion of the policy appears to have cooled. “I think that what may have happened, is that both the United States and Europe were really hoping for the best from Putin as a returned president,” she told CNN’s Fareed Zakaria in an interview in July. “And I think we’ve been quickly, unfortunately, disabused of those hopes.” While those seem like fightin’ words, policy analysts point out that it’s less clear how Clinton’s distrust of Putin would translate to a change in actual U.S. policy—much less potential military engagement—in Ukraine.

8) All American kids should get free, high-quality pre-K. Anyone remotely familiar with Clinton’s resume won’t find this to be much of a shocker, but early-childhood education is one of the issues she’s been most outspoken about in the last two years. She’s advocated for everything from universal pre-K and free nurse home-visits for at-risk mothers, to expanding existing programs, like Head Start and paid family leave.

9) #Blacklivesmatter. Clinton took a shellacking this fall for failing to say much one way or an another on the protests in Ferguson, Missouri, and about the Eric Garner case in New York. At an awards ceremony in December, she broke her silence—kinda. “Yes, black lives matter,” she said, but then failed to elaborate. She has yet to say whether she’s in favor of broad sentencing reform, body cameras on police, or how she might limit what military equipment is available to police forces.

TIME Retail

Minimum Wage Hikes to Affect More Than 1,400 Walmart Stores

Operations Inside A Wal-Mart Stores Inc. Location Ahead Of Black Friday
Patrick T. Fallon—Bloomberg / Getty Images An employee pulls a forklift with display units for DVD movies at a Wal-Mart Stores Inc. location ahead of Black Friday in Los Angeles, Calif., on Monday, November 24, 2014.

An internal memo details how compensation will be compressed at the top and bottom of the pay scale

An internal Walmart memo circulated to store managers earlier this month shows the retailer estimates that minimum wage hikes in 21 states will affect worker base salaries at 1,434 stores across the United States, according to a new report Wednesday.

The memo obtained by Reuters outlines which positions will be impacted by the hikes when they take effect on Jan. 1. Base salaries for three lower-level positions — cashiers, cart pushers and maintenance workers — will be lumped together under one rate, while the minimum premium pay to workers in supervisor roles like deli associates will narrow to within a closer range of lower grade workers.

Walmart, the country’s biggest private employer with some 1.3 million workers, has struggled to boost sales after Americans lost jobs or already low incomes during the financial crisis. The company estimates that its average full-time hourly wage is $12.92, but its chief executive has indicated Walmart plans to improve opportunities so more of its workers making the federal minimum wage of $7.25 an hour can earn more.

Read more at Reuters

MONEY Fast Food

2014 in Fast Food: A Year of Reckoning, Makeovers, and Waffle Tacos

Here's a look back at the strategies big and small, bold and sometimes bizarre, that sought to capture more of your fast food dollars over the past year.

In 2014, Ronald McDonald got a makeover, with the iconic clown mascot sporting supposedly hipper outfits including a vest, cargo pants, and sometimes a bowtie in order to—again, supposedly—win over new customers, especially younger ones. The makeover, widely decried as “desperate,” is symptomatic of a year marked with a wide range of alternately innovative and puzzling changes made by fast food players. In many ways, 2014 was a year of reckoning and upheaval in fast food, and not only for McDonald’s. Click through the gallery below and you’ll see what we mean.

 

  • Breakfast Wars

    141222_EM_FastFood_1
    Courtesy of Taco Bell

    The year in fast food got under way with the much-anticipated national launch of a Taco Bell breakfast menu, featuring the Waffle Taco. McDonald’s has thoroughly dominated the fast food breakfast world over the years, and Taco Bell’s encroachment on its turf was equal parts bold and nasty—including ads that mocked McDonald’s for being old-fashioned and outdated, and that used real-life Ronald McDonalds to endorse Taco Bell’s breakfast. The squabbles expanded into a broader war over fast food breakfast, which is the only traditional meal time that’s been experiencing sales growth of late. For its part, McDonald’s has introduced new breakfast options and rolled out free coffee offers twice in 2014 in order to win over customers. While McDonald’s remains the leader in fast food breakfast and chain restaurants overall, the expansion and increased competition from Taco Bell and other players in the fast and fast casual space are a big part why the Golden Arches has struggled mightily—a theme throughout 2014.

  • Personalization

    141222_EM_FastFood_2
    ZUMA Press, Inc / Alamy

    Higher quality ingredients and some level of customization in food ordering are highly prized by millennials. They’re also both central parts of the “fast casual experience and prime reasons that Chipotle, Panera Bread, and the rest of the restaurant category are flourishing. To try to stay competitive—and perhaps even hip with the youngsters—old-fashioned brands such as Pizza Hut and McDonald’s raised the bar on personalized orders in 2014. The former introduced a whole new menu featuring six new sauces, 11 new crusts, and four spicy “drizzles” that can be mixed and matched, while the latter has been frantically expanding a build-your-own burger concept to offset underwhelming sales.

  • Expanding Menus

    141222_EM_FastFood_3
    Alamy

    In addition to expanded breakfast and more personalization options, plenty of quick-service restaurants plodded on with a years-in-the-making trend of bolstering up menu choices in general. At the start of 2014, McDonald’s franchise owners were complaining about how large the menu had gotten—25 items for the “Dollar Menu and More” section alone, where most things cost $1 or $2. Expanded menus slow down service (especially at the drive-thru), but that hasn’t stopped many fast-food operators from trying to attract customers with more and more choices. The two most obvious examples are Starbucks, which has been adding tea and alcohol to menus left and right and broadly expanded its food selection and plans on doubling food sales in five years, and Pizza Hut, which simultaneously made its menu larger and more personalized to woo younger customers in particular. On a smaller scale, Wendy’s decided to add the highly successful Pretzel Bacon Cheeseburger to the menu permanently, and virtually every national fast food establishment keeps on rolling out limited-time offer items regularly.

  • Shrinking Menus

    141222_EM_FastFood_6
    Bloomberg—Bloomberg via Getty Images

    Shrinking Menus
    While the pressure to expand menus still exists, McDonald’s in particular has come to realize that there are limits to how big a menu can get before it hurts the business. Items like the McWrap, which comes with two choices of chicken and three sauce options and cannot be prepared in advance, slow service to a halt—making it virtually impossible to McDonald’s goal of getting orders to customers in one minute or less. After yet another report of declining same-restaurant sales in early winter, McDonald’s decided it was finally time to cut the menu, which had grown to 121 items, a 75% increase in a decade. The fast food giant is now testing the removal of some Quarter Pounders and other sandwiches to make the menu more doable (and profitable) for the company. Casual sit-down dining chains including Chili’s and Red Lobster likewise decided in 2014 to trim back menus, which had metastasized and proven unwieldy and not particularly popular with customers.

  • Digital Ordering and Payments

    141222_EM_FastFood_4
    Anatolii Babii / Alamy

    Burger King, Taco Bell, Starbucks, Chick-fil-A, Dunking Donuts, and McDonald’s are among the fast-food operators that advanced the options to pay for purchases—and often, order before ever setting food in the restaurant—with a smartphone in 2014. When you think about, it especially makes sense for fast food players to be at the forefront of the mobile payment sphere: These businesses are based on the premise of satisfying cravings in a hurry, so of course they love the idea of customers being able to order with the tap of a phone, before really thinking through what it is they’re ordering. The advent of Apple Pay, accepted at McDonald’s, Subway, and Panera Bread, among others, is good for business too because customers don’t need to have cash or even a credit card on hand to get their fix of food.

  • Worker Strikes

    141222_EM_FastFood_5
    Scott Olson/Getty

    Periodic walkouts by fast food workers around the U.S., combined with a big protest outside McDonald’s headquarters in Illinois in May, which led to hundreds of arrests, have brought various versions of the “Fight for $15″ (a campaign to boost all fast food employee wages to a minimum of $15 per hour) into the national spotlight in 2014. The movement appears to be growing, with walkouts in 150 cities in September, then reaching 190 cities during a planned strike in December. While it seems unlikely that the world’s biggest fast food companies will give in (and certainly not easily), they may not have a choice in some parts of the country: Seattle instituted a $15 minimum wage this year, and cities such as Los Angeles, San Francisco, Chicago and New York are considering doing the same—moves that would affect not only fast food workers, but all low-wage employees.

TIME Labor

Convenience Store Employees Join Fast Food Workers in New Strikes

McDonald's Workers, Activists Protest McDonald's Labor Practices
Andrew Burton--Getty Images Women hold banners during a protest for higher wages for fast food workers on March 18, 2014 in New York City.

Protests expected to reach 190 cities

Fast food workers’ campaign for better pay continues to spread.

Workers in hundreds of cities once again walked off the job Thursday, organizing protests advocating for a $15 per hour living wage and the right to unionize.

Fast food workers have gone on similar strikes several times in the past two years, but this time they were joined by convenience store workers from retailers like Big Lots and Dollar Tree in some cities. Organizers said strikes and protests hit 190 cities in total.

The strikes, backed by the Service Employees International Union, began two years ago at a few fast food restaurants in New York and have been growing ever since. So far, fast-food chains themselves haven’t given higher wages to workers in any widespread manner, instead maintaining that they offer competitive pay and benefits.

But the political effect of the strikes seems to be growing. President Barack Obama has acknowledged fast food workers’ plight in his campaign to push the federal minimum wage to $10.10, and dozens of cities and states have boosted their minimum wages. Two cities, Seattle and San Francisco, have even pledged to raise their minimum wages all the way to $15.

TIME The Brief

#TheBrief: Why Even Red States Want a Higher Minimum Wage

The first minimum wage was $0.25. Today, that’s $4.22

San Francisco and Oakland voted Tuesday to increase their minimum wages, and so did four states that roundly backed Republicans. Rising standards of living and inflation may be what triggered this increase, but is paying workers more the one issue we can all agree on?

Watch #TheBrief to find out what’s driving the push to pay their workers more.

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