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Wal-Mart calls for minimum wage hike
CEO Lee Scott tells executives he's urging congressional action in a bid to help 'working families.'
October 25, 2005: 12:47 PM EDT
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CNN's Andy Serwer reports on Wal-mart's proposal to raise the minimum wage and the No. 1 retailer's new health plan. (October 25)
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NEW YORK (CNN/Money) - Wal-Mart CEO Lee Scott said he's urging Congress to consider raising the minimum wage so that Wal-Mart customers don't have to struggle paycheck to paycheck.

Scott told Wal-Mart (Research) directors and executives in a speech Monday that he believes "it is time for Congress to take a look at the minimum wage and other legislation that can help working families."

"The U.S. minimum wage of $5.15 an hour has not been raised in nearly a decade and we believe it is out of date with the times," Scott said. "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 pay checks."

Given increasing gas prices and other economic pressures on Wal-Mart customers, Scott went on to say that Wal-Mart shoppers will further be challenged to "support themselves and their families."

"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," he said.

Tracy Sefl, a spokeswoman for Wal-Mart Watch, a group that's been highly critical of the retailer, said Scott's comments on raising minimum wage were "laughable and out of left field."

"I find it disingenuous and laughable that Lee Scott makes these remarks while the company hires lobbyist such as Lee Culpepper who oppose raising the minimum wage," Sefl said.

"We would be the first to applaud real change. But when a comment on raising minimum wage is dashed off and it flies in the face of Wal-Mart's own corporate stance, that's laughable," she added.

As the world's largest retailer and largest U.S. non-union private sector employer with more than 1.3 million "associates" in its U.S. stores, Wal-Mart has been a lightning rod for criticism about its wage and benefits policy as well as lawsuits alleging gender discrimination. It continues to draw fire for allegedly stifling small businesses and squeezing its vendors.

Wal-Mart maintains that it pays above the current $5.15 an hour minimum wage to its employees.

Scott also discussed a new health-care package with lower premiums for Wal-Mart workers.

The new "Value option" plan, which will be introduced Jan. 1 2006, offers insurance coverage of $23 a month "and kids covered for less than 50 cents per day ... no matter how many children," Scott said.

"We will offer this plan for $11 a month, with children covered for less than 30 cents per day in some markets -- and we are working to offer these savings nationally," he said.

Said Scott, "We want to drive out as much as 25 percent of the cost in the healthcare system through leading a coalition of business, government and industry leaders in applying standards and technologies for efficiency."

Scott also touted the retailer's efforts to present itself as a more environmentally friendly company.

Whether it is jobs, health care, product sourcing or environmental impact, "it is clear to me that in order to build a 21st century company, we need to view these same issues in a different light," Scott said in the speech.

"Our environmental goals at Wal-Mart are simple and straightforward," he said. "One, to be supplied 100 percent by renewable energy. Two, to create zero waste. Three, to sell products that sustain our resources and environment."

In energy-saving moves that will save Wal-Mart money, Scott said the company plans to increase the fuel efficiency of its truck fleet -- among the largest in the country -- by 25 percent over the next three years and double it within ten years.

"If implemented across our entire fleet by 2015, this would amount to savings of more than $310 million a year. Compare that to doing nothing," he said.

In addition, Wal-Mart said it will show preference to factories in China that participate in a "green company program" where the company will show preference to those suppliers and their factories involved in such a program.

"We are also committed to reducing our solid waste from U.S. stores and clubs by 25 percent in the next three years," Scott said. "We're replacing PVC packaging for our private brands with alternatives that are more sustainable and recyclable within the next two years."

Scott delivered the speech on the eve of the company's annual two-day conference for analysts at its Bentonville, Ark., headquarters.

In a Q&A session with reporters Tuesday to discuss the company's new initiatives, Scott said hurricane Katrina motivated him to rethink some of the company's policies.

"As we watched and experienced how the world reacted to our efforts following Katrina, it was time for me to send a message to our associates about who we can become as company," Scott said. "Our associates need to know how we can make a difference. It's a personal thing on our part. I felt it was the right time to share a bigger picture that tells a bigger story."

Said Sefl, "We do believe Wal-Mart is at a crossroads post-Katrina and it recognizes that. But while Scott talks about improving the environment and doing better for trees and nature, what's missing from the equation is the people aspect."


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