Wal-Mart Fan Disagrees With Its Wage Caps
Independent filmmaker Ron Galloway loved Wal-Mart Stores Inc. enough to personally finance a movie extolling the world’s largest retailer’s virtues.
So he was a natural fit for the company’s advocacy group, Working Families for Wal-Mart -- until a week ago when he quit its board.
Galloway said Tuesday that he had been troubled by Wal-Mart’s recently announced plan to establish wage caps for hourly employees.
When a Wal-Mart veteran featured in his film called him and became distraught that she would never get another raise, Galloway said, it put him over the edge.
“I struggle with talking about these negatives because I shop at Wal-Mart every day; I’m not disgruntled -- I was a Wal-Mart advocate and still am,” Galloway said.
“I understand Wal-Mart has to find a way to grow earnings and increase shareholder value, but I don’t believe they should do it on the backs of their long-term employees.”
Bentonville, Ark.-based Wal-Mart said in August that it was instituting maximum salary levels to encourage its 1.3 million U.S. workers to advance through the ranks rather than remain in the same positions.
Employees who earn more than the maximum amount for their jobs -- longtime workers -- won’t see a salary decrease. But they no longer will be entitled to raises unless they change positions.
A spokeswoman said fewer than 3% of Wal-Mart’s hourly employees -- which could be about 39,000 workers -- had hit the maximum salary.
Such caps are common in the retail industry, the company said, adding that caps were already in place for the rest of Wal-Mart employees.
Kevin Sheridan, a spokesman for Working Families, said Galloway left the group because of disagreement with Wal-Mart’s efforts to improve its environmental record.
“Ron is finishing work on a new film on the so-called myth of global warming that runs contrary to the aggressive sustainability agenda that Wal-Mart is pursuing,” Sheridan said. “In doing so, both parties agreed that departing the national committee would be best. We thank Ron for his service to our organization and wish him well.”
Galloway, who in November produced with his brother “Why Wal-Mart Works: And Why That Makes Some People Crazy,” made a name for himself with TV news appearances praising the giant retailer.
At the time, Galloway said he rushed his film, which was screened in Bentonville, to piggyback on the widely circulated anti-Wal-Mart film by Robert Greenwald, “Wal-Mart: The High Cost of Low Price.”
Galloway said Working Families had asked him to be part of its national steering committee in December.
In that role, Galloway said, he participated in conference calls to plan how best to represent the company and respond to growing criticism of Wal-Mart’s treatment of workers.
Wal-Mart’s critics welcomed Galloway’s resignation.
“I think it says something very powerful that one of their chief spokesman agrees with our position that this company is not changing for the better,” said Chris Kofinis of WakeUpWal-Mart.com.
Working Families, the pet project of former Clinton advisor Leslie Dach, set up a national steering committee as well as several state groups to tout the benefits Wal-Mart brings to customers and communities.
At the time it announced the wage caps, Wal-Mart said it would roll out an average pay increase of 6% for new hires at 1,200 Wal-Mart and Sam’s Club warehouse stores nationwide, including some of its approximately 200 stores in California.
The company also said it was increasing performance-based pay raises but declined to say by how much.
A spokeswoman said Tuesday that salary caps would be subject to yearly review to ensure that Wal-Mart’s wages remained competitive. Workers would be entitled to additional pay beyond the salary maximum if they work at night or in competitive markets, she said.
Those benefits aren’t enough to persuade Galloway to continue to publicly support Wal-Mart.
“I’m still a fan; I’ll shop there later on today,” he said. “I just know a lot of people affected by this and it’s something Wal-Mart needs to rethink.”
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