Jobs and Opportunities
One of the most important roles we play in sustaining positive progress in our communities is providing job opportunities. When we open a store in a community, we often receive thousands of job applications. For many people these are not just jobs; they are a first step in building a career and taking ownership in a business and fostering our company’s growth.
Today, we employ 1.9 million men and women in 14 markets around the world, with 1.3 million of those jobs in the United States. Some are students seeking part-time and seasonal jobs, others rely on Wal-Mart for supplemental income and many others see us as a place to grow a job into a life-long career. In addition to the jobs we directly create, we generate thousands of job opportunities in industries, including construction and materials, IT, agriculture and manufacturing.
To help individuals more easily apply for positions within our company, in 2003 we introduced a network of over 6,200 kiosks in all of our U.S. Wal-Mart stores and Sam’s Clubs. In 2006, a network of kiosks was installed in the Distribution Centers. Since 2003, these on-line hiring centers have accepted more than 21 million applications for hourly employment opportunities.
At the global, national and regional levels, we pay Associates competitive wages and we find that the jobs we offer are truly needed. For instance, when we opened a store just outside of Chicago in 2006, 25,000 people applied for 325 jobs. In the United States, the average hourly, full-time Associate salary for the Wal-Mart stores division is $10.76.
These wages, while competitive with industry, are in many cases for entry level jobs. We realize that many stakeholders expect us to pay more, while other stakeholders are concerned about our ability to remain competitive in serving our customers. We see ways to address both concerns. An example of this was our advocacy for an increase in the federal minimum wage that went into effect in July. This was a matter not only of advocating for our Associates, but our customers too.
As we work to help Associates develop and grow within the company, we are faced with a challenge that is intrinsic to our industry, and that is the high turnover rate in the retail business. That is not to say that Associates don’t build careers at our company – many do. In fact, approximately three-fourths of management-level Associates in our U.S. stores started as hourly Associates. After four to five years with our company, an hourly Associate is typically positioned to advance to assistant store manager. In 2006, more than 13,000 Associates were promoted to management positions. It’s important to note that most of these positions do not require a college degree, which keeps the door for advancement open to all of our Associates. And as these Associates move up within our company, we need to continue to find opportunities for them within their communities.
In every community where we operate, we compete to serve our customers. While there are many positive aspects of the competition, there can be unintentional economic consequences. Various studies have examined this complex issue – many of them conflicting and inconclusive. It is important to us to understand not only how many jobs we create, but to have a more comprehensive understanding of the total impact those jobs can have on the communities in which we operate.
We also see an opportunity to work with our communities to develop our stores in a way that will foster other businesses. To this end, in April 2006, we announced a Jobs and Opportunity Zone program. Through the program, 10 designated Wal-Mart stores will work with the surrounding local businesses and suppliers to spur job creation and economic development in communities where it is needed most. Each of the zones is anchored by a Wal-Mart store, which works with organizations (i.e., local chambers of commerce and minority business groups) and small businesses to generate economic opportunity for surrounding neighborhoods and to direct grant money to the community. Through the program, small businesses enjoy benefits like free advertising on the Wal-Mart in-store radio network and in local newspapers. We are also working to produce an annual “Wal-Mart Trends Report” which we will share exclusively with the small business community. Beyond benefiting the 10 designated communities, our Jobs and Opportunity Zone program benefits our company by teaching us how to better interact with and support all of our communities.
To date we have opened seven of our 10 designated zones. They are located in: Chicago, Il.; Cleveland, Oh.; El Mirage, Ariz.; Landover Hills, Md.; Portsmouth, Va.; Richmond, Calif.; and Sanger, Calif. Future zone openings provide us with the opportunity to learn from mistakes and to build on the progress that we’ve made. As we work to open the three remaining zones it will be important to apply what we have learned through previous zone openings to help us build even more effective and more meaningful relationships with local businesses. Our success here will enable us to determine if, how and when we expand the program.
Saving People Money So They Can Live Better
Our economic impact on communities also encompasses the money we save our customers every year. Through the efficiencies and strength of our supply chain, we are able to offer our customers low prices on the products they need and want. A study undertaken by Hausman and Leibtag concluded that when compared to traditional U.S. supermarkets, we offer many identical products at an average price of about 15 to 25 percent lower. Underscoring our belief that we are a vital engine for growth in lower-income, and consequently under-served communities, studies validate that lower-income households in particular benefit from our low prices.
The effect of our competitive prices transcends the customers who shop in our stores. Numerous studies have found that we drive down the price of consumer goods across the board, lowering the cost of living even for those who never shop at Wal-Mart. When we move to a community, supermarkets lower their prices in response to the prices we offer. In fact, an independently-certified Global Insight analysis estimated that consumer prices in the United States are 3.1 percent lower as a result of Wal-Mart, which corresponds to a 0.1 to 0.2 percentage-point reduction in the annual inflation rate over the last two decades. In 2006, this translated to a savings of more than $2,500 per household.
Fostering Sustainable Economic Growth around the World
Over the years, as we have expanded our footprint to include 14 markets, we have seen the many ways that Wal-Mart can influence local economies around the world. As in the United States, our global impact encompasses the jobs we create, the money we save families, the tax revenue we generate and the efficiencies we bring to the economy as a whole. But it also encompasses the unique programs we support in different countries around the world – especially in developing markets – to foster economic development. For instance, in Mexico we operate a program called “Giving is Also an Art.” The program supports local communities by selling handiwork made by local women in our Superama and Sam’s Club locations. One hundred percent of the proceeds are returned directly to the communities where the crafts are made.
This is but one project, and as we grow internationally, we must continue to find new and innovative ways – beyond simply fulfilling our business objectives – to support economic development in the communities where we operate.
In April 2006, a store on the West Side of Chicago was designated the first Jobs and Opportunity Zone. The store opened in an area with a historically high unemployment rate. It was also the first Wal-Mart within the Chicago city limits. The zone has served as a true anchor for development in the West Side. Since Wal-Mart opened, Menard’s, CVS, Aldi, Panera Bread and Bank of America all decided to build in the community. To support the surrounding community, since September of 2006, Wal-Mart has committed over half a million dollars to local charities, including local chambers of commerce, and has generated millions in tax revenue. In addition to Chicago, other zones include: Cleveland, Oh.; Decatur, Ga.; El Mirage, Ariz.; Landover Hills, Md.; Portsmouth, Va.; Richmond, Calif.; and Sanger, Calif.