Wal-Mart Speak: Hiring Veterans, Buying American – Just Don’t Mention Bribery

Wal-Mart Stores Inc. (WMT) waxed patriotic last week with news that it will hire any honorably discharged U.S. veteran who asks for a job within a year of leaving active duty, as the New York Times and others reported.

Has the giant retailer, which employs about 1.4 million in the U.S., lost its cost-control bearings? Is it so anxious to generate some positive press, in the wake of a widening foreign-bribery scandal, that it would sacrifice its vaunted profit margins by taking on a bunch of workers it doesn’t need?

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Not to worry, investing fans of Wal-Mart, because the offer is a canard. Most jobs offered through the veterans hiring program will be in Wal-Mart stores and Sam’s Clubs, with some positions in distribution centers. Wal-Mart -- the largest private U.S. employer, says the 100,000 vets would be hired over the next five years. Turnover alone would seem to ensure Wal-Mart doesn’t get stuck with more workers than it can handle.

But there’s even a better reason it won’t be swamped with vets: most who’ve served in the military can do much better. Market-research firm IBISWorld says the average Wal-Mart worker earns $8.81 an hour. Wal-Mart says its national average hourly wage is $12.40, but that figure includes managers and other higher-paid employees. It’s like Greyhound offering jobs to all airline pilots: little risk the offer will be accepted.

According to 2009 data from the Veterans Administration, vets are better educated as a group than their non-veteran counterparts. Nearly 32% of male veterans in the U.S. have completed some college, compared to 25% of non-veteran men. Female veterans -- whose median age is 20 years younger than that of male veterans -- are even farther ahead, with 43% having completed some college, versus 29% of women who never served in the military.

More than 10% of male veterans and 11% of female veterans have advanced degrees. These are the candidates for Wal-Mart’s near-minimum-wage jobs?

Drilling down a bit more, Wal-Mart admitted it won’t give a full-time job to every veteran who wants one, which means some will get a part-time position that pays so little, they’ll be eligible for food stamps. Meanwhile, Wal-Mart can earn up to $9,600 in tax credits for every veteran it hires.

With its strong gross profit margins, Wal-Mart, facing periodic protests and labor organizing drives over its low wages, could afford to pay more, as we detailed in this YCharts story.

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data by YCharts

So, Wal-Mart issued a brilliant press release, even if its promise amounts to little. The retailer also appealed to national pride by pledging to increase its sourcing of American-made products by $50 billion over the next decade. Given the company’s annual sales exceed $400 billion, that’s a pretty small pledge, eh?

Amy Merrick, a contributing editor at YCharts, is a former staff reporter for the Wall Street Journal, where she spent 11 years writing about the Midwest economy, state and municipal finances, and the retail and banking industries. Her work has been published in the Poynter Institute’s Best Newspaper Writing series. She can be reached at editor@ycharts.com.

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