Wal-heart

It appears Wal-Mart does have a heart, of sorts.

Today the world’s third largest corporation announced it would contribute more than $2 billion towards the fight against hunger in America.

The donation will come in the form of 1.1 billion pounds of food from Wal-Mart stores, distribution centers and Sam’s Club locations (valued at $1.75 billion), and grants totaling $250 million to support hunger relief organizations.

Considering that an estimated 49 million Americans are struggling with hunger, this is welcome news. And, despite Wal-Mart’s poor track record when it comes to paying its two million employees a livable wage, this is an opportunity to give to give some credit for doing good.

Further, it is admirable that Wal-Mart has acknowledged not only that hunger exists in this nation, but that it is widespread. According to Feeding America an estimated 1 in 6 people in our country don’t know where their next meal is going to come from on any given day.

Feeding America’s report, Hunger in America 2010, found the number of individuals who are food insecure increased 36 percent between 2007 and 2008. The organization, which has been a partner with Wal-Mart in the fight against hunger since 2005, is the nation’s leading domestic hunger-relief charity, supplying food to more than 37 million Americans each year.

“Sadly, hunger is not an abstract concept in America. The staggering reality is that 1 in 6 people in our country don’t know where their next meal is going to come from on any given day. Hunger exists in all of our communities, even if we can’t always see it. People across the nation are being forced to make tough decisions – choosing between paying for dinner for their families or paying medical bills, utilities, and even rent.” –Vicki Escarra, President & CEO, Feeding America

Though Wal-Mart is far from the only company that pays low wages, it’s massive size means increasing wages can have a significant impact with minimal impact on its bottom line.

The December 2007 study “Living Wage Policies and Wal-Mart,” conducted by the UC Berkeley Center for Labor Research and Education found that increasing wages to a minimum of $10 per hour for employees would amount to $2.38 billion a year in payroll costs, or 9.3 percent of Wal-Mart’s current hourly payroll. Though a sizable sum, it would have little impact, even if  this amount was solely passed on to consumers. The study found that, if distributed evenly among all consumers, it amounts to 36 cents per shopping trip for the average consumer.

Using Wal-Mart’s figures on U.S. sales and customers, the study found the average customer spends $40.30 per shopping trip, and makes 27 shopping trips per year, spending $1,088 annually at the store. The 36 cent increase amounts to a 0.9 percent increase in prices. For the average shopper, this would result in a price increase of $9.70 a year. Surely paying employees wages that enable them to be self-sufficient is worth $10 per customer annually.

Let us hope that this is but a first step as Wal-Mart goes beyond merely recognizing that hunger exists to tackling poverty, it’s root cause.

–By Jennifer E. Cooper