America's 5 biggest low-wage employers

Two-thirds of workers earning under $10 an hour work for large corporations. Here are the biggest employers in low-wage industries.

By 247 Wall St. Nov 21, 2012 4:33PM

Image: Man holding empty wallet © CharlesSturge.com, Image Source, Getty ImagesBy Trey Thoelcke, Michael Sauter, Alexander E. M. Hess and Samuel Weigley, 24/7 Wall St.

 

The gap between rich and poor is well illustrated by the large multi-billion-dollar corporations employing thousands of low-wage workers. With the Great Recession over, not only are many of these companies now hitting record profits, but their executive pay remains spectacularly high.

 

Yet, according to a refport released by the National Employment Law Project, the current federal minimum wage the workers are often paid, is worth 30% less than it was in 1968 in terms of purchasing power.

 

Two-thirds of low-wage workers -- those that are paid less than $10 an hour -- are employed by large corporations with at least 100 employees reports NELP. All of the largest companies in low-wage industries, including McDonald’s (MCD)and Wal-Mart Stores (WMT), have hundreds, even thousands, of stores across the country. Based on NELP’s July 2012 report, "Big Business, Corporate Profits, and the Minimum Wage," 24/7 Wall St. reviewed the 12 American companies that pay the least. You'll find the biggest 5 listed below.

 

These employers fall into one of two categories. They are are either large national restaurant chains employing tens of thousands of cashiers and cooks, or large national retailers, employing tens of thousands of cashiers and salespeople.

 

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In addition to low wages, many of these companies have a history of poor labor relations that extends beyond underpaying their employees. Long hours, unsafe or unpleasant working conditions, limited benefits and restricting access to full-time work, often accompany minimum wage jobs in many of these companies.

 

The recession has affected every company on this list. Many used the downturn to explain reductions in employee benefits, long hours, and continued low pay. However, the recession is over for a majority of minimum-wage employers. Nine of the 12 companies on this list have been profitable for the past three years. Of these 12 companies, a full ten had higher revenue compared to 2010.

 

Despite this fact, improvements in employee benefits or an increase in pay have not materialized for workers at most of the companies on the list.

 

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Based on the National Law Employment Project’s report, 24/7 Wall St. identified the 12 largest companies in industries that are primarily low-wage employers. The report also provided the most recent available data on the total size of the companies’ workforces, the recent performance of the corporations in terms of revenue and profit, and the highest executive pay at these companies. 24/7 Wall St. also reviewed revenue, income, and the number of stores from company filings.

These are the companies paying Americans the least.


1. Wal-Mart Stores (WMT)
 U.S. workforce: 1,400,000
 CEO compensation: 
$18,131,738
 Revenue: 
$446.95 billion
 Net income: 
$15.70 billion
 No. of U.S. stores: 
3,868

The labor practices of Wal-Mart Stores (WMT) have long received negative attention in the press, but that has not affected investors much. WMT’s share price rose more than 48% in the past five years. In 2008, Walmart agreed to pay $640 million in settlements of dozens of class-action lawsuits that claimed the company deprived workers of pay for time worked. In October a class action lawsuit was filed in a Chicago federal court alleging that the retailer had violated minimum wage and overtime laws. Walmart workers have begun to strike, and some plan to walk off the job on Black Friday, the busiest shopping day of the year. Walmart has filed an unfair-labor-practice complaint against the United Food and Commercial Workers International Union to prevent this from happening.

2. Yum! Brands (YUM)
 U.S. workforce: 880,330
 CEO compensation: $20,411,852
 Revenue: 
$12.63 billion
 Net income: 
$1.33 billion
 No. of U.S. stores: 
16,006

 

Because Yum! Brands (YUM), the operator of the Taco Bell, Pizza Hut and KFC chains, is one of the biggest employers of low wage workers, it takes benefits seriously. According to watchdog group Center for Media and Democracy, the fast food giant co-chaired the labor and business regulation subcommittee of the American Legislative Exchange Council, a "corporate-funded bill mill" that encourages laws that benefits its corporate members. At a 2011 meeting, attendees considered model bills designed to override paid sick leave legislation in the states. In 2012, following negative press over ALEC initiatives and the departure of McDonald’s, Wendy’s, Yum! Brands became one of several large companies to abandon the council.

 

3. McDonald’s (MCD)
 U.S. workforce: 859,978
 CEO compensation: 
$4,073,748
 Revenue: 
$27.01 billion
 Net income: 
$5.50 billion
 No. of U.S. stores: 
14,098

 

McDonald’s (MCD) is the king of fast-food, with revenue greater than any other restaurant operator on this list, and far more locations as well. The company’s website offers a long list of awards and recognition for the diversity of its workplace. But even McDonald’s is not immune to economic pressures. The company just reported its first monthly drop in global revenue at locations open more than a year, down 1.8% in October. McDonald’s USA president, Jan Fields was subsequently ousted to be replaced by Jeff Stratton, who is currently global chief restaurant officer.

 

Target (TGT)
 U.S. workforce: 365,000
 CEO compensation: 
$19,707,107
 Revenue: 
$69.87 billion
 Net income: 
$2.93 billion
 No. of U.S. stores: 
1,763

 

Shortly after competitor Wal-Mart announced that it would open its doors for Black Friday shoppers at 8 p.m. Thursday, Target (TGT) then said that it would also open its doors Thursday night. Employees were not thrilled by the news. One California-based Target worker drafted a petition calling on Target to "save Thanksgiving" and stick to its Friday opening time. More than 220,000 people have signed the petition. Target insists that it took employees into consideration before making the decision to open early. One executive said, "We had so many team members who wanted to work on Thursday that hundreds of our stores are now keeping lists of volunteers who want to work if shifts open up."

 

5. Sears Holdings (SHLD
 U.S. workforce: 264,000
 CEO compensation: 
$9,932,924
 Revenue: 
$41.57 billion
 Net income: 
-$3.11 billion
 No. of U.S. stores: 
3,510

Many companies like to tout how important their employees are, and Sears Holdings (SHLD) is no different. "Our associates are at the heart of our company and we value teamwork, integrity, and positive energy," says the company’s website. Unfortunately for the employees, the operator of Sears and Kmart has struggled in recent years, as evidenced by its recent massive $3.11 billion net loss, despite having revenue of $41.6 billion. In addition, similar to Walmart and Target, Sears and Kmart stores will be open on Thanksgiving for early Black Friday shopping, meaning the employees will have to work this holiday. Sears said it expects holiday hiring to be about the same as a year ago, while Walmart, Toys"R"Us and other retailers increased their seasonal hires.

 

Click here to read the rest of 24/7 Wall St.'s "Companies paying Americans the least."

205Comments
Nov 21, 2012 5:19PM
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Dislike labor unions all you want, but the simple fact is that without them there would be thousands of companies on this list.   As a retired corp exec I can say that the easiest way for an exec to get a raise and bonus is to reduce the labor cost !  By that I don't mean the management cost, and certainly not the high cost of the "home office",   I mean the hourly workers cost.  Paper pushers at the home office can make $35k to $42k.  Yet the worker who has contact with the customer, and brings in the money, is paid as little as possible. Until this mindset changes there will be no improvement.
Nov 21, 2012 5:47PM
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See those CEO payments. I am sorry, they should not get that much. It is not that hard, and should not be that easy. The economic system is wrong.
Nov 21, 2012 5:54PM
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One way to stop this is for all working Americans to stick together. Don't work for Walmart and don;t shop at walmart. But thats the problem people will not stick together to change things and make it right . And Greedy Coporations know this.
Nov 21, 2012 9:04PM
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to dw9seattle. I spent 30+ years at the store management level and most were closed on holidays, flooring industry. Imagine if a company said we want our employees to have the day to celebrate with their families, we'll match or beat any deal you get at the ridiculous hours sales. Imagine if they paid their employees a bit more $ and set up by store profit sharing. Imagine if they had set schedules so they could organize their lives. Think of the employee loyalty, improved service, retention of employees, cutting down on cost of training, reduced theft, pride in their job, WOW!

The problem is that most of these companies in upper management are book educated and have no idea what it's like to be on the floor, in the warehouse, on the dock and what it's like to have a customer in your face over something, or a company policy you have no control over.

If the big boys ever get to know their companies and not just the boardroom we may get back to what made this the U.S.A.   

Nov 21, 2012 6:03PM
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It’s the union that will provide decent wages for our workers. That is why 47% of Americans do not pay federal income tax because of the low wages they take home.  Asked a Wal-Mart employee if they pay Federal income taxes. Most of them are on food stamps. Your tax money is helping subsidies the workers of Wal-Mart.

Nov 21, 2012 6:48PM
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At all companies, large and small, profits and profit margins are what it is all about--and those at the top get paid the most to generate the most profits.  The sad fact is that the top corporate officers and cronies get paid the most, for squeezing out the most profits--largely by laying off workers.  Other cost-savings are much harder to come by.  Unfortunately, those top dogs and fat cats are paid far more than they are worth.  Most are greedy sociopaths who cravenly smile while burying the hatchet in a worker's back.  Society continues to reward them with low taxes on top of their millions.  Unbridled capitalism is also known as feudalism.  The armored knights have been replaced by private armies and bought police/local governments. 

Full-time work at $10/hr is about $16,000/year, and many workers are only being paid part-time at $8-$9/hr.  At 30 hours/week and not much in benefits, that works out to around $12,000 to $13,000/year.  Try raising a child or two on that!

Nov 21, 2012 6:38PM
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This is a result of decades of negative press for unions. They have been demonized and almost eliminated. Unions have their flaws but so does CEO pay packages. If Unions make a comeback entreprenuors will love it because there will be millions of people with alot more money to spend and many will earn enough to pay federal income tax. A good way to cure the deficit and the stagnant economy.
Nov 21, 2012 8:10PM
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None of these surprise me at all especially Walmart.  I haven't spent any money with Walmart in probably two years and I plan on keeping it that way.
Nov 21, 2012 10:40PM
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Lets make this discussion really simple. Sam's club, Costco. Both charge a membership fee. The difference is. With our Costco membership we get cash back which is more than our membership every year. We have a Costco American Express card with no annual fee and cash back also on the card. Costco employees make $12-14 dollars an hour to start and promotions are available to all employees.

Their sales continue to rise and if you have a return there is never a problem. No wonder they are always smiling. Go on the internet and see how few hours they are open. They don't drive their employees into the ground and you never hear an employee complain. There are very few companies that realize the reputation of the company is made by it's employees.

Nov 21, 2012 6:55PM
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Consumers have choices.  I think we are going to turn a page soon. One were people see the truth and stand up for others. By NOT SHOPPING at WALMART. Send a message to the greedy pigs that ruined there fathers company. 
Nov 21, 2012 8:07PM
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The CEO's could do without a few million.  If every big corporation's CEO's gave up a few million America would be a better place to live.  Naturally that will never happen!!!  Money is the root of all evil.  Just glad all the campaign adds are over where I live.

Nov 21, 2012 8:52PM
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The pay variance between YUM Brands CEO and McDonalds CEO is large… Maybe YUM Brands shareholders should revolt by dumping their shares and buy McDonalds?


In my opinion, the ratio of executive to line staff pay is outrageous. Assuming the average line staff worker makes $10/hr at McDonalds, the CEO probably makes 195 times as much. At YUM Brands, it is probably something like 981 times as much. You might be able to argue the CEO of McDonalds is worth 195 times the pay, but doubtful you can make the same argument for YUM Brands.


In reality, most of these service sector jobs do not require skilled labor. If almost anybody can perform the scope of work, it is likely going to be a low-wage job. This is especially true when you consider the fact that we have more available labor than we do jobs.


There was an earlier post regarding low cost goods from over sea’s leading to low paying jobs domestically. This is absolutely true. True free market mechanics would indicate that the lower cost a good is to produce the lower the wages. Unfortunately, while the cost of many goods are cheaper now: clothes, electronics – others are much higher: healthcare, housing, education.


As it turns out, outsourcing so much production to low-cost countries does have negative consequences. Our biggest export over the last decade probably has been inflation… The net trade deficit has resulted in a huge transfer of wealth from the American middle class. 

Nov 21, 2012 9:45PM
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I work 7 years for Target. You start out with a decent raise as you gain in Salary they give you a dime the following year a dime so you Quit. They can hire somebody cheaper. They Brag about giving Money to Schools not the working People. You are a Labor lifting heavy items to them is take it or Quit.

They only care about making money and throw some crumbsto the working people. When they are slow they cut your hours . You never get a 40 hour week Full time People working in the store.

Nov 22, 2012 11:19AM
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ceo-s with an annual income of 18,19,and 20 million a year-courtesy of millions upon millions of employees working for poverty level wages trying to feed their families ---------am i the only one that can see something wrong here ?
Nov 21, 2012 4:59PM
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Not a surprise about Sears/Kmart or SHLD on this list.
Nov 22, 2012 1:28AM
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President Teddy Roosevelt leveled the playing field between the millionaire/billionaire industrialists and labor. Since we already have history, we should study it so we can prevent these mistakes from happening again.

""Let the watchwords of all our people be the old familiar watchwords of honesty, decency, fair-dealing, and commonsense."... "We must treat each man on his worth and merits as a man. We must see that each is given a square deal, because he is entitled to no more and should receive no less." "The welfare of each of us is dependent fundamentally upon the welfare of all of us."
 - Teddy Roosevelt, Sept 7, 1903
Nov 21, 2012 10:06PM
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The government subsidizes these companies low wages and lack of benefits by providing food stamps, Medicaide and subsidized housing.
Nov 21, 2012 5:26PM
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We're all going to see absolutely no change, except in the incomes of some CEO and possibly narrower earnings.  Capitalism has ways to take care of the numbers and businesses will survive and employment will remain available in low skilled jobs.
Nov 21, 2012 11:24PM
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I see alot of blame hitting Wal-mart here but I wonder if people here are aware how BAD employees are treated under United Food and Commercial Workers Union (UFCW) are treated?  Years ago I worked at Kroger under a UFCW contract and I can tell you I would have made much more money and had better benefits working for Wal-Mart.  The idea that this union is going to "help" Wal-Mart workers is ridiculous.  The only people the UFCW or any of these unions care about is Union Management.  Like "secret" meetings between union leadership and management with union leadership suddenly buying a new car or home.  Yeh.  Kroger pays minimum wage and if your lucky you get 25 hours a week, for this generous gift you get to pay the union $20.00 per month. Don't be fooled by these loser unions the don't care about people.
Nov 22, 2012 6:19PM
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Most if not all low paying companies do not want workers to unionize because it will cause them money in the form of having to pay their employees more money and give them benefits and over time pay

 

I worked for one of these companies they tell you that you can make all sorts of earnings but in reality you would have to work 80 - 90 hours a week to make a living wage.

 

practices like paying employees piece rate should stop

 

on their bulletin board was posted that employees should apply for food stamps ( income eligible)    

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