A Retail Giant Gives Millions for Workforce Development. But Could It Do More?

photo: QualityHD/shutterstock

photo: QualityHD/shutterstock

Walmart and its foundation recently pledged $4 million for workforce development in a move that may raise eyebrows among those familiar with the retailer’s reputation when it comes to its own labor practices.

Workforce initiatives are popular among funders, especially the philanthropic arms of corporations that see such efforts as a way to expand economic mobility and address future labor needs. Some criticize this type of intervention, though, as ignoring the deeper structural forces that drive inequality—and diverting attention from the central role of business itself in this problem.

The new grants are part of Walmart’s five-year, $100 million effort to make it easier for employees in retail and similar sectors to learn skills that will advance their careers. So far, the company and its foundation have distributed more than $80 of the $100 million total.

The $4 million will go to three organizations to prepare workers for jobs that demand 21st century skills and credentials. About $2.4 million will go to the Foundation for California Community Colleges to launch an online service aimed at adult learners. Another $1 million will go to edX for its “Micro Bachelors” program, a series of courses aimed at teaching skills useful in the workplace.

Both those grants are from the company itself. In addition to those, Walmart Foundation provided Code for America with a $250,000 grant to explore how government technology systems can provide better access to quality jobs.

The company also announced it would be expanding higher education for its own workers, specifically those working in its eCommerce division. As part of the program, Walmart subsidizes a bachelor’s or associate’s degree in business or supply chain management from the University of Florida, Brandman University or Bellevue University.

Workforce development programs are extremely popular right now among funders, who see a growing need to address the mismatch between the skills and credentials required for well-paying jobs and the qualifications that workers possess.

A 2017 report by the McKinsey Global Institute estimates that by 2030, anywhere from 400 to 800 million people will be displaced worldwide by automation. Of that, from 75 to 375 million will need to switch to new industries and learn new skills to do so.

A related issue is the number of jobs that require a college degree. By 2020, 65 percent of jobs will require a college degree or some post-secondary education, according to a report by Georgetown University’s Center on Education and the Workforce. Based on Census data, the number of Americans with a four-year degree has reached an all-time high, but still only accounts for about a third of the adult population. That surprising statistic underscores the importance of adult education programs of the kind that Walmart is funding through the Foundation for California Community Colleges.

More corporate funders have swung behind workforce development programs in recent years as the labor force has tightened and companies have struggled to find enough people qualified to fill open jobs, especially middle-skilled positions that require specific competencies but not necessarily a four-year degree college degree.

Workforce training initiatives are particularly popular in the banking sector. JPMorgan Chase and Citi have both donated money to support training programs. Early on in its work in this space, JPMorgan Chase sponsored reports for several metro areas in 2014 that examined the mismatch between local employers’ job openings and the skills of local workers. This and related research has informed a number of its workforce efforts. In Harris County, Texas, for example, the bank partnered with local employers and the Council for Adult Experiential Learning to build a platform to provide workers with access to the information they need to take advantage of local jobs in the petrochemical industry.

A relative newcomer to workforce issues is the Ballmer Group, the grantmaking organization of Microsoft billionaire Steve Ballmer and his wife Connie. It’s recently given to several workforce development initiatives as part of its larger mission of reducing poverty and expanding opportunity. Earlier this year, the group committed $4.5 million to the National Fund for Workforce Solutions. It also backed Genesys Works, a nonprofit that teaches high school students the technical skills needed by companies, and National Skills Coalition, which advocates for state and federal policies that invest in training workers.  

Michael Bloomberg has shown a big interest in career readiness and technical training as it applies to young people. Bloomberg indicated that preparing high school students for careers would be a central piece of his  $375 million, five-year education initiative announced earlier this summer.

The Obama Foundation is also working on workforce development, especially among youth, in the South Side of Chicago. In fact, the former president’s largest personal donation as a philanthropist was for work on this issue. The foundation has said it’s committed to revitalizing the city’s South Side as part of its mission. Part of the workforce training is to ensure that when the presidential center opens, locals will be able to fill those jobs.

Workforce development initiatives have their merits for the workers they reach, but scaling can be difficult and these efforts leave far more workers behind. Another issue with this type of intervention is that many of the new jobs created in the economy are in retail and the service industry, two sectors known for their low wages and scarce benefits. With additional training, workers can move up to better jobs, but supply of such jobs is limited.

In 2015, the National Employment Law Project estimated that more than 40 percent of U.S. workers make less than $15 an hour. Even as the economy has improved, wages have barely budged.

Workforce development initiatives overlook the fact that many jobs that were traditionally considered “good jobs” didn’t inherently guarantee high wages, good benefits or job security. They provided workers with good wages and benefits because workers organized and demanded them—and because many corporate leaders, most famously Henry Ford, believed that well-paid workers were the backbone of a strong middle class and a robust economy. As labor unions have declined and corporate norms have changed, many companies have embraced low-road employment practices. Low pay and scarce benefits are the norm in many sectors, especially the retail and service industries.

Some may find it ironic that Walmart, a company notorious for its low wages, is pursuing a philanthropic strategy intended to benefit workers. In 2014, Americans for Tax Fairness, a coalition of 400 progressive groups across the country, estimated that the company cost taxpayers $6.2 billion because low wages force Walmart employees to supplement their incomes with public assistance.

In a statement to IP, Walmart defended its treatment of workers, saying:

Walmart is proud to be a place of opportunity, where 75 percent of our store management teams began as hourly associates and over 200,000 associates are promoted each year into roles of greater pay and responsibility. Over the past few years, we’ve invested over $2.7 billion in wages, training and education; in fact, we’ve raised wages 3 times in the past 3 years, and trained nearly 1 million associated through both our Pathways and Academies training programs. We’re empowering our people with the skills, confidence and the technology they need to serve our customers and own their career.

PayScale, a leader in analyzing worker compensation, estimates that average pay for employees at Walmart stores is $12 an hour. That is well above the minimum wage, but still not enough for the company’s workers to afford housing in large swaths of the U.S. Many of these workers continue to rely on the ETIC, SNAP, Medicaid, and other government benefits to get by—a de facto taxpayer subsidy for a corporation with $127 billion in profits in 2017.

As the biggest private employer in the country, Walmart is in a position to turn retail jobs into jobs that pay well, provide benefits and job security, protect workers’ right to organize, and allow families to thrive. That would probably cost the company more than the $100 million it put up for job training, though.