30 May 2024 5 min read

Beyond the minimum: why we believe Walmart should pay a living wage

By Angeli Benham

We believe paying a living wage is imperative and can be beneficial to companies and the broader economy.


Shareholder Commons has filed a shareholder resolution on behalf of LGIM America at Walmart’s* 2024 AGM, calling on the company to develop a living wage compensation policy.

A living wage is the remuneration received by a worker for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family.1 In March 2023, the International Labour Organisation (ILO) set out its own definition of a living wage: “the wage level that is necessary to afford a decent standard of living for workers and their families, taking into account the country circumstances and calculated for the work performed during the normal hours of work”. Ensuring a worker is paid sufficiently to support themselves and their family to a standard of “human dignity” is also set out in Article 23 of the Universal Declaration of Human Rights.

Walmart is the world’s largest food retailer, with a turnover of $611.3 billion2, and the largest employer in the US. Its latest annual report states that it employs approximately 2.1 million employees globally, and approximately 1.6 million in the US. In the US, approximately 92% of store employees are paid hourly and approximately 69% of employees are full time. Walmart’s minimum wage for store employees is $14 per hour, this compares to an overall US living wage of $25,3 noting that in some states the figure maybe higher or lower.   

As the largest employer in the US, Walmart not only has a duty of care to its employees but is in a unique position to influence the rest of the labour market. Furthermore, paying a living wage to its employees could have a positive impact on US GDP. It is estimated that closing the living wage gap worldwide could generate an additional $4.56 trillion every year through increased productivity and spending, translating to a more than 4% increase in annual GDP.4 As a diversified investor, increases in GDP may have a positive impact on the value of our clients’ portfolios.5

Paying a living wage might be viewed as simply a cost that could negatively impact a company’s bottom line. This is because the direct cost uplift of paying a living wage is relatively easy to calculate; however, this ignores the hidden costs to the company of not paying a living wage, which are less easy to calculate.

Hidden costs may manifest as additional recruitment costs, loss of productivity because of strike action, and the cost of absenteeism or presenteeism due to financial concerns. A study conducted by the Centre for Economics and Business Research found that absenteeism due to financial worries are estimated to cost UK employers £3.7 billion annually, while presenteeism due to financial worries is projected to have an even higher annual cost of £6.6 billion. The combined total cost in the UK alone is £10.3 billion.6

Low pay is cited as the main cause of employees leaving their jobs in certain US sectors such as retail and leisure/hospitality.7 A US study in 2000 on the supermarket industry suggests the average cost of staff turnover is $190,000, which will not only lower profits but also increase the potential for customer dissatisfaction.8

Many listed food retailers, particularly in the UK, pay their directly employed employees a real living wage. Tesco* and Sainsbury’s* both indicate that paying a living wage is possible without negatively impacting performance. 

In fact, Sainsbury’s took the decision to pay a living wage because they believe that “Only through investing in colleagues can we ensure a continuous improvement in the customer experience which in turn will improve corporate performance. This has proved effective in that not only have we seen colleague engagement scores increase but also, it is partially responsible for an 80bps improvement in productivity in terms of sales uplift versus colleague costs.”9

What led us to file this shareholder resolution?

LGIM has been engaging with Walmart over several years. As the largest global food retailer, it is one of 15 global food retailers that LGIM’s Investment Stewardship team has targeted for engagement.  This engagement programme calls on Walmart and others to set out a policy and a time-bound plan to pay employees within operations a living wage and to work with their supply chain partners to ensure workers can earn a living wage. Walmart’s policies on the living wage are also assessed by the Platform for Living Wage Financials and are rated as ‘embryonic’ – the lowest category under its assessment.10

We recognise the progress Walmart is making investing in store employees by increasing minimum wages to $14 per hour and providing a benefits package that includes opportunities for its employees to improve their skills and earn more.

But it takes time for an employee to upskill and gain a promotion, and not all employees will be able to take advantage of such opportunities. In the meantime, a significant proportion of Walmart employees continue to earn an insufficient basic hourly wage to provide a decent standard of living. Therefore, we encourage Walmart to adopt a living wage policy.

*For illustrative purposes only. Reference to a particular security is on a historic basis and does not mean that the security is currently held or will be held within an LGIM portfolio. The above information does not constitute a recommendation to buy or sell any security.


1. What is a Living Wage? - Global Living Wage Coalition

2. Top 10 Supermarket Retail Chains In The United States | ESM Magazine

3. Living Wage Calculator (mit.edu)

4. Flagship report - The Business Commission to Tackle Inequality (tacklinginequality.org)

5. Labor and Inequality Case Study - The Shareholder Commons

6. Financial wellbeing and productivity in the workplace - CEBR

7. Improving U.S. labor standards and the quality of jobs to reduce the costs of employee turnover to U.S. companies - Equitable Growth

8. New Ideas for Retaining Store-Level Employees (ccrrc.org)

9. Sainsbury’s Investor Relations

10. Platform Living Wage Financials – (PLWF)

Angeli Benham

Senior Global ESG Manager

Angeli leads our global approach to remuneration engagement and voting. She joined LGIM in 2005 and has over 20 years of corporate governance experience. She holds a BSc (Hons) degree in Financial Economics, Post Grad. Diploma in Law, Legal Practice Certificate (LPC), Investment Management Certificate (IMC) and is a graduate of ICSA (Institute of Chartered Secretaries and Administrators).

Angeli Benham