NEW YORK — Why wait on Washington to fix the economy when there’s Wal-Mart?
Wal-Mart Stores Inc., the world’s largest retailer and the nation’s biggest private employer with 1.4 million workers, said Tuesday that it is rolling out a three-part plan to help jumpstart the sluggish U.S. economy.
The plan includes hiring more than 100,000 veterans in the next five years, spending $50 billion to buy more American-made merchandise in the next 10 years and helping its part-time workers move into full-time positions sooner.
The move comes as Wal-Mart’s attempts to rebound from blows to its reputation in recent months from an alleged bribery scandal in Mexico and a deadly fire in November at a Bangladesh factory that supplies clothes to the company. Wal-Mart, which often has been criticized for offering low-paying jobs and not buying more from U.S. manufacturers, said its plan will highlight the career opportunities in the retail industry.
“We’ve developed a national paralysis that’s driven by all of us waiting for someone else to do something,” Bill Simon, president and CEO of Wal-Mart’s U.S. business, said at an annual retail industry convention in New York on Tuesday morning. “The beauty of the private sector is that we don’t have to win an election, convince Congress or pass a bill to do what we think is right. We can simply move forward, doing what we know is right.”
At the center of Wal-Mart’s plan is its pledge to hire veterans, many of who come from Afghanistan and Iraq are having a particularly hard time finding employment. The unemployment rate for veterans who served in Iraq or Afghanistan stood at 10.8 percent in December versus the overall unemployment rate of 7.8 percent.
The company said plans to hire every veteran who wants a job and has been honorably discharged in the first 12 months of active duty. The program, which will start on Memorial Day, will include jobs mostly in Wal-Mart’s stores or in its Sam’s Club locations. Some will be at its headquarters, based in Bentonville, Ark. or the company’s distribution centers.
Dave Tovar, a Wal-Mart spokesman, says that the company hasn’t worked out the details but it will “match up the veterans’ experience and qualifications.” Simon, who served in the Navy, said that veterans have “a record of performance under pressure.”
“They’re quick learners, and they’re team players. These are leaders with discipline, training, and a passion for service. There is a seriousness and sense of purpose that the military instills, and we need it today more than ever,” he said.
Wal-Mart said First Lady Michelle Obama’s team has expressed an interest in working with Wal-Mart and with the rest of the business community. In the next several weeks, Simon said the White House will convene the Department of Veterans Affairs, the Department of Defense and major U.S. employers to encourage businesses to make commitments to train and employ American’s returning veterans.
The first lady, who spearheaded a White House drive to encourage businesses to hire veterans, praised Wal-Mart’s announcement on Tuesday, calling it “historic.”
“We all believe that no one who serves our country should have to fight for a job once they return home,” The first lady said in the statement. “Wal-Mart is setting a groundbreaking example for the private sector to follow.”
In addition to hiring veterans, Wal-Mart said that it will buy spend $50 billion to buy products made in the U.S. over the next 10 years. According to data from Wal-Mart’s suppliers, items that are made, sourced or grown in the U.S. account for about two-thirds of the company’s spending on products for its U.S. business. The company said it plans to focus on buying more in areas such as sporting goods, fashion basics, storage products, games and paper products.
The commitment comes as economics are changing for making goods overseas. Labor costs are rising in Asia, while oil and transportation costs are high and increasingly uncertain.
Simon, Wal-Mart’s CEO, said that a few of the company’s manufacturers have told Wal-Mart that they have defined the “tipping points” at which manufacturing abroad will no longer make sense for them. Simon cited one supplier called 1888 Mills, which made most of its towels overseas, but had an underutilized factory in Griffin, Georgia.
Wal-Mart said it worked with the supplier on a couple of innovations and now the U.S. factory is hiring again. The towels made in the U.S. will be in 600 of its stores this spring, and another 600 stores in by the fall. The towels’ label will say “Made Here.”
The final piece of Wal-Mart’s plan is to help part-time workers transition into full-time employment if they desire to. Simon said that about 75 percent of its store management start as hourly associates, and their average pay is $50,000 to $170,000 a year.
“There are some fundamental misunderstandings out there about retail jobs, and we need to do better at explaining the opportunities we offer,” he said.