Detailed Findings & Methodology
Feeling the squeeze from e-commerce retailers, many of the companies on this list are struggling with declining revenue as online shopping becomes increasingly popular. According to a recent report by consultancy group Deloitte, 2017 will be the first year more Americans will do their holiday shopping online rather than in brick-and-mortar stores.
More than a third of the 25 employers on this list are primarily department stores — and many reported falling revenues in the most recent fiscal year. Low employee wages may be a necessity for these companies as they lose market share to internet retail giants like Amazon.
Unions are one of the most common and effective ways for workers to negotiate higher wages. Not surprisingly, union membership tends to be low in the companies on this list. In some cases — including Walmart, the world’s largest employer — companies are anti-union and take active measures to keep employees from organizing.
The companies on this list also include discount stores such as Dollar General and Dollar Tree. Considering their low-cost inventory, these stores likely cannot remain profitable without paying employees relatively little.
Based on the methodology used by the National Employment Law Project, an employment advocacy organization, in its 2012 report “Big Business, Corporate Profits, and the Minimum Wage,” 24/7 Wall St. identified the 25 large companies that pay employees the lowest wages. These companies operate in industries that typically pay low wages.
We first identified the three sectors that have the highest percentages of workers that are paid at or below the minimum wage from the BLS’ Occupational Employment Statistics database and its report, “Characteristics of Minimum Wage Workers, 2016.” The three sectors — leisure and hospitality, retail trade, and education and health services — together employ 78.4% of all workers paid the minimum wage or less.
Within these sectors, we then identified the 31 industries in which the median wage was at most $13 an hour — $5.75 above the federal minimum wage.
We identified the 147 lowest-paying public U.S. companies within those 31 industries by using the Capital IQ Screening tool, accessed September 2017. The 25 lowest paying companies are the largest employers among the 147 low-paying companies. Worldwide totals, full-time and part-time employee counts, as well as annual profit figures from the latest three fiscal years came from various corporate filings with the Securities and Exchange Commission. Company information also came from corporate websites and financial documents submitted to the SEC. CEO salaries came from Yahoo Finance.
We reviewed salary information submitted by employees to employee review site Glassdoor in order to screen any companies where wages for the most common occupations were not close to or less than $13 an hour. To calculate average wages and salaries, Glassdoor uses data from current and former employees, in addition to third party sources, emphasizing more recent salaries from within the last two years. Salary and wage estimates do not include bonuses, commissions, tips, stock options, and other benefits.
In keeping with the NELP methodology, all employee figures represent system-wide employment, including employees of franchisees, unless otherwise noted. Employee totals also include both full- and part-time workers and represent worldwide employment, unless otherwise noted.