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Is It Really a Good Thing That Wal-Mart Wants to Hire More Veterans?

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Critics say that Wal-Mart's newly-announced plan is merely smoke and mirrors.

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Is it a good-faith attempt at corporate social responsibility, or it is a cynical ploy to generate good publicity in the wake of labor strife and a high-profile bribery scandal? Opinions certainly ran the gamut after Wal-Mart (NYSE:WMT) announced yesterday that it will hire more than 100,000 veterans in the next five years, starting on Memorial Day.

Any veteran who applies for a job within 12 months of being honorably discharged will be hired, said Wal-Mart USA CEO Bill Simon in a speech to the National Retail Federation in New York on Tuesday.

"Not every returning veterans wants to work in retail," Simon said, according to the LA Times. "But every veteran who does will have a place to go." Depending on their qualifications, veterans can be hired for either part-time or full-time retail positions or even management trainee roles.

Michael Tuffelmire, a veteran who served during Operation Iraqi Freedom, said he approved of the retail giant's plan.

"When I came back, if I could have had a job at Wal-Mart, if it was a full time job that paid a wage [so] that I could pay my rent and I could pay my bills, yes, I would have taken it. I was struggling very hard," Tuffelmire said, according to WZZM 13.

First Lady Michelle Obama also issued a statement praising Wal-Mart, saying that the company "is setting a groundbreaking example for the private sector to follow."

Plenty of skeptics, however, question if the move will prove helpful to veterans. Many pointed out that Wal-Mart wages were less than competitive, and that employees were often not allowed to work enough hours to be eligible for health benefits.

"You're still subject to all the crap that comes from working for Wal-Mart," said Christopher Bentley Owen, a veteran and current Wal-Mart employee, who's also a member of the union-backed group, OUR Walmart, told The Nation. "Extremely low wages, poor benefits, and everything else. If that's the best that's available for veterans, then there is something wrong."

Wal-Mart says that a full-time hourly sales associate earns $12.57 per hour, but according to research from IBISWorld, sales associates at Wal-Mart earned an average of $8.81 per hour in 2011. Wal-Mart critics such as Rep. Alan Grayson (D-FL) have previously slammed the corporation, saying that Wal-Mart employees formed the largest group of Medicaid and food stamp recipients in many states, costing US taxpayers some $1,000 per worker.

Compared to seven other retail peers IBISWorld looked at, Wal-Mart is placed fifth, with only Kohl's (NYSE:KSS) ($8.02) and Target (NYSE:TGT) ($8.13) paying associates less. Home Depot (NYSE:HD) ($11.77), Lowe's (NYSE:LOW) ($11.16), and Best Buy (NYSE:BBY) ($9.67) were among those who paid their employees more than Wal-Mart did.

"If [$8.81 is] the best we can for our veterans, we're not really doing very much," commented Jordan Weissmann at The Atlantic, echoing the sentiments of Owen.

Weissmann also highlighted that the company's decision to up its hiring of veterans was not entirely an altruistic one. "Thanks to a tax credit for hiring veterans that was extended through 2013 as part of the fiscal cliff deal, Wal-Mart stands to save thousands of dollars per new employee by recruiting ex-military," he noted.

Sanford C. Bernstein's Colin McGranahan agreed that the decision to increase veteran hiring made business sense for Wal-Mart.

"It's a good pool of labor that fits well into how Wal-Mart runs its business, with potential associates that are accustomed to a chain of command, standard operating procedures, disciplined scheduling," McGranahan said, according to The Star-Ledger. "It also generates positive PR for Wal-Mart at a time when the company could certainly use some."

Questions on the motivations behind the hiring program and the quality of the jobs offered aside, there can perhaps be little dispute that Wal-Mart's plan is a worthwhile one, especially given that the current 10.8% unemployment rate for veterans (according to the Department of Veterans Affairs) is higher than the already worrisome national average of 7.9%.

'With unemployment for Iraq and Afghanistan veterans often above 10% in 2012, we need more employers to appreciate that these young men and women are not a charity, they are an investment," Paul Rieckhoff, CEO of Iraq and Afghanistan Veterans of America, told MSN. "Wal-Mart's footprint is large enough that they can single-handedly impact that unemployment number, especially if they exceed their 100,000 jobs goal."

Wal-Mart's commitment to hiring veterans could also help in easing the startlingly high US military suicide rates. 2012 estimates from the US Department of Veterans' Affairs show that some 18 veterans commit suicide each day -- or one every 80 minutes. While mental illness, including post-traumatic stress disorder, plays a large part in such tragedies, Peter D. Kramer, a clinical professor of psychiatry at Brown University, asserted that there is a strong correlation between unemployment and suicidality. As such, "a successful employment program would act as a mental health program," said Kramer

"The best suicide medicine for vets is often a job," concurred Mark Thompson at Time. "That's why Wal-Mart's plan to hire up to 100,000 vets over the coming five years could do a lot of good for many who have worn the nation's uniform."

"It's a win-win situation because it looks good for them, they're hiring America's sons and daughters back, and it's good for Wal-Mart because they're getting a good workforce," affirmed Tuffelmire.

(See also: 5 Reasons Why Wal-Mart Should Have Said Yes to Biden's Invitation Yesterday and Why Wal-Mart Won't Fire Striking Workers -- and What That Means for You.)

Twitter: @sterlingwong
No positions in stocks mentioned.
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