See the Spot: Is Walmart Really Saying It Pays Workers $15 an Hour?

Industry Self-Reglulator NAD Says Maybe So, Asks FTC to Review

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Is Walmart falsely implying that its workers make a living wage -- specifically the $15-an-hour minimum sought by some advocacy groups? The giant retailer may soon be answering that question for the Federal Trade Commission, after an unusual move by the National Advertising Division of the Council of Better Business Bureaus.

The NAD announced last week that it had referred the Walmart ad to the FTC after Walmart refused to participate in an NAD review, saying the ad that first aired in May on TV and online didn't make those implications and the NAD isn't qualified to review the matter.

One of the advocacy groups that typically criticizes Walmart's employment practices – Making Change at Walmart – today joined the NAD in calling on the FTC to review the ad. The FTC didn't immediately return calls on whether it's inquiring, and generally doesn't comment on cases in progress. But NAD Director Andrea Levine said the commission usually does take up matters referred by the group.

"They always take a look at it," Ms. Levine said in an interview. "They almost always call the advertiser to inquire about it. Many times simply getting a call from the FTC will persuade an advertiser to discontinue an advertisement. Sometimes they encourage them to come back here to participate in the process. Sometimes they prosecute. And sometimes they decide they don't have jurisdiction."

Certainly Walmart doesn't believe the NAD has jurisdiction in the matter, which it told the group.

In a statement to Ad Age, Walmart said: "We have been clear since our announcement in February that we are raising our lowest starting wage to $9 an hour and that we will be moving all current associates to at least $10 an hour in February 2016. Our ad is consistent with our initiative."

Walmart values NAD's role "providing a voluntary review process for traditional advertising" and has participated in NAD proceedings in the past and will in the future, the retailer said. "We don't agree with the NAD's interpretation of our 'Raise in Pay' commercial as a traditional ad, or with its determination that the self-regulatory process is an appropriate forum for larger policy issues. We think the NAD's interest is misplaced, because the commercial does not address competitors, make objective comparisons affecting consumer choice or include a call to action, which are the issues the NAD typically reviews."

Walmart spokesman Kory Lundberg said to his knowledge the company hasn't been contacted yet by the FTC.

The ad in question doesn't say directly that Walmart pays "a living wage" or $15 an hour. But when Ms. Levine saw it, and a segment about it on MSNBC's "Morning Joe," she came away with the impression that people could draw those conclusions.

A narrator in the 30-second ad says "a raise in pay raises us all" as the camera hovers on a large "15," the number of a Walmart checkout lane. "We're investing over $1 billion this year in higher wages, education and training," says text that runs immediately afterward.

"Many consumers care about the companies that they do business with," Ms. Levine said. "I do think it was directed at encouraging consumers to patronize the store. In that way it's a classic consumer-directed message: Buy here."

In a similar vein, she said the NAD in 2012 looked into Chipotle's "sustainable farming" claims and found they were supported by evidence.

Walmart may be doing more such ads this year. The retailer will focus heavily on its initiatives to improve wages, training and education of employees in ads this year, Chief Marketing Officer Stephen Quinn said in a June interview, as it moves away from what it's been running heavily since the holidays -- ads financed by suppliers featuring specific brands sold at Walmart. The retailer has asked suppliers to shift focus to providing lower prices rather than co-op marketing funds.

Correction: An earlier version of the story said Walmart expects the FTC will decide it has no jurisdiction in the matter. The company did not say this.

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