Will Walmart’s $1-A-Day College Play Help More Black People Graduate?

Kori Hale
Written by Kori Hale

Photo: Joe Raedle/Getty

Companies are looking to enhance their compensation but would like to do so in targeted ways. Walmart is dipping its toe into the shallow end of the employee education pool with its latest $1-a-day college tuition discount plan. As the largest private sector employer of African-Americans in the U.S. will this move help more black people graduate from college?

The Breakdown You Need to Know

Nearly 21% of Walmart’s 1.4 million U.S. workers are African-American. The company noted in its 2016 diversity report that more than 8.5% of Walmart executives and senior managers are black. These figures far outpace the national numbers put out by the Equal Employment Opportunity group, which are around 2.8%.

Walmart officials expect about 68,000 employees would probably enroll in its college tuition plan during the first five years. Employees can attend three universities as part of the program: the University of Florida, Brandman University and Bellevue University. The retail giant chose the schools because of their high graduation rates, particularly among part-time students, and their experience with those already in the workforce. During its annual shareholder meeting Walmart executives noted the schools have a good deal of experience with those already in the workforce.

When you roll back the demographics at these universities, CultureBanx discovered they have very low black representation. Only 6.2% of the student population at the University of Florida identify as black, and the annual in-state tuition costs $6,300. If this institution sounds familiar it’s because they recently apologized after black students were repeatedly and forcefully pulled offstage for celebrating during a graduation ceremony. In California nearly 10% of Brandman University’s students are black, and the tuition runs about $15,000 per year. Lastly, Walmart has chosen Bellevue University in Nebraska, which is 13% black, with tuition costs right around $9,000 for two semesters.

How exactly does Walmart’s college tuition plan work? Employees will have to specifically focus on bachelor’s or associate degrees in either business or supply-chain management. Walmart workers enrolled in the program would not be required to pay for their education upfront and seek reimbursement later.

A study by The Education Trust found the six-year graduation rate for black students was 45.4%. The average graduation rate for black students at HBCUs was 37.8%, compared with 32% for non-HBCUs, the latter is the category all three of Walmart’s chosen schools fall into.

Many large employers are trying tuition benefit programs. Starbucks pioneered the strategy four years ago when it launched its tuition subsidy and partnership with Arizona State University, a school that’s only 4% black. In March of this year, McDonald’s substantially increased its tuition benefits. Kroger, which is another another top five U.S. employer, created a new tuition program and in April and Chick-fil-A decided to expand its program in May.

Corporate Retention Mindfulness

Companies need to do more to attract workers but are still reluctant to raise wages. The labor market is getting stronger, and employers are needing to think harder about how to invest in recruiting and retaining employees. Only time will tell whether or not policymakers are going to keep unemployment low long enough to force big companies to finally just raise employee pay.

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About Kori Hale
I am the CEO of CultureBanx covering the intersection of business, technology and innovation for minorities. I was raised in investment banking while working at UBS internationally and Goldman Sachs in the states. I’m also the first black woman to anchor a daily news show from the New York Stock Exchange. Previously, I produced TV for the number one business news network on CNBC’s top rated shows Squawk on the Street and Squawk Alley. Prior to joining CNBC, I was an international producer for Bloomberg TV and a financial correspondent for TheStreet.com. As a board member for Brooklyn Center for the Performing Arts, I’m proud to be part of a generation of emerging arts supporters.